Economics

Planned Obsolescence

Published Oct 25, 2023

Definition of Planned Obsolescence

Planned obsolescence refers to the practice of designing and manufacturing products with a limited lifespan or a shorter useful life than they could have. The goal of planned obsolescence is to encourage consumers to replace their products more frequently, thereby driving sales and generating more revenue for the manufacturers.

Example

A common example of planned obsolescence is the smartphone industry. Smartphone manufacturers release new models every year, often with minor updates and improvements. These new models are usually incompatible with the accessories and software of previous models, creating a need for consumers to upgrade their phones.

For example, a customer who purchased a smartphone two years ago may find that their device is no longer compatible with the latest software updates or lacks certain features available in the newer models. This prompts the customer to consider buying a new phone, even if their current one is still functional.

Another example is the fashion industry, where trends change rapidly, and clothing styles become outdated quickly. This encourages consumers to frequently update their wardrobes to stay in style, even if their existing clothes are still in good condition.

Why Planned Obsolescence Matters

Planned obsolescence has both economic and environmental implications. From an economic perspective, it drives sales and stimulates consumer spending, benefiting manufacturers and the overall economy. However, it can also lead to wasteful consumption and unnecessary spending for consumers who feel compelled to replace their products more frequently.

From an environmental standpoint, planned obsolescence contributes to increased waste generation and resource depletion. Products with shorter lifespans end up in landfills sooner, requiring more resources to produce replacements. This not only has environmental consequences but also affects sustainability efforts and the circular economy.

Awareness of planned obsolescence allows consumers to make more informed purchasing decisions and consider the longevity and sustainability of the products they buy. It also encourages manufacturers to prioritize durability and design products with longer lifespans, reducing the environmental impact and promoting more sustainable consumption practices.