Bridging the gap between A-level economics and the real economy
A group of CEO’s, known as the Phoebus Cartel, got together to create the ultimate business idea just before the commercial dawn of lightbulbs in mass production. In order to maximise profits, they would have to compromise on one aspect of the lightbulb; its life span. However, this was on purpose. They realised that, in order to produce these lightbulbs at the forefront of technology they would lose profit. Thus, the theory of Planned Obsolescence was created which simply makes a product obsolete on purpose, so that a replacement is required. They placed a lifespan on the product, and even though the lightbulb was perfectly capable, people felt as though they needed to replace it constantly so that they could have the best, or most modern technology.
Planned Obsolescence is defined as “a policy of producing consumer goods that rapidly become obsolete and so require replacing, achieved by frequent changes in design, termination of the supply of spare parts, and the use of non-durable materials.” In other words, a product is created with the purpose to degrade after a period of time or a period of usage, with the intention to discontinue the line of products so that repair isn’t possible. It acts as an incentive to replace or renew the same product. Established companies programme software and manufacture hardware with the intention of diminishing their capabilities through various forms of upgrade. This in turn creates a life span for a product, such as a smartphone. Apple has been accused of carrying out planned obsolescence through its devices. It is notoriously known that with the new iPhone updates, older versions of phones suddenly degrade for no reason, and all models at the same time. A highly common example is the electric toothbrush – the bristles degrade at the same rate as any other toothbrush, and you can’t change the battery. You are almost forced into buying a new electric toothbrush to keep up with modern technology. If the battery could be replaced, this transaction could have been much cheaper, but due to planned obsolescence you’re repeatedly paying for the more expensive device and somehow consumers manage to justify that to themselves, and consequently companies make more profit. It was found that the battery used in common electric toothbrushes could be commercially available, given the opportunity to replace the battery in the first place.
There are numerous ways in which companies practice planned obsolescence within their products, for example, the discontinuation of spare parts. This means that once your product has been degraded, due to the aforementioned concepts, there is no way to replace a certain part. You have to replace the entire product, which means more money for the producer. Second, another method is the extortionately high repair costs – companies advertise their repair options almost as a favour to you as though you are the fault of the product losing its productivity. A number of people criticize this method to be corrupt. Third, there are many implications related to Planned Obsolescence, once a life span of a product has passed its expiry date the company doesn’t say that the product is now redundant, but it surely implies this. It’s an undercurrent of psychological behaviour in the consumer economics world. Fourth, heat is destructive to all electronics and producers can abuse the circuit board by placing heat sensors on the hottest parts of the circuit board, and this confuses the software to do all sorts of things to protect the hardware which as a result causes the device to become unstable. Again, incompatibility is a source of planned obsolescence and companies manufacture excuses such as “this software will run better on our new device”, and therefore, modern software such as anti-virus is placed on new devices. This in turn makes consumers feel as though their products are vulnerable to attack – the customer now needs to replace the device for security issues that were fabricated for the sole purpose of making more money. Furthermore, a prominent factor is the popularity of the product. Words such as “cool” and “savvy” are glorified when it comes to advertising. If you do not have the newest product, then you are no longer cool or savvy, and you are behind times and old fashioned. Last, the infamous warranty concept. Warranty exists only to serve one purpose; when the device is degraded (on purpose) the issue is no longer the responsibility of the producer and they are no longer viable for the repairs or replacement. Most products last considerably longer than the warranty date, it’s just a form of insurance so that companies save money.
Overall, Planned Obsolescence is the exploitation of human naivety and lack of knowledge in the world of electronics. Companies attack the customer’s mal judgement and turn this to their advantage to make more money. On the bright side, France is now asking companies to give further details about the capabilities of items produced in France as a legal requirement.
By Abbas Jodiyawalla