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Osborne effect
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The Osborne effect is a social phenomenon of customers canceling or deferring orders for the current, soon-to-be-obsolete product as an unexpected drawback of a company's announcing a future product prematurely. It is an example of cannibalization. The term alludes to the Osborne Computer Corporation, whose second product did not become available until more than a year after it was announced. The company's subsequent bankruptcy was widely blamed on reduced sales after the announcement. [1] [2]
Description
 An Osborne 1 from 1982  An Osborne Executive  An Osborne Vixen prototypeThe Osborne effect occurs when premature discussion of future, unavailable products damages sales of existing products. The name comes from the planned replacement of the Osborne 1, an early personal computer first sold by the Osborne Computer Corporation in 1981. In 1983, founder Adam Osborne pre-announced several next-generation computer models (the Osborne Executive and Osborne Vixen), which were only prototypes, highlighting the fact that they would outperform the existing model as the prototypes dramatically cut down assembly time. [3] A widely held belief was that sales of the Osborne 1 fell sharply as customers anticipated those more advanced systems, leading to a sales decline from which Osborne Computer was unable to recover. This belief appeared in the media almost immediately after the company's September 1983 bankruptcy: [4]
To give the jazzy $2,495 Osborne Executive a running start, Adam began orchestrating publicity early in 1983. We, along with many other magazines, were shown the machine in locked hotel rooms. We were required not to have anything in print about it until the planned release date in mid-April. As far as we know, nothing did appear in print, but dealers heard about the plans and cancelled orders for the Osborne 1 in droves. In early |
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