An increasing percentage of the average budget gets spent on technology-related purchases. Is that an inevitable function of the modern world we live in, or an area ripe for some savings?
It's 2009, the economic future is anything but certain, and we're all supposed to be tightening our belts lest our personal fiscal doomsday comes. Yet while we might choose to drive the car less or modify our holiday plans, the odds of our choosing to cut down on spending when it comes to new gadgets and associated services are rather smaller.
Some recent statistics from the Consumer Electronics Association (CEA) — the organisation behind the gigantic CES tech show currently running in Las Vegas — dramatically illustrate the point. Each year, the CEA provides a snapshot of market trends in technology buying at the opening of the show. (Those figures are largely US-centric, but the broad market similarities with Australia still make them a useful general indicator.)
It's no surprise that the overall market forecast is a tad gloomy. CEA economist Shawn DuBravac predicted that consumer spending will be down 0.3% in 2009, a slightly worse result than 2008. However, that doesn't mean that our spending on technology will fall. For the last 30 years, DuBravac explained, consumer electronics have taken up an increasing percentage of the household budget for consumer durables.
In 1977, such products accounted for 9% of the average budget. In 2009, that figure is set to be 17%. Factor in the "Moore's Law effect" — spending the same amount of money gets you much more power — and the amount of technology we're effectively purchasing climbs even higher. "Consumers are spending more of their money on technology purchases," DuBravac said.
There's two ways of looking at that trend. One is to take the view promoted by CEA lead analyst Steve Koenig: "Consumer electronics are a necessity." That might be true of mobile phones, Internet connections and PCs. But it's a harder case to make for the predicted top three growth areas for 2009: OLED displays, e-readers and HD camcorders. Most of us already have TVS, access to libraries and cameras in our mobiles.
As a card-carrying geek, I'm not likely to argue the case for tech minimalism, and if you're a Lifehacker regular, chances are you're keen on using technology too. However, chances are also good that you recognise there's plenty of great tech out there which doesn't cost anything, and that there's lots of ways to get better value out of what we already have. That's always appealing, but in the current financial climate, it's a wiser idea than ever.
Lifehacker's weekly Loaded column looks at better ways to manage (and stop worrying about) your money.