TechPotential: Predicting Technology Success
Companies are constantly launching new products that they hope will strike a chord with consumers. But how did Apple's iPod hit it big while WebTV and the tablet PC failed to catch on with mainstream consumers? The answer lies in our new report, "TechPotential: Predicting Technology Success." Our research concludes that success or failure rests on a simple truth: Consumers adopt products when they can easily identify the benefits of those products and when they believe those benefits are worth the effort and cost.

Forrester's Evaluation Of New Products
TechPotential is a tool that Forrester has developed to forecast sales of new consumer technology products and services. It evaluates three aspects of a product's launch -- consumer demand, usability and design, and marketing execution -- to project five-year unit sales of new products. The growth curve is driven by three factors:

• Consumer demand. Consumer demand, which is determined by the consumer's negotiation of the cost and benefits of the product, dictates the potential five-year growth of a product by identifying a universe of possible consumers, analyzing comparable products, and estimating potential consumer demand.

• Usability. We rate a product's design and usability based on four criteria: 1) consumer first impression; 2) installation; 3) first use; and 4) long-term value. Usability can drive word of mouth for a new product and determines how fast a product can grow.

• Execution. Finally, we assess the producer's ability to effectively market and distribute the product and to forge partnerships that will benefit the product's uptake. These marketing factors can slow or quicken the pace at which a new product sells, especially in the first year.

TechPotential And Real Products
TechPotential's analysis can be applied to a wide array of products and services. Here are a few examples:

• TiVo entered a market with a stable "universe" of potential consumers -- cable or satellite households -- and it established solid footing on the usability front with a stellar first impression and continued value. However, execution factors hurt the rate of TiVo adoption, as marketing efforts early on could have been stronger.

• Netflix has seen potential consumer demand for its service increase as more households adopt DVD players. Potential sales are reinforced by effortless usability, which drives word of mouth for the service. But Netflix will likely see slower growth rates going forward as it competes in a more mature market characterized by fewer new DVD player owners, as well as the availability of cable VOD and video over the Internet.

• Slingbox has a limited target market, which stymies potential sales growth. And while usability scores high, Slingbox requires a complex and lengthy installation process, which affects word of mouth for this product. Slingbox scores well on execution, with press coverage standing in for marketing, and widespread distribution.

How You Can Use TechPotential
TechPotential is designed to reveal not just which products will succeed but also why -- and how to redirect strategy to maximize that success. A TechPotential evaluation can be useful across an organization and for people in many different business capacities:

• Executives can use TechPotential to prioritize projects.

• Product managers can use TechPotential to prioritize launch decisions.

• Venture capitalists can use TechPotential to cut through the clutter.

• Entrepreneurs can use TechPotential to focus their businesses.

Research Referenced In This Issue Advertisers Face TV Reality (39320) Apple Kick-Starts A Legal Video Download Market (38054) CES 2005: Digital Devices Looking For Content (36303) Consumer Trust In Media Rebounds In 2005 (38794) Cord-Cutting Grows Into The US Mainstream (39170) Internet Appliances Don't Connect (12950) New Distribution Expands The Market For Movies (39185) Online Teens Are Not Immune To Phishing (39213) Segmenting Consumers By Technology Preference (36952) Tablet PC: Generation "1.5" (34145) TechPotential: Predicting Technology Success (37510) Teen Online Ad Targeting: Proceed With Caution (39351) The Consumer Device Adoption Cycle (38010) The Mind Of The DVR User: Acquisition And Features (34436) The State Of Consumer Electronics Online Lead Referrals (39354) The State Of Internet Access (38510) The US Will Not Mandate Net Neutrality (39310) User-Generated Content Ambushes The Media Biz (39187) What Communications Services Are Ethnic Minorities Buying? (39297) Who Has A Cross-Channel Media Audience? (38793) World Usability Day 2005 — Usability Gone Mainstream (38171)

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