Mon, Sep 10th 2007 6:35am
The obvious response to folks complaining about the iPhone price cut is that of course the price was going to be cut, because it's a tech item, and the cost of technology invariably marches lower. Yes, technology is a constant deflationary force, not just because prices of it keep dropping, but because the quality of any given item tends to rise over time. We've made this point in the past, that inflation statistics have a hard time dealing with tech items, because the measures only look at price and have a difficult time adjusting for quality improvements. As economist Russ Roberts notes, the new iPod Classic is not just $50 cheaper than the original, it holds 40 times as much data. In other words, doing a like-for-like comparison between the original iPod and the new one vastly understates the amount of progress that was made in such a short time. What's more, while it's easy to note the data storage comparisons, how do you quantify the addition of video playback or pictures? It's pretty difficult. So while inflation statistics serve a purpose, it's important to recognize that there's often a lot more at work than just price changes.
If you liked this post, you may also be interested in...
- Beijing Regulators Block Sales Of iPhones, Claiming The Design Is Too Close To Chinese Company's Phone
- Apple, Arbiters Of Art, Say Game About Surviving The Gaza Strip Isn't A Game, Even Though It Is
- DailyDirt: Old Video Games Live On...
- New iPhone Connector Port Revealed, Thus Wiping Out Several Generations Of Accessories In One Fell Swoop
- Failed Company, Now Patent Troll, Sues Apple Over Transferrable Playlists For A Third Time