Scientists are coming up with new innovations each day. Some of them look very promising while many others do not have any hope of surviving in the competitive IT market. But often, even the most promising technologies die out, or their development process is abandoned by their inventors. This is not only a problem with small IT firms, but with large multinational companies as well.
Microsoft recently announced its decision to cancel the production of the tablet called the Courier. This tablet was seen as a good move by Microsoft to compete with the popular iPad. Though Microsoft has not given any reason for the cancellation, there could be many reasons behind it.
Understanding Market Analogy
One reason why a company may abandon the production of a new technology could be the lack of resources to finance the production the technology. Production of information and communication technologies requires a lot of resources in terms of finances, quality staff and expensive equipment. If these are lacking in the company, then the production cannot go on, or may start and be abandoned in the middle. Any company facing this challenge may like to abandon the production totally.
An IT company may also abandon production of its innovative product if it will not get enough profit from the sale of the product. Prices of products in the IT market are determined by the forces of demand and supply, but competitors also play a major role. Competing products and services may offer what a firm’s product has to offer, but at a cheaper cost. This will force the firm to also reduce its prices, hence making little or no return on the amount of money invested in production. They may even be running at a loss.
Reasons for Abandonment
An IT company may also withdraw its product or service from the market because of a deficiency or fault in the product. Even though IT firms take time to perform all quality tests on their products to ensure they meet the highest standards, some products may still come out with some faults. Some of these faults are not easily detected until the product is being used. This may cause the producer to pause production and correct the errors. If it takes time to correct the error, the product might be withdrawn altogether.
IT is innovating every second and new products are always being introduced. Production of IT tools and equipment take time as the manufacturer has to ensure the highest quality standards are met. Sometimes by the time the product has gone through these entire tests and is ready to be released, the technology might be obsolete. Some other company might have release another product which is much advanced. It could also be that some other company has pirated the technology, used it for a product and is selling.
Whatever be the reason, a company reserves the right to cancel the production of one of its product if it deems it not beneficial to its growth and survival. Though it can cause further loss to the company, the management decision may be taken after careful consideration of various factors in the abandoning of various technologies.