Should you worry about price drops?

The price on HTC HD7 – first ever Windows 7 phone in India – is dropped one more time. Flipkart now has the price at Rs. 30599 and is ready to ship. In all likelihood there will be one more price drop, and yet another price drop. There are multitude of dynamics which govern the pricing of a mobile phone or any electronic device. Supply more than the demand, new and untested product, new retailer getting a foothold, a promotion from the manufacturer and so on. None of this are quite visible to the ordinary consumer. The only thing which a consumer like you and me should know is, electronic devices of any kind are expensive bananas.

photo © 2010 Sweeter Alternative | more info (via: Wylio)

Contraptions have a shelf life. The typical buying cycle for a new phone is 1 years to 2 years. I am holding my fourth phone in five years. That is a lifespan of  little over a year. Of all the devices, mobile phones have the least of lifespan and washing machines and refrigerators have the max of life span. Televisions, cameras fall some where in between. If this is the case, then should you even worry about the price drop on a device? To find an answer we need to look at what we have bought in the last five years.

Here’s a list of the electronic devices I have bought in the last 5 years :

1. Sony Eriscsson K750i- Bought in 2005 for Rs. 18000
2. 29 inch Onida Poison Theater with a Sony DVD Player – 33,000. Bought in November 2005.
3. iPod Nano – 4 GB – Bought in Feb 2006 for Rs. 18000
4. iPhone 3G S – Bought in Jan 2010 for Rs. 39000

Those have a combined cost price of over a lakh rupees. Let’s see how many of them are still relevant.  From the four devices above, I still use two (TV and iPhone), one (K750i) I traded in and the other (Nano) doesn’t work. I cannot even use it as a paperweight, as I loathe paper.

I was a proud owner of Onida Poison Theater. Now it is an antic. I could have gotten a flat screen TV if I have waited. iPod Nano is a total waste. The purchase of K750i now sounds juvenile as you can get touch screen Android phone for 7K. iPhone 3G S, for that cost I can now get an Android phone, a Symbian phone and top it with a Kindle. All those purchases sounded right at that time.

There will be price drops all the time. The only question is should you even worry about them?