Early Adopters Fall into a Costly Trap

It’s undeniable: Being among the first to try out a new piece of technology is
cool. There the thrill of doing what has never been done before, the feeling that you're
living in the future. And when you're the sole member of your social circle with the
latest hot gadget, people stare in fascination. They ask you questions. They see you as
the holder, of powerful, secret knowledge—for a little while, until the next big thing
comes alone. People tend to underestimate the costs of this temporary coolness,
which they pay in more ways than one. Don't fall into the early adopter trap. Don't
join the first wave of consumers who invest in the latest media-hyped hardware;
instead, wait and see. In buying electronics, as in most areas of life, delaying
gratification is worth it. You will save money and avoid being stuck with defective,
possibly doomed technology.

To put it bluntly, early adoption is a bad investment. First earliest versions of

devices are not only expensive, they also the most expensive that those devices will
ever be. Companies are presumably attempting to recover the cost of production as
fast as they can, and they know that there are serious tech-lovers who will pay a great
deal to be first. Once the revenues from early adopters’ purchases are safely in their
hands, they can cut the price and shift to the next marketing phase: selling the product
to everyone else. This is why the cost of the original iPhone dropped about US$200
only eight months after its release. Plus, electronics hardly ever become more
expensive because intense competition in the industry puts downward pressure on
prices over time. Prices of gadgets will fall shortly after release, and they will likely
keep falling. Many new models drop significantly in price as little as ten days after
hitting the market. Further, electronics rapidly depreciate because they become
obsolete so quickly. This means that early adopters pay the maximum price for an
item that does not hold onto its value. The resale price of a used cell phone or laptop
can drop by fifty percent within just a few months.

Speaking of becoming obsolete, those who are first to leap into a new
technology risk wasting money and time on something that will never catch on. Do
you remember high-definition DVDS (HD DVDS)? Neither do a lot of people. In
2006, two competing formats for high-definition video entered the market: HD

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DVDS and Blu-ray discs. Both seemed promising, and both required players costing
hundreds of US dollars. Cautious consumers decided to stay neutral, realizing that
one or the other would probably end up dominating and it was difficult to say which.
But a few eager consumers rolled the dice and bought an HD DVD player that soon
became virtually worthless. For reasons that are not entirely clear — Blu-ray has no
obvious technological advantage over its rival — the HD DVD format lost. Sales
dropped steadily, and in early 2008 HD DVD players were discontinued. Many new
products are similarly doomed to never make it; the early adopters are then stuck with
pricey gadgets that do nothing but sit on their shelves collecting dust. And as the story
of HD DVD shows, which products survive may be quite arbitrary, so even the most
knowledgeable among us can be taken by surprise.

Another good reason to resist the early-adoption temptation is that the first
version of a product typically has defects that cost lot in time and frustration. For
example, when Microsoft's latest game console, Xbox One, was released in 2013,
users immediately began to complain of problems. Some of them were malfunctions
of the motion sensor while others involved users being unable to get their machines
online. Dedicated gamers worked to find and share work-around solutions to these
issues. Such problems are so common with new technology that early adopters are
basically unpaid beta testers and troubleshooters. Unless this sounds to you like a fun
way to spend your time, don't be among the first users. If you wait to learn what the
problems are with a new electronic gadget, you can look forward to a smoother
experience —or choose a less troublesome product.

Early adopters do something most others are reluctant to do: take on overpriced,
insufficiently tested technology for the dubious rewards of being the first and
enjoying a short-term increase in status. Learn from their experiences. These
trailblazers do the world a service through their willingness to spend extra money and
work out the problems with a new product. When other consumers do start using that
product, it's cheaper and better-and has a more reliable future. So if you know any
early adopters, thank them, and then quietly congratulate yourself on not being one of
them.

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