Osborne effects: Death by pre-announcement

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    The "Osborne Effect" refers to the unintended consequences of announcing a future product ahead of its availability -- and its impact upon the sales of the current product. Here are the eight worst Osbornes we've ever seen.

    While everyone knows that the Osborne Effect was named for Adam Osborne and the demise of the Osborne 1 computer, was it really the first example of "doing an Osborne"?

    Caption by: Jason Perlow

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    A number of computer historians have pointed out that the first example of "doing an Osborne" probably originated with North Star Computers, Inc back in 1978, five years before Osborne shuffled off its mortal coil.

    North Star was an early CP/M personal computer vendor.  In 1978, North Star Computers announced a new version of its floppy disk controller at the same price, but with double the capacity of the old controller. When sales of the old controller decreased, the company nearly went out of business.

    Caption by: Jason Perlow

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    Everyone knows the Osborne story: In 1983 Adam Osborne pre-announces the replacement models (which have yet to be built) for the venerable Osborne 1. Sales of the Osborne 1 tanked, and the company goes out of business shortly thereafter.

    Affadavits from former Osborne employees given a number of years later cast some doubts on the mythology, although they do not fully discount the company's rapid demise due to the product pre-announcements.

    They allege that competing products such as the Kaypro shipping at the time had a larger screen and were less expensive than Osborne's next-generation replacement for the Osborne 1 and included bundled software, making them a superior value. Kaypro had already begun to cut into Osborne's sales, and other mismanagement at Osborne may have contributed to the company's downfall.

     

    Caption by: Jason Perlow

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    Sega, like Nintendo, Sony and Microsoft, was once a powerhouse in set-top video game consoles. Two years into the release of their Saturn console, the company started to publicly discuss their next-generation system, the Dreamcast.

    The company had already created a history of distrust with their short-lived Mega CD and 32X, which were considered ill-conceived stopgap systems. Saturn sales crawled to a halt and many planned games for the console were cancelled.

    While the Dreamcast eventually was released, customer loyalty was compromised and the system suffered poor sales, and Sega eventually exited the console business as a result.
     

    Caption by: Jason Perlow

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    In May of 2011, Research in Motion announced the availability of their first Blackberry Bold handsets based on OS 7, which included a number of multimedia and social networking improvements.

    All of this was good on paper, except that the company's Co-Chief Executive, Mike Lazaridis was busy telling crowds that the new phones would not be upgradeable to their next-generation QNX OS due the following year, which is now known as BlackBerry 10.

    As a result, this has put an effective freeze on traditional BlackBerry 7 handset sales and market share of RIM products has dropped into single digit percentage levels.

    A major management restructuring of the company has occurred, including the ouster of both Co-Founders and Chief Executives.

    BlackBerry 10 handsets are unlikely to ship until at least October of 2012, and the company has retained JP Morgan and the Royal Bank of Canada to determine go-forward options for the Waterloo, Ontario smartphone vendor, presumably including asset divestiture, severe austerity measures (large rounds of layoffs) and the sale of the entire company.

    Caption by: Jason Perlow

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    Nokia CEO Stephen Elop took a big risk by declaring his company of 125,000+  employees as sitting on a "Burning Platform"  in a widely-distributed memo which he wrote in February of 2011. Their current line of Symbian and MeeGo-based phones, he noted, were inferior to the products which were shipping by competitors from Apple and the Android OEMs.

    Shortly after issuing this memo, Nokia entered a partnership with Microsoft to produce Windows Phone-based devices. Sales of their high-end Symbian and MeeGo-based smartphones have since went in the toilet, and the company as a whole has been struggling to stay afloat.

    While their recently released Lumia 900 Windows Phone-based handset has garnered fairly positive reviews, the company's financial situation is dire and is expected to burn through its cash reserves in 2013 unless a miraculous turnaround occurs.

    Caption by: Jason Perlow

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    This week's announcement by Microsoft of Windows Phone 8's feature set took many users by surprise -- that the current generation of Windows Phone 7 devices -- including Nokia's flagship Lumia 900 which only launched in late April of this year -- will not be upgradeable to the new mobile operating system.

    Instead, they will get a consolation prize, Windows Phone 7.8, that gives them a new menu screen and some very minor improvements.

    While there hasn't been any indications of a Windows Phone sales slowdown yet -- as the platform only occupies single digit marketshare territory -- this cannot possibly be a positive development for the OEMs selling Windows Phone products with significant inventory in the sales channel.

    Caption by: Jason Perlow

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    Based on a reference platform announced by Intel in Q4 of 2011, the Ultrabook was conceived to be a high-end, lightweight and thin Windows-powered subnotebook design to compete with the Macbook Air designs released by Apple.

    Many OEMs, such as Lenovo, Dell, Hewlett-Packard and Acer have committed to this platform, and have since early 2012 started the rollout of a number of products based on the concept and Intel's Core i5 and i7 processors and chipsets.

    With the pre-announcement of Microsoft's own Surface tablet, which is expected to ship in the Fall of 2012 and early 2013,  consumer interest in many of the OEM Ultrabook designs may now be compromised.

    Since the Windows 8 Professional version of Surface has similar specs to many of the Ultrabooks pending release and currently on the market (they also utilize the same Ivy Bridge Intel Core i5 processors) but can function as both a notebook and a tablet, is unlikely that anything other than the most high-end of the Ultrabook designs will see consumer traction for the remainder of 2012 and for the balance of 2013.

    Caption by: Jason Perlow

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Everyone knows the Osborne story: In 1983 Adam Osborne pre-announces the replacement models (which have yet to be built) for the venerable Osborne 1. Sales of the Osborne 1 tanked, and the company goes out of business shortly thereafter.

Affadavits from former Osborne employees given a number of years later cast some doubts on the mythology, although they do not fully discount the company's rapid demise due to the product pre-announcements.

They allege that competing products such as the Kaypro shipping at the time had a larger screen and were less expensive than Osborne's next-generation replacement for the Osborne 1 and included bundled software, making them a superior value. Kaypro had already begun to cut into Osborne's sales, and other mismanagement at Osborne may have contributed to the company's downfall.

 

Caption by: Jason Perlow

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