Legal Definitions - complementary products

Complementary products are goods or services that are typically consumed or used together. The demand for one product is often directly linked to the demand for the other, meaning that an increase in the popularity or availability of one can lead to an increase in the demand for its complement, and vice-versa. These products enhance each other's value or utility when used in conjunction.

Here are some examples:

• Imagine a company that manufactures a popular brand of espresso machines. The coffee pods specifically designed for these machines are a complementary product. As more people purchase the espresso machines, the demand for the compatible coffee pods naturally increases, because the machines cannot function as intended without them. Conversely, if a new, highly desirable flavor of coffee pod is released, it might encourage more consumers to buy the associated espresso machine.

• Consider the relationship between smartphones and mobile applications (apps). While a smartphone can perform basic functions on its own, its full utility and value are significantly enhanced by the availability and use of various apps. When a new, groundbreaking app is released that requires a specific operating system or hardware capability, it can drive demand for the smartphones that support it. Similarly, the continuous development of innovative apps makes smartphones more appealing and useful to consumers.

• Think about a business that sells home security camera systems. A complementary product would be a cloud storage subscription service that allows users to save and access their recorded footage remotely. While the cameras can record locally, the cloud service adds significant value by providing off-site backup, remote viewing capabilities, and longer storage periods. An increase in sales of the camera systems will likely lead to an increase in subscriptions for the cloud storage, as customers seek to maximize the functionality and security offered by their new equipment.