A Tale of Two Toasters

Acme Toaster Company was founded in 1924 and has held a position among the top three toaster manufacturers since the close of World War II. It has been selling the Acme Toaster for more than half a century, tweaking the industrial design ever few years to accommodate changing consumer tastes. The company spends approximately one hundred thousand dollars per year on surveys, focus groups, and usability tests to ensure its products are keeping pace with market demands.

UltraKitchen LLC is a start-up firm that hopes to reinvigorate the small appliance market by modernizing utilitarian designs with Silicon Valley technology. The blueprint for its flagship product, the UltraToaster, was conceived after two hours of research, conducted in a conference room. After debating what consumers want in a toaster (the consensus was toast), the design team set out to build a product that would deliver perfect results every time, with a minimum of irritation and effort. To develop the initial design and functional spec for the UltraToaster, the company spent $34 on pizza and soft drinks.

The Acme Toaster has standard toaster features: a knob that sets the toasting time (brownness) in a range from 1 to 10, and a lever that raises and lowers the bread and turns the toasting elements on and off. Usability tests have shown that users routinely undertoast or overtoast their food items. The Acme Toaster design team has determined that toasting failures result from the user’s inadequate knowledge of toaster mechanics and by their failure to appreciate mutual reciprocities that exist between browning level, bread density, and moisture content – even though all factors are discussed at length in the manual. Because of the users’ failure to learn to use the toaster correctly, most users are forced to visually monitor toasting progress and manually eject the food item when it has reached the desired brownness (“serves them right,” the project manager says). The toaster generates one error message – a loud, annoying buzzing sound that occurs when the user foolishly pushes down the lever to extend the toasting time without first turning the knob to increase the brownness level.

The UltraToaster has rewritten the decades-old rules of toaster behavior. It has no brownness knob and no lever; instead it has a color LCD touch-screen display on one side of the machine. The user simply drops the bread, bagel, or pastry into the slot. The toaster detects the type of food item just inserted, and the LCD displays a series of pictures of that item in various states of brownness. The user simply touches the picture that best matches the desired brownness level, and the toaster begins to toast. The user is now free to make the rest of her breakfast; however, many users prefer to stay and watch the LCD’s live picture of the toasting process, along with a progress bar displaying the countdown to toast. When the toaster is finished toasting, it chimes pleasantly, and keeps the toast warm inside the unit until the user returns. One touch on the LCD display raises the toast to where the user can easily grasp it.

The Acme Toaster costs $29.99 and earns a profit of 8%. The UltraToaster costs $129.99 and enjoys a profit of 30%. Acme Toaster has an installed base numbering in the millions. The UltraToaster is UltraKitchen’s first product and has no installed base.

Question: Given the evolution of technology, five years from now, which product will be obsolete?