Osborne Effect

Osborne Effect

What is it?

The Osborne Effect is a phenomenon where the announcement or anticipation of a new and advanced technology or product can significantly reduce the sales of the current or existing product, as customers wait for the new version to become available.

The Osborne Effect is a phenomenon observed in business, particularly in the technology industry. It occurs when a company announces a new product or an upcoming version of a product too early before its actual release. This announcement can lead to a decline in sales of the current product, as customers may choose to wait for the new version instead of purchasing the existing one. The Osborne Effect is named after the Osborne Computer Corporation, which experienced a similar situation in the early 1980s.

Here are some simple examples:

  1. Imagine a smartphone manufacturer announces the upcoming release of a new phone model with revolutionary features, set to launch in six months. Excited about the new features, potential customers may decide to wait for the new phone's release rather than buying the current model, leading to a drop in sales for the existing product.

  2. A car company reveals plans for a new electric vehicle with better range and performance, set to launch next year. People considering buying a car from the company might postpone their purchase to wait for the new electric vehicle, causing a decline in sales for the current car models.

  3. A popular video game co ...