6 Infamous Product Leaks

By Kate Robertson | May 10, 2010 AAA
6 Infamous Product Leaks

The techno-blogosphere can't stop talking about Gray Powell, and for good reason. According to Gizmodo, the 27-year-old was hanging out in a bar in March in Redwood City, California, and did what countless people have done: he lost his cell phone. The hitch? It wasn't just any phone. The blog reported that Powell was testing out a next-generation iPhone, disguised as a regular iPhone, and the poor guy may have just ended his budding career at Apple.

IN PICTURES: 5 Ways To Control Emotional Spending

It's rare for a physical object to get leaked to the public before it's ready for consumption, so it's hard to say what impact the security breach will have on sales. But here's a glance back at some infamous leaks of the past.

  1. Movie: "X-Men Origins: Wolverine"
    An estimated 4.5 million comic book and action movie lovers around the world downloaded a leaked version of "X-Men Origins: Wolverine" a month before its May 2009 release. Although Twentieth Century Fox called in the FBI to investigate, reps at the studio emphasized that the online version wasn't the finished product. Special effects, title fonts and other important details weren't included in the online version, and the film company encouraged filmgoers to fork up the dough for theatre tickets if they were going to say they'd seen the real deal.
    The strategy worked. On opening day, Wolverine took in $35 million and was number one at the box office. Worldwide, Fox studios blamed the leak for preventing the film from making more on opening night, even though it made an estimated $158 million its first weekend, making it a huge financial success. (It may be the most prestigious film festival and competition in the world, but does winning Cannes lead to winning at the box office? Find out in Do Cannes Winners Cash In?)

  2. Album: "Chinese Democracy", Guns N' Roses
    It took 14 years to finish, more than 20 band members and additional musicians, five producers and a reported $14 million; maybe Axl Rose's masterpiece was doomed to fail. But it probably didn't help that after all that time, work and money, various versions of songs on the album were leaked up to five months before its November 2008 release.
    Even though bloggers reported that the FBI was making house calls, mixed reviews popped up all over the internet. Some called it as good as the band's celebrated work of the '80s and '90s, while others called it overly ambitious and too eclectic. But by the time the final product was released, the band sold just 261,000 copies in its first week and was beat out for the number one spot on the Billboard charts by Kanye West's "808s & Heartbreak". (For more, check out 6 Reasons Why Products Fail.)

  3. Book: "Twilight: Midnight Sun", Stephenie Meyer
    Whatever you think of Stephenie Meyer's series of novels about a high school student who falls in love with a vampire, the four-part series has earned the stay-at-home mother of three a ton of coin, made the careers of an attractive troupe of young actors and created a ravenously obsessive audience.
    Meyer planned to capitalize further on her series by re-writing the first novel from the perspective of vamp Edward, the main character's main squeeze. But the author had to scrap the plan when the first 12 chapters were leaked to the internet. A very frustrated Meyer decided to publish the book on her website for fans to read for free. A good literary decision? Definitely. A good business decision? It's hard to say.

  4. Video Game: "Halo 3"
    This first-person shooter video game was developed by Bungie for the Xbox 360. And video gamers are positively obsessed with it. Months before its September 2007 release, an almost-finished version of the game, code-named Epsilon, leaked to the internet. Microsoft punished overzealous gamers who played the Epsilon version by banning them from using their "live" accounts until the year 9999.
    Despite the leak, the game was the best-seller of the year and grossed $300 million in its first week. This week, perhaps in an effort to avoid another problem, Bungie released a beta version of the next installment of the Halo series, "Halo: Reach". Gamers are already predicting that it will be the best-selling game of 2010. (New ways to benefit from this industry have emerged over the last few years. The best part is, they're very profitable. Learn more in Play Video Games; Become A Millionaire.)

  5. Technology: iPad
    Not just for geeks, anyone who uses a computer had likely read theories about what the new iPad, now available in the U.S. and set for international release at the end of this month, would be like. The slim, portable computer that's essentially a hybrid of a Mac and an iPhone was referred to as the Apple "tablet" for months while the company maintained tight lips about the product.
    Just one night before Steve Jobs made the official announcement about the gadget's name and release date in January, tech blogs buzzed about what they thought could be photos of the computer. The photos proved to be accurate representations of a prototype for the product, and the price ($499) was much lower than what internet media had estimated. Though some have a few complaints about the iPad (no camera for video-chat? Seriously?), about one million have been sold in the U.S. since it hit stores last month. (For more, see Hype It Like Steve Jobs.)

  6. Cars: General Motors Plans
    Soon after the American government bailed GM out, documents given to American politicians were leaked that showed that for the first time ever, an American automotive company planned to build cars in China and import them into the United States by 2011. Auto workers, their unions and their supporters responded with fury, complaining that even more auto-making jobs were not up for outsourcing.
    Even though GM car sales in America have dropped dramatically and the company is struggling to maintain its market in the continent through aggressive marketing campaigns and cutbacks, sales in China have steadily risen in the last five years. GM also plans to focus on greener vehicles like hybrids, plug-in and electric cars in that country in the near future. (Learn more in 7 Hot Hybrids: Will They Save You Money On Gas?)

Not the End of the World
Even though companies treat product leaks seriously, it doesn't seem like there's actually that much harm. What matters is the type of product being produced, and if it's the type that internet-savvy people will use more than once (unlike a film or a book) or can't get without paying for it (unlike a video game or an album). A leak can't, for example, get in the way of an innovative, useful physical object's success (like an iPad), nor can it change the direction of a dying local industry (GM).

And who knows how involved a company actually is in some product leaks - as they say, there's no such thing as bad press, or, in the age of information overload, buzz is buzz.

Still feeling uninformed? Read this week's financial news highlights in Water Cooler Finance: Buffett's Armed and Greece Keeps Falling.

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