A problem with the economy: there are no more technologically prestigious products

In My Humble Opinion
1

A big problem with our economy (No. 2 after people just being plain ol’ broke) is a lack of demand for products. There are (virtually) no more technologically prestigious products; rather, everything has been commoditized and cheapened.

First, I’m not talking about fashion and/or luxury goods. A Louis Vuitton bag is expensive, and guess Luis Vuitton is a prestigious company. The same thing goes for high-end cars.

Second, let me deal with some exceptions to my thesis. Tesla is an expensive car admired for its technology. That would be a counter-example. So would Apple, which is just barely hanging onto the cool and prestige of its phones and tablets. Is Apple as cool as in 2007, 2008 when the iPhone was new? Hell no. But let’s not argue whether Apple is still cool. The trouble is that almost no other company or product is.

I am a translator of Japanese and a copywriter for that market. Sometime giants of the electronics industry there are teetering on the edge of bankruptcy now, basically because Samsung has eaten their lunch and none of these products are cool any more.

Let’s go back to the 1980s. Remember the Sony Walkman? That was the iPod of its time, man! (Not that anyone cares about iPods any more, but bear with me here…) Sony was genuinely thought of as a cool, inventive, prestigious company for coming out with a portable radio/tape player like that. It was high-tech! Now that’s something you might buy at a dollar store.

TVs used to be cool. Today’s TVs would have blown people away even as recently as the 1990s. Today, those huge flat screens are lined up in Costco, and no one particularly cares who makes them.

Computers used to be way cool! If an exec had a Compaq laptop in the 80s or 90s, he was a total badass. That was expensive high-tech! Now, IBM has sold off its laptop division to Lenovo, a Chinese company for chrissakes. Dell used to be this huge admired company–they were making computers! Now… does Dell still exist any more? Here again, Apple is the only company that can make computers cool, although they themselves don’t seem to give more than half a shit about their desktops and laptops. So old school.

And this is all part of the malaise. What was once cool is now commodity, produced in Asia for pennies and sold for cheap on Amazon or the barely breathing big box appliance stores. No one gives a shit. No one is excited.

Thoughts?

2

An increasingly large number of Americans are not “just plain broke”. There are enough Americans who cannot spend money as fast as they earn it, to provide a continuous demand for high-end products.

The number of households with net worth of over a million dollars is up by almost 50% since 2008, and now represents about 8% of all households.*

  • = 6.7-million in 2008, 9.6 million in 2013. Total households 114-million.
3

Oh, so everything’s OK?

4

I think you’re just looking at certain products that are in the maturity phase of their life cycle. Flat screens just aren’t ‘new’ anymore so manufacturers are focusing on cost to compete. New technologies just aren’t coming down the pipe fast enough. The high-end stuff if those 4K and curved screen sets.
Home appliances sure have become more technologically advanced than in the past. They’re no longer a commodity but are differentiating, asking higher price tags, and selling them. Front load washers, computer controlled fridges, etc. Same with vacuum cleaners. $600 for a Dyson!?! And people pay that?
Another one I can think of is thermostats. You can buy one for $40. But what’s hot right now? The $250 Nest wi-fi learning thermostat. It’s been so successful that Honeywell has rushed to come out with a competing hig-end model.
And those $15 smoke alarms? Have you seen the new $200 wi-fi models?

5

Net worth isn’t a very relevant statistic when you’re discussing spending ability. A lot of the “millionaires” that you’re discussing are in that category because they own a house. They’re not going to spend that house in order to buy consumer goods.

You’d get a more accurate picture by looking at trends in real disposable incomes.

6

I don’t think tech revolutions are all that obvious ahead of time. The iPod was initially mocked as “just a smaller Creative Nomad” when it was first released, and likewise the iPhone was thought to be just a prettier PalmPilot. Apple IS a luxury brand, like Louis Vuitton, and their success depends (IMO) more on their marketing than their actual technology, which is easily copied by Asian knock-offs. They see noticeably less success in foreign markets where they have cultural marketing barriers and American brands don’t matter as much.

Anyway, it’s not just about Apple. Sony has had flops too. Remember the MiniDisc? It was hailed as revolutionary, game-changing, etc., only to be forgotten by history.

