More Money Spent on Cellphones

This brief bit shows the paradox between rapidly falling cellphone prices and the large increase in revenue they generate. What is startling is that the average cellphone costs 40% more than it did one year ago. Meanwhile, new technology is introduced so quickly that phones depreciate after a year.

Cellphones Get Cheaper, So People Pay More
By Saul Hansell
New York Times
Nov. 20, 2007

There’s no place that the relentless reduction in prices for technology products is more visible than cellphones. It seems like only months between the time a phone is offered for sale at $300 and it is ready to be given away free in cereal boxes. (O.K. not quite, but that’s not a bad marketing idea.)
What’s odd about all this is that according to new data from the NPD Group, people are actually spending more on cellphones than a year ago. Americans bought 38 million phones in the third quarter up only 4 percent from the third quarter of 2006. But they spent a total of $3.2 billion on those phones, up from $2.2 billion a year earlier.
Doing the math, that means the average phone cost $82.81 this year, up 40 percent from $58.95 a year ago....
http://bits.blogs.nytimes.com/2007/11/20/cellphones-get-cheaper-so-people-pay-more/index.html?ref=technology