When to Buy Electronics

Posted by T | 8:29 PM | 0 comments »

The IPod...the IPhone...HDTV...Playstation 3....these electronic gizmos aren't just the latest toys on a wish list. They have actually become a part of our culture. "What's on your IPod?" has become a frequently-asked question, and each Christmas the latest video game system becomes the must-have gift for the kids.

The thing is, these devices are expensive. I like to be on the cutting edge of "what's hot" as much as anybody, but how does one buy these items and still live a life of frugality? When is a good time to buy electronics?

If history is any indicator, the answer is "wait a year or two". From the time Americans first started pressing an ear to the radio, electronics have always followed a pattern of selling at an extremely high price when they are first offered, and then coming down in price substantially as they move through the natural product life cycle and are replaced by the next "in" device.

When radios first started selling in the U.S., they looked like pieces of furniture...encased in wood, with a speaker covered in fabric. Some of the first, crude radio sets were sold to consumers for about $8.75 in 1915...about $180 in today's money. Obviously, basic radios have really declined in in price since then.

The same holds true for television. When TV's first went on sale in the U.S. they cost a couple of thousand dollars...at a time when little, if any, programming was available. That was about a year's salary back then.

So what does this tell us? It pays to wait! Purchasers of the IPhone found this out the hard way.
Just a couple of months after the much anticipated launch of the IPhone, Apple slashed the price from $600 to $400. The backlash by consumers who ponied up the big bucks was immediate, causing Steve Jobs to offer up an apology and a $100 store credit to those who has paid $600 for a fancy telephone.

I was one of the first people to jump on the compact disc craze. Back in the 1980's, I forked over about $600 for a CD player, at a time when few albums were available on CD, and CD's cost about $35 each. Now you can find a portable CD player for about $10, and CDs for even less.

I now have my eye on a widescreen HDTV, perhaps a plasma or LCD. But, the old tube version I have now, which I have had for more than 10 years, is still working great. I am in no hurry to run out and spend hundreds of dollars just for the sake of a clearer picture. One day, the tube on my TV will fail, and at that time plasma or LCD TVs will probably cost less than $200. Those TVs have already come down in price substantially since they were first offered just a few years ago. HDTVs first came on the market at a price of thousands of dollars. I saw one today in the paper for about $500...and that price is sure to fall even more.

Patience is a virtue...especially when it comes to electronics. If you can "make due" with the TV, phone or game system you currently have, big bargains are on your way a couple of years down the road.

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