How do current economic conditions affect the demand for electronic gadgets? 

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kipling2448 | (Level 3) Educator Emeritus

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"Electronic gadgets" is a broad term that encompasses both essential items like kitchen appliances and luxury items like flat-screen televisions, smart phones, and the like.  For purposes of discussion, it will be assumed that "electronic gadgets" refers to the latter category: luxury goods that are not essential but that have become a ubiquitous part of most people's lives.

Historically, electronic devices like televisions and stereos were considered luxuries that families would purchase when they could afford them, but that parents recognized were not essential for their and their children's sustenance. In other words, as the economy worsened, consumer purchases of electronic gadgets decreased. As economic conditions improved, purchases of televisions, stereos and other gadgets increased. As computers, MP3 players, smart phones and other devices were introduced to the consumer market, they became "must-haves" for many families irrespective of the fact that they were not technically necessities. Over time, however, the distinction between luxury and necessity disappeared, with both home computers and smart phones being increasingly integrated into the daily lives of many consumers. Today, cell phones are considered a necessity despite the fact that mankind prospered quite well for thousands of years without the level of connectivity that cell phones provide. In fact, some of us miss the days when we weren't around telephones because it meant no interruptions and no ability on the part of bosses and relatives to communicate instantaneously with us. In short, electronic gadgets the purchase of which used to be delayed because they were considered luxury items are today purchased even during difficult economic times because they are now considered necessities. In the case of larger, better televisions, though, such items remain luxuries under most people's definition and demand for them will be heavily affected by economic conditions.

In conclusion, demand for electronic gadgets used to decrease during difficult economic times, and increase when the economy was good and families had extra money to spend on luxury items. Today, electronic gadgets are considered necessities, and demand remains high even during economic slow-downs. Some types of electronic devises, such as video games, will still drop in demand when times are tough, but computers and smart phones have become so integrated into people's lives that they will still be purchased. That said, decisions on whether to replace electronic gadgets that still function with newer, better gadgets will continue to be influenced by economic conditions. Those decisions to delay upgrading one's computer systems, especially at the company level as opposed to the individual family, can have a serious impact on the electronic gadget industries.

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