How do companies predict if an innovation will be attractive to consumers?

Companies do not have unlimited money so they have to predict what consumers want when allocating their resources for R&D. 

This article discusses how companies research what is attractive to consumers and how companies attempt to differentiate their smartphones. 

Gizmodo

Companies want to find any feature that will differentiate their product from the competition, however this is only half the battle since the feature also will have to be preferred by consumers in order for them to purchase it. Companies use market research to predict if a product will be successful.

 In the article "How Apple Conducts Market Research and Keeps ios Source Code Locked Down" the author analyzes that it is very difficult for companies to know exactly what consumers want in an innovation since the consumer has never seen anything like it. Companies cannot release their ideas or test them because that would allow the competition to steal or copy ideas. Companies therefore have to research the opinions of consumers such as what they use most in a smartphone and what they wish would be improved to see if the innovation will be attractive.

Companies, in this case Apple, can do this using different types of market research such as surveys to study things like consumer preferences and how they vary based on region, customer satisfaction of products, and factors causing consumer to purchase their product. Companies use the results and feedback from the research to identify consumer wants and then predict whether the innovation matches these wants.