Monday, May 27, 2013

Sony and "The First Mover Advantage Fallacy"

Sony's SmartWatch
Although first to market it might
only help competitors come up
with better offerings
One of the topics I discussed in my book, Living in the Innovation Age, is the fallacy of the first mover advantage. While there are cases where first movers have been highly successful, there are plenty of cases of disillusionment and despair as well. I used the meteoric success of TiVo followed by a decade of sagging profit as a case-in-point in my book. 

On October 12, I blogged about GM's failed attempts at capitalizing its first mover advantage with its early introduction of the redesigned "2013 Chevy Malibu" in February 2012. 

The May 6 - May 12 issue of Businessweek discusses yet another example of the so called first mover advantage fallacy. The victim this time? Sony. 

Sony introduced its first smart watch, LiveView, in 2010. As a new product in the growing and lucrative smart device marketplace, it was interesting but lacked in features and was mired with kinks. A more recent version called the SmartWatch is priced at $130, is about the size of an iPod nano, has a 1.3-inch touchscreen, and wirelessly connects to Android smartphones using Bluetooth technology. The gadget alerts users to incoming calls and allows them to reply to e-mails or texts with an array of pre-written messages. It even connects to Facebook and Twitter and controls a wearer’s phone-based music library. 

Sales are struggling though.

Sony’s failure to gain traction with the SmartWatch is the latest in a long line of first-mover advantages the electronics giant has squandered. Well known failures include the CliĆ©, a Palm OS-based personal digital assistant that allowed users to listen to music, play games, and watch videos, which Sony introduced a year before Apple's iPod; a failed music platform similar to iTunes despite owning the distribution rights to thousands of popular songs and films; and an e-reader called the Portable Reader System, which Sony introduced a year ahead and with 600,000 titles, more than twice as many as Amazon’s Kindle.

Sources with inside knowledge of the company have attributed Sony's struggles to research that has been too inward-looking and deliberative and not focusing enough on early customer feedback. Perhaps Sony could learn and benefit from an increasingly popular concept known as the "Minimum Viable Product", which found its origins helping smaller entrepreneurial companies launch new products but seems equally applicable to larger companies such as Sony as well. 

The Bottom Line
Don't be too quick to assume a positive correlation between successful innovation and being first to market. As Mito Securities analyst Keita Wakabayashi puts it, "Sony was ahead of its rivals to release a watch, but it takes more than an idea to create a hit product. It’s about bringing a product that has functionalities that people would want and marketing the product in the right way.” So remember this the next time you have an innovative idea and instinctively want to rush to be first to market. You might just be helping out your competitors in the process...


  1. In a related story: Apple's iWatch not coming until late 2014, says analyst - FierceMobileIT.

    Check it out at:

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