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The Hidden Costs of Bargain Electronics
Fill Dirt writes "Mike Langberg of Knight-Ridder newspapers wrote an interesting article on the the hidden costs of bargain priced consumer electronics. I saw it in the Seattle Times business section with the title Can't lose with bargain DVD player, but low cost carries price ."
I have seen the real hidden costs of bargin equipment!
:)
As many great deals that I have found in fatwallet forums, I'll be damned that it seems I get more and more broke everytime I visit there...
Of course, whenever my bookoo of rebate money rolls in, I'll be doing much better.
Damn you fatwallet!
AC
It all goes to China, where it's disassembled by teens in makeshift tents looking for a quick way to earn a buck (and perhaps die because of the dangerous toxins in CRT screens.)
Life is just grand, isn't it?
Apex DVD players are junk... and so are Cyberhome, for that matter.
I sell them at a national department store, and roughly 80% of them sold come back defective... usually the drive door breaks, or it eats a dvd, or the components come loose in the back.
Not worth it. Spend 50 bucks and get a decent one.
Josh
hookers and grits.
Philips, which along with Sony and Pioneer has hundreds of patents covering all aspects of the DVD system, is administrating the granting of licences and the collection of royalties, which are then shared equally between the three manufacturers.
The Dutch electronics giant has set up a dedicated website -- www.licensing.philips.com -- which features a list of licensed manufacturers from its licensee database. Philips maintains the website is kept up-to-date with the latest licensing information.
A leading importer of DVD players, who asked not to be named, told ERT Weekly: "This is big news. We have found most low-cost DVD players do not hold the necessary licences.
A Philips spokesman said: "There are a number of manufacturers that don't have the necessary licences.
IIRC but cost of a licence is around $25.
From the article:
no assembly-line workers in China able to enter that country's growing middle class
Yes, the companies hiring these people are really holding them back. Just imagine if they couldn't find a job how quickly they could join the growing middle class!
Please, give me a break. The economy in China is completely different than what this 'journalist' is used to. The number of people living here just boggles the mind. I would say that over 90% of China's problems can be traced back to the fact that it's population is FAR too high. Too many people, not enough schools. Too many people, not enough jobs. Too many people, not enough land. If the workers had something past a middle school education, then yah, maybe they could enter the so called middle class. But they don't. Usually the workers are glad they have a job at all. If they don't want the job there's plenty of other people who would be glad to take their place.
Even though their wage is well below the poverty line in the west, they usually have an average salary for the area they're living in. For instance, at the kindergaten I'm working at now the Chinese teachers get around $100-120 USD / month. The cleaning staff gets perhaps around $70-80, I forget exactly. And these are considered good wages for the job they are doing. Hell, I don't think there's a single person at the school who doesn't have a mobile (cell) phone! And remember this is in a large metropolitan Chinese city, not out in the country where most of the manufacturing plants are. The cost of living is even lower where most of the plants are.
Do not anger the worm.
Yes, I didn't invert the title-- it's practically impossible to get away from DVD drives nowadays. They're almost standard on new computers-- and really only a $20-$30 upgrade if you build your own or customize an existing setup, so most people who've bought computers within the last year or so has one. PS2s and XBox have capabilities to play DVDs, so if you're a gamer you probably have another player. Not to mention the fact that some TVs have them built-in (like the old TV/VCR combos, which are surprisingly popular of late). The odds are good, then, that any given American household has a DVD player of some sort.
This raises an interesting point-- it's no wonder manufacturers are dropping the prices on their players to next to nothing; the market is saturated and people aren't likely to shell out $60+ on something "they already have".
I did, in all fairness, pick up a DVD player (as opposed to my PS2 etc.) in May of last year, but only because it was a feature of the 5.1 stereo "receiver" (actually a bookshelf changer-type system) that was on clearance anyway ($200). If the system had been full-priced (about $400) I would have said "screw it" and gone with the $250, 5.1, non-DVD-playing system sitting next to it. Both were by Sony, and I think the DVD system is no longer being produced. The point is that with all the el-cheapo DVD players floating around, I still went with a name-brand because it was "included" with the other item I wanted.
"Why Subscribe?" Good question...
A 555 timer chip is not a quality problem. It is a relatively old but very common device - it is good example of "tried and true". They have been in production for decades, and compared to more complicated chips are extremely reliable and rugged.
You are also increasingly unlikely to find such a device in a DVD player or in other modern consumer electronics. Complex modern consumer equipment tends to revolve around either a CPU/microcontroller or other highly integrated digital electronics, combined with the minimum amount of analog circuitry required to interact with the real world. The kind of functions a 555 timer might have performed (one shot timing or oscillation) are dealt with in the digital domain, and this functionality is developed as software. Using a 555 is the expensive way, not the cheap way, as hardware is expensive compared to the cost of software, which approaches zero for sufficiently large production runs.
