The Infamous Phoebus Cartel: Inception of Planned Obsolescence | The Lightbulb Conspiracy

“You can sell anything if you hide the truth well enough.”

In the glitzy world of tech launches and marketing campaigns, one quietly sinister strategy has shaped modern consumerism more than most would care to admit: planned obsolescence. And perhaps no historical case illustrates it better than the Phoebus Cartel, a 1924 alliance that fundamentally changed the way companies design, market, and profit from products.

This article dives deep into:

• The history of the Phoebus Cartel.

• How did planned obsolescence become a business model?

• The ethical and strategic dilemmas it creates.

• What MBA students and marketers can learn today.

• Case studies and emerging sustainable alternatives.

• Actionable insights for future marketers.

🕰️ The Origin Story: What Was the Phoebus Cartel?

The Phoebus Cartel was formed in 1924 by leading lightbulb manufacturers, General Electric (USA), Osram (Germany), Philips (Netherlands), and Compagnie des Lampes (France). Together, they created a global monopoly over incandescent bulb production.

But their goal wasn’t efficiency or innovation. It was control.

By the early 1900s, manufacturers had developed lightbulbs that could last up to 2,500 hours or more. Some, like the Centennial Lightbulb in Livermore, California, installed in 1901, are still glowing today - more than 123 years later.

The cartel found this unacceptable.

So, they intentionally reduced the lifespan of bulbs to just 1,000 hours and fined members who exceeded it. More bulb burnouts meant more purchases. More purchases meant more profits.

This was the birth of planned obsolescence—not by accident, but by cold, strategic design. It marked the beginning of a trend that would go on to define product strategy across industries for decades.

Graph showing bulb life span decline from 1900s to 1930s

The cartel was disbanded by the late 1930s due to patent expiration, World War II, and competition from cheaper Japanese alternatives flooding the US and European markets, but its legacy lives on. Its influence echoes in smartphones, home appliances, software licensing, fashion, and even digital products.

💡 Planned Obsolescence: Defined

Planned obsolescence is the practice of designing products with an artificially limited useful life or functionality so they become obsolete, or appear outdated after a certain period. This results in the consumer replacing the product, even if it still functions.

Types of Planned Obsolescence:

1. Technical obsolescence – Products that are engineered to wear out or break prematurely.

2. Psychological obsolescence – Consumers are led to believe their product is no longer fashionable or modern.

3. Systemic obsolescence – Changes in infrastructure or software make older products incompatible or unsupported.

4. Legal obsolescence – When new regulations render older models illegal or outdated (e.g., emissions regulations).

Real-World Examples:

• iPhones: Apple admitted to slowing down older iPhones via software updates in 2017, claiming it was to preserve battery life.

• Car models: Many auto brands release minor tweaks annually, feeding a market of constant upgrades.

• Electronics: Televisions, headphones, and laptops with non-replaceable batteries or proprietary screws hinder repair.

iPhone users are experiencing their phones slowing down after launch of a new model

📈 Why Do Companies Use Planned Obsolescence?

From a business perspective, planned obsolescence is about increasing purchase frequency. In economic terms, it maximizes the customer lifetime value (CLV) by shortening the replacement cycle.

Strategic Benefits:

• Ensures consistent demand

• Drives recurring revenue

• Creates justification for aggressive marketing

• Positions the brand as innovative and dynamic

However, these short-term gains often come at the cost of long-term trust and brand loyalty.

In a 2023 survey by McKinsey, 64% of Gen Z respondents said they research how long products last before purchasing.

🧠 The Marketer’s Role: Crafting the Narrative

While product teams may initiate the lifespan strategy, marketing departments execute it. Planned obsolescence is supported and accelerated by the way we:

• Launch campaigns that present new versions as must-haves

• Devalue older models subtly through comparison and influencer messaging

• Create FOMO (Fear Of Missing Out) by using limited-time offers or exclusive features

Marketers often glorify innovation while masking obsolescence. The challenge is not just to sell, but to sell responsibly.

As MBA students preparing for leadership roles, understanding how marketing choices influence consumer behavior and environmental impact is crucial.

