Planned obsolescence
Planned obsolescence is the conscious decision on the part of an agency to produce a consumer product that will become obsolete in a defined time frame. Planned obsolescence has great benefits for a producer in that it means a consumer will buy their product repeatedly, as their old one is no longer functional or desirable. It exists in many different products from vehicles to lightbulbs, from buildings to software.Planned obsolescence was first developed in the 1920s and 1930s when mass production had opened every minute aspect of the production process to exacting analysis.
Estimates of planned obsolescence can influence a company's decisions about product engineering; there is little business reason to make a product that lasts longer than anyone is expected to use it. Therefore the company can use the least expensive components that satisfy product lifetime projections. Such decisions are part of a broader discipline known as value engineering.
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2 Economics of planned obsolescence |
Planned obsolescence is made more likely by having the cost of repairs being comparable to replacement costs, or by actually refusing to provide service or parts any longer. Or a product might even never have been serviceable. For instance Microsoft no longer will provide customer service for Windows 3.1, creating a greater incentive to buy a more up to date Microsoft product.
Creating new lines of products that do not interoperate with older products can also make an older model quickly obsolete, forcing replacement.
Planned obsolescence tends to work best when a producer has at least a partial monopoly. Before introducing a planned obsolescence the producer has to know that the consumer is at least somewhat likely to buy a replacement from them. In these cases of planned obsolescence there is an information gap between the producer, who knows how long the product was designed to last, and the consumer who did not. Planned obsolescence is thus considered by many to be one of the market inefficiencies of a monopoly.
When a market becomes more competitive product lifespans tend to increase. When Japanese and European vehicles with longer lifespans entered the American market in the 1960s and 1970s the American carmakers were forced to respond by building more durable products.
However, there are some industries where there is significant competition and consumers have chosen to go for products that will fail anyway. For instance lightbulbs that last ,any years can easily be made for a price that would be considerably lower per hour of lifetime that conventional ones. These bulbs are used by almost businesses and industries. Consumers, however, tend to balk at paying two or three times as much even when it might save them money in the end.
Some consumers are also perfectly content with planned obsolescence. The buildings housing suburban box stores such as Walmart and Home Depot are not built to last any longer than twenty-five years. In this instance the retailers want the cheapest buildings possible. Stores are relocated or redesigned often enough that a longer lifespan would be useless to the consumer.
Even in a situation where planned obsolescence is appealing to both producer and consumer there can also be significant harm to society in the form of negative externalities. Continuously replacing, rather than repairing products, creates more waste, pollution, and uses more natural resources.
Others have defended planned obsolescence as a necessary driving force behind innovation and economic growth. Many products, such as DVDs, become both cheaper and more useful the more people have them. Would DVD players have been adopted as quickly, or even at all, if VCRs didn't break irreparably after three years?
Planned obsolescence will also tend to benefit those companies with the most modern and up to date products, thus encouraging extra investment in research and development that often has large positive externalities.
There is a tendency for people towards conservatism in their purchases, a predilection some economist believe to be excessive and harmful to the economy. These economists would argue, for instance, that Microsoft's efforts to encourage consumers to move from Windows 95 to Windows XP by withdrawing support and interoperability for the older operating system is a necessary corrective to people's natural aversion to change.
See also: obsolescenceTypes of planned obsolescence
Technical or functional obsolescence
The design of most consumer products includes much focus of expected average lifetime. For instance auto-parts maker would run the extra cost of ensuring part last for forty years if few cars spend more than five years on the road. Thus early in the design of a complex product it must be decided how long it is designed to last so that each component can be made to those specifications.Style obsolescence
Marketing may be driven primarily by aesthetic design. Product categories where this is the case display a fashion cycle. By continually introducing new designs and retargeting or discontinuing others, a manufacturer can "ride the fashion cycle." Examples of such product categories include automobiles (style obsolescence), with a strict yearly schedule of new models, and the almost entirely style-driven clothing industry (riding the fashion cycle).Expiry dates
Many products today have expiry dates long before they become inedible or unusable. Potato chips or soft drinks have dates that if exceeded will not be hazardous. Products like milk and yogurt also err greatly on the side of caution meaning that vast amounts of perfectly good food is thrown out each year that must then be replaced by consumers. Other products like razors or toothbrushes also have dates past which they can be used with no ill effects.Economics of planned obsolescence