The things you own go out of style and gadgets break; but what do you do when companies build those features into the products you buy – at no extra cost?
Designed to Be Replaced
Planned obsolescence is when products are engineered to become unfashionable, or unusable, after a certain period of time – and companies use this as a business strategy! From consumer electronics to household goods and clothing, planned obsolescence can be found across many industries. The rationale: generate long-term sales by forcing consumers to buy in volume over a long period of time.
The fashion industry is an area where planned obsolescence comes built-in. One year tube tops are in, the next they’re out. Last year’s denim jackets are designed to be replaced by this year’s models.
Now that’s pretty benign but the dark side of planned obsolescence is best illustrated by the example of the nylon stocking. The invention of nylon transformed an entire industry because it proved that we could now engineer polymers; but when Dupont came up with the nylon stocking scientists were told to play around until the synthetic fiber was more fragile and would “run” more often. More runs meant that women would have to buy more nylons.
When you consider that original nylon was used for parachutes in the military it seems kind of ridiculous that a pair of stocking only lasts a week or so.
It’s hard not to see this tactic as anything more than a company’s sinister motive to line their pockets with cash.
Not Just Nylons
There are many more products out there designed to wear out and break down. Take the humble light bulb. How often does a light bulb blow out, forcing you to replace it?
Think about that as you consider the Centennial Light, a light bulb manufactured by the Shelby Electric Company in the 1890s and continues to function after 113 years.
Isn’t that incredible? The Centennial Light was around before the Wright Brothers ever set foot at Kitty Hawk.
Of course how do you make money on a product that lasts a century? And so light bulbs were artificially capped; in 1924 a cartel limited the lifespan of a light bulb to 1000 hours. Before that light bulbs had an average lifespan of 2500 hours.
Not much has changed since then. Planned obsolescence is often designed into products to encourage a customer to buy the new updated version. The amount of ink in your printer is measured by a microchip which shuts off printing when ink drops below a certain level, not when your printer runs out of ink. This measure ensures that the ink and revenues are always flowing.
The Tech Cycle
Many phones are designed with only current technology in mind, to the exclusion of future technological developments. Mobile phones are not made to be future-proof. USB ports and connections that fit current products will not work in a few years and the customer will need a new phone.
The strategy of obsolescence is common in the computer industry. A company like Samsung may already be working on the phone that will replace the one that is currently being launched. Intel works on the next generation of computer chips before marketing the last one.
It’s standard practice these days. Think about how frustrating it is when a manufacturer releases software updates that aren’t compatible with your older hardware. That can be applied to almost any kind of software, where companies build in upward compatibility as a way to nudge you into upgrading.
Planned obsolescence is everywhere you look. The average laptop breaks within three to four years. Even automobiles aren’t safe!
In 1924 the automobile market had reached saturation. That means that pretty much everyone that wanted a car had one. To maintain sales the head of General Motors suggested annual model-design changes. He wanted to convince car owners that they needed a new car each year.
This mindset continues today. Is the 2016 Volkswagen Jetta any different from the 2015 model? As a result of car companies churning out models year after year, it is becoming increasingly difficult to find old car parts. Automobile manufacturers don’t want to sell you spare parts; they want you to buy a new car!
Consider the case of the new Apple watch, which tech repair and upgrade website iFixit claims has intentional obsolescence built into it.
“The S1 SiP [internal system in package] is encased in resin, and is further held in place by a mess of glue and soldered ribbon connectors. In short, basic component replacements look nearly impossible.”
Making it increasingly difficult to repair or upgrade your device means you just have to go out and get a new one when the time comes, and that’s more money flowing into Apple’s coffers.
Saturation and Startups
So why haven’t consumers risen up? Why don’t we stand up and say we won’t take it anymore?
Who knows? Maybe we’ve bought into it so much that we don’t even realize it’s happening. Or we’ve acquiesced and now expect small, iterated improvement to the exclusion of valuable change.
What’s really needed is a model that puts responsibility back onto the company to provide better products. Better producer responsibility laws could go a long way to achieving that goal.
Planned obsolescence tends to happen in saturated markets. When you’re in a saturated market, one where the amount of products is at a maximum, planned obsolescence can seem like smart economics. Make some small design changes and you can increase revenue many times over.
This often takes place in more mature markets, which leaves them open to disruption by entrepreneurs. Startups don’t have the time to structure a business in a way where products are designed to fail. They are competing with established giants and planned obsolescence is one area where they can fight hard and fight well.
To find out more, head over to Wall Street Survivor.