Is now the time to buy consumer electronics?

Thu Apr 24, 2008 12:48PM EDT

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They say there's no time like the present, and according to Richard Glikes, executive director of the Home Theater Specialists of America, that goes doubly so for buying electronic gadgetry. The reason? Blame it on China.

Given the state of the U.S. economy, spending your disposable income on high-tech toys may not seem like the best investment in 2008. But if you've already decided to purchase a TV or a new phone, you might be inclined to wait for prices to go down.

That might be a long wait, says Glikes. China is the production center for the vast majority of consumer electronics, and the heyday of cheap labor there may be rapidly coming to a close. For starters, blame the Olympics: In order to clear the air of pollution, many factories are shutting down in June, which could put a damper on the supply of many products. Also, China is tiptoeing towards better relationships with its workers: New labor and worker protection laws have pushed labor costs up 15 percent. The price of many components and metals used in making electronics is also going up.

Perhaps the biggest culprit of all: The falling U.S. dollar. The poor old greenback just doesn't go as far as it used to. Most notably it is falling against the euro, but it's also fallen considerably against the Chinese yuan, about 10 percent in the last year. In other words, if paid in dollars, Chinese companies now earn 10 percent less than they did a year ago due solely to the falling exchange rate. One can imagine that doesn't sit well with them.

In other words: Current prices may simply not be sustainable, and thus price increases may soon be on tap in order to shore up profits. Sure enough, prices are already going up for some LCD products. At the manufacturer level, says Glikes, prices in China are already up from 8 to 20 percent, and U.S. retail prices are soon to follow. 

Get ready for a bumpy 2008.

More perspective on the data from TWICE. 

Comments on Is now the time to buy consumer electronics?

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  • 126 Posted by cmao77 on Thu Sep 3, 2009 3:27PM EDT Report Abuse

    Many of you who feel that "its China's fault, that we need to bring jobs back home, and stop doing business with China" are either ignorant or uneducated. For those of you who feel that way, have you ever studied economics? Is China forcing us to buy products from them? The very fact that we have China supplying cheap labor is the reason that Americans are enjoying lower priced products. America DOES NOT have the resources (labor, land, capital, etc.) to sustain its own economy to build these types of products. If the U.S. cuts its ties to China, you would not have 90 percent of the things that you buy at wal-mart, and not at the same price. The U.S. is dependent upon global trade (yes, countries other than China too) in order to have a successful economy. Remember, trade usually happens when it benefits both parties. Furthermore, you will be paying much more for everything (cheap illegal labor is not allowed in the U.S.). With so many people complaining on the increase on fuel costs (justifiably so) , imagine the outcry that would happen from the very same people who said, "screw doing business with china," once they have to pay double for what they currently are for the products they use in everyday life. Please think and reason before you post anymore ignorant comments.

  • 127 Posted by cmao77 on Thu Sep 3, 2009 3:27PM EDT Report Abuse

    Many of you who feel that "its China's fault, that we need to bring jobs back home, and stop doing business with China" are either ignorant or uneducated. For those of you who feel that way, have you ever studied economics? Is China forcing us to buy products from them? The very fact that we have China supplying cheap labor is the reason that Americans are enjoying lower priced products. America DOES NOT have the resources (labor, land, capital, etc.) to sustain its own economy to build these types of products. If the U.S. cuts its ties to China, you would not have 90 percent of the things that you buy at wal-mart, and not at the same price. The U.S. is dependent upon global trade (yes, countries other than China too) in order to have a successful economy. Remember, trade usually happens when it benefits both parties. Furthermore, you will be paying much more for everything (cheap illegal labor is not allowed in the U.S.). With so many people complaining on the increase on fuel costs (justifiably so) , imagine the outcry that would happen from the very same people who said, "screw doing business with china," once they have to pay double for what they currently are for the products they use in everyday life. Please think and reason before you post anymore ignorant comments.

  • 130 Posted by mc8438 on Thu Sep 3, 2009 7:12PM EDT Report Abuse

    To the guy complaining that he can't afford a Plasma TV because of gas costs, a Plasma TV is the last kind of TV you want to buy if you are trying to conserve energy (which conserves your money). I think my 42" Plasma TV uses over 500 Watts of electricity, which is much more than most LCD screens. Heck once I had an oil heater that only used 750 Watts. An LCD TV may be a better investment for your bank account since they are more energy efficient, yet still have the same narrow footprint as a plasma screen. As a bonus you can play your video game on an LCD screen without worrying about burning the image into it. You also may be able to connect it to your computer if you want. Image burn-in is also an issue with plasma screens. My plasma tv manual literally warns the buyer at least 8 times in the manual, on practically every other every page, not to leave a still image on the screen.

  • 131 Posted by dwrdrock on Thu Sep 3, 2009 3:50PM EDT Report Abuse

    Im looking for the best deal for a sony xbr4 40 lcd tv, who has the best deal,

  • 132 Posted by tigercleveland@sbcglobal.net on Thu Sep 3, 2009 10:09PM EDT Report Abuse

    This is a take on the recession that hasn't been 'announced' yet. But for the Services Industry, this is good news becasue it will perhaps encourage consumers and small businesses to keep their equipment longer and either upgrade or repair as opposed to buying a whole new system. Its a problem when vendors like Best Buy have us convinced that computer systems are 'disposable'! For 400+ dollars, thats not disposable to me! We repair systems so our business may see increases in productivity. http://www.kcComputerMasters.com

  • 133 Posted by d_maxi9 on Thu Sep 3, 2009 3:50PM EDT Report Abuse

    the words in the article are true, but please beleave we (usa) are what keep these china factories up in going with our week dollar. if we stop or slow down our buying, they will do something to sell because china would would perfer to have less week usa dollars then a warehouse full of their products. remember that a lot of what u read is a attemp to make us spend. if don't nobody buy that high sxxx the price will GO DOWN. u can't replace american spending.

  • 134 Posted by jameswalsh1@sbcglobal.net on Thu Sep 3, 2009 4:28PM EDT Report Abuse

    Yes the Chinese labor force deserves higher wages, but I'm not sure all those middle men deserve a bump in their piece of the action. As NAFTA and CAFTA have proven, the people who slave to earn their low pay, rarely get any richer from market changes or government policies. So as a consumer, buy what you actually need, when you need it. If you wish to help the underpaid, donate to the Red Cross, or the Carter Center or whoever you think will actually spend the money on those less fortunate than you. By the way, that 5 year old PC you want to replace probably does its job just a swell as it did when you bought it. Keep using it. The landfills are already filled with perfectly usable PCs. When the TV broadcast indutry swithes to 100% digital next February, you can buy a $40 digital converter with the coupons the FCC is distibuting and you will find your old TV never looked better!

  • 135 Posted by clariatencio on Thu Sep 3, 2009 3:26PM EDT Report Abuse

    I don't know much about the economy, but for as long as I remember, the prices of electronics fall when the new product stops to be new and there is a fancier thing about to come out in the market- if I want something cheap, I just wait until the price goes down (it usually happens-- it might take a couple of years, though)And worst case scenario- who needs so much stuff anyway? I still own a walkman and it works- with rechargeable batteries

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