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Electronics are not commodities -- you get value out their use. Electronic devices would have to fall in price enough to exceed the value of having and using th
by Duff 15y ago
Electronics are not commodities -- you get value out their use. Electronic devices would have to fall in price enough to exceed the value of having and using the device.
If you look at people's behavior with a commodity like gasoline, you'll see similar behavior. When prices go up, people will "top off" their cars more frequently. When prices are falling, people tend to go further between fill-ups.
- danenania 15y ago"Electronics are not commodities -- you get value out their use. Electronic devices would have to fall in price enough to exceed the value of having and using the device." So how much would computers have to fall in price every year before people stopped buying them?
- Duff 15y agoThe number depends on your cost structure. I can tell you that where I worked, we traditionally planned on keeping most servers in service for 40-72 months. When Nehalem processors came out, the economics shifted, and there was a financial case for retiring devices at 24-36 months and consolidating them into virtual machine clusters. Without that consolidation opportunity, we probably would have extended the lifecycle of our server longer to preserve cash in 2009.
- jackpirate 15y agoPeople definitely do that with electronics too. As prices have dropped, people are upgrading their computers or buying their first more often. I'd wager the rate of consumption has been directly proportional to the rate of price drop for electronics. Of course, we are unlikely to see computer prices rise anytime soon.