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Steve Jobs and Apple: Their Real Strategy for Introducing New Products is Underpromise and Overdeliver

In my recent post, I talked about the promotion leverage gained by Apple and Steve Jobs in the lead up to the April 6th keynote at the 2011 Apple World Wide Developers Conference (WWDC). This caused Apple stock to jump by $10.42, or 3.09%. As reported in my update and a post by BNET blogger Erik Sherman, however, the keynote did not live up to the build up or what Apple watchers expected. As a result, Apple stock tumbled $5.40, or 1.57% by the end of the day, and has not done much better since. Then I thought wait a minute! It is not like Apple to disappoint... for long. This has to be part of a bigger and better plan. What if the disappointment is part of a deliberate strategy Jobs and Apple often use where they underpromise and overdeliver?

Introduction of the iPad.

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 â€" 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 are 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 plan.

I expect Apple has a similar plan for iCloud, iOS5, Lion, and other yet unannounced products. From past experience, Apple has found that an under-promise and over-deliver plan 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 delivery.
  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 three main stages 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. Ships products that over-deliver -- exciting buyers, accelerating the promotion leverage, and boosting the stock price.
What do you think of Apple's plan and how might you apply it to achieve great success in your new product introductions?


Ira Kalb is president of Kalb & Associates, an international consulting and training firm, and professor of marketing at the Marshall School of Business at University of Southern California (USC). Follow him on Twitter.

image courtesy of flickr user, marcopako 