The Fog of New Mobile Product Launches

Telecom & Wireless

Published: October 30, 2012 6:50 am

The list of new mobile products is extraordinarily long. Apple Inc.’s (NASDAQ: AAPL) iPad mini is only two weeks old. Microsoft Corp. (NASDAQ: MSFT) just released its Surface tablet, and partner Nokia Corp. (NYSE: NOK) will release a series of new smartphones. Google Inc. (NASDAQ: GOOG) has released its Nexus 4 and its Nexus 10, and it will launch its new Android 4.2 operating system shortly. Each of these new products competes with many already in the market, some of which belong to industry powerhouses such as Apple, Samsung and Amazon.com Inc. (NASDAQ: AMZN). Even if each of these newest mobile devices is perfect, there are only so many sales to go around.

The mobile business has become like the movie or car industries. Movie releases sometimes run into one another. There are only so many tickets to be sold on any given weekend, even if crowds come out to see popular movies. Every one to some extent takes viewers from others.

Americans buy about 1.2 million cars each month. Even in a month when several new models are launched, the number does not go above 1.4 million. Market elasticity is limited in all these cases — mobile devices, cars and movies.

Some smart consumer electronics and software executives have to wonder if it is better to delay a launch by a month or two to stay out of a ridiculously crowded period of new product releases. That strategy is always trumped by the idea that products early to market get the best sales. That is not always true, as Apple has proved. But Apple is Apple, and probably none of the other firms in the sector want to gamble that they suddenly have become the next Apple, because everyone knows they have not — at least yet.

Demand for smartphones may have been crippled already by the uncanny success of the Samsung Galaxy S III and Apple iPhone 5. The same might be said among tablet products because of the Apple iPad and Amazon Kindle Fire. Analysts fear that poor iPad sales in Apple’s most recent quarter may mean that the sector has been saturated, at least temporarily.

There may be millions of customers for new smartphone and tablet products, or even tens of millions. But at some point the number of buyers reaches a limit. That limit already may have been hit. All of the new products that have just come to market may find they have almost no ready buyers.

Douglas A. McIntyre

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