Chapter 2
"Lesser Profit in Electronic Industries"
The Globe And Mail, 05/11/06 6:50 PM
http://www.theglobeandmail.com/servlet/story/RTGAM.20061105.wblitz1105/BNStory/Technology/home


The result of analysis from this article is talking about consumers being unable to afford technologies these days. The price of electronic products has been driven up for three consecutive years since 2003. Products like digital cameras and Ipods were the main products that caused the rising revenue growth, as well as the faster than expected adoption of the flat screen televisions. Statistics from the United States show revenue from 2003 at $140-billion had gone up to now $302-billion in 2006. Finally, this year people are starting to find prices are getting to costly and are hoping that they’ll drop. Analysis shows that the prices range for products have been dropping lately. For example, the flat screen televisions have dropped significantly; digital cameras are maturing; supplies of new game consoles are limited.

Analysts say that there are two new kinds of products that could have encouraged electronic sales for this year are limiting their own success. One of the new products is the next generation of DVD’s called Blu-ray and HD DVD formats, which are not having an insiders’ war. Another product is the upcoming Sony Playstation 3 and Nintendo Wii, which are in hot demand but has limited quantities available.



Relation to Chapter 2


From all the information that analysts gave us from the article, we can see the demand of electronic products is still high but it has gotten too costly that people cannot afford them anymore. The advance technology over the past few years has driven up both the demand and prices up for electronic products, such as flat screen televisions, digital cameras, Ipods, etc. It is not so expensive that it gets to the point where consumers don’t want to spend too much on them. Therefore, the demand of electronic products is going down along with the prices. The article also talked about the new items that could've helped the demand for electronic products. For example, Sony Playstation 3 is in a very hot demand, and it is also not a very expensive item. But the console has a limited supply, so it is not satisfying consumers’ demand. This might seem bad for electronic companies, but in my opinion, I see a good opportunity for electronic industries to make some profit. Using Playstation 3 as example, if they can set their console’s price a bit higher and trying to find the equilibrium. Then they might be able to make even more money since they can only have a limited supply of Playstation 3.