My thesis is that people are stupid and shallow ™, don’t really understand technology, and care more about showing off to their friends than actually supporting any sort of technological leap. Tesla is an expensive car admired for its prestige, with the electric parts kinda like a bonus. Compare the Tesla to the Leaf or the Volt – why aren’t they as cool?

There are still potentially interesting developments happening in the potential consumer space. Virtual or augmented reality. Drones. Self-driving cars. 4k TV. Bioinformatics/fancy heartbeat sensors. Smart watches. But none of these will really become “cool” until they reach some sort of mass adoption. Various wearable cameras (notice how the GoPro quietly permeated through all the “extreme” sports by virtue of their marketing?).

Having grown up in the 80s, the Walkman wasn’t really that cool to begin with and would soon be eclipsed by the Diamond Rio, iRiver, and various other similar products until Apple silhouetted the hell out of them with their iPod ads. The VirtualBoy was far more innovative than any handheld to follow it, and it flopped to stupid Tomadachi and Pokemon games. And Compaq, seriously? Weren’t they always the budget business brand, like a lesser Dell? “Real” execs wielded ThinkPads and Toughbooks even when they had floppy drives.

TL;DR: Cool is whatever marketers convinced enough kids to buy, or what the kids convince each other to buy, not what is actually innovative.

7

Right. This is kindof a restatement of my thesis. There isn’t new stuff coming along that excites people.

The trouble is that not enough people are buying the high-end stuff, and the makers (or the couple that I know in Japan) are really teetering. Yes, they are trying to make “extra-value-added” appliances, but people are basically scoffing at the added tech and environmental performance.

People don’t think of the Japanese giants as having “awesome tech” any more. They just don’t care.

8

True, but I am talking about perceptions in real time. What companies are admired right now for their technology? Does anyone think, “Wow, Sony is so awesome!” these days?

That is an excellent point, thanks!

I do. And let’s not forget Blu-ray, which has massively underperformed (another technological “advance” about which people basically said, “**** it.”)

Thanks again, you are making me think here, although you are also adding weight to my thesis, I feel. Indeed, the Volt was cool for about two weeks, then seemed to fade away. Does GM still hope it does anything? I wonder what the story is on that. The Leaf has gone virtually nowhere too.

This is a mixed bag! My thoughts:

Virtual or augmented reality. Self-driving cars. These will be big when they work and are reasonably priced.

Drones. These will become a big part of life, but I’m not sure about how big they will become as consumer products.

4k TV. Yeah, the electronics companies would love for this to be big, and they are really starting to beat the drum, but I think this is another Blu-ray or 3D TV. People will take it if it’s cheap, but they’re not going to shell out major cash for it (the trouble with Blu-ray is that the players are cheap but the discs are expensive in an age when people want to stream movies for cheap or free).

Bioinformatics/fancy heartbeat sensors. Niche.

Smart watches. Total bust. People don’t buy watches much any more because of cell phones, and if they do it’s as a fashion statement (I was surprised to see a Swatch store go into our local fancy mall… but that’s a fashion statement, I guess? I sure as hell wouldn’t wear one.) People who want functionality already have cell phones.

The Walkman certainly got a lot of media attention and it was a big deal. Heck, Sony transistor radios were a big deal in the 60s. (There is a scene in the Jerry Lewis movie The Errand Boy where one is heavily featured on screen.) The point being that, at one distant time, Sony was admired for its technology. Today, how many people even know that Sony originated Blu-ray? If anything, that would be a strike against them.

Yeah, it’s hard to remember but, “It rose to become the largest supplier of PC systems during the 1990s before being overtaken by Dell in 2001.” (Compaq - Wikipedia). Laptops were a big deal in the early 90s–very few people had them, and Compaq was a big brand. But I’m no expert–maybe ThinkPad was more prestigious. I’m sure you see my point, however. Laptops were once a big deal. Today, they are just standard kit. Tablets were cool for maybe a year. The chill goes off the rose pretty soon these days!

9

I think the OP is back to front in imagining this is a new phenomenon.

It’s the nature of the technology sector that products mature very fast and what was 5 years ago a premium product that people would buy as much as anything to show off, is today something you can nickel and dime.

Examples like Apple are the exception, both in how they’ve built the brand loyalty and also convinced the majority of people to pay extra for a premium product.

But that won’t last forever, and now that there’s really nothing to choose between Android and iOS, that brand loyalty is fragile. If they don’t keep innovating new features, iPhone will go the way of blackberry, just how things have always been.

10

Personally, the cycle seems not all that different from before, with each product having its few months (maybe a year max) of limelight before being replaced by the next. If anything, the Internet has shortened the in-between times from one product to the next since hype is that much more easily spread, then replaced, from one product to the next.

Walkman -> MD -> Rio -> Nomad -> Zen -> iPod -> ubiquity
386 -> 486 -> Pentium -> Athlon -> dual core -> who cares
Genesis -> Dreamcast -> Jaguar -> N64 -> PS2 -> Xbox -> PS3 -> 360 -> same ol’, same ol’
Prius -> Smart Cars -> hybrid SUVs -> Prius v2 -> Tesla -> Leaf -> who cares
Compaq -> ThinkPad -> ToughBook -> PowerBook -> Netbook -> Chromebook -> MacBook -> who cares
iPhone -> G1 -> iPhone 22 -> Nexus -> iPhone 4000 -> Galaxy this or that -> who cares
CRT -> Plasma -> LCD -> LED -> LED LCD -> OLED -> who cares
GeoCities -> Tripod -> Angelfire -> MySpace -> Facebook -> twittybird -> instant picture -> ???
IRC -> ICQ -> AIM -> SMS -> snapchat -> whatever the cool kids today do
SDMB -> SDMB -> SDMB -> SDMB

There’s always just so much stuff out there competing with each other, nothing stays cool long. These days, I don’t think there’s less stuff coming out, there’s probably just so much more of it that our limited attention span is already stretched too thin between sociopath media and incremental gadget #10 that nobody gives a damn… because “cool” itself is no longer cool.

11

I think another issue is the trend in technology is moving away from selling the hardware.

Companies based their business plan on selling the delivery systems. Nobody bought a VCR in order to own one. You bought it to watch movies. You bought a television to watch shows. You bought a stereo to listen to music. You bought a console to play games. You bought a computer to access the internet. The technology companies were selling was just a means of getting the thing you actually wanted.

And the new wave is to bypass these delivery systems and get whatever you actually want direct. If you want to watch a movie or listen to a song or play a game, you can increasingly do it without buying a physical item.

The companies that produce content might be able to adapt and survive. But the companies that sell delivery systems are having problems.

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Well, the cool stuff today is software, and tablets and smartphones which let people use the software and watch the videos and take and share the pictures.

And the cry of “there is nothing new that is cool” is nothing new either. In the late 1980s the PC seemed dead. People laughed at is as nothing more than a place to store recipes. Then they got connected and they were cool again - as a way of getting on-line. Sure they are commodities now. Unless you are a gamer, any random laptop you buy will be fine and better than the one you have (not counting the OS.) Doesn’t mean there isn’t anything new.

13

You got the order of the systems wrong (and the Jaguar was a flop from the beginning). That said, the newest generation of consoles (PS4 and Xbox One) are selling faster and better than any preceding generation. Analysts want to say that the console market is no longer special and is just a commodity now. Others even say consoles are dead in the water and will be replaced by more powerful tablets/easer-to-use PCs any day now. But consumers refuse to follow along and continue to see consoles as “cool” and keep buying them up in record numbers.

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There has to be a name for the fallacy where people misattribute their own personal decrease in interest in a medium as that medium falling into decline (see: Every middle aged person’s rant about how there’s no more good music/movies/tv anymore).

In reality, it’s one of the most exciting times to be a gadget nerd right now due to kickstarter. In the past few years, people have been able to get excited about glowing plants, affordable sous vide machines, all-in-one hardware credit cards, smart watches, affordable IR cameras, high quality VR headsets and a thousand other cool hardware projects.

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I can atest to that.

My 60 year old aunt who barely understands the technology that she has, got herself one of those house thermostats and smoke alarms and carbon monoxide detectors that she can control with her iphone. And all the while that she was visiting us, 600 miles from her empty house, she kept fucking around with her house climate control system. She just couldn’t get over how amazing she thought it was. You’d think she was controlling the Mars rover.

So while much more ubiquitous, technology is still cool. Smart phones and laptops are a growing and integral part of what people do every day. We take them for granted more often than not, but all you have to do is imagine you lost these things, even for a day. I think most people would lose their minds without these devices at their disposal every minute of every day.

As to prestige, well that is still important to many and you see it happen all the time as people trip over themselves to dump their one year old device for the latest and greatest new models. Neither Apple nor Samsung will lose money or market share with their emergent i6 and S6 devices.

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Is that inflation adjusted? Could not the argument be made that wealth is being concentrated at the top rather than all boats rising? I don’t think a million dollars on assets is really “rich” any more either. Where did you get this statistic from?

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I had not known consoles were doing well. TIL.

Kickstarter is a good counter-trend to point out, thanks for that.

I am actually interested in technology. I have done a lot of marketing writing about it. A lot about automobiles, and I think we are going to see some very interesting technological changes unfold in that industry over the next 20 years and beyond.

But automobiles are a good example, since the auto industry, despite its technological progress with hybrids, electric cars, and fuel cell vehicles, doesn’t really have the wow factor these days. For example, in Japan, there is a big social trend of young people not getting licenses and buying cars. Auto sales in Japan are scarily bad to the Japanese automakers.

I’m also not saying there is nothing new or interesting. I’m really talking about how excitement about tech relates to excitement and thus to consumption patterns and society as a whole.

I’ve also done a lot of work with small businesses, and what they really suffer from these days is people not giving a shit about their product. You know, you go to a networking event, and you have your Edward Jones guy, your real estate lady, your “small business marketing expert”–and absolutely nobody gives a shit. It’s hard to come up with a product or service that people really care about these days.

The big companies on the other hand, they’ve got money. They can come up with incredible stuff! Technology! Ideas! Well, what I’m saying is that, these days, those big businesses are more and more in the position of the sad sack small business networkers. People don’t give a shit about their products or their brands. They’re not excited.

Microsoft just laid off 18,000 people (about half from Nokia, but still–even 9,000 would be huge). I read that their online business (including Bing, etc.), has been bleeding about $100 million a year.

Apple hasn’t launched a truly new product since the iPad in 2010.

And I know as a quasi-insider how a couple of truly huge Japanese companies are doing that used to be famous for their tech (in a word, shithouse).

So… that’s my argument. If I’m seeing something that’s not there, if things are truly unchanged and hunky-dory, tell me. Hey, I’d love for things to be great!

18

Has 3D printing really not come up yet in this conversation?

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There’s also the common misperception, seen in this thread, that “contains a microchip” = “technology”, all others need not apply.

A technology that is revolutionizing the American, and world, economies far more than any gadget is Hydraulic Fracturing. I don’t think I need to go into this one that much, but just to give an idea as to how revolutionary this is, the US now produces more oil than Saudi Arabia. And this is just beginning, the majority of this increase occurring in two states - North Dakota and, of course, Texas. But there’s shale all over the country and all over the world and there’s nothing that says that Colorado or Pennsylvania (or for that matter, Britain or Germany or China or Australia) can’t do the same. In fact, the odds are is that they will.

In addition, breakthroughs in Solar Cell technologies have driven down the price per watt so that solar power is financially competitive with utility-generated power in many countries, and soon will be in the developed world. Hell, in Germany, solar cells produce so much electricity at times that it renders spot prices negative. And, the last time I looked at a map, Germany isn’t a country that lies on the equator, bathing in tropical sun.

Televisions were mentioned earlier, but the biggest technological breakthrough to occur during the 1950’s was the development of the Intermodal Cargo Container, which reduced costs of shipping from 5.83/ton-load to .16/ton-load, and in five years (from 1965 to 1970) increased the productivity of an hour of port labor from 1.3 tons/hour to 30 tons/hour.

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In regards to Hydraulic Fracturing, compare the relative position of the US to other countries over the years: List of countries by oil production - Wikipedia