will planned obsolescence kill silicon valley
Post on 13-Aug-2015
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1920’s Automotive Market
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1905 1910 1915 1920 1925
1926: 4 million cars
Planned Obsolescenceis a policy of planning or designing a product with an artificially limited useful life, so it will become obsolete, that is, unfashionable or no longer functional after a certain period of time.
https://en.wikipedia.org/wiki/Planned_obsolescence
Silicon Valley’s Leading Hardware Product
170 million units shipped in 2014New model every yearLimited lifespan
Non-replaceable batteryHigh repair costsExpensive, fixed memorySoftware rapidly outgrows hardware
What’s Different This Time?
1. Moore’s Law2. Universal Cloud Connectivity3. Constant Threat of Overnight Global Competition
Cutting-Edge TechnologiesEnormous Software EcosystemHigh Consumer Value
Apple’s Playbook for Obsolescence
iPhone 1st Gen(release: 06/07)
iPhone 3G(release: 07/08)
iPhone 3GS(release: 06/09)
iPhone 4(release: 06/10)
iPhone 4S(release: 10/11)
iPhone 5(release: 09/12)
iPhone 5c/5s(release: 09/13)
iPhone 6/6+(release: 09/14)
iOS 1.x
iOS 2.x
iOS 3.x
iOS 5.x
iOS 4.x
iOS 6.x
iOS 7.x
iOS 8.x
iOS 9.x (just announced)
?
Winning Moves:• Deliver real value with every generation• Incorporate functionality from other devices• Build a strong software ecosystem• Make upgrading to new hardware easy• Enhance margin with tiered pricing (such as
for larger memory)
“Apple” Quadrant
SmartphonesVirtual reality systems
Risks:• Products may move into a longer-life
quadrant
“Apple” (short life, high price)
UsefulLife
Price Point< $300 > $300
7-10 yrs
1-3 yrs
UsefulLife
Price Point< $300 > $300
7-10 yrs
1-3 yrs
“Point Product” Quadrant
Fitness trackersAction camerasHeadsetsHealth monitors
Winning Moves:• Design with a 2-year timeframe in mind• Focus on a single, well-defined use case• Relentlessly drive down cost• Encourage multi-unit sales
Risks:• Watch out for integration into an adjacent
quadrant
“Point Product” (short life, low price)
Winning Moves:• Design with a 10-year timeframe in mind• Land and expand into related devices• Relentlessly distribute free software over the
cloud to improve devices in the field• Build a strong ecosystem that enables
valuable device-to-device interactions
“Land & Expand” Quadrant
Home IoT:ThermostatsSpeakersDoorlocksScalesSecurity
Risks:• Not properly designing hardware for a 10-
year timeframe
“Land & Expand” (long life, low price)
UsefulLife
Price Point< $300 > $300
7-10 yrs
1-3 yrs
Winning Moves:• Design with a 10-year timeframe in mind• Relentlessly distribute free software over the
cloud to improve devices in the field• License enabling tech to other players• Create a software ecosystem for 3rd parties
Risks:• One-and-done relationships with customers
due to long timeframe between purchases
“Detroit” Quadrant
TVsCarsKitchen appliancesGaming consolesDSLR cameras
“Detroit” (long life, high price)
UsefulLife
Price Point< $300 > $300
7-10 yrs
1-3 yrs
Quadrants Can Shift
Price Point< $300 > $300
7-10 yrs
1-3 yrs
“Apple” Quadrant
PCsLaptopsTablets
“Detroit” Quadrant
UsefulLife
Products Can Be Subsumed
Price Point< $300 > $300
7-10 yrs
1-3 yrs
“Point Product” Quadrant
Point & Shoot Cameras
“Apple” Quadrant
UsefulLife
Success Possible in Every Quadrant
Price Point< $300 > $300
7-10 yrs
1-3 yrs
“Point Product” Quadrant “Apple” Quadrant
“Land & Expand” Quadrant “Detroit” Quadrant
UsefulLife
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