Bulletproof demand for must-have gadgets drives half year profit to $306 million for JB HI-FI.
Herein lies a major problem with society today.
It seems that the majority of people must upgrade their “obsolete” devices. Is this driven by the consumers or the companies producing these must-haves?
I believe a huge portion of this question is, it is the companies driving this want. Continually upgrading systems forcing the consumer to ditch their perfectly working gadgets. Sure, keeping up with the Jones and Fear of missing out plays a huge role as well.
One can go through life with a minimum of technology. Heck, I do not own a smart phone and still manage to navigate the world.
What say you?
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Yes,they want us to keep buying things.That’s why nothing is made to last long these days 
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Will power required. Simples.
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There’s something called the product life cycle (part of the Boston Consulting Group’s growth/share matrix) which is an old model but still relevant today.
This model categorises some products (cash cows) as generating profit for years while others may plateau and fail quickly (dogs). In order to stay in the market companies have to keep coming up with “stars” (quick growth sales, high market share) which will hopefully turn into cash cows.
If they don’t keep coming up with this other competitors will take market share and their dividends will fall leading to shareholder sell off /takeover threat.
Products that last forever are good for us but not good for the manufacturers. The alternative is a closed monopoly where you have just one product and little or no innovation.
Obviously people want low prices and high quality, but that is difficult for a manufacturer to justify to shareholder who want profits. So these days producers have managed to convince us that we need to pay for things that we didn’t realise we needed. Or they find new ways to get money out of us.
It’s incredibly frustrating for the consumer. But at the end of the day producers go into the market to make profits. It’s a jungle out there in the market. I can see the whole model imploding as originally predicted by Marx. The reason it hasn’t is innovation. I think it’s Schumpeter who made the case for that, but I never did finish his book (must get it out and dust it off).
The reassuring thing is that despite not having a smartphone, you will find that at some point in the future, smartphones will become completely obsolete and we will have implanted chips. (hopefully after my time on this planet)
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I’m happy with obsolete devices … I’m obsolete myself now.
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God Annie … what with pacemakers and chips when we trundle through that crematorium incinerator we’ll come out just a lump of steaming molten metal.
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In my case I much prefer “vintage and collectable”
Yeah right!
I decided to omit the pinocchio emoji as most of us are aware that it’s become somewhat sullied on this forum! 
Cheers Bret! 
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How so?
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Didn’t want to stray into the topic of sneezing 
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…
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Perhaps. Or is it not more likely that a new paradigm arrives that creates a whole new type of market and product? It is interesting that this thread focuses on smart phones.
Back in 2004/5 I did quite a lot of work with Nokia up in Helsinki. This was when they were the biggest phone maker in the world. They launched something like 5 or 6 new phone designs a year at that stage. They have managed to get the time spent on “concept to design to production to replace with the next one” cycle down to 11-12 months. They did this to chase the new product buzz going, to overwhelm the competition with new stuff and to cover all the different customer needs.
Then Apple launched the smart phone and the rest is history. See also Kodak and digital cameras, arguably an even more interesting story.
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All of us currently on this forum will not be around to participate in the indignity of such an outcome. 
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“the perennial gale of creative destruction”
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Cor I like that … did you dream up that one yourself. Very prophetic and insightful.
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would that I were so eloquent or intellectual. It was Mr Schumpeter. The scary thing is that Schumpeter lived way before the internet was a figment of anyone’s imagination (he didn’t even live to see Farenheit 451, which alluded to social media, published) yet he would not be surprised at all about AI.
His prediction was apparently that capitalism would fall because it would be destroyed from within rather than through any violent revolution. From what I read of his book (which I have somewhere), he thought capitalism would keep going as long as entrepreneurs kept innovating new ways for it to expand and continue.
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Thanks for sharing. I’d not even heard of Schumpeter, shame on me. Glancing across his works and his theories, and when he developed them, it does me wonder if he would retain or revise his thinking if alive today? I’d certainly agree that capitalism does not seem threatened by revolution, at least not western capitalism. But might that be because capitalism has many players with huge interest in keeping capitalism going - and the resources to do just that? Certainly right now, capitalism as it stands, does not seem to be benefiting the majority or giving people all that they need.
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Be careful what you wish for. We are all stakeholders in this particular experiment.
My main problem with capitalism is that it is a hungry beast with a growling stomach. I’m just worried that stomach is hungry because it’s so full of promises rather than real commodities. That says more about our modern financial systems than capitalism in itself, which after all is just the market system humans have had since the beginning of time.
My view has always been that regulation and control is absolutely necessary to keep markets in check and ensure competition and consumer choice prevails. But we are entering an era of total uncertainty because of AI and the job displacement that is already starting to take place. I’m just grateful to have lived in a normal world for most of my time here. Feel so sorry for the young and the uncertainty that they face/will face.
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Let me first say that I really do agree with your post - especially the need for robust regulation to hold back the wilder behaviours that capitalism can encourage.
I’m interested in the notion that there has been a divergence from simple / traditional capitalism with the introduction of modern financial systems. And also if that simple capitalism is no more than the hand of the market.
I had understood that the market exists regardless of whatever -ism is in place. Capitalism is the system by which money is raised for investment, the investment is used to create a means of production, the risk lies with the investors, but so does the reward if the production results in a product that can be sold to the market at a price that provides profit. The market determines the price it can be sold at - driven by demand and competitor offerings. So in that sense capitalism feeds the market but is not the market.
The financial systems that adapt or change capitalism seem to me to be ones that take the risk away for the investors. The most obvious of these is the limited company - or to be more specific the limited liability company. This creates risk not the for the initiating entrepreneur - but more for the shareholders (ok, these are investors) and any debtors the enterprise involves. But worse now are hedge funds that seem to take little or zero risk in their investments. It strikes me that the reduction of risk for the entrepreneur means others carry the can … and that ain’t capitalism.
Other more modern financial systems - hedging, shorting, derivatives, etc. are surely just financial tools that need strong regulation and limits. I read that the futures market alone is many multiples of the world’s GDP. So if that goes wrong…
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Yes I meant financial instruments, futures, hedges, derivatives etc.
When they had the select committees after the last crash the problem was summed up by a committee member (or similar bright spark), who said words to the effect that they cannot keep using the excuse that nobody really understood how derivatives work.
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The best and most readable (and most scary) book about the 2008 crash was by John Lanchester and called “Oops!”. Best written because he’s a writer rather than an economist or life long city worker. And the title sums up the attitude of the financial sector. Oops, soz, but just an accident, so no-one’s fault really.
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