Emerging Technologies

Why is tech getting cheaper?

Matt Rosoff
Manager of the tech vertical and the San Francisco bureau, Business Insider

Technological innovation is great for consumers. As technology gets more advanced, prices drop and products get better.

The US Bureau of Labor Statistics tracks prices for broad categories of goods over time. As this chart of prices for the last 18 years shows, prices have dropped dramatically in almost every tech sector. The drop in computer hardware is particularly steep.

The one exception? Cable, satellite TV, and radio service.

Lack of competition might be a factor — in a lot of markets, users can choose between their local cable provider, one or two local phone providers, and maybe a single satellite TV provider. There has also been a relentless drop in the price of components used in most electronics gear, thanks to things like Moore’s Law — which says the number of transistors you can fit on a chip will double every 18 months — and manufacturing advances.

That isn’t the case for the infrastructure used to deliver services like TV.

151016-Tech cheaper electronic goods BI

This article is published in collaboration with Business Insider. Publication does not imply endorsement of views by the World Economic Forum.

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Author: Matt Rosoff runs the tech vertical and the San Francisco bureau for Business Insider.

Image: Men are silhouetted against a video screen as they pose with smartphones. REUTERS/Dado Ruvic. 

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