August is the New September…Which was the New March…
For many tech categories, new models were historically announced at the beginning of the year and then brought to market in the Spring period (March/April). I think some if not all of this timing was driven by the need to sufficiently inventory the supply chain in advance of the holiday season.
A few years ago I did an analysis of the seasonality of sales for consumer tech products. The results surprised me. The fourth quarter represents about 27 percent of total annual sales volume – the most of any quarter – but significantly less than what I would have expected. I also found that new product categories are heavily dominated by the fourth quarter. Regardless of when they are announced or when they ultimately hit retail channels, a new category will typically see well over half of its annual sales volume in the fourth quarter. Over time, as the product category matures, sales in the fourth quarter move from 50%+ of annual sales volume to roughly 27%.
I think this phenomenon is driven by the fact that consumers like to both give and receive “new” tech products during the holiday season. As a product category matures it becomes more heavily driven by replacement cycles – consumers buy a new one when the old one breaks.
This relationship holds across a number of categories and time periods. I refer to it as the Law of Nascent Product Seasonality. Here’s a recent example. Apple launched the iPad in April 2010. They would go on to sell 14.79 million units in 2010, but 7.33 million would be sold in the fourth quarter. Despite the category being well received, Apple still sold about half of their first year total sales in the fourth calendar quarter.
Supply chain dynamics are improving significantly. The world is becoming flatter and not only can goods be moved quicker and more seamlessly around the globe, but so can ideas and the marketing messages of these products.
Take for example the Xbox Kinect. It was launched globally in November 2010 and would go on to sell 8 million units in its first 60 days on the market – laying hold to the Guinness World Record of being the “fastest selling consumer electronics device.” This is an incredible supply chain feat that is rarely given its due credit.
Historically announcement and release periods were months apart. While that is still the case for a myriad of products, it is equally not the case for a large number of products that are coming to market on the day they are announced or quickly thereafter.
We have seen a shift as companies like Apple began to make more product release announcements in the Fall. Note how Apple’s announcements have change. Until the iPhone 4S was released in October 2011, Apple had primarily released new models in the June/July time frame. The same is true for iPad. Only the iPod series of products have historically enjoyed a fall release.
iPhone: June 29, 2007 (4GB and 8GB), February 5, 2008 (16GB)
iPhone 3: July 11, 2008 (4GB and 8GB)
iPhone 3G: June 19, 2009 (16GB and 32GB), June 24, 2010 (8GB Black)
iPhone 4: June 24, 2010 (16GB and 32GB), February 10, 2011 (CDMA), April 28, 2011 (White), October 14, 2011 (8GB)
iPhone 4S: October 14, 2011 (16GB, 32GB, and 64GB)
iPhone 5: September 21, 2012 (16GB, 32GB, and 64GB)
iPad (1st generation): April 3, 2010
iPad 2: March 11, 2011
iPad (3rd generation): March 16, 2012
iPad (4th generation): November 2, 2012
iPad mini: Novemeber 2, 2012
iPod Touch releases
1st generation: September 14, 2007
2nd generation: September 9, 2008
3rd generation: September 9, 2009
4th generation: September 8, 2010
5th generation: October 15, 2012
Following the success of Apple, other companies began making September launches and we saw in 2012 not only releases from Apple, but also from Amazon and others. Even Microsoft released Windows 8 in the fall.
Today, speculation abounds that Google will launch their new Nexus 7 at an event July 24th and their Moto X at an event on August 1st. Here’s a full list of rumored upcoming launches. We are seeing companies like Google attempt to get in front of the back to school selling period as well as a slue of September release announcements. And so with it August becomes the new September.