Audio/Video, Business

Why a recession can be good for technology and consumers

As everyone knows we are in the middle of an economic downturn, a recession, call it what you want it is bad news for the economy. As we move deeper and deeper into what the media is calling the financial crisis we hear news of corruption, business closings and all sorts of bad things. It is enough to put you off your lunch.

But an economic recession does not mean all bad news. In one and very important way it has hidden benefits to the consumer, the companies that sell to them and to technology in general. In the simplest terms a recession forces companies to trim their margins, reduce inefficiencies and actually produce a better product.

For years, hardware and software have been playing leapfrog with poorly timed and poorly executed refreshes [especially in the GPU industry] very little new or revolutionary technology has been produced. We as consumers have been force fed the PR line that older and renamed products are new and we need to buy them to "keep current" sadly this is not the case.

How does all this work? It is very easy math to do; AMD is a good example. They know they cannot compete head to head with Intel and their high-end CPUs so they go for the value segment and provide a better product at a lower cost in this area. The result was a good and optimized  CPU architecture, and now Phenom II is going from competing against  the Core 2 architecture to entry-level Core i7 processors that are coming to market at much higher platform cost. The same can be said for their GPU offerings – first ATI, then renamed AMD GPG lost the edge to nVidia and now are attacking at the bottom with a low cost, high-performance, energy saving product in the form of the Radeon HD 4770, the world’s first 40nm chip with almost one billion transistors.

nVidia  has no response to this, consumers are looking to save some money and still get good performance are going to go for this card over the more expensive and renamed GTS 250 – renamed from GeForce 8800GTS512MB and 9800GT/GTX+ [same architecture through three product generations?].

As another example the much disliked EA Games has decided to, as they put it, "go back to basics" – meaning they are going to start working on games that people actually will want to play; games that are engaging and enjoyable and not just more of the same. They have also admitted that their DRM schemes were hurting their sales and decided to offer a DRM-removal tool for free, a much better move than Apple’s 30-cents-a-song rip-off scheme. So we see multiple benefits for consumers here. 

The weakening market has brought us more energy efficient products for the home and office it has spurred the development of products like the netbook, the nettop, and other low cost, low power products. These in turn have forced manufacturers to reduce the cost of their notebooks and desktops to compete. 

On top of all of this, as we enter into a more energy conscious and green society we see manufacturers rushing to earn our green dollars. They are pushing more energy efficient products, products with reduced lead and other harmful materials, using packaging that is recycled and recyclable and not pushing the cost up on these as they would in a more healthy economy. 

In the end the economic troubles are nothing to laugh about; many people are losing their jobs and homes. But even with all of the gloom there is still that small silver lining of improvement in the cost and value of the electronic products we buy for our homes and work. Ultimately, we will have better and higher performing parts that will enable us to earn more at a lower cost of equipment.