What is Planned Obsolescence?
Planned obsolescence is a business strategy in which products are deliberately designed to have a limited lifespan, encouraging consumers to purchase replacements or upgraded versions frequently. This approach, which has been around for decades, ensures that companies maintain a consistent revenue stream by fostering the need for new products. Initially used in industries like fashion and automobiles, planned obsolescence has evolved into a common practice across various sectors, particularly in technology.
The term was first popularised in the 1920s when car manufacturers started to release annual updates to entice customers into buying newer models despite the older cars functioning perfectly. This idea spread to other industries, making it a widespread practice to shorten a product’s lifecycle intentionally. However, the ethical and environmental consequences have led to its regulation in certain countries.
How Does Planned Obsolescence Work?
Planned obsolescence manifests in various forms. Companies employ several strategies to ensure that their products stop working after a certain period or seem outdated, compelling consumers to purchase a new version. The three main types of planned obsolescence are technical, perceived, and functional.
Technical Obsolescence
Technical obsolescence occurs when a product is engineered to fail after a certain period. This is common in consumer electronics, where parts wear out or become irreparable. A famous example is with smartphones, which are designed with non-replaceable batteries. After a few years, the battery performance deteriorates, and the lack of easy replacements forces users to buy a new phone instead of repairing the old one. Apple was once accused of slowing down older iPhones, prompting users to upgrade to newer models. Although the company argued this was to protect battery health, the backlash emphasised consumers’ frustrations with planned obsolescence.
Perceived Obsolescence
Perceived obsolescence focuses on fashion and design rather than functionality. It occurs when products are made to feel outdated due to changes in design rather than being technically obsolete. This is prevalent in industries like fashion and automobiles. For example, car manufacturers release new models with slight design changes, making previous models seem less desirable, even though they function just as well. Fast fashion brands also engage in perceived obsolescence by introducing frequent, trendy clothing lines, encouraging consumers to buy new items even if their wardrobe is wonderful.
Functional Obsolescence
Functional obsolescence occurs when new products are introduced with additional features that make older versions seem inadequate, even though they still perform their primary functions. This is common in technology and appliances. For instance, software updates for operating systems often stop supporting older devices, forcing users to upgrade to newer hardware to continue using the software. A classic example is the shift from traditional light bulbs to energy-saving LED bulbs, where older bulbs were phased out even though they were still functional.
The Impact of Planned Obsolescence on Consumers
Planned obsolescence directly impacts consumers by pushing them to replace products more frequently than necessary. This practice increases financial burdens, frustration, and a growing mistrust towards businesses.
Financial Impact
Consumers are forced to spend more money in the long run as they need to replace products that could have lasted longer if not for their intentional design flaws. Smartphones, for example, have a significant upfront cost. It adds up when consumers are forced to replace them every two to three years due to non-replaceable batteries or software incompatibilities. This extends to other industries like automobiles, where regular model updates make older cars seem outdated, reducing their resale value.
Frustration and Dissatisfaction
When consumers realise that companies are deliberately shortening the lifespan of products, they feel distrust and dissatisfaction. This creates a sense of manipulation, as people feel coerced into buying products more often than necessary. The smartphone industry has faced significant criticism in this regard. Consumers often find their once-premium devices performing poorly after a couple of years, making them feel cheated into upgrading.
Right to Repair Movement
In response to planned obsolescence, there has been a rise in the right-to-repair movement. This global initiative advocates for consumers’ ability to repair their products instead of being forced to replace them. The movement is particularly prominent in the tech sector, where companies like Apple and Samsung have been criticised for making their devices challenging to repair. In response, some regions have introduced laws that require manufacturers to provide spare parts and make products more repairable, signalling a potential shift away from planned obsolescence.
Why is Planned Obsolescence Banned in Some Countries?
Planned obsolescence has been widely criticized for its environmental and ethical consequences. Several countries have taken legal measures to regulate or ban this practice to promote sustainability and protect consumer rights.
