What They Say
An article in the NYT, widely syndicated, looked at the trends for higher pricing in consumer electronics (and automotive). The author spoke to Stephen Baker of NPD and he pointed out that notebooks that cost at least $1,000 increased 15% in a year. Sales of TVs also fell last year from a pandemic-fueled craze in 2020, but NPD said that sales of $1,000-and-up televisions climbed 47%.
“It costs the same to ship a $300 notebook computer as a $1,300 notebook computer,” said Baker
A relatively higher supply of pricier products is one reason it has sometimes been easier to find an expensive laptop, smartphone or car than a lower-cost model.
The boom has also been fuelled by higher disposable income for a lot of Americans because of savings in travel and eating out as well as government benefits. US phone operators have also offered good deals for consumers to trade up to 5G smartphones which typically cost more.
Baker also said that brands were experimenting and “a basic Windows laptop for $300 or $350 a couple of years ago will try nudging up entry-level models to $550 or $600”. Makers might also try cutting back on $499 large-screen TVs to see if a $599 television might sell nearly as well.
“There is a lot of hunting and pecking that is going to happen in the next couple of years to try to understand what is happening,”
Baker said.
What We Think
I would add to this issue the restriction in chip supply. If you only have a limited supply of chips, it makes more sense to sell the higher priced products which usually have a better profit margin. I’m pleased to see that Baker is again on the programme for the DSCC/SID Business Conference. He has a great level of insight into what US consumers and retailers are thinking. (BR)