There are quality factors in consumer electronics - it's not all the same - but it's not so simple as the use of a single device. Factors include:
With increasingly high levels of integration, more of the product is dependant on software (either in a CPU or as a way of describing custom silicon). Quality depends extremely heavily on design. Now, much of the complicated design isn't even performed by a hardware manufacturer. For example, take a look at the many usb key type MP3 players on the market. Notice how they're all almost identical in specifications? This is because the manufacturers don't start from scratch each time, but use the same chip set as all their competitors and often the same reference design from the chip designers. The guts of one of these players is just as good as the next, but one may be better overall due to better design and construction of the case, or a better user manual, or better headphones, etc.
The reason they had that level of quality was they pre-tested and stress tested each component that went into the production of their consumer electronics. They spent literally billions of dollars on test equipment from companies like Aetrium and others.
As soon as Sony (and other electronics manufacturers as well) started seeing serious competetion coming from cheap Chinese imports, the easiest way to add to their bottom line was, among other things, to cut out the pre-testing.
The failure rate of each individual electronic component is pretty small, but when you have several thousand components that go into a VCR or camcorder, each component having a .001% chance of failing, the combined failure rate of all the components amounts to 1-2%. Now, when a particular component fails, the unit may not die, but something marginal like picture quality will suffer.
Sales at companies that sold test equipment plummeted - I know from personal experience.
Nowadays, a Sony VCR is pretty much just as crappy as a cheap Chinese import. The premium you pay goes to marketing, product design and adding sometimes unique and hopefully useful features - which usually backfires and winds up being a bloated and unusable product.
The lower cost leads to higher failure rates in a shorter time span, but now the technology has become disposable and it is not uncommon to replace these cheap items every 3-5 years instead of 5-7.
Think about it: When was the last time you actually took an electronic item in for repair?
I bought a camcorder last year. The tape handling sucks, it will casually eat the occasional tape. The batteries that came with it? Lets just say that I've had erections that have lasted longer. Its not a problem with the battery, but something about the unit is just sucking the juice.
When I inquired about warranty repair I was told that the unit had a 90 DAY WARRANTY! And YES, it was purchased NEW, not a refurb. I was, needless to say, shocked - but what else should I expect from our new, disposable goods economy.
Good security is based upon reality and common sense. Common sense is a function of having common knowledge.
>She makes many technical (but important) observations about how the system is set up to take advantage but not benefit these workers and these countries.
;-)
Workers are only part of the system. Money going into a country at all is a big benefit, wether it goes to workers, a corporation, or a government.
Money is made to be spent. Eventually that money works its way into the hands of the workers, wether it's the company president getting themselves a new yacht built, or a politician buying a new jet.
>She makes many technical (but important) observations about how the system is set up to take advantage but not benefit these workers and these countries.
Of course it is. They're going (quickly) through the same steps that took us through the industrial revolution. Right now they're at the foothills of it, getting the short shrift.
>Employers in the west never volunteered minimum wage, child labour laws, working hour restrictions, etc, etc, etc. It had to be fought for, and these people don't have a voice in the marketplaces where their goods are being sold.
I'll argue the other point: Did a voice in the marketplace even make the slightest difference to getting companies to implement these policies? Or, was it in fact mob rule (Unions) that did it?
I'd hedge my bets on the latter. The people of the US, as a whole, really don't (and never really did) care if their ketchup was made by a unionized Heinz or a non-Unionized local company.
There's so many more workers in China it's only a matter of time (and very little at that compared to the US, IMHO) before workers there demand more, and decide to demand it in groups.
If you could be told what you can see or read, then it follows that you could be told what to say or think - BoC
Look who didn't read the article. The author mentioned this woman and says now it has come to light that she's a former Wal-Mart employee, and has a history of "slip and fall lawsuits" and worker compensation claims.
What time is it/will be over there? Check with my iPhone app!
if a typical Japanese worker had their way, they'd work Saturdays too
As someone who has lived and worked in Japan, I'd like to correct this. No one I knew enjoyed all the unpaid overtime. They did it because they felt compelled to by their company.
Actually, there was one programmer who would have worked even if the boss/company hadn't demanded it, but the other 500+ would gladly have taken the time off.
In fact, in seven years, I met three people who told me they enjoyed their work. One was the aforementioned programmer, the other two were the presidents of their companies.
It isn't "miraculous" at all. It's obvious and the last two centuries have largely shown determined efforts to prevent this from happening because it is so obvious.
