CASE STUDY 9 New Concept Development at Philips Philips Philips has a proud history of innovation and has been responsible for launching several ‘new to the world’ product categories, like X-ray tubes in its early days, the Compact Cassette in the 1960s followed by the Compact Disc in the 1980s, and more recently Ambilight TV. These successes are linked to Philips’ deep understanding of innovation, enabled notably by significant R&D investments and strong traditions in design. Since 2003, Philips has been engaged in a market-driven change programme to rejuvenate its brand and approach to new product innovation with expertise on end-user insights. Six years later, the end-user insights approach has significantly influenced the way Philips innovates, in line with the new brand promise of ‘sense and simplicity’. Yet in 2000, new product innovation was still predominantly shaped by R&D, particularly in its lighting business. In that same year, Philips incurred a net loss of EUR 3206 million. Management was focused on dissolving the Components business, returning the Semiconductor business to profitability, simplifying the organisation and making cost savings. Philips’ role in the global lighting industry had always been dominant. Philips Lighting was Philips’ ‘cash cow’; it operated in a mature, low-growth oligopoly market in which finding new approaches to realise bottom-line growth was the main challenge. End-user driven innovation was a new approach to innovation, perhaps truly a ‘radical’ one given the division’s history. How was this new approach piloted? Exploratory Stages Following Albert Einstein’s notion that ‘insanity is doing the same things over and over again and expecting different results’, senior management realised that something had to change. Consequently, in early 2001 the Chief Technology Officer of the Lamps business initiated a set of complementary activities of an exploratory nature in order to catalyse learning opportunities and help shape a platform for a future vision. These activities were: · □ A vision team in the Central Lighting Development Lab. This involved four employees with an equal male and female representation, two of the people were new to the development lab, the other two were well established and anchored informal leaders. The team’s role was to bring outside inspiration into the development organisation via lectures, workshops, visits and books. These activitiesresulted in the start of two ‘out of the box’ innovation projects in 2002, one of which led to the invention of Ambilight TV. · □ An exploratory automotive project for car headlights. This involved piloting a combination of the Dialog Decision Process (DDP)1 and a Philips Design innovation process based on socio-cultural insights. · □ A Philips Lighting ‘New Business Creation’ (NBC) group. This involved a team of four senior managers and one lateral thinker, whose role was to challenge mainstream business assumptions by asking simple questions. E ...

1. CASE STUDY 9
New Concept Development at Philips
Philips
Philips has a proud history of innovation and has been
responsible for launching several ‘new to the world’ product
categories, like X-ray tubes in its early days, the Compact
Cassette in the 1960s followed by the Compact Disc in the
1980s, and more recently Ambilight TV. These successes are
linked to Philips’ deep understanding of innovation, enabled
notably by significant R&D investments and strong traditions in
design.
Since 2003, Philips has been engaged in a market-driven change
programme to rejuvenate its brand and approach to new product
innovation with expertise on end-user insights. Six years later,
the end-user insights approach has significantly influenced the
way Philips innovates, in line with the new brand promise of
‘sense and simplicity’. Yet in 2000, new product innovation was
still predominantly shaped by R&D, particularly in its lighting
business. In that same year, Philips incurred a net loss of EUR
3206 million. Management was focused on dissolving the
Components business, returning the Semiconductor business to
profitability, simplifying the organisation and making cost
savings.
Philips’ role in the global lighting industry had always been
dominant. Philips Lighting was Philips’ ‘cash cow’; it operated
in a mature, low-growth oligopoly market in which finding new
approaches to realise bottom-line growth was the main
challenge. End-user driven innovation was a new approach to
innovation, perhaps truly a ‘radical’ one given the division’s
history. How was this new approach piloted?
Exploratory Stages
Following Albert Einstein’s notion that ‘insanity is doing the
same things over and over again and expecting different
results’, senior management realised that something had to

