This summer has been the season of inflation for many people. It seems like everything we had to pay for increased in price once fuel prices rose earlier this year (and have only slowly started to decline). The grocery store, where essentials like bread, pasta, vegetables, and other consumables all cost more now than they did a year (or even just a few months ago), is where this is most likely felt outside of the petrol station.
Although it can be more difficult to detect, inflation has also had an impact on the cost of digital devices like smartphones and computers. Technology products have a longer production cycle than food or other consumables, frequently taking 18 months or longer to go from a concept to a store shelf. Many businesses establish the target price for a product from the outset of the development cycle, which gives them greater protection against fluctuations in inflation over the near term. Additionally, the cost of tech products rarely increases once they are released; in fact, we are used to them getting cheaper over time.
But this year, we’ve seen many instances when products have either openly become more costly or just haven’t decreased in price over time as we’ve come to expect. The continuous supply chain crisis, which makes it more difficult for businesses to get components, especially for products that don’t employ high-end smartphone or laptop processors, is partly to blame for this. However, even large corporations are not immune to rising gasoline prices and other inflationary consequences, which is also increasing the cost of your next item.
Let’s look at a few instances.
The starting price of Apple’s most recent MacBook Air, which was released in July after being announced at the beginning of June, is $200 more than that of the model it replaces. Because the new Air has so many additional features to help justify its prices, like a new chassis design, better display, quicker processor, and other things, it’s difficult to argue that’s solely due to inflation.
The older MacBook Air, however, is still available from Apple alongside the newer model, and it is still advertised at the same price as it was back in 2020. When a new model is released, Apple typically reduces the price of earlier versions, giving savvy (and patient) buyers a chance to save money on technology that is still extremely capable. You’ll still spend the same $999 for an entry-level MacBook Air with the M1 CPU today as you would have in November 2020 since Apple didn’t need to raise the price of the old model to make it appear cheaper.
Recent wearables and folding phone announcements from Samsung make the effects of inflation more obvious. The pricing of the new Galaxy Watch 5 is $30 more than the price of the Galaxy Watch 4, despite only having a slightly larger battery and one (questionably helpful) additional health sensor. The Galaxy Z Fold 4 and Z Flip 4 are priced the same as their predecessors. It is essentially the same watch as the Galaxy Watch 4, although it is more expensive than the Watch 4 was when it was first introduced last year. The new Galaxy Buds 2 Pro cost $229, which is $30 higher than what the Galaxy Buds Pro cost when they were first released in January 2021.
Other businesses have taken the unusual step of just boosting the prices of their current products. Late last year, Sonos increased pricing across its array of wireless speakers in anticipation of the inflation spike of 2022, citing rising supply chain expenses. In an effort to stop revenue loss throughout the whole company, Meta recently raised the cost of the Quest 2 virtual reality headset by a stunning $100 (a 33 percent increase). The Quest 2 was probably a financial loss for Meta at launch, but it’s obvious that Meta doesn’t want to keep floating it, thus customers will have to pay more moving forward due to other commercial and economic factors.
Anecdotally, it’s also been difficult to discover really outstanding bargains on technology from the previous year. When I was looking for a comparable deal this summer, the big box stores were out of stock, so I had to scrounge around eBay until I could find something for a price I was willing to pay. A year ago, I was able to purchase an iPad Pro that was a year old for hundreds of dollars off its launch price at Best Buy. This summer, our deals team has also observed less significant offers on brand-new, unused products overall, with the majority of the best deals occurring on refurbished or used gadgets.
(Pro tip: buy used if you can; you’ll save a lot of money and prevent items from going to the landfill or being recycled inefficiently.) The simple lack of availability of many in-demand products as a result of the ongoing supply chain issues is another factor keeping prices high.
We may anticipate seeing additional effects of inflation in the costs of new phones, laptops, and other items that get announced as we approach the busy product launch season. According to industry observers, the iPhone 14 will cost more than the iPhone 13 did; if this turns out to be true, Apple may decide to maintain the iPhone 13 in its portfolio without reducing its price as it has done with other versions in years past.
Even though the price is the same as it was a year ago, it will still appear to be less expensive than the new one. In a manner similar to how Samsung’s new watches employ the same chips from last year but cost more, Apple is also anticipated to use the same CPU in the iPhone 14 as in the iPhone 13.
You should expect that cost to be passed on to you, the customer, which means your next USB-C cable or phone case will probably cost more. Amazon is reportedly hiking the price of its seller fees this fall as a strategy to deal with inflation.
If you consider the long-term scale of decades, it’s still true that the cost of technology is expected to decrease over time. But we can’t expect technology to remain independent from the rest of the economy indefinitely; if the price of your next loaf of bread goes up, it’s likely that the same will be true of your next smartphone.