Is the product upgrade cycle in jeopardy of failing?
By Rimma Kats
February 21, 2013
Just months after Apple released its highly anticipated iPhone 5, rumors have already begun on the company’s next need-to-have device. With constant upgrades and minimal time intervals between them, the manufacturing giant and its competitors may face pushback from consumers.
Nowadays, it seems like new smartphones and tablets are released every month. With endless upgrades and system improvements left, many manufacturers may leave would-be buyers perpetually on the sidelines.
“Is Apple losing its air of exclusivity?” said Vanessa Horwell, chief visibility officer of ThinkInk, Miami Beach, FL. “Not yet.
“But it’s facing serious innovation challenges from Samsung and others, the likes of which it hasn’t seen since the 1990s and Microsoft’s dominance,” she said. “And let’s not forget part of that product exclusivity relied as much on the panache of the late Steve Jobs as it did from true product innovation.
“In a Jobs-less world, Apple CEO Tim Cook may lack the proper showmanship. There’s no getting around the fact that Apple’s stock has fallen 35 percent in the last five month. It’s a reflection on the confidence of his strategy and direction.”
According to industry experts, the product upgrade cycle is poised to face some serious challenges.
Upgrades with just enough time interval between them, launched with precision PR efforts, builds brand buzz, excitement and rumors.
Marketers who have too many upgrades in a short period of time end up with more product tweaks and less innovations.
“The iPhone 4s and the iPad mini come to mind,” Ms. Horwell said. “You start to feel like you’re on a treadmill, never quite catching up – there’s always other product launch just around the corner.
“A possible parallel are video games and the console wars of the 1990s and 2000s,” she said. “Apple, for years, has relied less on global dominance by the numbers and more on a smaller, committed fan base – Apple groupies if you will.
“But, with a smaller support pool, Apple’s coveted position as tech leader could be at risk if that already relatively slim pool of supporters thins even slightly or begins purchasing fewer Apple products at greater intervals – especially as the upgrade cycle quickens.”
According to Ms. Horwell, with more product choices, consumers will have more reason to hold out.
So in the long-term this does, in fact, hurt Apple and others that take the same approach.
Apple is not in a tailspin – yet. However, the manufacturing giant has had a couple of challenging months.
Instead of releasing another product just months after its previous hit device, perhaps the company needs to slow things down a bit.
“There’s been speculation of late that Apple is working on developing a watch or a wearable smart gadget,” Ms. Horwell said. “Sounds intriguing, doesn’t it? Combined with the recent CES excitement over bendable/foldable/malleable technology, a hypothetical device like the one Apple is presumed to be working on could be that game changer it will need by 2014.
Not to get philosophical, but no one company, like a person, or nation can remain on top forever,” she said. “But that doesn’t mean the alternative is global oblivion.
“Apple is facing some real challenges. Whether it remains on top or goes through another prolonged transitionary period as it did in the late 1980s and 1990s remains to be seen. Either way, Apple has not gone rotten just yet. And it will remain a dominant player in the computing, telecommunications, video gaming and music worlds for a long time to come. The question is what new arena and part of our lives will it conquer next?”
Not the only one
Apple is not the only company facing product upgrade cycle challenges.
Companies such as Samsung also seem to roll out smartphones and tablets quickly.
Although there is much consumer demand for these devices, it seems competition outweighs everything else.
According to Carl Howe, vice president of research and data sciences at Yankee Group, Boston, Apple is not facing a product upgrade cycle issue at the moment, especially after the high success of its iPhone 4S and iPhone 5 products.
“Apple is one of the few companies that seems to get it,” Mr. Howe said. They do one model once a year.
“Samsung, however, floods the marketer different times of the year,” he said. “The upgrade cycle is far worse in the Android ecosystem.”
The smartphone product cycle is very much what car companies have dealt with for decades.
Automotive companies roll out a new vehicle every year. The mobile industry is doing the same thing.
Companies such as Samsung might benefit in following a similar model.
“I have heard that Samsung’s strategy is a little like a pasta strategy – you throw a bunch at the wall and see which ones stick,” Mr. Howe said.
“It’s a way to approach the market, but it might not be the right approach,” he said. “You have to be really disciplined.
“Apple has had 5 consecutive hits with their iPhone devices and no one believes that next year they’re going to have another hit. But, loyalty has never been higher, so the likelihood of them striking out is pretty low and it’s mainly because they don’t sell on product features, but more on product experiences.”
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