Tuesday, 7 July 2015

Planned obsolescence

From Wikipedia, the free encyclopedia/ Blogger Ref http://www.p2pfoundation.net/Transfinancial_Economics

Jump to: navigation, search
Planned obsolescence or built-in obsolescence[1] in industrial design is a policy of planning or designing a product with an artificially limited useful life, so it will become obsolete, that is, unfashionable or no longer functional after a certain period of time. [2] The rationale behind the strategy is to generate short-term sales volume by reducing the time between repeat purchases (referred to as "shortening the replacement cycle"), until customers catch on and move to another product platform.
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. In a competitive industry, this is a risky strategy because when consumers catch on to this, they decide to buy from competitors instead.
Planned obsolescence tends to work best when a producer has at least an oligopoly.[3] 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.[citation needed] For example, 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.[4]

History and origins of the phrase[edit]

Further information: Phoebus cartel
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 the concept is often misattributed to Sloan.[5] 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.

Ending the Depression Through Planned Obsolescence, by Bernard London, 1932
Origins of planned obsolescence go back at least as far as 1932 with Bernard London's pamphlet Ending the Depression Through Planned Obsolescence.[6] 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!'"

Types of planned obsolescence[edit]

Lifespan-limiting design[edit]

The design of all 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.[citation needed] 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 replaced 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 capacitor.[7]
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.[8]

Style obsolescence[edit]

Obsolescence of desirability or stylistic 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.
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 that the original products remain 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.

Systemic obsolescence[edit]

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. Common examples of planned systemic obsolescence include not accommodating for forward compatibility in software, or routinely changing screws or fasteners so that they cannot easily be operated with existing tools.

Programmed obsolescence[edit]

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 (with ink toners, up to 50% of the toner is often still full[9]). This constitutes programmed obsolescence, in that there is no random component to the decline in function.[citation needed]

Advantages and disadvantages of planned obsolescence[edit]

Further information: Waste hierarchy
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.
Also, for industries, planned obsolescence stimulates demand by encouraging purchasers/putting them under pressure to buy sooner if they still want a functioning product. These products can be bought from the same manufacturer (a replacement part or a newer model), or from a competitor who might also rely on planned obsolescence.[1] Especially in developed countries (where many industries already face a saturated market), this technique is often necessary for producers to maintain their level of revenue.
While planned obsolescence is appealing to producers, it can also do significant harm to the society in the form of negative externalities. Continuously replacing, rather than repairing, products creates more waste and pollution, uses more natural resources, and results in more consumer spending. Planned obsolescence can thus 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.[10]
There is also 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.
One workaround for consumers 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.

Critics and supporters[edit]

Shortening the replacement cycle has many critics as well as supporters.
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."[11]
Critics such as Vance Packard claim the process wastes and exploits customers. With psychological obsolescence, resources are used up making changes, often cosmetic changes, that are not of great value to the customer.
Some people, such as Ronny Balcaen, have proposed to create a new label to counter the diminishing quality of products due to the planned obsolescence technique.[9] Others have defended planned obsolescence as a necessary driving force behind innovation and economic growth.[citation needed]
Supporters claim planned obsolescence 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.
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."[2]
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."[10]

Planned obsolescence in software[edit]

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.[12] 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.[13] 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.

The Future of Planned Obsolescence[edit]

