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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, economics 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'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.
A common method of planned obsolescence is to use inferior materials that are prone to eventually breaking or otherwise becoming damaged. In the case of wheeled can openers, colluding manufacturers make the can opener's teeth out of relatively soft metal that is prone to deformation (and consequent malfunction due to flattening of the teeth) after using the opener for a while. Some can opener manufacturers make one-wheeled 'butterfly' can openers with a rotating axis piece made of poor-quality plastic that is very prone to breakage. Similarly, some manufacturers of ear protectors and some manufacturers of sunglasses use poor-quality plastic that is prone to embrittlement and breakage. Screws are often made with a combination of relatively soft metal and an opening that is too shallow to grip the screwdriver head well, such that deformation of the metal gripping the screwdriver head (and consequent malfunction due to the inability of the screwdriver head to grip the screw) is highly likely.
Planned obsolescence is made more likely by making the cost of repairs comparable to the replacement cost, or by refusing to provide service or parts any longer. A product might even never have been serviceable. Creating new lines of products that do not interoperate with older products can also make an older model quickly obsolete, forcing replacement. Examples include change of formats and peripheral devices in computers, change of formats in home audio recordings and movies (gramophone record to Magnetic tape sound recordings to CDs and VHS video to DVDs to Blu-ray).
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 a service of battery replacement 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 capacitor. Another example is computers in which heat-sensitive capacitors are placed exactly in the hot air flow which results from cooling the processor. 
Planned functional obsolescence is a type of technical obsolescence in which companies introduce new technology which replaces the old. The old products do not have the same capabilities or functionality as the new ones. For example a company that sold consumer video tape decks while they were developing DVD recorders was engaging in planned obsolescence. They were actively planning to make their existing product (video tape) obsolete by developing a substitute product (recordable DVD) with greater functionality (better recording quality). Associated products that are complements to the old products also become obsolete with the introduction of new products. An example of this is video tape holders which became obsolete when video tapes and video tape decks became obsolete.
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. New software is frequently introduced that is not compatible with older software. This makes the older software largely obsolete. Even though an older version of a word processing program is operating correctly, it might not be able to read data saved by newer versions. The same thing may be said of printers and refill cartridges, for example.
Another way of introducing systemic obsolescence is to eliminate service and maintenance for a product. If a product fails, the user is forced to purchase a new one. This strategy seldom works because there are typically third parties that are prepared to perform the service if parts are still available. To combat this third party repairing – say in the case of replacing a laser assembly in a DVD drive — soldered points are on the printed circuit board without explanation so, unless the user knows which ones to remove, the item cannot be repaired. In turn, third parties can overcome this by reverse-engineering (a legal practice), but at added expense which may drive up the price of third-party repair to the point that it is economically unattractive to consumers.
Marketing may be driven primarily by aesthetic design. Product categories in this case display a fashion cycle. By continually introducing new designs, and retargeting or discontinuing others, a manufacturer can "ride the fashion cycle". Such product categories include automobiles (style obsolescence), with a strict yearly schedule of new models; the almost entirely style-driven clothing industry (riding the fashion cycle); and the mobile phone industries with constant minor feature enhancements and restyling.
Planned style obsolescence occurs when marketers change the styling of products so customers will purchase products more frequently. The style changes are designed to make owners of the old model feel out of date.
Some companies have developed a version of obsolescence in which the product informs the user when it is time to buy a replacement. Examples of this include water filters that display a replacement notice after a predefined time and disposable razors that have a strip that changes color. Whether the user is notified before the product has actually deteriorated or the product simply deteriorates more quickly than is necessary, planned obsolescence is the result. In this way planned obsolescence may be introduced without the company going to the expense of developing a "more up to date" replacement model.
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. 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.
When a product consumes a resource, as when a computer printer consumes ink and paper, it is generally understood that this is unavoidable. But some products also consume related resources that need not be consumed. For example, a 4‑colour inkjet printer that is used mostly for printing in gray scale and seldom in colour may be pre-programmed to deplete colour inks while printing black, so that the colour cartridge(s) must be replaced more often.
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; and upcycling the resources can offset the budget for home projects, whereas downcycling allows for more generalized purposes to live on. And those 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 manufacturer will cease updates and support. As open source software can always be updated and maintained, 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.
It may sometimes be economically infeasible to offer perpetual support for software. This especially applies to network-related software, where continued development work may be necessary to close new entry points for malicious attackers and malicious software. Covering these costs would either require a continual maintenance fee or a much higher upfront cost. Thus network-related software may reach an actual end-of-life, where support has been withdrawn from the provider and continued use of the software would yield an unacceptable security risk to the customer.
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Planned obsolescence has these consequences: