Steve Jobs turned the top-secret product announcement into an art form.
The late Apple (NASDAQ: AAPL) founder mastered the art of keeping details about a new product – iPad, iPhone, iPod, pick one – so close to the vest that consumers were inevitably and pleasantly surprised by the new gadgets. So were investors. New Apple products routinely gave the stock a 10-12% boost in the weeks that followed.
That’s no longer the case.
Apple’s last two product releases essentially bombed – both with investors and the general public. Released in September, the iPhone 5 disappointed, prompting the stock to fall slightly in the ensuing three weeks.
Wall Street was even less impressed with the iPad Mini. Apple shares dropped almost 100 points in the two weeks that followed the product’s October 23 release.
In both cases, it was common knowledge what Apple was releasing. Everyone knew the iPhone 5 and iPad Mini were coming, causing consumers’ and tech bloggers’ imaginations to run wild in the weeks preceding the announcements. Expectations grew to unrealistic levels, and thus both products were essentially set up to fail.
Blame Jobs’ replacement Tim Cook if you want. Blame consumer fatigue in seeing yet another iPhone and iPad introduced. Blame the products themselves for failing to pack much of a “wow” factor.
But the lack of secrecy surrounding Apple’s two product launches also played a role in them flopping. And it’s for the same reason that Facebook (NASDAQ: FB) and Research In Motion disappointed with their recent new-product unveilings.
Facebook shares declined 4% in the four sessions that followed the company’s Graph Search announcement. Shares of Research In Motion, which changed its company name to BlackBerry (NASDAQ: BBRY) last Wednesday, declined 6% in the hours after its new smartphone was unveiled. (The stock has since bounced back after changing its ticker symbol to BBRY.)
That’s a stark contrast to how investors used to respond to Apple’s product announcements. It’s not that the Graph Search and the BlackBerry 10 are bad products, necessarily. It’s simply that they didn’t meet the outsized expectations surrounding their releases.
And that’s not the companies’ fault.
Facebook couldn’t have been more secretive leading up to its Graph Search announcement. A mysterious “Come and See What We’re Building” invitation to the press was the only information people had in the days leading up to the Graph Search release. Unlike Apple’s secretive product launches during the Steve Jobs regime, however, Facebook’s tight-lipped strategy backfired.
With so little information to go on, speculation about what the announcement could be – A Facebook smartphone?! A search engine to rival Google?! – grew out of control. Anything shy of expanding its social network to Mars was bound to disappoint.
There was less secrecy surrounding the BlackBerry 10. After all, everyone knew a more advanced version of the outdated BlackBerry phone was coming. And that only fueled the rumor mill about what cool features the new product might offer. Judging by market reaction in the hours following the announcement, the BlackBerry 10 didn’t quite live up to its pre-launch billing.
Therein lies the conundrum for all future tech product launches.
Mark Zuckerberg and company went the secrecy route prior to announcing the Graph Search function. Research In Motion made no bones about the fact that it would be introducing a BlackBerry for the iPhone generation. In both cases, the products failed to impress investors. High secrecy, low secrecy – neither strategy worked. Damned if you do, damned if you don’t it seems.
On the heels of Wall Street’s collective yawn after Apple released its iPhone 5 and iPad Mini, perhaps the days of new product launches goosing stock prices are over. Maybe there are just too many bloggers out there now that aren’t shy about letting their imaginations run wild any time a tech company is set to reveal its latest invention.
Perhaps low-key product launches are a more prudent strategy for tech companies in 2013. Staying under the radar is a good way to keep expectations low. And low expectations are much easier to exceed.
It seems that managing expectations is the only way tech companies can truly take investors by surprise these days.
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