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Planned obsolescence or built-in obsolescence in industrial design is a policy of planning or designing a product with a limited useful life, so it will become obsolete, that is, unfashionable or no longer functional after a certain period of time. Planned obsolescence has potential benefits for a producer because to obtain continuing use of the product the consumer is under pressure to purchase again, whether from the same manufacturer (a replacement part or a newer model), or from a competitor who might also rely on planned obsolescence.
For an industry, planned obsolescence stimulates demand by encouraging purchasers to buy sooner if they still want a functioning product. There is however the potential backlash of consumers who learn that the manufacturer invested money to make the product obsolete faster; such consumers might turn to a producer (if any exists) that offers a more durable alternative.
Estimates of planned obsolescence can influence a company's decisions about product engineering. 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.
In the United States, automotive design reached a turning point in 1924 when the American national automobile market began reaching saturation. To maintain unit sales, General Motors head Alfred P. Sloan Jr. suggested annual model-year design changes to convince car owners that they needed to buy a new replacement each year, an idea borrowed from the bicycle industry (though Sloan usually gets the credit, or blame). Critics called his strategy "planned obsolescence". Sloan preferred the term "dynamic obsolescence". This strategy had far-reaching effects on the auto business, the field of product design, and eventually the American economy. The smaller players could not maintain the pace and expense of yearly re-styling. Henry Ford did not like the model-year change because he clung to an engineer's notions of simplicity, economies of scale, and design integrity. GM surpassed Ford's sales in 1931 and became the dominant company in the industry thereafter. The frequent design changes also made it necessary to use a body-on-frame rather than the lighter, but less flexible,[clarification needed] monocoque design used by most European automakers.
Origins of planned obsolescence go back at least as far as 1932 with Bernard London (fr)'s pamphlet Ending the Depression Through Planned Obsolescence. The essence of London's plan would have the government impose a legal obsolescence on consumer articles, to stimulate and perpetuate consumption.
However, the phrase was first popularized in 1954 by Brooks Stevens, an American industrial designer. Stevens was due to give a talk at an advertising conference in Minneapolis in 1954. Without giving it much thought, he used the term as the title of his talk. From that point on, "planned obsolescence" became Stevens' catchphrase. By his definition, planned obsolescence was "Instilling in the buyer the desire to own something a little newer, a little better, a little sooner than is necessary."
The phrase was quickly taken up by others, but Stevens' definition was challenged. By the late 1950s, planned obsolescence had become a commonly used term for products designed to break easily or to quickly go out of style. In fact, the concept was so widely recognized that in 1959 Volkswagen mocked it in an advertising campaign. While acknowledging the widespread use of planned obsolescence among automobile manufacturers, Volkswagen pitched itself as an alternative. "We do not believe in planned obsolescence", the ads suggested. "We don't change a car for the sake of change."
In 1960, cultural critic Vance Packard published The Waste Makers, promoted as an exposé of "the systematic attempt of business to make us wasteful, debt-ridden, permanently discontented individuals".
Packard divided planned obsolescence into two sub categories: obsolescence of desirability and obsolescence of function. "Obsolescence of desirability", also called "psychological obsolescence", referred to marketers' attempts to wear out a product in the owner's mind. Packard quoted industrial designer George Nelson, who wrote: "Design... is an attempt to make a contribution through change. When no contribution is made or can be made, the only process available for giving the illusion of change is 'styling!'"
The rationale behind the strategy is to generate long-term sales volume by reducing the time between repeat purchases, (referred to as shortening the replacement cycle). Firms that pursue this strategy believe that the additional sales revenue it creates more than offsets the additional costs of research and development and opportunity costs of existing product line cannibalization. The rewards are by no means certain: in a competitive industry, this can be a risky strategy because consumers may decide to buy from competitors.
Shortening the replacement cycle has many critics as well as supporters. Critics such as Vance Packard claim the process wastes and exploits customers. Resources are used up making changes, often cosmetic changes, that are not of great value to the customer. Supporters claim it drives technological advances and contributes to material well-being. They claim that a market structure of planned obsolescence and rapid innovation may be preferred to long-lasting products and slow innovation. In a fast-paced competitive industry market success requires that products are made obsolete by actively developing replacements. Waiting for a competitor to make products obsolete is a sure guarantee of future demise.
