There was once a point in time when rotary phones, color TV, and floppy discs were the latest advancements in modern technology.
Today, that seems almost laughable because we’ve come so far since then.
We now live in a world where everything is fast-paced — especially when it comes to rendering one technology obsolete through the introduction of something new and innovating.
Even in this lifetime, we’ve seen technologies die out that at one point were the must-have gadgets of their days.
Blackberry phones and handheld game consoles like Nintendo’s Game Boy being the perfect examples of this.
I’m sure we could all think of a never-ending list to add to the obsolete category.
But here are a few that you may have easily overlooked…
Diesel Cars
Over a century after Rudolf Diesel died under mysterious circumstances, a growing number of consumers and industry experts alike believe that the engine that bears his name is about to meet its maker.
But the looming death of his engine no longer seems fanciful nor the probable cause mysterious.
In 2015, the onset of Dieselgate — the revelation that Volkswagen (OTC: VLKAY) installed cheat software to help its diesel vehicles pass environmental tests — became the biggest scandal to hit the automotive industry in decades.
While VW has taken the right steps toward fixing this issue with its diesel car owners, this event seems to have started a death spiral for diesel engines all over the world.
In general, diesel vehicles find themselves smack-dab in the middle of a global environmental crisis.
Air pollution now kills approximately 3.3 million people each year — that’s more than HIV, malaria, and influenza combined — with emissions from diesel engines among the worst culprits.
Besides that, with affordable electric vehicles (EVs) like the Chevy (NYSE: GM) Bolt, which promise ever growing ranges, diesel’s days were already numbered.
VW’s announcement that it would never sell another diesel car within the U.S. was the fatal blow, leaving only a few niche offerings at select dealerships — essentially, the corrected leftover diesel vehicles that were left in inventory.
But VW isn’t the only auto manufacturer caught in the crosshairs…
Audi (OTC: AUDVF) and Porsche (OTC: POAHF) are under investigation for installing cheat software into their vehicles, as well.
Daimler (OTC: DDAIF) is also under some scrutiny for knowingly selling around 1 million cars that emitted more harmful nitrogen oxide than permitted by law over the past decade.
Faced with the prospect that no diesel engine is as clean as manufacturers once promised, cities like Paris, Mexico City, Madrid, and Athens, Greece, have even taken steps to ban diesel vehicles by 2025.
In the beginning, diesel was touted as a wonder fuel.
It was marketed as a way of driving cost efficiently while doing a bit to save the planet.
Government, industry, and science united to sell consumers the ultimate dream: Cars fueled by diesel would help to cut carbon dioxide emissions as we eased into a new eco-friendly age.
Diesel vehicles gained most of their fame in Europe and were later adopted in the U.S.
Drivers liked the fuel-efficiency of diesel engines, which made running costs cheaper than gas-powered engines over the long term.
European governments that are concerned about rising carbon emissions even deliberately cut fuel duty on diesel to encourage people to switch.
But the truth of the matter is that diesel engines emit far more soot and nitrogen oxides than their gasoline counterparts.
Ever since Volkswagen’s clean diesels were found to be nothing of the sort, European officials have taken strong stances against cars that use the fuel.
European Parliament voted to introduce new regulations that would allow it to fine car manufacturers more than $30,000 per vehicle if they were caught cheating on emissions tests.
Aggressive policy measures like these will also help accelerate the adoption of hybrids and EVs because there’s nothing like facing large levies to spur a global upgrade.
Cash
Think long and hard about the last time you carried physical cash or when a business asked for cash only as payment.
It’s been a while, right?
Just three years ago, Washington Post reported that eight out of 10 people carried less than $50 cash in their wallets on a regular basis.
Today, only one out of 10 Americans admitted to no longer carrying cash at all.
An astounding 62% of American adults surveyed in a Gallup poll last year think that the country has the possibility of becoming a cashless economy.
The data also shared that 56% of millennials do not feel comfortable with carrying cash in their wallets, which could be due to concerns of either spending it all too quickly or losing it.
While there hasn’t been a clear reason as to why carrying cash has been on the decline in recent years across all age groups, it may be safe to assume that people are either becoming more budget conscious or that mobile payment technology just lures in more customers.
Companies that offer up ways to pay without using physical cash have become more prevalent over the past decade.
