18 March 2014

To buy, or not to buy, that is the question

Edward Liang writes:*

The most recent big new for tech savvy people was the announcement of new Samsung galaxy S5. Without going into too much detail on the features, basically the S5 is bigger, better, and faster compared to the last generation. These aspects sound great on paper, but the question is, does average consumer really “need” the new features? Or are they just another marketing gimmick like every other press conference from other manufacturers? The problem here is the benefits from what the marketing team tells us is way bigger than the actual benefit itself. For example, the marketing may empathize that with the better camera you can take pictures that are above HD quality, but can an average person really distinguish the difference between HD and above HD quality? Even if the person can distinguish it, does he really need it? The necessity problem really extends into the production problem of newer cellphones, as majority of them are assembled in developing countries, which have lower labour cost, but the product will be sold at developed countries for much higher price. Not only the inequality of the revenue and income wage during production, also pollutions from the production, and the E-waste from the old cellphones.

Bottom Line: There will always be newer and better products every year, but the purchasing power is depending on the consumer; sometimes whether we should buy the newer cellphone to satisfy our wants or just stick with our old phones that are just as good, the decision can be tough. Ultimately, to buy, or not to buy, that is not the only question, we should also consider all the externalities before making the purchase decision.

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.

2 comments:

  1. I agree that most of all, the humankind, especially the people in Asia should consider the externalities before doing any purchases. As the processing of technology kept rising each day, many new technology stuff keep on popping out. For example, Iphone, is one of the craziest technology I've never thought of buying a new one because it always come out with a new model but just a little bit of new technology changes. This is why I only using, the one and only, iphone 4S. Each year, as I saw the news and from new post of Facebook, I saw new Iphone coming up with more and more higher price. I was thinking of that shouldn't rising of the technology would bring down the price of the product? So why is the price kept on rising? There is a side blog that shows/talks about how cheap is the materiel being produce, so why Apple kept rising the price just by looking on their profits? Where will the old phone going to be? Isn't this creates more and more waste to harm the environment? It's sad that this is out of control by the government due to the utilities to the people.
    Will you think if it would work if Government control or regulates the new technology be late on press could decreases the waste of the materials that is being dumped or could help decreasing the environment?

    #1435

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  2. 6721 said
    I agree with most part of this article, however, I wonder is it true that we do not need newer,better phone? the answer seems to be no. if the market does not have demand for newer phone, then those duopolies(here I refer to Apple and Samsung) will not produce newer phone, because it cost millions of dollars to invent new hardware. I think the main reason is that our demand for better hardware has increased recent years, because more and more great software require a better hardware. for example, some new apps run very slowly on iphone 4 but not on iphone 5s. In order to use those new amazing apps, we need to get new hardware. I totally agree that cellphone does have some negative externalities, but there are more positive externalities. When I was in my middle school, people use Nokia to call or text message. We never thought in the future, we would do online banking, video chatting, and shopping on the cellphones. and cellphone companies will exchange your old phone to a new phone with a very low cost. other than that, I do agree with that the pollution during the production is hard to ignore, and also the inequality of distribution of income between the labors and company.
    #6721

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