What happens when brands retain control of their products?

05 : 01 : 2018 Technology : Automotive : Digital
Tesla Model X Tesla Model X

This furore highlights a wider discrepancy between consumers’ and technology companies’ concepts of, and attitudes towards, ownership.

Peter Maxwell, senior journalist, LS:N Global

Widely held suspicion turned to outrage after it was proved that Apple’s phones didn’t merely feel slower as they aged, but were intentionally being throttled by the company in order to prevent them from abruptly shutting down.

Looking past the vitriol expounded by both commentators and consumers alike, the fact remains that the brand’s actions were entirely appropriate. A drop in performance would for most iPhone owners probably be an acceptable trade-off for maintaining functionality. What is at issue here is the question of permission – Apple acted without consent. As iFixit’s Jeff Suovanen, one of the engineers who discovered the practice, comments: ‘It’s a reasonable thing to do but it’s sketchy to do it without disclosure.’

This furore highlights a wider discrepancy between consumers’ and technology companies’ attitudes towards ownership when it comes to products that rely on remaining networked back to the manufacturer. As brands across sectors increasingly make their inventory Internet of Things-enabled, this is something that will affect an ever growing basket of goods.

Largely these infractions are benign and welcome, providing vital security patches for newly exposed software flaws, for example. Actively altering functionality, however, even when there is an obvious benefit to the consumer, seems to be a boundary that brands should not transgress without first entering into dialogue with their customers.

Unfortunately, consumer faith in technology companies’ ability to address them clearly and honestly has been damaged by decades worth of terms and conditions statements that hide changes to services in dense dossiers of opaque language. Brands entering the technology area in a rush to make their previously dumb product lines more network connected will do well to not make a similar mistake.

The freemium model adopted by app- and game-makers is segueing into physical goods, meaning that buying a device does not always mean you have access to its full potential.

Perhaps an even greater cause for concern is the way in which software’s increasingly important role in the operation of all kinds of products is being exploited to add new tiers of revenue generation. The freemium model adopted by app- and game-makers is seguing into physical goods, meaning that buying a device does not always mean you have access to its full potential.

One example was highlighted during last summer’s Hurricane Irma, when news broke that Tesla had sent out a software update that allowed owners of certain models in the vicinity of the storm to temporarily access an extra 40 miles worth of range. This ‘upgrade’, which in fact merely allows owners to access the full potential of the hardware they have already purchased, usually costs $3,250.

This tactic had been employed by Tesla for several years, but the news story brought it to the attention of a much wider car-buying audience, promoting author and economist Alex Tabarrok to accuse Tesla of essentially selling damaged goods. ‘I fear that Tesla may have made a marketing faux-pas,’ said Tabarrok. ‘When it turns off the extra mileage boost are Tesla customers going to say ‘thanks for temporarily making my car better?’ Or are they going to complain, ‘why are you making MY car worse than it has to be?’’

That ‘why’ is a question an increasing number of brands will have to work out how to answer succinctly and often – or, better yet, negate altogether by being transparent about how much of the products they sell remain in their ownership.

For more on the future of consumer electronics, look out for our coverage of CES 2018 throughout next week.