Gadgets Dial Up Wallet Share
As a share of durable good spending, technology has actually continued to rise through the recessions.
As a share of durable good spending, technology has actually continued to rise through the recessions.
Jeremy Glaser: For Morningstar, I'm Jeremy Glaser at the 2012 Consumer Electronics Show.
If the consumer is hurting, there is no sign of it here in Las Vegas. Now, granted this is the place where the highest-end products are going to be launched and we're going to see the technology that's really for the early adopters, but we still haven't heard a lot of talk about a hurting consumer, about creating new products that might be at a cheaper price point, ones that people who might not be willing to splurge are going to be taking a look at or are going to be really focused on. We found that even consumers who might be looking at the lower end of the market still really want some of that technology there.
On the auto side, we heard from Ford that consumers who are buying the more entry level Fiesta models are just as likely to want the higher-end SYNC technology system as people who are buying the more expensive automobiles, and we also heard that consumers even in emerging markets really are demanding the highest level of technology, and in some cases, even higher-end technology than the developed market consumers really want.
So, it seems like technology is one area where consumers are willing to open their wallets a little bit more in order to get more power, in order to improve their lives a little bit through these different products.
Shawn DuBravac: The thing we've also seen over the recession, while it's not countercyclical, consumer electronics holds up much better than other durable good categories like appliances, like automotive, like furniture and furnishings.
So, when consumers have retrenched and when they've delayed durable goods purchases, they tend to delay these larger durable good purchases or these other categories and still spend on tech. As a share of durable good spending, technology has actually continued to rise through the recessions.
Glaser: We had a chance talk to Morningstar's Rick Summer about how the availability of some cheaper Android smartphones are really expanding that marketplace as well, in spite of a lot of potential headwinds for those consumers.
Rick Summer: One of the things we really have to pay attention to is how Android has been able to come down market. So we're seeing a lot of phones that used to be feature phones that are now smartphones, so there actually is an underlying operating system, which means there's an underlying marketplace, there are underlying applications that are delivered that aren't just being delivered to that $500 device user, but also to that $99, $49 device user at the same time.
I think that's going to penetrate not only just into emerging markets but obviously into lower classes or cheaper classes of devices here in the more developed markets at the same time.
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