Technology Functionality Stagflation

stag·fla·tion (stāg-flā'shən)
n. Sluggish economic growth coupled with a high rate of inflation

So Santa Claus obviously screwed up this year because he had me marked down on his list as a 'good boy' rather than a 'bad boy' and instead of lump of coal he left a Sharp Aquos 42" flat screen LCD TV.

The TV is great however that's not what I'm writing about.

What stunned me is how cheap flat screen technology has gotten over the years, there seems to be an amazing stagflation occurring in technology where features and functionality are skyrocketing on a quarterly basis while prices are falling rapidly.

Is this resulting in falling profits for 'off the shelf consumer technology' on a per item basis - I don't know but here are my personal circumstances and you can make up your own mind by 'shorting' consumer technology stocks.

So when we moved to New York 3 1/2 years ago we bought a 26" Sharp Aquos lcd - at the time 720P was the best technology you could buy and although you could buy bigger sizes at $2800 the 26" was as large as we wanted to spend (mainly because we use a projector with 110" display when we want the 'at home movie' experience).

So here we are Christmas 2007 and we bought a top of the line Sharp Aquos 42" 1080i (yes here are 1080p lcds out there but with the lack of true 1080p content out there I was happy to pass), yes there are a lot bigger TVs than 42" (we almost bought a 46" but there is also the 60" units as well).

Grand total for our much better much bigger TV...... $995

Almost 1/3rd of our original cost 3 years ago with at least 3 times the functionality - I know we are used to dramatic increases in functionality in computing but it's hard for people to conceptualise the radically larger number of additional computer processing power but when you look at a consumer electronics product like a TV it's plain to see that there is no way Sharp is making as much profit off this purchase as it did from us 3 years ago.


Cheers,
Dean