Gadget prices head down

The prices of consumer electronics gear continued to fall this spring, according to a new report from The NPD Group.

A 2 percent decline in April from March was across the board, the market researcher said Thursday, with prices dropping for 19 of the 27 products that NPD tracks. The company said the biggest drop in dollars was seen in plasma and rear-projection TVs, both of which fell by about $40 over March prices.

"TV prices remain under pressure as new screen sizes, new distribution channels and new brands alter the playing field at the high end of the market," Stephen Baker, director of industry analysis at NPD, said in a statement. "Falling prices for plasma, which have declined over $1,000 since last January, and rear-projection TV, have put stress on category pricing all the way down to the basic tube set."

Meanwhile, DVD recorder prices fell by 9.9 percent, which is the second-biggest decline since January 2003. Prices of personal CD players dropped 7.2 percent in April.

Both desktop and notebook PC prices fell as well. Notebook prices leveled off from an increase seen in March, and desktop prices dropped 5 percent from the previous month--the biggest one-month decrease since November. However, desktop PC prices are actually the only category that has seen an increase in average selling prices since January 2003. The market researcher said IT products have seen much less pricing pressure in recent months.

The consumer market space is getting crowded with products like digital music players and plasma television sets from technology companies such as Hewlett-Packard, Gateway and Dell. This month, Dell announced plans to launch plasma TVs that will be aggressively priced. In the past, the low-price strategy has helped it sell large numbers of units quickly to gain market share, forcing rivals to respond by lowering their prices.

[Razzl]

Why is music exempt from the economics of competition?

Just a thought here--why is it that all of these technologies respond to the economics of competition with price decreases, as theory says should happen, but the members of the RIAA never, ever drop the price of music CD's to compete for market share against their rivals? Why has the price of this mature technology never gone down in the 20 years of its existence? Why does this industry prefer to risk losing its whole customer base to piracy rather than give the customers fair price competition? Can you say collusion and price-fixing?...