Alternative phrasing: "the $3.57 you save (per unit) today will give you a $100.000 end of year bonus, but cost the company millions in future lost sales"
Guess what theyre gonna do?
Guess what theyre gonna do?
Isn’t the company going to make more sales in the future (and hence more profit)? And isn’t replacing stuff with new versions going to lead to improvements in people’s lives through more efficient, quieter, and more effective technology?
So, yes, replacing stuff with new versions will bring more and more sales as opposed to building something that will last. Hence "planned obsolescence" and the war on making things repairable that we've seen lately. Great for business, bad for the customer.
Modern electronics certainly can be made with much higher reliability than their mid-century ancestors, but the driving factor that prevents this is aggressive cost cutting that happily shaves pennies off COGS to shift the statistical distribution to the left. Unless consumers are willing to pay more for long-lived devices, this is doomed to continue.
Yet people understand it with cars. Maybe because it’s moving?
I've got a relative's dryer right now that's acting up. Do I really want to do the work of calling around to a bunch of repair guys to find out which one won't charge me a fee to come out and say "it's going to cost more to fix than to buy a new one, and we can have the new one installed and delivered tomorrow" ? I've heard this trash spiel so many times at this point I don't even care to try engaging, despite not even having to pay for it myself.
No, I'll spend the 20 minutes taking a few screws off and looking at the thing. Then order parts. Then next week, an hour or two to replace the part. Then it will likely be sorted for the next decade, but if it does break again it will continue to be repairable rather than effectively a consumable.
Only if you don't overdo it. When your products break too quickly many customers will stay one-time customers and switch to products from the competition. There's also the reputation damage to consider.
And of course it works best if you have a fairly high market share. If you have a low market share most products on the market are from your competitors, so you can you are better off boosting your reputation with longer-lasting products (compared to other products at the same price point).
Come to think of it, the "break it faster to sell more" strategy works mostly in monopolies, duopolies or with market collusion (like the Phoebus cartel that lowered the lifespan of light bulbs)
It is the behavior of the buyers that drives costs down. People are extremely cost sensitive in the mid to low segments, shifting their purchase decisions from one product to another just because of less than $1 price difference. Some companies cannot survive at all without saving those $3.57.
Unlike Voyagers 1 and 2