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What you are talking about is the idea of sacrificing quality for cost in a sensible manner, so you aren't creating unnecessary cost beyond a needed lifespan. B

What you are talking about is the idea of sacrificing quality for cost in a sensible manner, so you aren't creating unnecessary cost beyond a needed lifespan. But that's not planned obsolescence. Planned obsolescence is when you artificially shorten the lifespan of something in order to increase the sales of the product or the next generation of the product in order to generate more revenue.

Gibbon1 11y ago
I have a standard answer to planned obsolescence. It has a salt water economics spin on it, though those guys would hate this argument. If you have a product with an active resale market. Any product with a noted higher quality will sell for a premium. At first you think that this is a boon to the seller. But the manufacturer can turn around and demand a premium. So what happens is, the manufacture gets to pull forward the secondary sale. If a use car sells for a $2000 premium on the used market, the manufacturer can probably charge $2000 more. And he gets to book that today, not five years from now when the first buy sells it. There is a dismal reverse of this, if your product goes bad like yesterdays fish, the customer is going to demand and get a discount. This interacts with the cost value curve for given products, meaning after a while you're just throwing money away trying to make the product 'better'. Similarly, not spending enough money results in an way crappier product than the cost of materials and labor would suggest. The upshot is car brands like Toyota are on the premium side of the curve and it's not too hard for them to stay there. Chrysler is on the other side of the curve and is economically trapped.
tsotha 11y ago
>Planned obsolescence is when you artificially shorten the lifespan of something in order to increase the sales of the product or the next generation of the product in order to generate more revenue. The strategy, as originally articulated, meant companies should use marketing to move customers to new models for status/styling reasons. It worked, too, in the car industry (which was the subject). For years the Mad Men types were able to convince people to buy a new car every two years, long before the old one was worn out. Artificially shortening the lifespan of a product isn't profitable because of the hit the manufacturer takes to its reputation.
- gspetr 11y ago
  > Artificially shortening the lifespan of a product isn't profitable because of the hit the manufacturer takes to its reputation. Works well for nVidia. Speculations that it's newer drivers destroying older cards' performance seemingly cannot be quelled. You can get away with that if you can still create a superior product than your sole competitor and can even get away with deliberately lying to customers (See 3.5 GB of good memory instead of 4 GB on GTX970)
- kevin_thibedeau 11y ago
  FWIW cars did have far more reliability problems until electronic control systems became common and engineering practices became sophisticated enough to manage long term quality. Much of the marketing to get a new car at frequent intervals played against the legitimate anxiety of having a car that was rusted out and unreliable after five years.
- mifreewil 11y ago
  > Artificially shortening the lifespan of a product isn't profitable because of the hit the manufacturer takes to its reputation. Isn't this exactly what Apple does with its chargers all the time? They change them in the slightest manner in newer generations, so the older generation charger doesn't work with it. I don't think there is an actual legitimate reason to do this - such as improved design or functionality. It doesn't seem to hurt Apple at all though, their hardware is still top notch and above and beyond its competitors.

Gibbon1 11y ago

I have a standard answer to planned obsolescence. It has a salt water economics spin on it, though those guys would hate this argument. If you have a product with an active resale market. Any product with a noted higher quality will sell for a premium. At first you think that this is a boon to the seller. But the manufacturer can turn around and demand a premium. So what happens is, the manufacture gets to pull forward the secondary sale. If a use car sells for a $2000 premium on the used market, the manufacturer can probably charge $2000 more. And he gets to book that today, not five years from now when the first buy sells it. There is a dismal reverse of this, if your product goes bad like yesterdays fish, the customer is going to demand and get a discount. This interacts with the cost value curve for given products, meaning after a while you're just throwing money away trying to make the product 'better'. Similarly, not spending enough money results in an way crappier product than the cost of materials and labor would suggest. The upshot is car brands like Toyota are on the premium side of the curve and it's not too hard for them to stay there. Chrysler is on the other side of the curve and is economically trapped.

tsotha 11y ago

>Planned obsolescence is when you artificially shorten the lifespan of something in order to increase the sales of the product or the next generation of the product in order to generate more revenue. The strategy, as originally articulated, meant companies should use marketing to move customers to new models for status/styling reasons. It worked, too, in the car industry (which was the subject). For years the Mad Men types were able to convince people to buy a new car every two years, long before the old one was worn out. Artificially shortening the lifespan of a product isn't profitable because of the hit the manufacturer takes to its reputation.

gspetr 11y ago
> Artificially shortening the lifespan of a product isn't profitable because of the hit the manufacturer takes to its reputation. Works well for nVidia. Speculations that it's newer drivers destroying older cards' performance seemingly cannot be quelled. You can get away with that if you can still create a superior product than your sole competitor and can even get away with deliberately lying to customers (See 3.5 GB of good memory instead of 4 GB on GTX970)
kevin_thibedeau 11y ago
FWIW cars did have far more reliability problems until electronic control systems became common and engineering practices became sophisticated enough to manage long term quality. Much of the marketing to get a new car at frequent intervals played against the legitimate anxiety of having a car that was rusted out and unreliable after five years.
mifreewil 11y ago
> Artificially shortening the lifespan of a product isn't profitable because of the hit the manufacturer takes to its reputation. Isn't this exactly what Apple does with its chargers all the time? They change them in the slightest manner in newer generations, so the older generation charger doesn't work with it. I don't think there is an actual legitimate reason to do this - such as improved design or functionality. It doesn't seem to hurt Apple at all though, their hardware is still top notch and above and beyond its competitors.