2. change. Consequently, in early 2001 the Chief Technology
Officer of the Lamps business initiated a set of complementary
activities of an exploratory nature in order to catalyse learning
opportunities and help shape a platform for a future vision.
These activities were:
· □ A vision team in the Central Lighting Development Lab.
This involved four employees with an equal male and female
representation, two of the people were new to the development
lab, the other two were well established and anchored informal
leaders. The team’s role was to bring outside inspiration into
the development organisation via lectures, workshops, visits and
books. These activitiesresulted in the start of two ‘out of the
box’ innovation projects in 2002, one of which led to the
invention of Ambilight TV.
· □ An exploratory automotive project for car headlights. This
involved piloting a combination of the Dialog Decision Process
(DDP)1 and a Philips Design innovation process based on socio-
cultural insights.
· □ A Philips Lighting ‘New Business Creation’ (NBC) group.
This involved a team of four senior managers and one lateral
thinker, whose role was to challenge mainstream business
assumptions by asking simple questions. Established as a new
organisational unit in a six month period, the NBC group was
set up to provide the environment for ‘out of the box’ business
development. Once the unit was created, the main open question
was how to fill the NBC idea pipeline?
Think the Lighting Future Project
Building on the experiences of these three exploratory projects
and using other Philips knowledge on radical innovation, the
‘Think the Lighting Future’ project (TTLF) was defined at the
end of 2001. It was established in response to the CEO’s
ambition to identify a 10% top-line growth opportunity
(approximately EUR 500 million) which could be achieved in a
five to seven year time-frame. Senior management was
instrumental in initiating the TTLF project. The project had
three tangible deliverables for the end of 2002:

3. · □ Clarify alternative scope definitions for Philips Lighting
that could deliver 10% top-line growth in the longer term.
· □ Define two to three New Business Creation projects.
· □ Define a process for knowledge sharing and updating the
NBC long-list.
In addition there were several ‘intangible’ aspirations for the
project – for example, it was envisaged that it would:
· □ Provide a ‘growing in opportunity’ for the senior
management team, thus creating commitment for additional
scope.
· □ Prepare for implementation (avoid ‘not invented here
syndrome’) for critical mass of colleagues.
· □ Radiate, let involved colleagues experience that the whole
exercise is about doing different things… and doing them
differently…
· □ Create the confidence to deal with a stretching vision.
‘Think the Lighting Future’ was a ‘presidential project’ with
core team participation from each Lighting business group,
Philips Design and Philips Research: which was – next to its
scope of 10 years ahead – an innovation in itself. In addition,
special attention was put on forming a diverse team to enable
different views to be captured. Importantly this project provided
opportunities for learning and improvement of the corporate
innovation process – for example, the original three-step design
process (information sharing, ideation, idea development and
concept definition) was expanded by a fourth step (translation
to action).
Emphasis was also placed on creating broad ownership from the
beginning both in management via the DDP approach and in the
executing functions via multifunctional workshops.
Subsequently the dialogue decision process was further
expanded to a ‘trialog’ process involving the decision team, the
core team (i.e. the decision preparation team) and the
implementation team.
Vital to orchestrating communication was the set-up of Think
the Lighting Future as an extended Dialogue (trialog) Decision

4. Process around three key innovation dimensions:
· □ People – understanding and serving both end-users’ explicit
current as well as their implicit emerging needs.
· □ Technology – understanding and using current and emerging
technology options to enable user relevant functionality.
· □ Business – understanding current and emerging market
characteristics and dynamics; applying appropriate and future-
proof business models.
Thirty-two colleagues were invited to two workshops. They
came from different innovation backgrounds (marketing,
business development, R&D) and from different Lighting
businesses, Design and Research teams. Maximal possible
global presence was established. Since TTLF was a highly
visible presidential project, workshop participation was seen as
an honour. The workshops served several tangible and
intangible purposes, including:
· □ Enriching the core-team work by existing corporate
knowledge.
· □ Generation of business ideas seeds.
· □ Preparing for later implementation.
· □ Building a ‘performing’ team around a shared vision.
All workshop flows and all tools used during the workshops
were especially designed such that the holistic outcomes became
highly probable by equally and simultaneously focusing on the
different dimensions: people and their needs, technology
enabling new solution spaces and business including generic
competition and existing next to emerging business models
facilitating value creation.
By the end of 2002, TTLF was concluded and was regarded as a
successful exploration and visioning project. It led to the
selection of a ‘theme’ for new business: Atmosphere Provider,
which was about ‘empowering people to become their own light
designers’. It also led to three new business creation projects
and delivered a list of ideas for New Business Creation.
However, no additional turnover had yet been generated. The
real work was about to start…