Environmental Concerns
One of the primary reasons for banning planned obsolescence is its contribution to environmental degradation. When products are designed to fail or become obsolete quickly, they end up in landfills, contributing to the growing problem of electronic waste. The production and disposal of short-lived products also increase carbon emissions and resource depletion. For example, the constant replacement of smartphones leads to a significant environmental footprint, as extracting materials like lithium and cobalt for batteries is resource-intensive and harmful.
Sustainability Issues
In recent years, there has been a growing emphasis on sustainability and the need to transition towards a circular economy, where products are designed to last longer, be repairable, and recyclable. Planned obsolescence directly opposes this principle by promoting a disposable culture. Countries like France have introduced laws that require manufacturers to inform consumers about the expected lifespan of their products and to offer more extended warranties. These measures aim to promote sustainable consumption and reduce waste.
Countries with Bans
France has been at the forefront of the fight against planned obsolescence. In 2015, the country passed a law making it illegal for manufacturers to deliberately shorten their products’ lifespans. Companies must now provide information on their products’ expected lifespans and offer repair services. Failure to comply with these regulations can result in hefty fines.
The European Union (EU) is also taking steps to regulate planned obsolescence. The EU is pushing for stricter regulations as part of its circular economy strategy, which encourages sustainability and reduces waste by extending the lifespan of products. The EU is working on establishing laws that promote repairability and recyclability of consumer goods, particularly in the electronics sector.
Is Planned Obsolescence Beneficial for Businesses?
While planned obsolescence has historically been a profitable business strategy, its long-term sustainability and ethical implications still need to be investigated.
Short-term Benefits
- Companies can ensure repeat consumer purchases by designing products with a limited lifespan. This guarantees a steady revenue stream, as consumers are forced to replace their products more frequently.
- Planned obsolescence encourages businesses to release new and improved products regularly. This has been key to innovation in industries like technology as companies continually strive to offer the latest features and designs.
- Companies that implement planned obsolescence can dominate their markets by pushing consumers to stick with their brand for replacements rather than switching to competitors. Smartphone giants like Apple benefit from a loyal customer base that consistently upgrades to new models.
Long-term Risks
Despite the short-term gains, planned obsolescence presents significant risks to businesses in the long run.
Brand Reputation
As consumers become more aware of products’ intentional design flaws, they are likely to lose trust in companies that practice planned obsolescence. This can damage brand loyalty and lead to a decline in sales over time. Brands like Apple and Samsung have faced criticism and legal challenges over their practices, forcing them to reconsider their product designs.
Legislative Backlash
With growing regulatory efforts to curb planned obsolescence, companies face increasing legal pressures. Countries like France have already introduced laws against planned obsolescence, and the European Union is pushing for stricter regulations. As more governments take action, businesses that continue to rely on this strategy may face fines and reputational damage.
Shifting Consumer Preferences
Modern consumers are more environmentally conscious and increasingly demand sustainable products. Companies that fail to adapt to this shift may lose market share to competitors offering more durable and repairable products.
Examples of Sustainable Business Models
Some businesses are thriving by moving away from planned obsolescence and embracing sustainability. For example, the outdoor clothing company Patagonia promotes product longevity and repairability through its “Worn Wear” programme, which encourages customers to repair, reuse, and recycle their products. This approach has strengthened Patagonia’s brand reputation and built a loyal customer base, demonstrating that businesses can succeed without relying on planned obsolescence.
Alternatives to Planned Obsolescence: Sustainable Business Models
As consumer demand for durability and sustainability grows, businesses are exploring alternatives to planned obsolescence. Sustainable business models offer a way to balance profitability with environmental and ethical responsibility.
Circular Economy
One key alternative to planned obsolescence is the circular economy. This model’s products are designed to last longer, be repairable, and ultimately recyclable. Instead of producing disposable products that need to be replaced frequently, companies focus on extending the product lifecycle. For example, companies like Fairphone design smartphones with modular parts that can be easily replaced or upgraded, reducing the need to buy new devices.
