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Top line electrical gadgets boom

THERE has never been a better tune to get wired for sound. Or photographs. Or DVDs, LCDs and USBs.
Prices on electronic gadgets are dropping so fast - some as much as 60 per cent in a year that average consumers are now able to fill their lounge rooms with cutting-edge technology.
A year ago, a lO2cm plasma TV cost up to $10,000 but some models now sell for about $4000 and consumers are snapping them up.
This helps drag prices down and keep them there. As more buyers rush to take advantage of reduced prices, more equipment is produced to meet demand.
VCRs used to cost more than $1000. Now they cost next-to-nothing. The phenomenon is referred to in the industry as "price erosion".
How long it takes for a price to "erode" depends on the product type. Laptop computers have come down in price in recent times but took much longer to do so than digital cameras or flash memory devices, such as USB "thumb" drives.
But it's in the plasma television market where price drops have been most significant.
For whatever reasons this happens - improved production efficiency and competition are the two main causes - many items eventually approach a "sweet spot" for consumers who can no longer hold back.
Among the big-name retailers experiencing the rush is JB HiFi, which this week declared a 60.7 per cent increase in full-year net profit and plans to open another six stores by Christmas.
JB Hi-Fi Marion manager Tony Viali believes that while falling prices play a part in increased sales, better educated consumers are another factor.
"A year ago, people were wary of LCD and plasma TVs because they heard somewhere that the screen life is not very good," he said, but pointed out they would actually last about 20 years.
This by far exceeds how long most people plan to keep their TVs. Consumers have come to realise this, and so are more confident with their purchase.
Among other product categories in which prices have fallen during the past year are digital still and video cameras laptop computers and portable music players.
Relatively new products, such as DVD and hard-drive recorders, referred to as PVRs (Personal Video Recorders) or DVRs (Digital Video Recorders), have also dropped in price.
Early models were priced about $2000 but now they are about half that and, with emerging digital recording technologies such as BluRay (which is intended to enable recording of a High Definition telecast, whereas current DVRs can only record Standard Definition) you can be certain the prices will soon be shaken up again.
In fact, this could cause a major shift in purchase patterns and pricing over the next year. As television networks increase their production of high-definition content, consumers will want to be able to record it, requiring yet another upgrade to their system.
This will have a big effect on the sales and pricing of standard-definition recorders.
CommSec analyst Craig Woolford said strong economic conditions were bolstering consumer confidence and driving more spending.
So how low can prices go? That's a question no manufacturer is willing to answer. There is still room to move, however, for price drops on televisions.
Truscott Hi-Fi manager Martin Johnson believes pricing on LCD televisions may yet fall significantly. A Sharp or Philips 92cm LCD a year ago would have cost about $11,000, but they now are priced at about $9000 and may fall even further.