New research from UNSW Business School suggests a big part of industry strategy has been to satisfy consumers who play the product upgrade waiting game with releases based on technology advancements.
“Big players such as Apple and Samsung can’t get too complacent about their massive brand loyalty”, warns Sam Kirshner, a lecturer in the school of information systems and technology management at UNSW Business School. “The longer companies wait to upgrade products, the more customers they lose if they have a big smartphone failure.”
He has looked at when is the best time to release a smartphone, and the upgrade cycle.
He says that “for companies that really don’t have any brand commitment, they really have no choice but to upgrade all the time,” however he has found due to the speed of smartphone development, there have been epic fails, such as from BlackBerry, Amazon’s Fire Phone, the Facebook phone and the Samsung Galaxy Note 7, which came complete with exploding batteries.
New research from UNSW Business School suggests a big part of industry strategy has been to satisfy consumers who play the product upgrade waiting game with releases based on technology advancements, but this approach is not as good as assessing brand and marketing factors for upgrade timing.
“Relying on massive brand loyalty could cause a lot of damage. Brand commitment creates pent-up demand, which is where they get all the advantages – and the longer companies delay product upgrades, the larger that pent-up demand and the advantages are likely to be,” says Kirshner.
In his research, conducted with academics at Queens University in Ontario, Kirshner argues that companies with high brand commitment have an advantage, because they can delay costly upgrades and make customers wait long periods for new products, as Apple does.
“However, at the same time, this loyalty is a double-edged sword. The longer companies wait to upgrade products, the more customers they lose if they have a big failure,” he says. “This can potentially damage brand commitment, because their clients will not have the same level of trust in the brand.”
For the release of its iPhone 5s in 2013, customers waited 13 months, and Apple then sold close to nine million phones globally in one weekend, which made up for lost sales. Later, the iPhone 6 became one of its best sellers ever.
Read further details in BusinessThink
For further comment call Lecturer Sam Kirshner on 02 9385 5517 or Email s.kirshner@unsw.edu.au
Media contact: Julian Lorkin: 02 9385 9887