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STRATEGY

Planned Obsolescence? That Trick Only Works at Apple
 

Apple is worth emulating in many ways. But not when it comes to how the company intentionally limits the lifespan of its products.

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The notion of planned obsolescence, or the practice of designing products so they have a limited effective lifespan, may seem like some smart, practical economics to some. And at times that is true. But for entrepreneurs, deliberately limiting the life of products and services is a bad mistake.

When iOS 7 came whistling down the data pipe to older model iPhones, it must have first seemed like an early holiday present. No cost, and all sorts of new goodies. But as Catherine Rampell wrote in the New York Times, good news turned to bad as her iPhone 4 became "a lot more sluggish."

The battery was starting to run down much faster, too. But the same thing seemed to be happening to a lot of people who, like me, swear by their Apple products. When I called tech analysts, they said that the new operating system (iOS 7) being pushed out to existing users was making older models unbearably slow. Apple phone batteries, which have a finite number of charges in them to begin with, were drained by the new software.

A new battery would have run $79. A low-end iPhone 5C? Maybe $100. "It seemed like Apple was sending me a not-so-subtle message to upgrade," she wrote.

There are generous explanations such as, people want the new features, battery technology keeps advancing and adding longer life with new generations, and more powerful software might be slow on an older chip. But none of this should have been a surprise to Apple. Didn't anyone there test the impact on an iPhone 4? Surely there were some units to be had.

Of course and of course. Apple almost certainly had to know that loading iOS 7 onto older hardware would cripple it. This isn't the first time it happened. So why not let people decide to download the newest version or not, as has happened in the past? Two words: planned obsolescence.

When you're in a relatively saturated market--and all markets eventually get saturated--planned obsolescence can seem like a smart move. How many of the tens of millions of sales of both the iPhone 5s and 5c are due to owners finding their own devices, if not bricked, then moving with all the deliberate speed of a sleepy snail?

In the case of the iPhone 4 crawling under the weight of iOS 7, Apple probably won't pay a price. The company has been smart in its walled garden technology strategy, as it is relatively difficult for consumers to break away without extensive plans for moving data, services, and entertainment along with them--assuming that it would be possible. And the company has been able to shuttle people along, moving past incompatibilities, bad performance of old hardware, and even high-profile issues like the antenna problem of the iPhone 4.

Entrepreneurs, on the other hand, don't have the time to structure a business that locks in customers. They are competing with rivals large and small and cannot afford to give any ground by leaving a bad taste in the mouths of customers. Why pay extra if you needn't?

In the long run, you're always best off being honest with people. Maybe you don't get that hop ahead of competitors, but you also don't have to bar the castle gate from that long line of villagers bearing torches and pitchforks.

IMAGE: Courtesy of Apple
Last updated: Nov 7, 2013

ERIK SHERMAN's work has appeared in such publications as The Wall Street Journal, The New York Times Magazine, and Fortune. He also blogs for CBS MoneyWatch.
@ErikSherman




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