5. Atmosphere Provider Programme
In July 2003 senior management launched the ‘Atmosphere
Provider’ programme. The programme lasted two and half years
and was given some explicit and several implicit deliverables:
· □ Bring ‘Atmosphere Provider’ as a theme to life.
· ○ Create a ‘need-scape’ for the new innovation area.
· ○ Envisage the boundaries/solution space of the innovation
and growth opportunities.
· □ Initiate the creation of a related patent portfolio.
· □ Prove the business potential by piloting the three new
business creation projects.
· □ Exploration towards new business proposition definition
including initial product concepts.
· ○ Prototyping and market testing.
· ○ Business case development and transfer to mainstream
business.
And implicitly –
· □ Prepare for transfer and scaling up.
· □ Initiate the building of an Atmosphere Provider network
(with shared vision, creativity, cross-functional and discipline
perspectives, embracing the required new way of working, etc.).
· □ Pioneer the end-user driven innovation approach.
The programme’s architecture was designed to ensure cross-
fertilisation between the development of the broader business
theme and the three new business creation projects; emerging
insights from creating the new business were captured via
foundation documents; general observations derived from the
theme development were fed back into NBC projects.
The core of the programme comprised a team of four people: the
overall programme manager who had led the TTLF project and
three project managers, of whom one had been a TTLF core
team member whilst the other two were new to Philips Lighting.
Over time, a small support team became involved: a lighting
designer, an experienced market researcher, a marketing
specialist and several colleagues from Philips Design. The team
was small and flexible; additional skills andcapacity were

6. brought in on an as-needed basis, which in turn required good
communication skills from the project managers and the
commitment from senior management to ensure the needed
resources were made available to the team when required.
Initiation:
· □ 10 July 2003 in the Philips Lighting Senior Management
meeting.
Deliverables:
· □ Bring the Atmosphere Provider theme to life.
· □ Show proof points via business potential in the three
selected projects.
· □ Investment: EUR 2.85 million from August 2003 to
December 2005.
Context of assignment:
· □ Cross-functional with impact on Philips Lighting level
beyond a single Business Group, positioned under Global
Marketing, unclear ownership on executive level, no standard
processes or tools => learn as you go.
Characteristics of assignment:
· □ Innovation for additional profitable growth (out of the box),
market-led, pioneering, emphasis on results in the form of
content, high risk and high reward, phase 1 of change
management.
Core team:
· □ Dorothea Seebode, Gerard Harkin, Benedicte van Houtert,
Paul Brulez, followed up by Stefan Verbrugh (from April 2004).
Extended team:
· □ Markus Reisinger, Liesbeth Ploeg (from Dec.04), Ronald
Dalderup (from Jan.05).
Mindset:
· □ Focus on results, commitment, dialogue.
By the end of 2005:
· □ In total over 1800 people had been involved globally, across
and beyond Philips Lighting.
· □ Three foundation documents were published with over 1000
copies distributed.

