Question

What is the effect of new technology on consumer electronics market?

Answer 1

It has increased the process value chain of ensuring there us adequate resources in ensuring the consumers get their services or goods required for a particular time, for instance the efficient distribution of the goods after they ordering.

It has increased the search of goods and services required by the consumer,for instance if a consumer wants customisation and personalisation of their services of their goods.

Explanation:

From the demand perspective:

The development of new technology leads to an increase in the demand for consumer electronics. For example, new and better technology in televisions like the launch of Smart TVs has resulted in an increased demand. Another example can be that a new technology from 4G to 5G will lead to increase in the demand for smartphones which support 5G or when Apple launches a new iPhone, an upgradation of the old one, then many people are attracted to buy the updated phone and the demand tends to rise.

Thus, due to a new technology, there is a surge in the demand for products like smartphones, smartwatches, televisions etc.The following figure illustrates the effect of new technology on consumer electronics market:

As shown in the figure above, initially the market for consumer electronics (say smartphones) is in equilibrium at point E. New technology causes an increase in the demand and the demand curve shifts rightwards (from DD to DD'). As a result, the quantity (from Q to Q') and the price (P to P') of smartphones increases.

From the supply perspective:

A new technology can also lower the cost of producing of consumer electronics. As a result, the supply will increase. This will lead to a lower price and higher quantity.

Therefore, taking into the account the simultaneous effect of both demand and supply, development of technology definitely leads to an increase in the quantity of consumer electronics. However, the effect on the prices remains ambiguous

It has increased sales on the side of the producers because they are able to get ready market by selling their products online.The resultant effect is on the increased earning because the producers have saved the costs of intensive and extensive advertisement and research and development.

It has increased the efficiency levels when it comes to communication, tracking of the goods and services, pricing strategy and ensuring there is effective market conversation.