The bizarre business of intentional product failure: planned obsolescence
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December 23 2016

Commentary by Eoin Treacy

The bizarre business of intentional product failure: planned obsolescence

This article from reportsfromearth.com may be of interest to subscribers. Here is a section:

Today built-in obsolescence is used in many different products. There is, however, the potential backlash of consumers who learn that the manufacturer intentionally make the product obsolete faster. Such consumers might turn to an alternative producer (if any exists) that offers a more durable alternative. In other words, this nasty strategy is not available for small companies who would only lose customers.

Given today’s tremendous increase of international corporate power and severely reduced competition, planned obsolescence has become an attractive possibility for products than ever in human history.

Built-in obsolescence was already used in the 1920s and 1930s when global mass production became possible and rigorously optimized. 

Eoin Treacy's view

I have to have my car smog tested soon and coincidentally the check engine light came on just ahead of when the test was due. In talks with the chaps at the dealership and with other customers while I was waiting the scale of obsolescence by design is quite astounding. 

For example, one of the technicians recounted how he bought a manufacturer’s original part for his Audi Q7 on eBay. He thought he had gotten a wonderful deal only to find that Audi’s computers will not code any part that is more than three years old; even if it is unused, one of their own and appropriate for the car in the question. 

It makes the argument for leasing rather than buying quite compelling, but from an even broader perspective the argument for either diesel or electric vehicles is also well made. 

Diesels might be more polluting but they are definitely more reliable and fuel efficient. Volkswagen has held a progression of higher reaction lows since late last year and is now testing its highs for the year. While somewhat overbought in the very short-term a clear downward dynamic would be required to question potential for additional upside. 

With so many fewer moving parts in an electric vehicle, there are obvious benefits to owning a Tesla and the fact they are attractive looking cars compared to the competition is an additional point in their favour. The share has rallied over the last few weeks to challenge the progression of lower rally highs for the year and a clear downward dynamic would be required to check potential for additional higher to lateral ranging. 

Sensata Technologies collapsed right along with Volkswagen since most of the sensors it produces are for diesel vehicles. Nevertheless the number of sensors required in modern vehicles is likely to increase rather than decrease, especially with evolving assistive and autonomous capabilities. The share failed to hold its move to new recovery highs this week and will need to hold the region of the trend mean, during the current pullback, if potential for additional higher to lateral ranging is to be given the benefit of the doubt. 

 

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