| Pub. Date | : March' 2020 |
|---|---|
| Product Name | : The IUP Journal of Case Folio |
| Product Type | : Article |
| Product Code | : IJBS10320 |
| Author Name | :Syeda Maseeha Qumer |
| Availability | : YES |
| Subject/Domain | : Management |
| Download Format | : PDF Format |
| No. of Pages | : 20 |
The case focuses on global tech giant Apple's supposed planned obsolescence strategy and its social, environmental and economic implications. Apple was accused of deliberately slowing down its iPhones through software updates and designing its products to be short-lived in order to encourage customers to buy its new models and boost sales. Moreover, a number of devices from Apple were increasingly being designed in ways that made it difficult for users to fix them, thereby shortening their lifespan. Though Apple admitted to throttling older iPhones, it said that it had done so for a purely altruistic reason-allegedly to prevent them from crashing due to aging batteries. To make up for its lack of transparency, Apple eventually discounted the price of replacing batteries in older iPhones. The case explores how Apple's planned obsolescence leads to a short life cycle of the products, which impacts sustainability negatively. By encouraging a culture of consumption, Apple is contributing to the overuse of energy and resources, which increases the risk of global warming. Discarded devices produce large quantities of electronic waste (e-waste) that pollute ecosystems and contribute to climate change. In addition, mining for essential raw materials endangers workers by fueling armed conflict in countries like the Democratic Republic of the Congo (DRC). Also, workers who assemble iPhones in Chinese factories endure sweatshop-like conditions. As one of the most valuable companies in the world, Apple is environmentally focused and is continuously working to reduce its environmental footprint by focusing on climate change, resources, and safer materials. However, the company's commitment to protecting the people and the planet is increasingly being diluted due to allegations of planned obsolescence. Analysts wondered whether Apple's planned obsolescence is just a public perception or whether the company is really guilty of built-in obsolescence. Going forward, the questions before Apple are: How can it tackle the issue of planned obsolescence? How can it assure stakeholders that it places sustainability before profits? Should the company take a clear stance on this issue, given its global scale and influence? If so, how should Apple go about it?
In October 2018, in an unprecedented ruling on planned obsolescence, the Italian Competition Authority (AGCM) fined tech giant Apple Inc. (Apple) E5 mn (US$5.7 mn), stating the company had engaged in dishonest practices by failing to provide its customers with an effective way to recover the full functionality of their devices. It stated that Apple had deliberately limited the useful life of its products by prompting users to install software updates that significantly reduced the performance of their phones. As a result, many consumers had had to upgrade their handsets. Apple was fined an additional E5 mn for allegedly failing to provide adequate information on how to maintain and replace batteries in the company's flagship device, the iPhone.