Planned obsolescence has been assumed a necessity when it comes to stimulating consumption, however, this practice has come into question. In the 21st century, the arrival of economic and environmental crisis has made a change in the consciousness of people. The need to maintain a minimum product renewal date does not mean that abuses have to be accepted such as the tons of waste that could be avoided.
After years of not taking this issue seriously, the French Assembly has taken a step forward. It has established a fine of up to 300,000 euros and jail terms of up to two years for those manufacturers planning the death of their products in advance. The rule is not only relevant because of the sanctions that it establishes but also because it is the first time that a legislation recognizes openly the existence of planned obsolescence. These techniques may include "a deliberate introduction of a flaw, a weakness, a scheduled stop, a technical limitation, incompatibility or other obstacles for repair", reads the text regarding what may be considered as planned obsolescence.
France is not the only government in which this kind of practice is being used. The European Union is also beginning to address this problem. The European Economic and Social Committee (EESC), an advisory body of the EU, has approved a dictum which totally bans planned obsolescence. This dictum also proposes additional measures to combat this practice. "We propose three lines of action. Firstly, companies can facilitate repair. Secondly, the use of social awareness campaigns to combat aesthetic obsolescence; the constant renewal of unused products, particularly clothes and telephones. And finally, the introduction of a labeling system which indicates the durability of a device, so the consumer has the possibility of choosing whether if he/she prefers to buy a cheap product or a more expensive, more durable product", explains Carlos Trias Pinto, president of the Consultative Commission on Industrial Change EESC, the group that developed the dictum. All in all, what is clear is that the movement against planned obsolescence Is strong in the EU which may also lead in the implementation of similar dicta in the rest of the continents as well.[14]

See also[edit]


  1. ^ Jump up to: a b "Computer Electronics: Blu-Ray". ComputerInfoWeb.com. 2008. Retrieved September 20, 2008. 
  2. ^ Jump up to: a b Bulow, Jeremy (November 1986). "An Economic Theory of Planned Obsolescence" (PDF). The Quarterly Journal of Economics (New York: John Wiley & Sons, Inc.) 101 (4): 729–749. doi:10.2307/1884176. Retrieved April 9, 2013. 
  3. Jump up ^ Orbach, Barak (2004). "The Durapolist Puzzle: Monopoly Power in Durable-Goods Market". Yale Journal on Regulation, vol. 21, pp. 67–118. Retrieved May 18, 2008. 
  4. Jump up ^ Dickinson, Torry D.; Schaeffer, Robert K. (2001). Fast Forward: Work, Gender, and Protest in a Changing World. Rowman & Littlefield. pp. 55–6. ISBN 0-7425-0895-1. 
  5. Jump up ^ Babaian, Sharon (1998). The Most Benevolent Machine: A Historical Assessment of Cycles in Canada. Ottawa: National Museum of Science and Technology. p. 97. ISBN 0-660-91670-3. 
  6. Jump up ^ Bernard London's pamphlet
  7. Jump up ^ http://htv-gmbh.de/media/pdf/presse/Testhaus_HTV_deckt_Sollbruchstellen_auf_%28Infosat_07_-_2013%29.pdf
  8. Jump up ^ The Shady World of Repair Manuals: Copyrighting for Planned Obsolescence | Wired Opinion | Wired.com
  9. ^ Jump up to: a b RTBF documentary "L'obsolescence programmée" by Xavier Vanbuggenhout
  10. ^ Jump up to: a b Guiltinan, Joseph Guiltinan (2009). "Creative Destruction and Destructive Creations: Environmental Ethics and Planned Obsolescence". Journal of Business Ethics 89. 
  11. Jump up ^ "Planned obsolescence". The Economists. Retrieved 8 February 2014. 
  12. Jump up ^ "Idea: Planned obsolescence". The Economist. March 25, 2009. Retrieved May 29, 2011. 
  13. Jump up ^ Cassia, Fernando (March 28, 2007). "Open Source, the only weapon against 'planned obsolescence'". The Inquirer. Retrieved August 2, 2012. 
  14. Jump up ^ Lavadoras con muerte anunciada. (2014, November 2). Retrieved May 19, 2015, from http://economia.elpais.com/economia/2014/10/31/actualidad/1414761553_335774.html

Further reading[edit]

1 comment:

  1. Easily Increase Your ClickBank Banner Traffic And Commissions

    Bannerizer made it easy for you to promote ClickBank products by banners, simply visit Bannerizer, and grab the banner codes for your chosen ClickBank products or use the Universal ClickBank Banner Rotator Tool to promote all of the available ClickBank products.


Will Big Data keeps its promise?

Blogger Ref   https://wiki.p2pfoundation.net/Transfinancial_Economics The following link has very important implications for economics e...