Will Planned Obsolescence Kill Silicon Valley
•Télécharger en tant que PPTX, PDF•
2 j'aime•1,128 vues
In Detroit’s heyday, automotive manufacturers built generations of vehicles with intentionally limited lifespans to encourage new vehicle purchases on a regular basis. In today’s world of connected hardware, leading vendors like Apple are pursuing similar strategies based on rapid obsolescence. What’s different this time is the role of Moore’s Law and software – rapid innovations in faster wireless protocols, higher power processors, lower power budgets and better battery lives are forcing consumers, designers and businesses to view hardware as a service rather than merely as products. However, unlike the decisions that eventually led to Detroit’s downfall, planned obsolescence is a good thing for both consumers and hardware vendors alike. This talk explores how designers can create products that ease rapid transitions from generation to generation of product, and how businesses can benefit from planned obsolesence while still delighting their customers.
Recommandé
Recommandé
Contenu connexe
Similaire à Will Planned Obsolescence Kill Silicon Valley
Similaire à Will Planned Obsolescence Kill Silicon Valley (20)
Dernier
Dernier (20)
Will Planned Obsolescence Kill Silicon Valley
- 1. Will Planned Obsolescence Kill Silicon Valley? Rob Coneybeer Shasta Ventures
- 4. 1920’s Automotive Market 1900 U.S.AnnualUnitProduction 1905 1910 1915 1920 1925 1926: 4 million cars
- 5. Planned Obsolescence is 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
- 6. New models every year Fins as a proxy for fashion Artificially limited lifespan
- 9. Silicon Valley’s Leading Hardware Product 170 million units shipped in 2014 New model every year Limited lifespan Non-replaceable battery High repair costs Expensive, fixed memory Software rapidly outgrows hardware
- 10. What’s Different This Time? 1. Moore’s Law 2. Universal Cloud Connectivity 3. Constant Threat of Overnight Global Competition Cutting-Edge Technologies Enormous Software Ecosystem High Consumer Value
- 11. 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) ?
- 12. Obsolescence Strategies for Connected Hardware Price Point < $300 > $300 7-10 yrs 1-3 yrs Useful Life
- 13. 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 Smartphones Virtual reality systems Risks: • Products may move into a longer-life quadrant “Apple” (short life, high price) Useful Life Price Point < $300 > $300 7-10 yrs 1-3 yrs
- 14. Useful Life Price Point < $300 > $300 7-10 yrs 1-3 yrs “Point Product” Quadrant Fitness trackers Action cameras Headsets Health 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)
- 15. 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: Thermostats Speakers Doorlocks Scales Security Risks: • Not properly designing hardware for a 10- year timeframe “Land & Expand” (long life, low price) Useful Life Price Point < $300 > $300 7-10 yrs 1-3 yrs
- 16. 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 TVs Cars Kitchen appliances Gaming consoles DSLR cameras “Detroit” (long life, high price) Useful Life Price Point < $300 > $300 7-10 yrs 1-3 yrs
- 17. Quadrants Can Shift Price Point < $300 > $300 7-10 yrs 1-3 yrs “Apple” Quadrant PCs Laptops Tablets “Detroit” Quadrant Useful Life
- 18. Products Can Be Subsumed Price Point < $300 > $300 7-10 yrs 1-3 yrs “Point Product” Quadrant Point & Shoot Cameras “Apple” Quadrant Useful Life
- 19. 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 Useful Life
- 20. Planned Obsolescence versus Planning for Obsolescence
Notes de l'éditeur
- 100 years ago Detroit was the innovation hub of the American economy Detroit was booming & envy of the world – shining light of American entrepreneurship ONE OF THE KEY INVENTIONS WAS THE ASSEMBLY LINE…
- Brought cost down to a point where every family could afford a car Internal Combustion Engine, The Assembly Line, Standardized Parts OVER A SHORT PERIOD OF TIME, AUTOMOBILES BECAME VERY POPULAR WITH CONSUMERS & ACHIEVED HUGE PRODUCT-MARKET FIT…
- By 1926, there were nearly 20 million cars on the road in the United States – 1 for every 5 Americans The market of 1st-time buyers of new cars reached saturation Sales of used vehicles surpassed new vehicle sales. IN THE FACE OF FLAGGING DEMAND THERE WAS HUGE PRESSURE TO CONTINUE GROWING … HOW TO DO IT?
- To keep growing , Detroit created and embraced Planned Obolescence This was a new idea – until then, most manufacturers made the same exact products year after year Alfred P. Sloan, then President of GM, became a master at implementing this idea of “Planned Obsolescence” HOW DID HE DO IT?
