Some Of The Biggest Product Flops of 2011 – Ashley Push Up top honours

pd December 29, 2011 0

A number of incredible new products were launched this year.  Apple (AAPL) introduced the iPhone 4S and Boeing (BA)  introduced the 787 Dreamliner.  The 787 Dreamliner is a fuel-efficient jet built of carbon composite which finally had its first commercial flight.  However not all products and services launched this year did well.  Some failed terribley. 24/7 Wall St. looked at some of biggest product launches of 2011 in order to identify some of the worst of the lot.

Products generally fail because they are either inferior versions of already successful products (RIMM and Netflix fall into this) or they have little to no demand (Ashley Push UP here).

Research In Motion’s (RIMM) PlayBook is the greatest example of the former. There is no room for a poorly designed tablet in a market dominated by the upmarket iPad and its inexpensive cousin Kindle Fire. The Playbook was widely panned. RIM publicly blamed its weak sales on competitive shifts in the tablet market, referring to the release of Kindle Fire.

Many companies also often fail to understand consumer sentiment and, as a result, do not accurately estimate demand for the product. When Netflix (NFLX) announced it would spin off its DVD-by-mail service in the form of a new service called Qwikster, customers were outraged. Nobody wanted the new site and nobody wanted to pay extra money for it. As a result, it failed before it even got off the ground. The Qwikster blunder ended up costing Netflix many customers.  Some estimates have the loss in customers over 800,000 and nearng 1,000,000.

Sometimes companies are just stupid.  This year The Ashley Push Up Triangle from Abercrombie & Finch seems to epitomize that.  And let’s not forget Mars Needs Moms, perhpas the worst performing huge budget film since Howard the Duck.

1. Ashley Push Up Triangle > Company: Abercrombie & Fitch

While no stranger to controversy, Abercrombie & Fitch (NYSE: ANF) seemed  to have crossed a line this time. In March, 2011, the retailer unveiled its  spring line for Abercrombie Kids, a division targeting children ages 8 to 14.  Included in the line was the Ashley Push Up Triangle, a bikini top with  padding. The launch prompted a violent response from parent groups. Several  child development experts also criticized the top because it sexualized young  girls. At first, Abercrombie tried to address the concerns by reclassifying the  top as padded and saying it was not intended for very young girls. It stated on  Facebook: “We’ve re-categorized the Ashley swimsuit as padded. We agree with  those who say it is best ‘suited’ for girls age 12 and older.” But while the  bottoms are still available, the bikini top is no longer featured on the  company’s website.

2. Qwikster > Company: Netflix

In September 2011, Netflix (NASDAQ: NFLX) announced that it would be  separating its online streaming service and its DVD mail service. Streaming was  going to continue under the Netflix brand, while DVD-by-mail was going to  operate under a new website called Qwikster. The change and the accompanying  increase in prices outraged customers, leading the company to kill off Qwikster  before it was even launched. CEO Reed Hastings announced this decision in a blog  post on the company’s website in which he began, “I messed up. I owe everyone an  explanation.” The blog post was mobbed with more than 27,000 comments from angry  customers. The ordeal cost the company approximately 800,000 customers.

3. Volt > Company: General Motors

GM (NYSE: GM) was originally so excited about the Volt that the company had  announced in January it was speeding up its roll-out by six months. But by  November the excitement had fizzled out. Larry Nitz, GM’s executive director for  vehicle electrification told Reuters, “It’s naive to think that the world is  going to switch tomorrow to EVs [electric vehicles].” Indeed, sales for the  vehicle have been consistently low. Only 125 models were sold in July 2011. This  was after GM spokeswoman Michelle Bunker was quoted as saying that the Volt was “virtually sold out” due to its popularity — a statement later shown to be  misguided. Adding insult to injury, Chevy Volts are under investigation for  fires involving the cars’ lithium-ion batteries. For concerned Volt owners, GM  has offered free loaner cars.

4. HTC Status (Facebook Phone) > Company:  AT&T/HTC

In June of this year, AT&T (NYSE: T) announced the HTC Status. The Status  was the first, and likely the last, smartphone with a dedicated Facebook share  button. At the time of its launch, AT&T hoped it would be incredibly popular  among Facebook users. “We can’t wait to put the HTC Status in the hands of our  young customers who will waste no time tapping into Facebook to update their  friends,” said AT&T Senior VP of Devices, AT&T Mobility and Consumer  Markets Jeff Bradley in a statement. But sales were significantly lower than the  company had originally expected, and rumors that the phone would be discontinued  quickly spread. Given the ease with which users can access Facebook on other  smartphones, the case for owning the Status was not very strong. Despite its low  sales, AT&T has defended its product, stating, “The HTC Status is a great  product and our plans for it to be part of our portfolio haven’t changed.”

5. PlayBook > Company: Research In Motion

The PlayBook was one of the most anticipated consumer electronic products of  2011 and “one of RIM’s most important roll-outs,” as The Wall Street  Journal put it. It was the company’s first attempt at competing with Apple  in the tablet space. Leveraging the success of the BlackBerry, many hoped it  would be the businessman’s answer to the iPad. Unfortunately, the BlackBerry App  World had few well-regarded apps, critical to compete with the iPad and Apple’s  App Store. Following poor sales, RIM (NASDAQ: RIMM) lowered its sales target for  the second quarter of 2011 to one-third of what it had been originally,  according to research firm DigiTimes. In a statement, RIM blamed the poor sales  on “several factors, including recent shifts in the competitive dynamics of the  tablet market,” by which it was referring to the popular Kindle Fire. The  company attempted to get its product off the ground with aggressive promotions,  which caused it to lose $485 million in discounts on the tablet in the third  quarter.

6. Fiat 500 > Company: Fiat

This year, Fiat released its new 500 — a three door car that is under 12 ft.  long. The car was expected to be a big seller, rivaling BMW’s Mini. Even before  the car’s launch, however, detractors were predicting failure. Alan Mulally, CEO  of Ford (NYSE: F), stated in Panorama magazine, “I do not see large  market in the U.S.A. for a smaller car than the Fiesta. Those that tried  failed.” He was right. According to online magazine DailyTech, “Fiat  expected to sell 50,000 500s during 2011 in North America. Through the first  seven months of 2011, Fiat sold fewer than 12,000.” Sales were so poor that  Chrysler Group, which manages the Fiat brand in the United States, ousted U.S.  chief Laura Soave this past November.

7. Mars Needs Moms > Company: Disney

Following the release of Avatar in 2009, Hollywood had a new cash  cow in the form of 3-D films. This all changed with the release of director  Simon Wells’s Mars Needs Moms — a flop of epic proportions. Disney  (NYSE: DIS), of course, was expecting another hit. The film cost $175 million to  make. In its opening weekend it brought in just $6.9 million. According to movie  data website The Numbers, Mars Needs Moms lost an estimated $130  million in worldwide gross sales, the biggest money loser of all time.  Journalist Brooks Barnes wrote in the New York Times, “In the movie  business, sometimes a flop is just a flop. Then there are misses so disastrous  that they send signals to broad swaths of Hollywood.” Mars Needs Moms  signaled that the market has become saturated and that digitally animated family  films are not the sure thing they once were.

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