The main concern of the opponents of planned obsolescence is not the existence of the process, but its possible postponement. They are concerned that technological improvements are not introduced even though they could be. They are worried that marketers will refrain from developing new products, or postpone their introduction because of product cannibalization issues. For example, if the payback period for a product is five years, a firm might refrain from introducing a new product for at least five years even though it may be possible for them to launch in three years. This postponement is only feasible in monopolistic markets. In more competitive markets rival firms will take advantage of the postponement and launch their own products. However, if a firm develops a product improvement but keeps that improvement secret, that firm effectively maintains a monopoly on that improvement, unless and until another firm independently develops the same product improvement, which is unlikely if it is a particularly innovative or creative one.
The design of most consumer products includes an expected average lifetime permeating all stages of development. Thus, it must be decided early in the design of a complex product how long it is designed to last so that each component can be made to those specifications. Since all matter is subject to entropy, it is impossible for any designed object to retain its full function forever; all products will ultimately break down, no matter what steps are taken. Limited lifespan is only a sign of planned obsolescence if the lifespan of the product is rendered artificially short by design.
A common method of deliberately limiting a product's useful life is to use inferior materials in critical areas, or deliberately suboptimal component layouts which cause excessive wear. Using soft metal in screws and cheap plastic instead of metal in stress-bearing components will increase the speed at which a product will become inoperable through normal usage and render it prone to breakage from even minor forms of abnormal usage. For example, small, brittle plastic gears in toys are extremely prone to damage if the toy is played with roughly, which can easily destroy key functions of the toy and force the purchase of a replacement.
Some products are powered by a battery (cell) that is soldered into the circuitry or enclosed in a sealed housing, instead of being easily replaceable by a new battery. Although the product owner could resolder in a new battery, most owners will not bother or do not have the required skills. Some products contain rechargeable batteries that are not user-replaceable after they have worn down, so that consumers are required to pay for the manufacturer to replace the battery, or to buy a new product.
Planned obsolescence is sometimes achieved by placing a heat-sensitive component adjacent to a component that is expected to get hot. A common example is LCD screens with heat-sensitive electrolytic capacitors placed next to power components which may be 100°C or hotter; this heat greatly reduces the lifespan of the electrolytic capacitorr.
The ultimate examples of such design are single-use versions of traditionally durable goods, such as disposable cameras, where the customer must purchase an entire new product after using them a single time. Such products are often designed to be impossible to service; for example, a cheap "throwaway" digital watch may have a casing which is simply sealed in the factory, with no designed ability for the user to access the interior without destroying the watch entirely.
Often the goal of such design is to make the cost of repairs comparable to the replacement cost, or to prevent any form of servicing of the product at all. In 2012, Toshiba was criticized for issuing cease-and-desist letters to the owner of a website that hosted its copyrighted repair manuals, to the detriment of the independent and home repair market.
Planned systemic obsolescence is the deliberate attempt to make a product obsolete by altering the system in which it is used in such a way as to make its continued use difficult. For example, needlessly eliminating backward compatibility in software, or routinely changing screws or fasteners so that they cannot easily be operated with existing tools.
Many products are primarily desirable for aesthetic rather than functional reasons; the most obvious example of such a product is clothing. Such products experience a cycle of desirability referred to as a fashion cycle. By continually introducing new aesthetics, and retargeting or discontinuing older designs, a manufacturer can "ride the fashion cycle," allowing for constant sales despite the original products remaining fully functional. To a more limited extent this is also true of some consumer electronic products, where manufacturers will release slightly updated products at regular intervals and emphasize their value as status symbols.
Planned style obsolescence occurs when designers change the styling of products so customers will purchase products more frequently, due to the decrease in the perceived desirability of unfashionable items.
In some cases, notification may be combined with the deliberate disabling of a product to prevent it from working, thus requiring the buyer to purchase a replacement. Example: inkjet printer manufacturers who employ smart chips in their ink cartridges to prevent them from being used after a certain threshold (number of pages, time, etc.), even though the cartridge may still contain usable ink or could be refilled. This constitutes programmed obsolescence, in that there is no random component to the decline in function.
Planned obsolescence tends to work best when a producer has at least an oligopoly. 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 asymmetry between the producer – who knows how long the product was designed to last – and the consumer, who does not. When a market becomes more competitive, product lifespans tend to increase. When Japanese vehicles with longer lifespans entered the American market in the 1960s and 1970s, American carmakers were forced to respond by building more durable products.