Eco-friendly Initiatives
Many companies are adopting eco-friendly initiatives to align with the growing demand for sustainability. By offering products made from recycled or renewable materials and providing repair services and longer warranties, businesses can attract environmentally conscious consumers and build a reputation for sustainability. Companies like IKEA have started offering services that promote circular consumption, such as buying back and reselling used furniture, which aligns with the shift towards reducing waste and extending product lifecycles.
Consumer Demand for Durability
Consumers increasingly prefer durable products as they become more educated about planned obsolescence’s environmental and financial implications. Businesses that adapt to this demand by offering long-lasting, high-quality goods will likely gain a competitive advantage. For instance, Levi’s jeans are known for their durability, and the brand’s commitment to sustainability includes encouraging customers to repair rather than replace worn-out clothing. This not only fosters brand loyalty but also reduces waste.
The Future of Planned Obsolescence
Planned obsolescence has sparked significant debate recently as consumers, governments, and businesses grapple with its ethical, environmental, and economic implications. The future of planned obsolescence is increasingly uncertain as regulatory and consumer pressures push companies to reconsider their reliance on this strategy.
Legislative Changes
Businesses must adapt as countries continue to pass laws to curb planned obsolescence. Europe, in particular, is leading the way with its circular economy initiatives, prioritising sustainability and resource efficiency. These regulatory efforts will likely expand, requiring companies to design more durable, repairable, and recyclable products. For instance, the European Union’s eco-design directives set new standards for product durability and energy efficiency across various industries, particularly electronics.
Growing Consumer Awareness
Consumer awareness of planned obsolescence is rising, driven by media coverage, legal battles, and the influence of movements like the right to repair. As more people become aware of the financial and environmental costs associated with short-lived products, they are likely to shift towards brands that offer greater value in terms of durability and sustainability. This shift presents both a challenge and an opportunity for businesses. Companies that continue to rely on planned obsolescence risk losing market share, while those prioritising long-term value and sustainability benefit.
Technological Innovation
Technological advancements could also reduce the need for planned obsolescence. As more companies invest in innovation, they discover new ways to extend product lifespans, improve repairability, and reduce environmental impact. 3D printing technology, for example, is making it easier for consumers to replace parts of products, further challenging the planned obsolescence model. Additionally, the rise of subscription-based business models could shift the focus from product ownership to service longevity, reducing the emphasis on frequent replacements.
Final Thoughts on the Business Strategy
While planned obsolescence may have been a profitable business strategy for many years, its long-term viability is increasingly doubtful. As environmental concerns grow and consumers demand more sustainable products, businesses that rely on short product lifecycles will likely face increasing scrutiny. Forward-thinking companies are already shifting away from this approach, embracing sustainability, repairability, and durability as core components of their business models. In the future, businesses prioritising long-term value over short-term profits will benefit financially and contribute to a more sustainable and ethical global marketplace.
FAQs
- What is the theory of planned obsolescence?
- Which is an example of planned obsolescence?
- Is planned obsolescence a business model?
- Is planned obsolescence good or bad?
- How to end planned obsolescence?
Planned obsolescence is a business strategy where products are deliberately designed to have a limited lifespan or quickly become outdated. This practice encourages consumers to buy replacements or upgrades more frequently, ensuring continuous sales for businesses.
A well-known example is the smartphone industry, where non-replaceable batteries degrade over time, causing the device to slow down or malfunction. This leads users to buy a new phone rather than repair the old one. Apple has faced accusations of implementing planned obsolescence with its iPhone models.
Yes, planned obsolescence can be considered a business model, especially in industries like technology, fashion, and consumer electronics. Companies use this strategy to increase sales by ensuring that consumers frequently purchase new products or upgrades.
Planned obsolescence has both positive and negative aspects. It drives innovation and creates short-term profits for businesses, but it can harm consumers financially, damage brand reputation, and contribute to environmental waste. Increasingly, the practice is viewed negatively due to its ethical and environmental impacts.
Ending planned obsolescence requires legal reforms, such as the right to repair laws, and a shift in consumer preferences toward durable and repairable products. Businesses can adopt sustainable models by designing products that last longer, providing repair services, and promoting recycling efforts. Consumer demand for sustainability can also pressure companies to move away from planned obsolescence.