🔍 Case Study: Apple vs. Fairphone

Apple's product ecosystem has driven loyalty and innovation but also criticism for hardware obsolescence. In contrast, Fairphone, a Netherlands-based company, champions repairability and transparency.

Fairphone’s Model:

• Modular design (battery, screen, camera, all replaceable)

• Software support for up to 5–7 years

• Ethically sourced materials and fair labor practices

Entirely repairable Fairphone, where you can replace the battery or any other parts if it's broken.

Fairphone sells fewer units, but its customer retention and brand advocacy are exceptionally strong among conscious consumers.

Apple, under pressure, has gradually shifted, offering self-repair kits and increasing transparency about product performance.

🧥 Fashion: Fast vs. Slow

Fast Fashion:

Brands like Zara, H&M, and Shein thrive on quick turnover. With micro-seasons every few weeks, garments are designed to last a few washes.

According to the World Economic Forum, the fashion industry produces 92 million tons of waste per year.

Slow Fashion:

Brands like Patagonia, Eileen Fisher, and Levi’s promote durability and reuse. Patagonia famously ran a 2011 campaign: “Don’t Buy This Jacket.”

Despite selling less in volume, Patagonia’s revenues and brand equity have grown steadily, backed by sustainability and trust.

Patagonia promote using products longer rather than buying new every cycle

🛠️ Right to Repair Movement

Consumers are pushing back. The Right to Repair movement advocates for:

• Access to tools and manuals

• Legal protections for third-party repairs

• Product design that facilitates disassembly and upgrades

Legal Wins:

• European Union: Mandates device repairability for up to 10 years.

• US States: Over 20 have introduced or passed right-to-repair laws.

Marketers must begin incorporating these values into their messaging.

Trust is no longer a “nice-to-have”, it’s a key differentiator.

🎓 Insights for MBA Students and Young Marketers

1. Understand the Lifecycle

Push your teams to assess whether their product lifecycle is consumer-friendly or exploitative.

2. Champion Transparency

If a product is not built to last, don’t hide it—frame it honestly. Or better yet, advocate for change internally.

3. Reward Sustainability

Build campaigns around durability, reuse, and environmental savings. Market sustainability not just as a CSR tactic but as a value proposition.

4. Leverage Loyalty over Frequency

Customer retention is often cheaper than acquisition. Sustainable products drive long-term brand equity.

Harvard Business Review reports that increasing customer retention by just 5% can boost profits by 25% to 95%.

🧪 Exercise for MBA Classrooms

Scenario:

You’re a product manager at a consumer electronics company. Your team is designing a new smartwatch. The business team wants:

• A non-replaceable battery

• Annual model launches

• Minimal software support after 2 years

Your goal is to pitch a different approach.

Deliverables:

1. A revised product strategy that balances profit and sustainability

2. A marketing campaign slogan and positioning angle

3. A financial model that shows value through loyalty, not frequency

Present your pitch as if addressing your company’s board.

🌍 Marketing for the Circular Economy

We are moving from a linear economy (make, use, dispose) to a circular one (make, use, repair, reuse, recycle).

Marketers will play a major role in educating consumers and aligning branding with circular values.

Brands Leading the Way:

• IKEA now offers furniture buy-back programs.

• Dell uses recycled materials and offers disassembly-friendly designs.

• Allbirds publishes carbon footprint data for every shoe.

These companies are proving that green growth is not a myth—it’s a choice.

🔚 Conclusion: Is Planned Obsolescence Worth It?

The Phoebus Cartel proved that you could engineer demand through manipulation. But it also proved that trust, once broken, leaves a legacy.

Today’s marketing students must graduate not just with skills, but with perspective. You will be the future gatekeepers of strategy, communication, and consumer trust.

Ask yourself:

• Will your next campaign create genuine value?

• Are you helping the planet, or just pushing another product?

Because in the long term, what survives is not the product, but the principle.

Author: Gunjan Solanki

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🔗 Resources & Further Reading:

• IEEE: The Great Lightbulb Conspiracy

• The Light Bulb Conspiracy – YouTube Documentary

• Centennial Light Project

• Ellen MacArthur Foundation – Circular Economy

• Harvard Business Review: Conscious Capitalism