When the newest gadget hits the stores, it's tempting to rush out and be the first in line to buy it. After all, it's fun to have the latest and greatest. But there are some solid reasons for holding off on that shiny new tech purchase. While it may rain on your parade today, it may save your wallet in the long run. Here are just a few reasons why it might be worth the wait.
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Perhaps the biggest reason to hold back on your gadget splurge is the price. When a new product hits the shelves, its price is at its highest. Often, waiting even just six months will mean a much friendlier price tag – especially if an updated model is about to be released.
For example, in the wake of the iPad and iPhone 4 releases, Apple (Nasdaq:AAPL) has seen its iPod sales decline, and has slashed its prices accordingly; the 32GB iPod Touch is now going for $299USD on the Apple website, down from $400USD. While you may prefer to put your money on the iPad on the iPhone, if you are just looking for a new mp3 player, an iPod looks like a great deal right now. (Learn more about the iPhone 4 and Apple in Will iPhone 4 Send Apple Stock Soaring?)
As many of us may be set to experience, buying into a particular format can backfire if a different one ends up being the standard. When new formats enter the scene, replacing your old model - or worst case, entire collection - can leave you frustrated and hundreds of dollars poorer. Take for example the recent at-home movie format wars. Although DVD is still widely available, Blu-Ray continues to gain ground. If the trend continues, your DVD collection may end up in the garage sale box along with your CDs – and we'll be left forking out the cash to replace them with Blu-Ray and digital downloads. Or you might look even further ahead, and just skip to on-demand movies and save yourself the storage space. (Learn more in 6 Reasons Why Products Fail.)
Often contending products can help to drive down the prices of new products. These could either be existing comparable items, or new ones entering the market with the intention of competing for the space. A good example would be Sony's Playstation 3. After entering the market at $599US for the 60GB model in May 2005, but this fall cut their prices to compete with Microsoft's (Nasdaq:MSFT) Xbox 360 and Nintendo's Wii. Now, you can get the 120GB model for $299US.
Sony also recently dropped the price of their e-book reader to fall more in line with Amazon's (Nasdaq:AMZN) Kindle and Barnes & Noble's (NYSE:BKS) Nook. The high-end 3G version has dropped from $350US to $300US.
Sometimes, when a new product is released, major problems are discovered. If you are among the first to buy in, you may find yourself holding a product that while being the newest of its kind, is also a big pain to actually use. Those enjoying Apple's fastest selling product to date, the iPhone 4, may have realized that the signal strength dropped significantly if the phone was held a certain way. An issue that will no doubt be resolved in upcoming versions, the current phone requires either a specific case, a piece of duct tape or holding the phone a certain way.
The Bottom Line
It may be worth it for some to spend the extra cash and have that new device right away, but for many waiting just a few months is a good trade for the savings. No one likes to see that special tech gadget they forked out big cash for on sale for 60% off just a short time later.
Catch up on your financial news; read Water Cooler Finance: I-Spy, IPOs And iPhones.