While planned obsolescence is appealing to producers, there can also be significant harm to society in the form of negative externalities. Continuously replacing, rather than repairing, products creates more waste, pollution, uses more natural resources, and results in more consumer spending. One workaround for these setbacks can involve a consumer getting more tech-savvy about them so they can jury-rig them to work with newer equipment similar to a MacGyverism; additionally, upcycling the resources can offset the budget for home projects, whereas downcycling allows for more generalized purposes to live on. These consumer strategies can counter the setbacks.
Others have defended planned obsolescence as a necessary driving force behind innovation and economic growth.
If marketers expect a product to become obsolete, they can design it to last for a specific lifetime. If a product will be technically or stylistically obsolete in five years, many marketers will design the product so it will only last for that time. This is done through a technical process called value engineering. An example is home entertainment electronics which tend to be designed and built with moving components like motors and gears that last until technical or stylistic innovations make them obsolete.
These products could be built with higher-grade components, but they are not because this would impose an unnecessary cost on the purchaser – see overengineering. Value engineering will reduce the cost of making the product and lower the price to consumers. A company will typically use the least expensive components that satisfy the product's lifetime projections.
The use of value engineering techniques have led to planned obsolescence being associated with product deterioration and inferior quality. Vance Packard claimed that this could give engineering a bad name, because it directed creative engineering energies toward short-term market ends rather than more lofty and ambitious engineering goals.
Software companies are sometimes thought to deliberately drop support for older technologies as a calculated attempt to force users to purchase new products to replace those made obsolete. Most proprietary software will ultimately reach an end-of-life point, at which the supplier will cease updates and support. As open source software can always be updated and maintained by somebody else, the user is not at the sole mercy of a proprietary vendor. Software which is abandoned by the manufacturer support-wise is sometimes called abandonware.
Vendor lock-in through incompatibility, DRM and hardware restriction can effectively expand obsolescence of a "part" to the "whole" product, although each of the parts could otherwise be general-purpose. A personal computer that due to deliberate restrictions can only run a specific operating system, which only allows playback of files from a specific source, becomes significantly less useful when the source is not available any more.
In popular culture planned obsolescence is often associated with negative emotions and supposedly hurts the consumer, but many times the exact opposite is claimed. Philip Kotler argues that: “Much so-called planned obsolescence is the working of the competitive and technological forces in a free society—forces that lead to ever-improving goods and services.”
Consider for example a consumer who bought a PC in order to enjoy video games. That PC could be manufactured, at the expense of higher cost and price, to last for a decade or longer; but the consumer is likely to replace it sooner for a better model, although motivations by style obsolescence enter the scene. It might be uneconomical, and in some cases not even ecological, to use more or better resources in order to manufacture products that would last many years longer than consumers are willing to use them (see: value engineering, overengineering). Otherwise, planned obsolescence occurs when consumers desire changes in design due to fashion or similar psychological desires. Thus the constant changes in the products are often demanded by consumers from producers. This is the reason why planned obsolescence can be observed mainly in highly innovative or fashion industries, where the pace of innovation or changes in fashion driven by consumer desires dictates short life cycles of products. That doesn't apply so well to data storage devices in a PC used for anything more serious than games: even if the user is going to replace a hard disk drive after a few years of use for volume or speed reasons, it breaking even one day before a complete replacement is likely to lead to data loss with potentially serious consequences.
A different case can be made for monopoly markets, or possibly for some oligopoly markets, where planned obsolescence may occur at the expense of the consumer. Jeremy Bulow argues that "monopolists are shown to desire uneconomically short useful lives for their goods. Oligopolists have the monopolist's incentive for short lives as well as a second incentive that may either increase or decrease their chosen durability."
Nevertheless, planned obsolescence can have a negative impact on the environment in aggregate. Even when planned obsolescence might help to save scarce resources per unit produced, it tends to increase output in aggregate, since due to laws of supply and demand decreases in cost and price will eventually result in increases in demand and consumption. However, the negative environmental impacts of planned obsolescence are dependent also on the process of production.
This poses the following ethical dilemma: while planned obsolescence may help to accelerate innovation, economic growth and improve wellbeing of consumers, it is true that it may also create social costs by harming the environment. According to Joseph Guiltinan "Pro-environment product design and marketing practices and innovative government policies may alleviate the problem over time. However, given the current lack of understanding about consumer replacement and disposal behavior, it is questionable as to whether these practices and policies will be sufficiently informed to be effective."