These companies include PayPal (NASDAQ: PYPL), Venmo, LevelUp, Square (NYSE: SQ), Google Wallet, and more…
With Apple Pay and Android Pay also taking a bite out of the market, it’s looking more like cash will soon become obsolete.
In Q1 of this year, Apple Pay saw a 450% increase in its usage, generating $7.01 billion.
Earlier this year, PayPal announced its plans to be incorporated into Google’s Android Pay. PayPal also says it had a revenue of $2.98 billion at the end of 2016 and processed over $102 billion in payments.
Juniper Research’s data shows that Apple Pay, Android Pay, and Samsung Pay alone will reach over 300 million users by the end of 2017.
With all the various ways of offering payment options that entirely remove cash from the equation, the possibility of becoming a cashless economy is not too outlandish.
As more consumers continue to shop online over brick-and-mortar establishments, the rate of either credit card or mobile payments is likely to continue on its upward trajectory.
Online payments rendering cold, hard cash obsolete just might not be too far off.
Smartwatches
Remember back in 2015 when Apple (NASDAQ: AAPL) launched its Apple Watch and everybody wanted one?
Well, they seem to be dying, too. Sales dropped a whopping 71% between the third quarters of 2015 and 2016, and general interest in all smartwatches seems to be fading overall.
I guess it’s safe to say that the smartwatch is dying out, too.
The CEO of Chinese electronics maker Huawei, Eric Xu Zhijun, certainly surprised everyone with his comments regarding the wearable technology back in April. In truth, he publicly trashed it.
Despite the fact that his company makes them, Zhijun states that he would never wear one:
I am always confused as to what smartwatches are for when we have smartphones.
Zhijun is not alone in feeling this way.
National serviceman Brian Chang’s favorite watch is a Hublot Classic Fusion, which he received as an 18th birthday present from his parents.
Smartwatches do not appeal to him — never mind that they boast multiple functions and tell time more accurately — Chang says it’s all about the sentimental value:
Mechanical watches have a soul. No smartwatch comes close to the feeling of a mechanical rotor whirring on your wrist.
Many people feel the same way, which explains why the day when smartwatches will slay the luxury watch market may never come.
When the Apple watch was first released, the high-end versions boasted gold plating and cost several thousand dollars.
Apple tried (and failed) to market this version as a must-have luxury accessory, complete with a 12-page Vogue advert.
But of course, consumers soon learned the difference in quality between a finely crafted Rolex, with its decades-long tradition of craftsmanship, over a digital watch with technology that would become obsolete way too soon.
Prestige, tradition, style, and mystique are the characteristics that drive consumers back to luxury Swiss watches.
A luxury watch is more than just a timepiece.
It’s a status symbol, a work of art, a complex mechanical marvel, a family heirloom, or a practical statement piece that’s built to last for generations.
Swiss watch brands have built an unmatchable reputation for high-quality craftsmanship, precision, reliability, and longevity for their timepieces that greatly outweighs their smarter counterparts.
The Swiss luxury watch industry said that it’s still going strong, even declaring that its downturn has passed.
A report from the Federation of the Swiss Watch Industry (FH) said that exports as of May 2017 were at nearly $1.8 billion, a 9% growth from the same time last year.
Let’s face it: The smartwatch industry is doomed.
However, it wasn’t supposed to be this way…
Less than three years ago, analysts predicted that the industry would be on fire.
Now, let’s cut to the present… Pebble is deader than the ashes of burned up Galaxy Note 7s. Fitbit, the most popular wearable brand, can’t get its first real smartwatch out the door. Android Wear is a buggy, fractured mess. And even Apple, that claims to sell more smartwatches than anyone else, refuses to state just how many Apple Watches it’s sold — probably because the numbers are so low.
If you’d rather use your phone than a watch, then what use is a smaller, buggier version on your wrist?
And if you’re like serviceman Chang and prefer a classic analog watch, why would you ever choose a more expensive smartwatch that will become obsolete mere months after you buy it?
It seems like Zhijun was right: Smartwatches just don’t add up.
The Bottom Line
On the surface, it’s very easy to overlook technologies like these that seem to be doing well.
But after digging deeper, it’s obvious that their days are numbered.
That’s all for now.
Until next time,
John Peterson
Pro Trader Today