The Successful Failure

On September 12, 2012 Apple opened its doors to the market for the unveiling of their new iPhone 5. The public’s reaction was nothing short of madness, camping nights outside the store to be the first to try out this new “innovation”. Fast forward a few years and Apple’s stock price has risen from around $72.54 in (2012) to around $175.40 (2019). Since its release back in in 2007, Apple has sold a staggering number of 2.2 billion phones. Many factors could be attributed to Apple’s success but one not to belittled is utilization of planned obsolescence. Typically, one year after Apple releases its flag ship phone a new and improved version is drop on the market. With every new phone model introduced an older one usually sees its end. Apple has been known to nudge consumers to purchase new products by slowing their phone down with new software updates. The designed premeditated lifespan of a product for financial gain is known as planned obsolescence. A production technique that has profited all types of industries from the incandescent lightbulb to football boots. However this consumer economy might slowly be approaching its limits. Waste from many of these cycling products has gotten so bad that in 2017 China (a once global importer of recyclable goods) extensively banned imports of common solid wastes. It is clear this type of production is starting to have negative consequences for a sustainable economy. To better understand how we got here it is important to know where it began.

This takes us back 1920, a time when America was living a period of economic prosperity, a time know as ‘The Roaring Twenties”.  America was enjoying the  economic boost brought by the aftermaths of World War I. This was a time before  the integration of planned obsolete products. Back then the general focus of products was to push for longer lifespans. These products were made with finer attention to quality and thus worked over a larger period of time. Contrast that to today’s plethora of throwables fabricated in cheap labor countries.  

On October 29, of 1929, with the crash of the stock market, America entered a period later to be known as The Great Depression. The hype around the booming economy had lead to a snowball of problems. Business had over expanded, the middle class was over spent, and banks had been operating without guarantees, often speculated egregiously on the stock markets. (About.com 20th Century History).

A key actor also weighing on the problem was production. Back then production had a general focus on making non-obsolete goods. Many Americans got in debt with goods that were infallible. If goods never die, the production of these goods are limited to reach market saturation. After this point production stops and factories close. Businessman had to reconsider a new selling strategy one that involved a shorter life cycle . 

One of the first companies to implement this idea was General Motors under the directive of Alfred P. Joan Jr. In 1924 the automobile market had reached its peak and the automobile companies were struggling to keep high profits. To maintain unit sales Alfred P. Joan Jr. suggested the idea to vary the model of the car every year in order to convince car owners they needed a new replacement each year. Henry Ford the leader in America automobiles at that time stayed adamant to this idea. He believed in the simplicity of design integrity. Nonetheless the sluggish market drew pressured to new marketing ideas. In 1931 General Motors sales exceeded those of Ford’s, forever changing the makeup of not only cars but products as well (The Centrist Party)

One could argue that the embedded short lifespans of products helped circulate money back in the economy. This introduced cheaper quality goods and paved the way for planned obsolesce. Producers found that they would make more money if they could resell their products in a smaller window of time. This revitalized production and gave the American people jobs again. However just like planned obsolescent was used as a tool to boost the economy it quickly shifted to unfair business practices.

The most highlighted case was that of the cartel of light bulbs. This cartel was formed in December 23, 1924. It was made up of Osram, Philips, Tungsram, Associated Electrical Industries, ELIN, Compagnie des Lampes, Internationl General Electric, and the GE Overseas Group and founded the Phoebus S.A. cartel in Switzerland. At first  Not making many alterations were made to the light bulb industry, however they quickly grew to create a dent in the global economy. These companies agreed to mutually reduce their fabrication cost by cooperatively standardizing the life span of their light bulbs to 1000s hours.  This was a major decision by the leading light bulb making companies by which they could raise their prices without the fear of competition.  When the market is shared by a small number of companies, they find themselves in a position of limited competition. This is known as an oligopoly. The participating companies were mutually surveyed, and monetary fines were made to the fabricators of bulbs that lasted longer than the set 1000-hour life expectancy. Sales skyrocketed, however by having limited competition there were no incentives for technological advances. The Phoebus cartel reinforced how short lived products benefited the growing consumer based economy. The Phoebus cartel’s planned was greatly disrupted by Scandinavian competition and died by the introduction of World War II in 1939(Afinidad Eléctrica).

Planned Obsolescence has expanded and transformed in many ways since the 1900s. Today’s primary examples of how products are altered is through design, hardware, and software.  Take for example Apple. Back in 2018 the phone maker faced numerous lawsuits after numerous account of faulty batteries. The iPhone’s are fabricated in such a way that removing the battery of a phone is challenging.  The rare five star screw pin that holds the cover piece together makes it almost impossible for anyone to change their batteries by themselves. Of course this isn’t much of a problem at first however, as time progresses the life span of the battery is limited to around 2 years. By this time Apples strategy is too incentivize their customer base to buy their new subsidized iPhone through carriers contract’s at 100$ that is 20 dollars more than actually getting the battery replaced by Apple for 79$ (). 

 Furthermore there are other cases in which the software of a product is manipulated. The classic example of this is the inkjet cartridge in printers. The manufacturers of these cartridges make a smart chip part of the build in the cartridge. These smart chips limit the lifespan of their product not by physical deterioration but by a simple time clock. The smart chips found in inkjet cartridges become obsolete after a certain threshold of pages and time regardless if there still is any usable ink (Popular Mechanics).

Planned obsolescence has impact that go beyond revenues and capital. The problem with it is that it relies on the erroneous idea that infinite materials and resources can be obtained in a world of finite material. The earth can only take so much of our toxic waste. It’s a matter of time for the resources we exploit will begin to have serious repercussions. Since planned obsolescence relies on constant purchase cycles we end up piling landfills of waste. For many companies it is cheaper to export waste to third world countries, rather than to properly dispose of them themselves. And now that China won’t take it who will?

References

“Afinidad Eléctrica.” Afinidad Eléctrica. N.p., n.d. Web. 10 Apr. 2014.

Obsolescence: The Financial Impact on Property Performance. N.p.: Jones Lang Wootton, 1988. Print.

“Planned Obsolescence.” — The Centrist Party. N.p., n.d. Web. 9 Apr. 2014.

“Planned Obsolescence.” The Economist. The Economist Newspaper, 23 Mar. 2009. Web. 10 Apr. 2014.

“The Great Depression.” About.com 20th Century History. N.p., n.d. Web. 10 Apr. 2014.

“8 Surprising Products Designed to Fail Early.” Popular Mechanics. N.p., n.d. Web. 10 Apr. 2014.

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