Saturday, May 25News That Matters

Yes, inflation has come for tech products, too

For many, this summer has been the season of inflation. After fuel prices spiked earlier this year (and have only slowly started to come down), it seems like everything we had to pay for suddenly became more expensive. Outside of the gas station, this is most likely felt at the grocery store, where staples like bread, pasta, vegetables, and other consumables all cost more now than they did a year (or even just a few months) ago.

Inflation has also impacted the price of tech products, like smartphones and laptops, but it can be harder to spot. Unlike food or other consumables, technology products have a long production cycle, often taking 18 months or more to go from an idea to a store shelf. Many companies set a product’s target price at the start of its development cycle, which makes them more insulated from short-term swings in inflation. Tech devices also rarely go up in price after they’ve been released; in fact, we’re accustomed to them becoming less expensive over time.

But this year, we’ve seen numerous examples where devices have either gotten explicitly more expensive or just haven’t fallen in price over time the way we’ve been conditioned to expect them to. Part of this is due to the ongoing supply chain crunch, which makes it harder for companies to source components, especially for devices that don’t use high-end smartphone or laptop processors. But big companies are also not immune to rising fuel costs and other inflationary effects, and that’s also driving prices up for your next gadget.

Let’s take a look at a few examples.

Apple’s latest MacBook Air, which was announced at the beginning of June and started shipping in July, comes with a starting price of $200 more than the model it’s succeeding. It’s hard to say that’s entirely due to inflation because the new Air comes with a host of new features to help justify its cost: a new chassis design, better display, faster processor, and so on.APPLE’S NEW MACBOOK AIR COSTS MORE THAN THE OLD ONE, AND THE OLD MODEL HASN’T FALLEN IN PRICE — IT’S THE SAME AS IT WAS TWO YEARS AGO

But Apple is still selling the prior generation MacBook Air alongside the new one, and it’s still listed for the same price as when it came out way back in 2020. Typically, Apple lowers the price of older models when a new one comes out, which provides a way for smart (and patient) shoppers to save money on still very capable technology. But with the new model coming in at a higher price, Apple didn’t have to lower the old one to make it look like a deal — you’ll still pay the same $999 for an entry-level MacBook Air with the M1 processor today as you would have had you bought it in November 2020.

Samsung recently announced a whole suite of new wearables and folding phones, and the impacts of inflation are more explicit there. The Galaxy Z Fold 4 and Z Flip 4 are the same prices as their forebears, but the new Galaxy Watch 5 is $30 more expensive than the Galaxy Watch 4, despite only coming with a slightly larger battery and one (dubiously useful) extra health sensor. For all intents and purposes, it’s the same watch as the Galaxy Watch 4, but it costs more than the Watch 4 did at launch last year. Similarly, the new Galaxy Buds 2 Pro are $229, $30 more than the Galaxy Buds Pro were when they came out in January 2021.

The Galaxy Watch 5, Watch 4, and Watch 4 Classic side by side
Samsung’s Galaxy Watch 5 (left) costs $30 more than the Watch 4 (middle), despite having essentially the same specs and design.

Other companies have made the rare move of just raising prices on existing products. Late last year, ahead of the inflation spike of 2022, Sonos raised prices across its line of wireless speakers, citing increasing supply chain costs. Meta recently increased the price of the Quest 2 virtual reality headset by a whopping $100 (a 33 percent jump) as it attempts to staunch its own bleeding of revenue across its business. The Quest 2 was likely a money loser for Meta at launch, but thanks to other business and economic pressures, it’s clear that Meta doesn’t want to continue floating it, and so consumers will have to pay more going forward.GOOD DEALS ON OLDER DEVICES ARE ALSO HARDER TO FIND NOW

Anecdotally, it’s also been harder to find really great deals on last year’s technology. A year ago, I was able to get a year-old iPad Pro for hundreds of dollars off its launch price at Best Buy; when I was looking for a similar deal this summer, the big box stores came up empty, and I had to scrounge around eBay until I could find something for a price I was willing to pay. Our deals team has also seen fewer big discounts on new-in-box products across the board this summer, with most good sales happening on refurbished or second-hand devices. (Pro tip: buy refurbished if you can — it can save you a lot of money, and it helps keep things from ending up in a landfill or being inefficiently recycled.) Another factor keeping prices up is just the lack of availability of many in-demand products, thanks to the ongoing supply chain woes.

As we head into the big product launch season, we can expect to see more effects of inflation in the prices of new phones, laptops, and other devices that get announced. Industry analysts are warning that the iPhone 14 will be more expensive than the iPhone 13 was; if that pans out, Apple could keep the iPhone 13 in the lineup without lowering its price like it has with older models in years past. It will still look like a savings compared to the new one while still costing the same as it did a year ago. Apple is also expected to use the same processor in the iPhone 14 as in the iPhone 13, similar to how Samsung’s new watches use the same chips as last year but cost more.

Amazon is reportedly raising the price of its seller fees this fall as a way to deal with inflation — you can certainly expect that cost to be passed on to you, the consumer, which means your next USB-C cable or phone case will likely cost more.

We’ve been used to the cost of tech coming down over time, and if you look at a long-term scale of decades, that’s still certainly the case. But we can’t expect technology to be immune to the rest of the economy forever, and if your next loaf of bread costs more than it did before, your next smartphone likely will, too.

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