The cutting edge is where tech companies say they want to be, but being a follower can be just as prudent according to new research from Duke University's Fuqua School of Business.

Professor John Joseph found that cell phone companies who were first with new technology tended to launch several new features at once, but didn't perform any better financially than companies that waited to see what features took off before introducing them.

"You can do well under both conditions," he said. "You can be a first mover as long as you introduce broadly, and you can be a second mover as long as you are selective, picking narrowly but picking wisely, and you can have similar performance outcomes."

Joseph and Ronald Klingebiel of the Frankfurt School of Finance and Management studied the launch of new mobile phone features between 2004 and 2008, when the introduction of new hardware was at its peak. Their findings, "Entry Timing and Innovation Strategy in Feature Phones," were recently published online in the Strategic Management Journal.

The researchers focused on the pre-smartphone era, before the Apple iPhone, and before the development focus shifted to new software and applications. It was a time when different kinds of hardware — flip phones, sliders, bricks — were battling for supremacy in the cell phone market.

"This was a unique period because you didn't have a dominant player like Apple," Joseph said. "You had a bunch of different players."

Joseph and Klingebiel confined their study to Germany. That's generally the first market in Europe where new features were released. It was also an easier market to track and rule out other factors in their results, Joseph said.

They studied 69 new technologies — moveable cameras, Wi-Fi, USB ports and so on — launched in 393 varieties of phone by 46 different companies during the four years.

"Companies didn't know what the dominant design would be," Joseph said. "They were trying to figure it out and throwing stuff out there to see what would stick."

The researchers compared the order in which companies introduced features to the financial return they saw from being first, or from being among the followers. They considered a feature a hit if it generated an average of €2 million a month more than similar phones without it. The team also interviewed 68 managers at 12 phone manufacturers about their product release strategies.

"We began to see a pattern whereby early movers tended to launch many technologies at the same time, some of which were successful, some of which were not," Joseph said. "The later movers were very narrow in what they introduced."

The potential for extra revenue from a new feature peaked between six and 12 months after it was launched, the study found. In November 2004, HTC became the first company to add a music player to its phones. The music player was generating almost €2 million in monthly revenue six months after HTC introduced it. That's when Sony-Ericsson added its music player. Another six months later the music player was bringing in about €7 million per month for the companies that had introduced it.

By the time Samsung added the feature, three years later, the benefit was minimal. Companies that follow the leaders take less risk for less reward, Joseph said.

"The big money is going to be made at the very beginning," he said. "The problem, of course, is that the company that introduces broadly, they do well on the hits but get stung by the flops. The later guys don't get the big bump, but they get a little bump and they avoid the flops."

Nokia flopped with the twisting clam shell phone, which had a screen that could lift and twist. The company launched it in September 2004 and saw no benefit. LG also introduced the feature a few months later without success.

"Companies that couldn't move quickly enough to kill these products ended up having performance problems," Joseph said. "If you are going to be a second mover, you have to be an expert winner-picker. You have to introduce only those things that are going to yield a decent return."

Joseph said the lessons of the study can be applied to any industry characterized by rapid innovation and intense competition.

"It's reflective of any consumer electronics industry today that is in this period of high growth in the early stage," he said. "It's not just about introducing one thing quickly. It's about the breadth of your innovation portfolio at any given time."