The Toronto Star
June 16, 2007 Saturday
Don't be cool, stand back from leading edge

BYLINE: Rob Wright, Toronto Star

SECTION: LIFE; Pg. L13

LENGTH: 600 words

Ponder this scenario: Two years ago you bought a 2005 Ford Focus for $25,000. Glancing at a newspaper ad the other day you noticed a 2007 Ford Focus selling for $12,500. In fact, looking further, you see a 2007 Mercedes Benz selling for $25,000 - about half what the same model was selling for two years ago.

What's your reaction? a) I'm mad because I spent $25,000 on a car two years ago that sells for only $12,500 today; b) I'm happy because, when it comes time to replace my car, I can either buy a higher-quality model for the same money, or spend half that amount and get the same model; c) A little of both.

With a few exceptions, that's the way things are in the consumer technology world. Over time, the stuff gets better, more powerful, usually smaller and cheaper. Should we lament this condition, or learn to live with it?

I'll opt for the latter any day.

What the consumer needs is a strategy for deciding if and when to buy. This is especially valuable nowadays, since the product cycle - hence product obsolescence - has accelerated quite a bit of late.

For instance, when the VCR first hit the shelves in 1977, the price for a new one was about $1,500. It wasn't until about 10 years later that prices fell to about $500, where they stayed for about a decade before plummeting to under $100 once the DVD came along in 1996.

The DVD player, in turn, initially cost about $1,000, but fell to $500 within a year or two, then to under $100 a few years later.

The cause of the sudden acceleration? Mainly the entry of a number of new players - and in particular low-wage China - into the technology manufacturing space.

Now, back to developing a buying strategy.

First, determine your comfort zone. Are you an early adopter who has to have the latest and greatest as soon as it hits the shelves? Or do you like to stay one or two steps behind the cutting edge so you're not stuck with high prices or technology orphans (such as the Beta VCR)? Or are you the type who likes to wait until the prices have hit rock bottom?

In the 1980s and '90s, the early adopters, who paid through the nose for their technolust, could count on a good decade of exclusive enjoyment. Now, that time has been cut to as little as a year or two as the incentives for early adoption have been dramatically reduced.

So, if you just have to have that brand new 50-inch plasma HDTVwith all the bells and whistles, the question is: Do you fork out the $3,000 now or wait a year or two and get it for $1,500?

At the same time, the incentives to stay a step or two back from the leading edge have been improved. Later models are not only cheaper, but they are also generally more feature-rich.

In the HDTV arena, for instance, during the past year alone, a couple of significant enhancements have become pretty much standard fare. These include: HDMI, or high-definition multimedia interface, a vastly improved way to connect other products to your TV; and 1080p, the highest standard offered under the HDTV specification, with 1,080 horizontal lines of non-interlaced (or progressive - the "p" in 1080p) video resolution.

Had you paid $3,000 a year ago for an HDTV, chances are you missed out on both of these innovations.

(Admittedly, nobody is yet broadcasting in 1080p. The only source is the new generation of high-definition DVD players - Blu-ray and HD DVD.)

Personally, I've always been a bit of a cautious buyer, so I've always stayed a step behind the leading edge. Now there's little reason to change that way of thinking - and plenty of reasons to stick with it.

In the consumer technology arena, patience truly is a virtue.