Today’s technologies and consumer goods change very quickly, which results in frequent disposal of useful items even before their physical life cycle is complete.
One of the primary sources of this phenomenon is the planned obsolescence.
The concept of planned obsolescence is a business model in which manufacturers create a system to ensure that their products are periodically replaced.
However, before we delve into the details, let's first try to understand planned obsolescence and its implications for consumers and the environment.
This article explores the concept, where it originated from, and how it affects our society.
Understanding Planned Obsolescence
As mentioned above, planned obsolescence is a concept in which manufacturers produce products with a limited useful lifespan.
This strategy forces consumers to opt for the newer models, which in turn leads to constant demand and, therefore, constant money circulation within the companies.
It primarily occurs in three different ways: technological obsolescence, functional obsolescence, and perceived obsolescence.
Technological Obsolescence
Technological change is another reason products become obsolete and, therefore, their prices are lowered.
For example, gadgets such as mobile phones and computers are short-lived because new models with improved features are manufactured.
Functional Obsolescence
This means that products are created with a predetermined or limited lifetime. For instance, a refrigerator or washing machine develops faults within a short period after the warranty has expired.
Perceived Obsolescence
People are often given the impression that whatever they are using is outdated, even if it is still perfectly usable.
This is especially the case in industries such as fashion and automobiles, where trends change periodically.
Another environmental impact of planned obsolescence is that it leads to the generation of more waste, which harms the environment.
Where Did the Concept of Planned Obsolescence Originate?
The idea of planned obsolescence can be traced back to the 1920s when car manufacturing company General Motors was looking for a way to challenge Ford Motor Company.
GM president Alfred P. Sloan adopted a new model each year, which was already prevalent in the bicycle industry.
His goal was to make the consumer unhappy with his current car and to make him want to purchase the latest model even if his current car still worked.
However, the concept of proactively shortening the life of products is not new at all. In 1924, a cartel of light bulb manufacturers known as Phoebus deliberately lowered the useful life of light bulbs from 1,500 to 2,000 to 1,000 hours and penalized members who made longer bulbs.
The term “planned obsolescence” was first used in 1932 by real estate agent Bernard London, who proposed the concept in the middle of the Great Depression as a way to boosting sales.
The Economic Incentives Behind Planned Obsolescence
Increased Sales and Revenue
Creating sales demand is a significant advantage of implementing planned obsolescence in the industry.
This way, companies ensure that their products wear out more often, and consumers constantly generate more revenue for businesses.
Planned obsolescence can increase sales by up to 20% for companies that implement it effectively.
The electronics manufacturing industry worldwide relies on the concept of planned obsolescence.
The average annual revenue generated by planned obsolescence in the electronics industry is estimated to be around $1.3 billion.
Market development and product development
Planned obsolescence helps ensure a constant demand for new products on the market and thus stimulates technological advancement.
Since old products are considered outdated, companies introduce new models, thus enhancing technology and demand.
The average time between product updates in the electronics industry is around 12-18 months, which can lead to frequent increases in sales and revenue.
This cycle is apparent in the smartphone segment, where firms such as Apple and Samsung release new models annually.
For example, Apple’s net sales were $383.29 billion in 2023, mainly due to new product introductions.
Cost Management
By designing products with a short useful life, there is potential to lower overall production costs.
Reducing non-recyclable or less long-lasting materials and parts also decreases manufacturing costs.
Consumer Desire for Novelty
Psychology is the most critical factor that can underpin the concept of planned obsolescence.
People always wish to acquire the best and most innovative products, which may influence marketing strategies and societal trends. Around 70% of consumers upgrade their products due to the desire for newer features and technologies.
This is where the idea of perceived obsolescence comes in, which makes people replace products that are still entirely usable but deemed old.
This is most prevalent in fashion, where the culture of changing seasons and fast fashion encourage the continuous buying of clothes.
The fashion industry produces over 100 billion garments annually; most are used once or twice before being disposed of.
Effects of Planned Obsolescence
Increased Waste Generation
The culture of planned product obsolescence means that people keep replacing their products at regular intervals, which results in a lot of waste.
Of all the types of waste, electronic waste, or e-waste, are incredibly challenging.
Electronic waste includes lead, mercury, and cadmium, which can pollute the soil and water, thus posing critical environmental and health effects.
According to estimates, 53.6 million metric tons of electronic waste was generated in 2019, and this number is projected to increase to 74.7 million metric tons by 2030 if current trends continue.
Environmental Impact
The impact of planned obsolescence on the environment has become a significant concern over time.
This rapid increase is due to many electronic products' short, useful lives today.
A hypothetical study estimated that if the life of ICT devices were increased by 50%, up to 28 million tons of e-waste could have been prevented between 2015 and 2020.
Play your part in preserving our nature and have a look at our sustainable products range.
Economic and Consumer Impact
Consumers are forced to spend more money on the product by having it designed in a way that only has a limited lifespan.
This not only burdens household budgets but also contributes to the culture of disability.
In addition, a study pointed out that customers demand long-lasting and easily repaired products, with 65% of the surveyed consumers willing to pay more for clothes that last longer.
Social Impact
Therefore, the social impacts of planned obsolescence are significant, especially in Third World nations, most of which serve as dumping grounds for electronic waste.
A report reveals that informal sectors in the recycling industry in countries such as India and Nigeria were hazardous.
People, especially children, are exposed to dangerous chemicals at the workplace without sufficient safeguard measures, and their health is affected.
Lasting Products, Happy Earth
Planned obsolescence is a serious problem in terms of sustainability. Businesses should promote sustainable production and manufacture products that can last long.
If businesses promote sustainable processes and materials, consumer trends will change. The need of the hour is to develop a global trend of eco-friendly products and stop the trend of obsolescence.
As a consumer, always bear in mind that the best product is the one you didn't buy (yes we say that, even though we are an online business ourselves). Things you can do as a consumer include:
- Ask yourself "Do I really always need the newest product?"
- Focus on quality not quantity
- If something breaks, don't throw it away but repair it
- Follow HOP and their petitions. Your voice counts!
Did you know about Planned Obsolescence? Feel free to leave a comment below.
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