# Planned Obsolescence Explained: Strategies, Examples, and Consumer Impact

## What Is Planned Obsolescence?

Planned obsolescence is a strategy to make sure a product becomes outdated or useless within a certain time period. This proactive move guarantees that consumers will seek replacements in the future, thus increasing demand.

Obsolescence can be achieved through introducing a superior replacement model or by intentionally designing a product to cease proper function within a specific window. In either case, consumers will theoretically favor the next generational products over the old ones.

[Planned obsolescence](https://www.investopedia.com/articles/pf/07/disposablesociety.asp) is prevalent in the technology and fashion industries. Consumers tend to view planned obsolescence negatively, particularly if there is little difference in the new version compared to the previous one. For example, Apple has a plan for iPhone users to make direct payments to exchange hardware components annually. People saw this as an attempt to increase demand at the customer's expense. Apple has denied these claims.

### Key Takeaways

*   Planned obsolescence is a business strategy where a product is designed to have a limited lifespan, prompting consumers to purchase newer models or replacements sooner than necessary.
*   This strategy is prevalent in industries like technology, fashion, and automotive, where products are often deliberately designed to become outdated or less functional within a certain time frame.
*   While planned obsolescence can help companies control costs and drive demand, it often faces consumer backlash if the new versions offer minimal improvements over previous models.
*   The practice can stimulate technological progress, as seen with companies like Apple, which are often criticized for deliberately shortening the lifespan of their products to encourage frequent upgrades.
*   Critics argue that this strategy can harm brand reputation by prioritizing profit over consumer satisfaction, although it remains a standard practice in many sectors.  
    

## How Planned Obsolescence Impacts Various Industries

Some industries are more known for planned obsolescence than others. In fashion, nylon stockings often run, which means they need to be replaced regularly.  

Meanwhile, in technology, the replacement cycle for personal electronic devices such as smartphones has historically been two to three years because components begin to wear down and new generations of software and operating systems grow less compatible with the aging hardware. Furthermore, software is also often designed to include new features and file types that are incompatible with old versions of the program.

> **Important**
>
> Planned obsolescence differs from perceived obsolescence, which is when designers make frequent stylistic changes to their products due to the decrease in the perceived desirability of unfashionable items.

Computer hardware also sees planned obsolescence as microprocessors follow [Moore's Law,](https://www.investopedia.com/terms/m/mooreslaw.asp) doubling transistor count and halving processing cost every two years.

Finally, planned obsolescence also affects automobile manufacturers, who annually roll out new versions of their models.

## The Consumer Impact of Planned Obsolescence

### How Consumers Respond to Planned Obsolescence

Consumers usually react negatively to planned obsolescence, especially if new products don't improve much over previous versions. [Brands](https://www.investopedia.com/terms/b/brand.asp) can damage their reputation and drive customers away by using this method to artificially increase demand.

However, planned obsolescence isn't always viewed negatively. Companies might use it to control costs. For example, a phone company might choose parts that last five years instead of 20 to control costs.  

### Case Study: Apple and Planned Obsolescence

[Apple Inc.](https://www.investopedia.com/investing/apple-1-trillion-company-now-what/) has often been at the center of skeptical consumer discourse. The company announced a plan for iPhone users to make direct payments to exchange hardware annually.  

Observers saw the company's intent to shorten the replacement cycle as a way to boost demand at consumers' expense. Skeptics doubted [Apple's](https://www.investopedia.com/articles/fundamental-analysis/12/steve-jobs-apple-story.asp) ability to quickly make meaningful improvements, a common issue for phone makers with two- or three-year cycles.

Apple denies planned obsolescence, though a Harvard study found iOS upgrades slowed older iPhone processors, not to push new sales. Apple [recently settled](https://www.investopedia.com/apple-aapl-reaches-settlement-over-iphone-batterygate-5088300) a 2017 class-action lawsuit over the issue, agreeing to issue payouts to customers and state governments over what has been referred to as "batterygate."

Of course, while Apple is notorious for this practice, it has not been proved unequivocally. Some economists believe planned obsolescence can drive technological progress, even if it occurs. Besides, other manufacturers, such as the makers of Android phones and tablets, also release new versions of their products annually.