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Economic Times

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Image Credit: Economic Times

The Osborne Effect: Why tech giants stay silent on their next big thing?

  • The Osborne Effect, a phenomenon of self-cannibalization, refers to the negative impact on a company's current sales when it pre-announces a future product.
  • Osborne Computer Corporation experienced the Osborne Effect when it prematurely announced the Osborne Executive, causing a decline in sales, inventory pile-up, and ultimately leading to the company's bankruptcy in less than 30 months.
  • Tech giants like Apple and Samsung have learned from this mistake and now maintain extreme secrecy around their upcoming products to avoid a sales slump on existing models.
  • While some companies strategically tease future products without triggering the Osborne Effect, industries with rapid obsolescence, such as smartphones and laptops, must be cautious in their product announcements.

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