Industry Forecasting Methods

Every industry catering to every market has teams of visionaries looking to consumer trends. They are constantly attempting to forecast the consumer demands that will propel their company to prosperity in the forward near-term. As old trends are always replaced by new trends this becomes an ongoing process which is related very closely with research and development. Taking a brief look at Apple and its iPod, they pose an excellent illustration of how a company can climb to the top by correctly forecasting industry and market trends. They also pose and excellent illustration as to how quickly they could fall from that pedestal should their industry forecasting methods fail to keep up with current trends.

Product life spans are getting shorter and shorter these days.  As companies invest heavily in research and development to keep up with emerging trends in consumer shopping habits newer model goods are quickly phasing out older model goods in a never ending circle of survival.  When companies spend to upgrade their current product offerings they are essentially canablizing their own sales on older modeled items.  However, if they don’t perform this continual investment then they quickly begin to lose their customers to their competitors who are investing in their own product improvements.  Ironically this is a cycle of spend money to stay afloat and not spend money to get ahead, and the hope is to get lucky as Apple did with it’s iPod in the early part of the 2000s.

The iPod was a product born from a company that was established and had hung around for a couple decades. Apple hadn’t been a market leader because of Microsoft, but it wasn’t a laggard either. They were simply existing and profitable. What made Apple a market leader however was a big bet in demand forecasting on a new market in an old industry. Apple bet ahead of others that with the dawn of digital music customers would like to take their music with them portably instead of having it stationary with their computer. With other companies investing their resources in CDs and portable CD players Apple released the first iPod and within a couple years had established itself as the only true dominant player in the digital music player industry.

Apple did not accomplish this feat solely because it aimed to however. The company did get lucky in that their product became the standard mp3 player in the global economy despite the many competitors that tried to challenge it. Indeed this is quite interesting seeing as though Apple existed with the roles reversed for years living in the shadow of the PC operating system Windows. The whole point of product development and industry tending though is to count on continual research and development to keep you in the game until you hit the big one. Professional ethics dictate that this be done amicably and Apple did just that when it saw a new market emerging and disrupted the portable music industry players by entering and offering what was to become the standard for the decade.

Apple, however, is back to where it was a decade ago. Despite the arguments that Apple is far stronger a company than it was 10 years ago I would argue that Apple is merely a few years away from being a dead company. Internally this probably causes some amount of stress requiring conflict management and plenty of industry forecasting disagreements. If they were to stop improving their product lines market demands would turn this industry leader into a has-been manufacturer of old trends. Apple must now and continually implement trend forecasting for where the industry is going and what the market consumers demand to remain on the top.

Currently trend forecasting suggests that we are entering an era in digital video that is similar to the dawn of digital audio 8-10 years ago. Consumer’s ability to purchase, copy, and store video files on their computers is becoming feasible as computers can now be purchased with many hundreds of gigabytes of storage. In addition to storage technicalities bandwidth technological advances are making it increasingly feasible to download and even stream these very same videos from the internet directly to your media center. Computers and TVs are becoming more harmonious and portable players are now incorporating video capabilities. In order for Apple’s iPod to remain dominant they need to forecast which of these trends are going to expand into everyday life. Video storage and streaming downloaded video I believe are going to be real big in the near future.

Apple’s research and development team will have plenty of employee motivation in incorporating new technological developments into their leading hardware, the iPod, and leading software and digital store, iTunes. While they work on improving their product and service offerings, their marketing team will be the leaders in inmproving customer lifetime value by guiding the public to their products and assuring their customers that they are evolving and remain ahead of the competition in terms of product functionality, versatility, and beauty.

Apple has always been a company capable of staying current. As they have recently enjoyed a number of years as an industry leader through their good fortune of creating a product that has become a staple for their consuming market, they now must return to the what brought the company this far in the first place; investment in a great research and development team to keep the company current with consumer demands and a marketing team to persuade the public via in-store and email marketing campaigns that their newer products not only satisfy as they have before but now cater to emerging technologies and emerging demands. They must market to stay not just afloat but stay floating on top of the rest. I’d like to think that the visionaries for Apple are at least as bright as myself; let’s hope they are able to forecast the industry and market trends that allow them to stay current for many more years to come.