Why gadget makers can't keep a secret

03.11.2006
We live in, arguably, the golden age of leaks about yet-to-be-released gadgets. Reading about these leaks is great fun for enthusiastic consumers eager to know details about forthcoming media players, smart phones, online services and the like.

But while these leaks are fun for consumers and keep columnists like me busy, they're bad news for the companies that produce gadgets. In the ongoing battle for wallet-share, consumer electronics companies want desperately to keep product plans secret.

These companies compete in a cut-throat, zero-sum marketplace in which each pours enormous resources into beating the others to market with the best combinations of design, technology and features. In this highly competitive environment, secrecy enables companies to blindside competitors and gain what venture capitalists (and annoying technology columnists) call "first-mover advantage." It can also slow down counterfeiters, who in recent years have been able to get exact copies of gadgets into the market even before the originals ship. Perhaps the best reason to clamp down on leaks, however, is to control the all-important first impression of a product in the public eye.

Gadget vendors employ a wide range of tools to control information leaks about feature sets, branding, marketing strategy, design, partnerships and technology. Tools include nondisclosure agreements, proprietary information agreements and even the old-fashioned practice of threatening to fire employees who blab about product plans.

But 10 years ago, keeping gadget information secret was easy -- companies had only to withhold information from the press. Today, such secrets remain nearly impossible to keep. So why can't these guys keep a secret?

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