7. · □ Patents: > 50 IDs submitted, > 25 patents filed, > 10 patents
in pipeline.
·
Case Questions
1.
Identify the key stages in the development process, starting at
the initial brief to the final selection of the three business cases.
Source: Extract from Dorothea Seebode, Gerard Harkin and
John Bessant (2009) Radical Innovation at Philips Lighting.
Read Case Study 7 and respond to question 2.
Pre-Launch Decisions which Influence Innovation Success
It has been extensively documented in management literature
that an incredibly large share of firms’ investments in
technological innovation do not generate substantial financial
returns. Three main reasons underlying this phenomenon can be
identified. First, technological innovation creates knowledge
and technological assets that often remain largely unexploited.
Various studies show that between 70 and 90% of corporate
technology assets often never get used in core products or lines
of business. Second, the likelihood that an innovation project
reaches completion and that the new product is introduced into
the market is strikingly low. It has been estimated that the
probability of new product commercialisation is about 40% in
many industries, with some cases (e.g., pharmaceutics) where
the mortality of innovation projects is much higher. Finally, a
large share of the innovations that ultimately reach the market
do not experience a satisfactory diffusion and their sales are
discontinued. Empirical studies have shown indeed that on
average 40–50% of fully commercialised new products turn out
to be commercial failures.

8. An important managerial question is however left unanswered:
which are the levers a manager can act upon to achieve adoption
network acceptance and early adopters’ acceptance for a high-
tech innovation, having a given functional content and a set of
technical specifications, which is introduced within the scope of
a given competitive and product strategy (Table 7.5)?
TABLE 7.5 Commercialisation factors influencing the adoption
of innovations
Variable
Description
Timing
– When will the innovation first be launched into the market?
– Will the firm announce the innovation to the press long before
its market launch?
– Will the firm partner with external organisations long before
the official market launch?
Targeting and positioning
– Which market segments will the innovation will be addressed
to?
– Which will be the position of the innovation in the eyes of
potential adopters in each of the targeted market segments?
– Will the firm target different segments as long as the
commercialisation process progresses?
Inter-firm relationships
– Which external organisations will the firm partner with during
the commercialisation of the innovation?
– Which forms of relationships will be most appropriate (e.g.,
licensing agreements, strategic, long-term partnerships) to

9. organise such relationships?
Product
– Which bundle of additional adds-on, services and
functionalities surrounding the ‘core’ innovation will be
included in the basic configuration of the new product?
Distribution
– Which type of distribution strategy (e.g., push or pull) will be
needed to streamline the market penetration of the innovation?
– Which types of distribution channels will be chosen to deliver
the innovation to market (e.g., retail or specialised
distributors)?
– Which critical functions (e.g., customer education) will they
be required to perform?
Advertising and promotion
– Which message will be communicated during the pre-
announcement and post-launch advertising campaign?
– Which types of communication channels will be employed for
these advertising and promotion initiatives (e.g., mass or
specialised channels)?
Pricing
– Which pricing strategy (e.g., skimming or penetration) will be
used for the market introduction of the new product?
– Which pricing strategy will be adopted for complementary
goods and additional services?
The commercialisation processes of 11 technological
innovations, launched in high-technology markets in the past 30
years, were investigated using this approach (Table 7.6).
TABLE 7.6 Successful and unsuccessful innovation examined

10. Radical innovations
Systemic innovations
Unsuccessful innovations
Apple Newton
IBM PC-Junior
Sony Betamax
3DO Interactive Multiplayer
Sony MiniDisc
Apple Newton
Sony Betamax
Successful innovations
Tom Tom GO
Sony Walkman
RIM BlackBerry
Palm Pilot
Nintendo NES
Apple iPod
Comparing the commercialisation of the successful and
unsuccessful systemic innovations in the sample, a number of

