Apple

The bleeding-edge gadget binge will lead to an economic hangover

TR member dcolbert thinks that our current bleeding-edge gadget binge will eventually leave us with an epic economic hangover. What do you think? Does the consumer public need a gadget intervention?

The banking/financial industry and the real estate market have taken a lot of abuse for being at the root of the economic instability in the United States. There's no doubt, when you look at the housing bubble, you can see that billions of dollars in equity simply evaporated over the last decade. But a thought occurred to me when I read a recent article on Gizmodo about the danger of buying Apple products. Instead of accusing the financial, banking, or real estate industries for our current economic morass, I think we should blame Steve Jobs.

Let me elaborate. All my life, growing up, gear-heads and geeks knew one thing was a constant truism. "Never buy bleeding-edge technology." The only people who ever had the latest and greatest PCs on their desks were inevitably the most technology clueless individuals in an organization. In fact, some pointy-haired bosses had more power on their desk than the entire department under them, and they were using all those cycles just to create PowerPoint slide shows and Excel spreadsheets.

The real nerds were still maximizing their 286/ATs when the 386 came out and nursing their 386DX40 along when the 486 was the hottest ticket in town. It was a point of pride to try and get that new game to run on the last generation processor, even though the bare minimum recommendation was the "SX" version of the newest model.

True gadget geeks knew that the premium for bleeding edge was simply not worth the very few things that could actually leverage the increased performance. They also knew that bleeding edge could quickly become expensive paperweights, like RAM-BUS memory during the P4 era.

Crowds wait for iPad at the Apple Store in San Francisco. (Credit: James Martin/CNET)

Really, the Cult of Apple has thrown this conventional wisdom out the window. I realized this when I thought about how long I wanted to pick up a Mac Mini - and when I actually did. I had been using an old G4 800 Mhz Quick Silver for quite awhile. When Google announced that Chrome for Mac would be Intel only, I knew my G4 was near the end of its run.

There was a huge premium on the Mac Mini for what any mini or micro-atx PC could deliver for far less cash. So, I watched and I waited. Eventually, Micro Center - the Midwest's version of Fry's - had a deal on new, last generation, Intel Architecture Mac Minis. It wasn't until the Mini was "obsolete" by Mac standards that it made any economic sense for me to buy it.

Somewhere around that time, the world went nuts. I've been thinking about this, and when I was younger, the gadgets of the status-conscious were pagers and cell phones. With the arrival of pay-as-you go plans at WalMart, a regular cell phone became about as prestigious as driving a rust-eaten late model domestic automobile. And for awhile, among the corporate elite, Palm Pilots and PDAs had a certain "C-Level Status Symbol" quality. But in general, there has been a vacuum in the easily-flashed status-symbol gadget for the idle rich.

The rise of the smartphone - and especially the iPhone - revolutionized this space. Now, clearly, the iPhone has lost almost all of the exclusive cachet it once enjoyed. But along the way, the luster of the iPhone rubbed off on almost anything with that bitten fruit logo. People are not content to have just any version of an Apple product. They wait in anticipation roughly every 18 months to find out how the latest and greatest Apple product makes their formerly top-tier Apple product about as interesting as soggy cardboard.

Every article I've read on why you shouldn't buy an Apple product right now has had a singular focus, "If you buy now, something new will come out soon, and you'll regret not having that." The soon-to-be-released iPad 2 will have an A5 processor, a built-in gyroscope, plus front and back-facing cameras. Furthermore, the value of the original iPad has decreased by $100. Doctors, lawyers, and other successful professionals across the world will shudder to imagine pulling out a last generation Apple device in front of clients or friends.

Line for iPad at London's Westfield shopping centre. (Photo credit: Karen Friar)

I can't think of any other time in the history of the "PC revolution" when so many people were so eager to be on the rapidly depreciating breaking edge of the technology wave. The amount of personal equity that must have disappeared in the last few years on technology might just make the housing bubble's burst look trivial.

Buying a bleeding-edge Apple product like a MacBook Air is roughly the same as buying a less expensive but equally capable device from Acer, then taking a few hundred dollar bills and lighting yourself a Swisher Sweet using the cash as a match. There are tons of people doing this, and they're doing it over and over again, every time something new comes out that they must have.

When netbooks were the must-have gadget, I waited until I was able to trade an old IBM Server and an iPaq PDA for a $199 Eee PC 701. The value proposition just didn't make sense to me. But since then, I've been caught up in the same hysteria as the rest of the world. When the iPad came out, I caught the tablet bug and couldn't wait. I have mixed emotions, because I've gotten good mileage out of the iPad, but it was a lot of money and the depreciation, if I sold it today, would be a significant percentage of the original price.

Apple enjoyed an entire year of being the only show in town, but I think that Android tablets will help make the tablet PC more of a commodity and less of a status symbol. $800 for a Xoom or $500 for a Galaxy isn't going to work, and I'm not interested in subsidized pricing through required wireless contracts either. Inexpensive Android tablets mean that almost anybody can have a relatively "iPad-like" experience - well, except for the gaping hole in their bank account.

Line for the iPad wraps around the Apple Store in Shanghai, China. (Photo credit: Apple)

I just can't figure out how we got to this point. I've grown cynical about the collective intelligence of the consumer public. I won't be shocked if there are lines wrapping around the Apple store when the iPad 2 hits the streets, even though many of those people will have barely put any wear on their original iPad.

My comments about lost equity are only party sarcastic. I really think that we're on a gadget binge that's eventually going to leave us with an epic economic hangover. I wonder how many people are destroying their future personal equity to keep up with the latest and greatest gadgets today. Maybe what we need is a gadget intervention - just put the Atrix down, step away from the Xoom, and put the Kinect out of your mind.

Let me know what you think in the forums. Am I right? Have we completely lost touch with reasonable upgrade cycles, or is our gadget addiction mostly harmless in the long run?

About

Donovan Colbert has over 16 years of experience in the IT Industry. He's worked in help-desk, enterprise software support, systems administration and engineering, IT management, and is a regular contributor for TechRepublic. Currently, his profession...

Editor's Picks