- GM created the idea of “Model Years” for cars – every year, new models came out, with significant cosmetic changes, to entice consumers to abandon their old vehicles before they needed to At the same time, actively lowered the lifespans of their vehicles Over the next few decades, this is what Detroit produced – unnecessary upgrades (fins) with lower quality than in the past AS A RESULT, DETROIT STOPPED SERVING CUSTOMERS
- …which created a huge opening for Japanese & German automakers This is a picture of an early Honda Civic – cars that delivered what customers wanted – long lives and useful technology in the form of fuel efficiency AND HERE’S WHAT HAPPENED TO DETROIT
- Today, Detroit is only a shadow of it’s former self – over ½ of the population has fled since it’s peak It’s no longer a center for innovation Some people say that Planned Obsolescence killed Detroit FAST FORWARD TO HARDWARE TODAY IN SILICON VALLEY
- Today the worldwide shining light of American ingenuity, entrepreneurship & tech innovation is Silicon Valley Within Silicon Valley, the world’s most valuable company upgrades their flagship product every single year – with a high-priced, fashionable product. SOUNDS FAMILIAR, DOESN’T IT?
- Is something different this time? YES Obsolescence is the “new normal” in product design. Far from killing Silicon Valley (like it did to Detroit), embracing it is actually the foundation for the most successful hardware companies today. What is the new Planned Obsolscence playbook for hardware companies? LETS TAKE A QUICK LOOK AT APPLE’S ENGINE FOR PLANNED OBSOLESCENCE WITH THE IPHONE
- Foundation is free software, rapid upgrade cycles, and eventual forced sunset of older iPhones All while bringing along the application developer ecosystem Predictable BUT WHAT ABOUT OTHER COMPANIES? THERE’S A HUGE AMOUNT OF INNOVATION IN CONNECTED DEVICES EVERYWHERE IN THE WORLD AROUND US, FROM OUR HOMES, TO TRANSPORTATION, TO OUR WORKPLACES & FACTORIES
- Connected hardware companies need to consider 2 key elements: Useful Life, due to pace of technology innovation Price Point LET’S TAKE A CLOSER LOOK AT SOME EXAMPLES & WINNING STRATEGIES FOR EACH QUADRANT
- These are the products with a short expected useful life, and a high price point Expect a VR winner here as well Because of the high pace of innovation, these product will become obsolete rapidly Because of the price point, consumers can only afford a small # of these products Key observations: Deliver real & increased value in every generation – every new hardware generation should deliver significantly increased value Make it easy to upgrade to new hardware Software ecosystem is critical Justify the price by incorporating functionality from other devices (just like point-and-shoot cameras)
- These are the products with a short expected useful life, and a low price point Key observations: Design with a 2-year timeframe in mind, recognize relatively rapid replacement Focus on a single, well-defined use case Get dominant market share to relentlessly drive down the cost Encourage multi-unit sales Software ecosystem not as important RISK: integration into an adjacent quadrant
- These are the products with a LONG expected useful life, and a low price point Great IoT in the home products fall into this quadrant - like Nest and Sonos Key observations: PROTECT THE BEACHHEAD to allow for subsequent HW sales of related devices Design with a 10-year timeframe in mind – support software upgrades for a decade Relentlessly distribute free software over the cloud to improve devices in the field Build a strong ecosystem that enables valuable device-to-device interactions RISKS: losing the beachhead by either not designing for a 10-year lifespan, or failing to regularly provide value for free through the software
- These are the products with both a LONG expected useful life, and a high price point This is the predicament that Detroit fell into – can be the most challenging quadrant Key observations: Design with a long timeframe in mind – consumers expect quality License to other players (Tesla with batteries & drivetrains, XBOX with the Kinect and to publishers) RISK: Due to long timeframe between purchases, this can be a tough category to retain customers
- What happens is the USEFUL pace of technology innovation slows down? Consumers won’t see sufficient value to upgrade every 1-3 years.
- Products can become features in adjacent categories Point-and-shoot cameras are the perfect example, fitness trackers might be
- What do all of these scenarios have in common? Main successful business model is selling hardware Careful consideration of the correct design life is CRITICAL Think of the price of hardware as including a pre-paid software service. Planned obsolescence was originally an afterthought that eventually killed Detroit in the absence of real technology innovation. But today, planning for obsolescence is at the foundation of Silicon Valley hardware strategies.
- A FINAL THOUGHT This looks like a play on words, but it’s an important distinction One is about screwing your customers, and the other is about serving your customers To build a successful connected hardware company today, don’t force obsolescence, but recognize it and harness the rapid pace of technology innovation to the customer’s benefit.