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The era of ubercheap tech

If you're thinking of complaining about the price of any piece of modern technology - don't.

As Fred Dagg would say: "You don't know how lucky you are, mate".

An interesting (albeit rather brief) article comparing the price of every-day electronic items over the past 60 years or so paints a very clear picture that shows just how much prices have fallen.

Who would have thought that, back in the 1960s, a portable transistor radio cost the equivalent of $1,100 in today's money?

Actually, I'm not so sure that some of the prices quoted in that story are really accurate.

For example -- I bought LPs back in the 1960s and, as someone in my early teens I don't think I could have afforded even a quarter of the albums I purchased -- if they really did have a today's-dollar $73 equivalence.

I do remember however, that colour TV sets were inordinately expensive when they first came out.

In fact, there was a huge business model based on renting rather than selling these uber-expensive devices. Instead of paying over $1,000 for a Philips K9, Thorn TX9, Pye Vidmatic or other set, Kiwis rushed to pay just a small weekly fee. Those pitching rentals also promised free servicing and/or replacement - which was important at a time when electronic devices were far less reliable than they are today.

If, as that article suggests, a simple record-player cost over $3K, it's no wonder that so many keen amateurs built their own. Indeed, magazines such as Electronics Australia relied on the high cost of commercial stereos to ensure massive interest in their regular "stereo amp" projects. Whether you bought a shrink-wrapped kit from DSE or whether you etched your own PCB and bought the components individually, there was a huge amount of pleasure and satisfaction to be had from building your own system -- with the cost savings just a lovely bonus.

Perhaps one of the most interesting aspects of prices has been the (apparent) decline in the price of recorded music. LPs were $73 in the '60s and they dropped to $50 in the 1980s (on CD). Today, we pay about $20-$30 for an album on CD and probably less if you download from iTunes (I don't know, my music tastes are not coincident with contemporary releases).

Now while one might think that the recording companies are doing it hard and must be making less than they did way-back... remember that sales volumes these days are massively greater than they were back in the 1960s. Not only are their more customers but modern distribution systems (ie: the internet) has made it easier for people to buy. IMHO, music prices are still too high.

So where to from here?

China's slave/low-cost labour force has enabled the price of modern electronic devices to be pushed down to levels unthinkable just 50 short years ago -- but surely there has to be a limit.

Even if all those workers were replaced with automated robotic assembly systems, recovering the massive capital cost of such systems will place a floor on the price that must be charged.

To be honest, I think we're probably at (or very near) the inverted peak of the "cheap gadgets" era. I'm picking that from this point forwards, the cost of our gadgets will begin to increase rather than decrease (in real dollar terms).

Labour is not going to get cheaper. In fact, labour rates in China are already causing price rises.

Despite the "throw away" economy, demand is plateauing in many areas (iPhone/smartphone) for example -- and that means reduced economies of scale as manufacturing is scaled back.

Then there are the environmental concerns and limits on raw materials. Pretty soon the penny will drop and we'll start to realise that we can't go on throwing stuff away at the rate we presently do.

And here's something worth considering...

That TV set which cost $4,500 in 1965 was very repairable and many of them lasted at least 15 years (with repairs) before they were retired. Compare that with today's much cheaper sets which will probably be tossed and replaced within 3-4 years. A quarter of $4,500 is about $1,100 - pretty close to the price of those new sets.

What would we have to lose if we reverted to the model that saw us buying gadgets which were designed to be incrementally upgraded and repaired?

Such a move would conserve natural resources, reduce the environmental impact of dumping so much gear into landfills and also create jobs in the form of service/upgrade technicians.

Time for a rethink perhaps?

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