Apple Product Introduction Strategy: Underpromise and Overdeliver

Reactions are in for the Apple Watch announcement on March 9th with the majority skewed toward the negative. Here's one comment from a Reddit user as quoted in BBC News,

"It's not uncommon for watches to be priced from $350 to $10,000. But the Apple Watch is different. It's not a Rolex. In a year, it's going to be obsolete and in 10 years it won't even power on because the battery will no longer hold a charge."

Apple stock reaction was lukewarm after the announcement with the stock closing up just 49¢. The day after, it was down $2.63. Is it time for Tim Cook and Apple lovers to panic? Hardly. This is a typical reaction to the introduction of a new Apple product.

iPad introduction

Remember the iPad introduction? After the product was announced, Apple detractors talked about what it didn't have rather than what it did. Many savvy professionals and students I know said to me, "Who needs an iPad? I have an iPhone and a laptop. Who's going to buy one of these?" Brooke Donald, writing for the Associated Press, interviewed me about the product name for her article "Shiny gadget, icky name: iPad jokes fly on Web." Even the French paper Libération denounced Apple after my interview gave a positive view of the iPad announcement. In an excellent post by Erick Schonfeld in TechCrunch, the headline reads, "Nobody Predicted The iPad's Growth. Nobody." He points out that the most optimistic forecast was 7 million iPads sold in 2010. Apple ended up selling nearly 15 million units - more than double the most ambitious prediction.

Revolutionary marketing lifts the sales of evolutionary products.

When Apple introduced the iPad2, most tech watchers said it was evolutionary instead of revolutionary. Even so, buyers queued up around the world in lines longer than expected (and longer than for the original iPad) for the opportunity to buy an iPad2 sooner rather than later. There were even reports of people selling their body parts to buy the iPad2. Furthermore, Apple's marketing has managed to turn a lowly iPad2 accessory into a featured product by branding it as the Smart Cover with desirable benefits and features to produce greater sales.

Apple's UPOD strategy.

As it has so many times before, I suspect that Apple is merely following its tried and true formula for success that Steve Jobs implemented with great skill - under-promise and over-deliver. Apple has found that an under-promise and over-deliver strategy has numerous benefits.

  1. Sets expectations lower so that the delivered products exceed expectations.
  2. Helps to avoid tipping off competitors.
  3. Helps to avoid shareholder disappointment and lawsuits.
  4. Enables Apple to gauge any negative reactions to the under-promised products.
  5. Allows the company to respond to these reactions by improving the products before they are actually delivered.
  6. Generates far more excitement and publicity when the products beat expectations.
  7. Quiets detractors.

What marketers can learn.

In the field of high-technology, so many over-promise and under-deliver that a term has been coined to describe the worst case of this phenomenon - vaporware. Good marketers know that over-promising tends to undermine credibility and tarnish the image of the company. As Apple has discovered, it is more effective to do the opposite (under-promise and over-deliver). An UPOD plan has four main pillars where Apple...

  1. Builds up excitement with their announcements for maximum promotion leverage.
  2. Provides effective presentations that under-promise performance and withhold surprises -- setting lower expectations, temporarily disappointing some Apple watchers, and providing fuel for Apple detractors (unfortunately for detractors, they tend to mishandle the fuel, crash and burn, and generate more publicity for Apple).
  3. Uses the negative feedback to improve the product before it is released.
  4. Ships products that over-deliver -- exciting buyers, accelerating the promotion leverage, and boosting the stock price.

It will be interesting to see if they incorporated this strategy again when the final version of the Apple Watch is released on April 24th. Stay tuned.