11. decisions were taken along the dimensions.
Inter-Firm Relationships
Our analysis indicates that obtaining the support from the
critical members of innovation’s adoption network requires
chiefly a careful administration of the inter-firm relationships
that are established before and along the commercialisation
process.
The decision to prevent other companies (e.g., competitors and
suppliers of complementary hardware and software) from
manufacturing products based on the innovation’s underlying
technology is likely to be a first detrimental decision for the
large-scale adoption of a high-technology innovation. This is
due to the strong network externalities that high-tech markets,
because of their tight interconnectedness, are currently
experiencing. Accordingly, letting the actors of the adoption
network manufacture products based on the innovation’s
technology (e.g., through advantageous out-licensing
agreements) increases the availability of complementary
products and the chances that a potential adopter chooses to
purchase the innovation. This in turn exponentially enhances the
value of the innovation in the eyes of both subsequent adopters
and the other members of the adoption network, in a self-
reinforcing double-loop cycle. The effects of this
commercialisation decision are very clear when comparing the
cases of the Palm Pilot (whose OS operating system was
released for free to all manufacturers of adds-on and software
applications) with that of Sony Betamax (with the Japanese firm
that accepted to licence the underlying technology to Zenith
only more than one year after launch, when the incoming
success of the VHS by JVC was already undisputable).
It also emerges as a critical approach to win the support of the
critical members of the adoption network to enter into long-

12. term, strategic partnerships with them. This allows firms to
share the risks and the costs they incur when supporting a
systemic innovation (e.g., developing and manufacturing ad
hoc, specialised, complementary devices or pieces of software).
This is what Palm did, in 1996, when commercialising its Pilot:
it decided to sign a �20 million agreement with Circuit City to
ensure adequate shelf space and customer education services for
its new product. Similarly Apple, to streamline the acceptance
of the iPod and the associated iTunes Music Store service, was
able to convince a number of record labels (e.g., Sony Music
Entertainment, BMG, EMI, Universal and Warner) to endorse
the new service provision model ensuring a 65% compensation
for each song sold through iTunes. In a similar vein, Nintendo
invested heavily in order to obtain the full support for its NES
from the most important game developers (e.g., Taito, Bandai,
Capcom). This required the Japanese firm to grant above the
average money compensation for each game sold. Sometimes
the innovating firm instead refuses to establish any partnerships
with the members of the adoption network, or simply sets up
arm’s-length, commercial relationships with them, with the aim
of maximising its potential profits from the innovation. This is
evident in the case of 3DO, which failed to establish any forms
of relationship with the developers of software titles and the
manufacturers of consoles for its new Interactive Multiplayer. A
similar phenomenon is clear in the commercialisation of the
Betamax, where Sony refused to partner with video rental
channels and film producers (with the exception of Paramount
Home Video, with which a Joint Venture was established).
A critical member of the adoption network for content-based
innovations is the community of small and highly creative
software and application developers. In order to secure their
support, it is especially critical to develop an easy to use
software authoring kit that is made available for free or at a
very low price. This is what Palm did when it released for free
the application development kit for its Pilot. 3DO, on the other

13. hand, decided to sell the authoring system for the Interactive
Multiplayer for several thousand dollars.
Timing
Besides the form of the inter-firms relationships with the
critical members of the adoption network, it seems that the
timing with which they are established is important in
determining the degree of support they ensure to the innovation.
The analysis indicates that sometimes firms deliberately
postpone the establishment of strategic partnerships with the
adoption network on the assumption that, once the innovation
has taken off in the market, its critical players will support it of
their own accord. However, it often happens that, after an
initial, unexpected growth of the new product’s sales, the
innovation never diffuses in the largest part of the target
market. This is what happened in the commercialisation of the
MiniDisc: Sony refused to partner with consumer electronics
outlets (which played a critical role in ensuring a wide
availability of recorded music albums) in the belief that the new
format would diffuse into the mass market and, as a result, force
outlets to provide the required shelf space. This phenomenon is
due to the fact that the bulk of a high-tech consumer
innovation’s target market is made of people who resist new
products and experience a high level of uncertainty when
evaluating the opportunity to buy them. Although early adopters
might be willing to purchase the new product whilst it is not
backed up by the critical members of the adoption network
(because they are mainly attracted by the technical content and
degree of sophistication of the innovation and are able to more
objectively assess its advantages), this represents an important
signal to later adopters of the value of the innovation, which
helps reduce their resistance and customer uncertainty.
Therefore, although a high-tech innovation may experience an
unexpected sales growth immediately after launch without

