What is the difference between functional and technical obsolescence?
Answer: These two terms are often used synonymously, and while their meanings are slightly subjective, I would argue they are distinctly different.
Technical obsolescence is when a product is no longer technically superior to other similar products. For example, you may buy the latest iPod, which has the most storage and largest screen of any iPod available. A week later, Apple may introduce a new iPod model that has twice the storage, a larger screen, and makes coffee for you in the morning.
The new iPod is technically superior than the model you purchased, which means the iPod you bought a week earlier is "technically obsolete." But that does not mean your iPod is functionally obsolete. It still plays music and can download new songs from your computer using iTunes.
Functional obsolescence is when a product no longer functions like it did when you bought it. Using the iPod example again, if Apple released a new version of iTunes that only worked with the new iPod, your iPod would be limited in its capability to download and play new music. This would make your iPod "functionally obsolete." Fortunately, companies like to maintain their consumer base. This means they have a strong incentive to support products for several years after their release.
In summary, a product may become technically obsolete well before it becomes functionally obsolete. When you buy any type of computer or electronic product, you have to expect that it will soon become technically obsolete. But that should not cause you undue distress. If your iPod still plays all the songs you like and the buttons keep working the way you are used to, who cares if there is a new model out with a bigger screen and a bigger hard drive? It is to your benefit to be content with the product you have instead of always comparing it to the newest model.