> $500 smartphone today would have cost tens of thousands of dollars only a few years ago, if it were even possible to manufacture then
Would you have spent ten thousand dollars on such a phone a few years ago? I wouldn't have. I'd have put that money towards renting a nice place to live.
Are you spending, today, ten thousand dollars to buy pre-production builds of next year's smartphone? Is it worth it to you?
The reason people buy smartphones today is because they're a few hundred dollars. That's the point where the cost of the thing falls far enough below the value it delivers to make it worth buying. You can buy one and use it to access your bank account and stress about how to pay back your credit bill next month. So even if that phone would have cost a million dollars decades ago, you don't feel like a millionaire because you aren't one. If you were a millionaire in the 1990s, you'd probably have a house with a swimming pool. If you were poor in the 1990s, you would be stressed about your credit card bill, but maybe doing it on paper.
If someone gave a million dollars to a poor person in the 1990s, they'd probably have spent it to pay off debt, get a roof over their head and feed their family, not blow it all on a prototype palm pilot, a portable TV, and a Cray. In other words, they wouldn't have spent $1,000,000 on smartphone-equivalent functionality, because that functionality would still only have been worth about $500 to them.
The technological deflation gave you a $500 phone, it didn't give you a million dollars of value.
Would you have spent ten thousand dollars on such a phone a few years ago? I wouldn't have. I'd have put that money towards renting a nice place to live.
Are you spending, today, ten thousand dollars to buy pre-production builds of next year's smartphone? Is it worth it to you?
The reason people buy smartphones today is because they're a few hundred dollars. That's the point where the cost of the thing falls far enough below the value it delivers to make it worth buying. You can buy one and use it to access your bank account and stress about how to pay back your credit bill next month. So even if that phone would have cost a million dollars decades ago, you don't feel like a millionaire because you aren't one. If you were a millionaire in the 1990s, you'd probably have a house with a swimming pool. If you were poor in the 1990s, you would be stressed about your credit card bill, but maybe doing it on paper.
If someone gave a million dollars to a poor person in the 1990s, they'd probably have spent it to pay off debt, get a roof over their head and feed their family, not blow it all on a prototype palm pilot, a portable TV, and a Cray. In other words, they wouldn't have spent $1,000,000 on smartphone-equivalent functionality, because that functionality would still only have been worth about $500 to them.
The technological deflation gave you a $500 phone, it didn't give you a million dollars of value.