14. support from the critical players of the adoption network, it is
of paramount importance to rapidly secure this support, through
the establishment of long-term, strategic partnership, if large-
scale adoption is to be achieved. All firms whose innovations
had experienced a relevant and rapid diffusion in the bulk of
their target market started very early indeed to work with the
adoption network’s critical players. This is clear in the cases of
the Pilot by Palm, the NES by Nintendo and the iPod by Apple.
It often happens that firms rush to market their high-tech
innovations in an attempt to establish them as technological
standards and to quickly recover their R&D investments. This
sometimes leads to the launch of an incomplete product, with
some functionalities not working perfectly, as a result of the
acceleration of development and testing activities. This seems
to have a very negative effect on the attitude developed by early
adopters. Companies sometimes prefer shortening time to
market at the expense of product completeness on the
assumption that the potential technical problems will not affect
the purchasing decision and the satisfaction of the average
member of the target market. In doing so they overlook that the
innovation is adopted immediately after launch by those
customer segments that are most sensitive to the new product’s
technical content and sophistication, and whose opinion about
the new product is key in affecting subsequent purchases. This
erroneous conduct is clear in the commercialisation of the IBM
PC-Junior and the Apple Newton, while there is no sign of new
product acceleration for the successful radical innovations in
the sample (e.g., Tom Tom GO, Sony Walkman and RIM
BlackBerry).
It should be noted that the negative impact of the launch of an
incomplete product is exacerbated by an overblown pre-
announcement campaign, which raises the expectations of early
adopters and leaves them disappointed when a deficient version
reaches the market: their attitudes to the innovation as a whole

15. are thereby negatively affected. This happened with the Apple’s
Newton, which was announced 18 months before the actual
launch and was known as one of the most-hyped and postponed
products for years. Similarly, the PC-Junior was pre-announced
about 12 months before the launch, which fuelled the curiosity,
rumours and enthusiasm that accompanied the new product.
Analysts started referring to the PC-Junior by the nickname
‘Peanut’. Interestingly, IBM itself contributed to nurturing
these expectations by drawing a thick curtain of secrecy over
the new product after having pre-announced it.
Targeting and Positioning
Especially for content-based innovations, it seems that a firm
more easily succeeds in orchestrating the behaviour of the
adoption network’s players and in securing their support if the
positioning of the new product is unambiguous. The experience
of 3DO in the commercialisation of the Interactive Multiplayer
is paradigmatic in this respect. The new, revolutionary console
always lacked a library of software titles that were able to fully
exploit its graphic capabilities. This was partly due to its
unclear positioning: the Multiplayer was sold as a gaming
platform with advanced interactive, learning and educational
capabilities, enabled by its CD-Rom support, that caused
confusion in the developers community about the exact
applications that were required for its commercial success. On
the other hand, the NES by Nintendo was unambiguously
positioned as a gaming system, and the Palm Pilot as a
substitute for personal paper-based organisers.
The incapability to understand that an incomplete new product
is likely to elicit a very negative reaction in the first market
segments that adopt it is also due to a lack of pro-active
targeting of these early adopters. The firms in the sample that
failed to raise a positive post-purchase attitude of early adopters
had not targeted the innovation at any specific market segments