There are only so many things that can be imported. Take, for instance, Kuwait. 95% of Kuwaiti exports are in petroleum, which makes up over half of GDP, since it is essentially their only natural resource. Nearly 100% of food is imported as agricultural capacity is nearly zero. The United States, on the other hand, has no reason to import anything except to lower the price. There are very, very limited exceptions, mostly in precious and semi-precious metals used in manufacturing where trading is based on necessity. Relying on unnecessary imports (note that something being "cheaper" does not make it "necessary") creates a succession of structural unemployment, depressed wages and/or government subsidy to keep uncompetitve sectors from producing millions of homeless people. At some point you simply must accept that the guy across the street in New York will not be able to produce anything for you at the price available in New Delhi and that some services must be provided in terms of your local economy, unless you envision a future at the homeless shelter.
Realize what is happening: production is MOVING not dramatically INCREASING. If production moves and is not quickly replaced, your GDP suffers because, obviously, you're no longer PRODUCING. We haven't found anything yet to replace what we're shipping offshore, so hey, if you've got any ideas on the "next big thing" that can only be produced here, you just fire away.
The total global economy is now about $110 Trillion, or about ten times that of the United States. The total global population is about 6 billion. That's an average GDP per capita of $18,333/year, which is HALF the current GDP/capita of the United States, but it is twice that of Poland and nearly five times that of China and almost ten times that of India. Now, considering the amount of production moving to China and India, which represent a third of the world population, and that the United States represents 10% of the global economy, one can assume that for every $1000 increase in GDP per capita in China and India, it will cost the United States $868 in GDP per capita. Why? Getting India and China to $18k/capita through exports would take transfers of $34,000,000,000,000 per year in production, 10% of which by definition would come out of the United States (in reality the US takes 20% of their exports, while India imports half as much and China practically nothing), unless new production is created, which to date has not happened (remember all the talk of "jobless recovery?"). That $3.4 Trillion would represent nearly a third of our economy, say, equivalent to losing California, New York and Texas.
Since 1983, GDP in real terms has only increased by about 18% while imports have increased from 8% to roughly 14% of GDP. In current dollars, that's $750 billion in production already shifted, equal to $2,900 in GDP/capita. The minimum wage of $3.80 in 1983 would require $5.70 today, but that wage is now only $5.15, which is a loss of 11% in standard of living, or about $1100/year. Since this is generally the wage we pay our manufacturing line workers, do you think these things are unrelated?
I don't reject the idea of equalizing incomes globally through trade. However, the current pace is suicidal especially when thinking in terms of moving production to countries with more than five times the human resources and one tenth the cost of labor already used to export to the United States three times what is imported. That kind of relationship cannot possibly be mutually beneficial to any sustainable degree. We already have a trade deficit of nearly $550 billion, which is $2000/year for every man, woman and child in the country, thus a family of four is already supporting $8,000 in trade-related waste. Escaping that scenario would take a miracle that cannot be imported from China.
Manufacturing has not doubled. In twenty years it has added about 60%. That's not even 2.5% per year. Inflation over the same period was 3.1% per year. Besides, the concern is that as a function of per capita GNP, which is obviously a function of popluation, is changing and not in an upward direction. You've failed to site direct references to authoritative sources, so here's mine:
.014% of GNP). "Soaring" my ass. YES, GNP has increased so that .014% of X may be greater than .020% of Y, but the real gains were in finance and services. YES, absent huge increases in unemployment that means we are shifting jobs around. However, as you have keenly noted, "blue-collar" jobs often pay around the median (read: not "well," just not "badly"). Service jobs usually pay at or near the minimum wage, which is $2.33 where I live.
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/. post. Econometrics are far too complex for this venue. However, it is safe to say, things are not so rosy as you seem to hope.
http://www.bea.gov/bea/dn2/gpoc.htm
You will notice that we have dropped from total manufacturing being about 18% of GNP to 14% of GNP between 1987 and 2001. You will also notice that we have added roughly 30 million in population. In terms of electronics manufacturing, we've lost nearly 30% in that sector just between 1994 and 2001 (.020% of GNP to
As for your statement about "bogus zero-sum economics," well, having studied economics, and given the above facts, I see no problem with what is an accepted model in such obvious cases. Ask any unemployed software engineer if he thinks Indian outsourcing is a zero-sum game and I'm sure you'll get a "yes." He loses a job, India gains a job. It may be part of a larger game, but at that level of analysis, it is a zero-sum game and it is perfectly reasonable to view it as such. In terms of trade deficit, if China exports twice as much as it imports, it IS a zero sum game. They win, we lose. Make no mistake, trade deficits are -bad-.
The median income, that is the maximum of what the bottom 65 Million Americans earn, is $28,117 per year. That's $13.50 per hour. I'm not sure where you got your figures, since you didn't bother to provide a reference, so here's one of mine:
http://www.irs.gov/taxstats/article/0,,id=10288
Of that, 13 million make less than $5,121. So we have 78 million out of 130 million taxpaying, working adults who make less than your purported "average blue-collar wage."
Admittedly, it is quite difficult to really see the entire picture in a