deflation and technology

I'm not sure if it has always been true, but it has been true for as long as I remember, that the first people to buy a technology pay the most and then the technology gets cheaper and better as time goes on. In other words- it pays to wait. One notable example of this is the iphone.

The original iphone was released in June of 2007. The iphone was originally priced at $599 for the 8 GB model and $499 for the 4 GB model and the iphone was only available for people who signed up for a 2-year AT&T service plan. 3 months later, in September, the 4GB model was discontinued and the price on the 8GB dropped from $599 to $399. There was such an outcry, that Steve Jobs said anyone who bought an iphone for $599 would get a $100 credit to use in apple's stores (or online).

Nowadays, the iphone is in its 3rd generation (3GS) and costs $99. Everyone that I have spoken to that has an iphone loves it. I am quite intrigued with it myself. However, even though I already have AT&T, I have a basic phone and have a family plan with my wife and we only pay about $70 a month for both of us. I think if I got an iphone, it would probably cost us about $110 or $120 a month combined, and it isn't worth an extra $40 or $50 a month to me.

Anyway, in terms of deflation, the same thing is true with bluray players, laptops, GPS devices and so on. It wasn't that long ago that a laptop w/ 2 GB of RAM would cost a thousand bucks, now you can get a laptop w/ 4 GB of RAM for $600! I guess it is good in this day and age with wages not increasing much and the price of rent, food, and gas going up, that we can get better and better electronics for less and less $.