Tech Time Warp: The Osborne Effect

Posted by Kate Johanns on Apr 21, 2017 11:30:00 AM

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Osborne Computer.jpgNext time you watch a meticulously planned product launch, remember one of the most infamous—the April 18, 1983, announcement of the successor to the Osborne 1, the first commercially successful portable computer.

Adam Osborne was riding high. In 1981, his Osborne Computer Corporation had introduced the enormously successful Osborne 1. Designed by Lee Felsenstein—a member of the Homebrew Computer Club—the Osborne 1 cost $1,795. It weighed a manageable 24 pounds and could fit under an airplane seat. The “luggable” had only a 5-inch screen, but it had two floppy drives and a portable battery pack. Osborne initially thought he would sell 10,000 units throughout the Osborne 1’s entire product lifecycle, but within eight months, 11,000 had been sold, and at its peak, 10,000 were sold a month.

But Osborne kept perfecting the product, responding to competition from the likes of IBM, Apple, and Kaypro. On April 18, 1983, he announced that a new product was in the works, hinting at larger screens, smaller overall size, etc. He was referencing either the Osborne Executive (introduced in May 1983 for $2,495) or the Osborne Vixen (which was smaller than the Osborne 1 and ran MS-DOS).

Fallout from a premature announcement

Osborne’s announcement certainly piqued consumers’ interest. They began cancelling existing orders for the Osborne 1, preferring to wait for the newer model. Unfortunately, Osborne had let the cat out of the bag early—production of the newer model was behind schedule. The company’s cash got so tight that Osborne filed for bankruptcy in September 1983 and never fully recovered, even after the 1984 launch of the Vixen.

The product launch blunder came to be known as the “Osborne Effect,” and anytime a company experiences slumping sales of an existing product after announcing a product in the pipeline, the term reappears (see Sega in 1997 and Nokia and RIM in the early 2010s). The problem is, with the benefit of hindsight, business experts concede that the Osborne Computer Corporation’s downfall was due more to increased competition than an ill-timed announcement. Still, the “Osborne Effect” overshadows Adam Osborne’s many accomplishments.

Barracuda MSP blog

Tech Time Warp is a weekly feature that looks back at interesting moments and milestones in tech history.

Photo: Karl Baron via Flickr.com. Used under CC 2.0 License

Topics: Tech Time Warp

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