16. after launch. This is clear in the cases of Apple’s Newton and
IBM’s PC-Junior that were aimed at a broadly defined market
made of mass consumers and families with children. It was only
after the first months of sales that managers realised the new
products were being purchased by people with a very different
profile than the average target customer (namely, executives
and companies looking for sales force automation applications,
and managers used to working with a traditional PC at the office
who wanted to bring some work at home). On the other hand,
when commercialising the Walkman, Sony realized that it was
going to be initially purchased by young men fond of sport and
outdoor living, and that the ‘near CD quality’ of sound
reproduction associated with advanced portability of the device
was key in affecting their post-purchase attitude. Similarly,
RIM targeted its BlackBerry immediately after launch to top
executives (e.g., Chief Information Officers, Chief Financial
Officers) or sales agents who had a compelling reason to
receive e-mail messages in real time while travelling for work,
and ensured that this functionality was working perfectly from a
technical point of view.
Product
The aforementioned lack of targeting of the innovation’s early
adopters is detrimental also because it often prevents firms from
devising a configuration of the whole product at launch that
meets early adopters’ expectations, which are usually very
different from the intended average target customer’s. For
instance, the IBM PC-Junior was not compatible with many of
the applications available for the traditional PC, and the Apple
Newton lacked connectivity with PC and Macintosh at launch. It
is noteworthy and seemingly nonsensical that both IBM and
Apple had sponsored these capabilities of the new products
during the pre-announcement campaign, which exacerbates the
negative effect of an inappropriate product configuration at
launch over early adopters’ satisfaction. This might be the

17. result of the attempt to anticipate the launch of the innovation
without a clear targeting of the early customers.
On the other hand, the successful innovations in the sample do
not seem to have missed any critical functionalities to satisfy
early adopters’ expectations. How could this be achieved? The
analysis suggests that an effective commercialisation strategy
could need to include a limited number of simple functionalities
in the configuration of the new product at launch, designed to
satisfy the compelling reason to purchase of early adopters. The
product configuration is enriched with additional functionalities
as long as the innovation diffuses in the less innovative
segments of the target market. An essential prerequisite for
successfully adopting this approach, which increases the
likelihood that the new product is complete at launch despite a
firm’s attempt to rush it to market, is a careful targeting of the
innovation’s early customers. This approach was for instance
adopted by RIM in the commercialisation of the BlackBerry. In
order to improve the chances of satisfying the new product’s
early customers, RIM decided to design and launch a simplified
version of the BlackBerry, called Desktop Redirector, that could
work using as a mail server any PCs or laptops and only
featured the revolutionary ‘push’ approach to mail delivery.
Agenda, address book, and synchronisation with PC were added
as long as the BlackBerry diffused in the market. On the other
hand, Apple tried to include as many complex functionalities as
possible in the first version of the Newton (e.g., infrared
communication, advanced handwriting recognition, contact
manager, organiser, synchronisation with both PC and
Macintosh, traditional and wireless phone connectivity), some
of which were absent or did not function perfectly at launch,
resulting in a very negative attitude from early adopters.
Advertising and Promotion
The role of the pre-announcement campaign in influencing the

18. post-purchase attitude of early adopters has already been
discussed in this section of the chapter. In particular, it has
emerged that an early pre-announcement of the new product
generates great expectations in the innovation’s early adopters.
If the new product at launch fails to fulfil these expectations,
because it is incomplete as a result of a rush to market, or
because it lacks some functionalities that are critical for early
adopters, the latter turn out to be highly dissatisfied with the
innovation, and their opinion about it freezes any further
diffusion of the new product. Therefore, if a firm chooses to
pre-announce early a high-tech innovation, it must be sure to
arrive on the market with a complete product having the few,
critical functionalities that are necessary to satisfy the
compelling reason to buy of early adopters. This is consistent
with literature on New Product Pre-announcements (NPPAs),
which indicates that pre-announcing and then missing
introduction dates for new products is not detrimental per se in
terms of customer acceptance. It becomes problematic only in
the case when the new product, once it reaches the market, fails
to fulfil the expectations of early adopters nurtured by the pre-
announcement campaign. This is exactly what happened with
the commercialisation of the Apple Newton and the IBM PC-
Junior.
Case Questions
2. What are the critical differences in the timing and positioning
of successful versus unsuccessful innovations?
Source: Federico Frattini (2010) Achieving adoption network
and early adopters acceptance for technological innovations, in
Tidd, J. (ed.) Gaining Momentum: managing the diffusion of
innovations. Imperial College Press, London.