Trade and upgrade before the values fade

Thanks to the situation mentioned yesterday, that the lifespan of electronic gadgets has become shorter and shorter, there have emerged in recent years consumers who opt to buy state-of-the-art models and then trade them as soon as the next generation becomes available. While it may look like this is a rather expensive mode of consumption, there is a certain rationale behind it. Of course cutting-edge products are costly. Of course trading means selling their items at discounted prices. But these aficionados are only too happy to pay the difference and keep staying ahead of the pack. They are also mindful of the fact that if they hold on to the items, the re-sell value will drop so dramatically that they will be worth next to nothing in just a couple of years' time.

This is something to which I can testify. A few months ago, I took my mobile phone to a collector for a quote. The offer for a phone that I had paid nearly HKD2,000 (about USD250) for a little more than two years ago was a mere HKD350 (about USD45). That is a massive drop of over 80% in value! I wonder how much that phone is worth now that it is a few more months older. From an economic point of view then, the more prudent consumer is none the wiser, although he may find solace in the fact that he is not guilty of producing another piece of electronic garbage.