That's Technology. Those two words by Steve Jobs were the equivalent of throwing gas on the fire that had already been ignited by the $200 price cut of the Apple iPhone. While Jobs was attempting to explain the sudden drop in price for the mobile device, he was really speaking to the technology cycle. Kudos to you Mr. Jobs, I completely agree with your assessment of how fast technology is changing and those of us who ride the bleeding edge have got to stop crying and face the fact that what is new and shiny today will be old and tarnished tomorrow. I know, I just got burned myself. But am I bummed? Take the jump to find out.
I just finished building my home theater, complete with 1080p projector, THX-certified amplifier with HDMI, and an LG BH100 combo player that plays both HD DVD and Blu-ray discs. You can get the player on the street for around $1,000. The player works great, but not a week after making my purchase, installing it in the home theater, and getting my fill of high-definition movies, LG announced the LG-BH200 that provides more HD DVD support than the BH100. The price, when released later this year, will be $1,000, meaning the BH100 is either now obsolete and a worthless piece of junk sitting in my entertainment center, or it's going to see a price drop as the company tries to empty its inventory.
But I just spent $1,000 on the BH100! LG owes me! Right!? right…?
Of course not. No company in its right mind would offer a rebate simply because the cost of production and product saturation have caused the price to drop. Steve Jobs is no idiot. He's not offering that $100 certificate as a way of saying "sorry," he's doing it purely for public relations.
- Bleeding Edge: This is the stage where a product is brand new. This may be a totally new product, or may be an innovation of an existing concept that makes it seem new. The technology is first generation, and hasn't reached maturity or market saturation. Those of us that purchase a product at this stage might be trendsetters (iPhone again), or we might be stuck with a dud (think the Newton — sorry, Apple, you can't win them all). Products released at this point are generally very expensive and only attract those people with the "gotta have it now" mentality.
- Leading Edge: The product has been proven, but it's still not accepted on a grand scale. Both Blu-ray and HD DVD have proven themselves as solid platforms for delivering high-def movies, but taking a look at the sparse catalog of titles available means they're still in their infancy. Prices at this point tend to drop slightly as the cost of manufacturing the product decreases due to demand, and there are general improvements in the components themselves. According to Steve Jobs, getting a better deal on components was one of the main reasons the company can offer the iPhone at a reduced price. This of course leads to more people going out and buying the product, which leads us to the third stage.
- State of the Art or Mainstream: This is where everyone agrees the product is the right one. Market saturation peaks at this stage, and prices seem to stabilize for a while. It wouldn't surprise me if two years from now, we're able to purchase an iPhone for $99, and combination high-definition players for $299.
- Dated: If this were a bell curve, the product begins to slide in popularity in this stage. It's still useful, but new Bleeding Edge technology is there to replace it. Companies begin to offload inventory and begin to play down the popularity of the product in order to promote the next big thing. Anyone remember the RAZR craze? How many people are rushing out to buy one of those phones now? The DVD format is currently in this state.
- Obsolete: The final dying stage of a product. It's on life support now, and anyone buying it is really behind the times. VHS, anyone? No one is asking for their money back on all the movies they bought on this format, and then bought again on DVD.
I said watching the technology cycle in action is fun, but it can also be costly. Those who adopt at the bleeding/leading stages are always going to pay more than someone who picks up the product when it has become mainstream. But that's technology.
Stephen Schleicher has crossed the country several times over the last couple of years working as an editor, graphic designer, videographer, director and producer. He currently shares his knowledge with students of media and Web development at Fort Hays State University. Stephen is the man behind the Coolness Roundup podcast, and loves reading comic books in his spare time.