Crisis In Japan Will Increase Consumer Electronic Prices

A devastating earthquake and tsunami earlier this month in Japan caused shortages of electronic components. It will also result in increased prices. Currently, Apple has to find alternative manufacturers for components of their new iPad2. While Apple may be able to find substitute manufacturers, those same manufacturers realize they have Apple in a desperate situation, and are charging more for those parts. In addition to Apple finding itself in a bind, consumer electronics as a whole are finding shortages of components. And of course, the old “supply and demand” axiom is pushing prices up.

Crisis in Japan Will Increase Consumer Prices

There are already signs of an increase in the price of memory chips. Display panels for computers, game consoles, and cell phones are also a problem due to the damaged Japanese factories. As a result, electronic goods such as computers, mobile phones and DVDs are predicted to be rising in price. Digital cameras and camcorders may be affected as well. Not only will we be affected by price increases, but by shortages of the electronic gadgets themselves.

Everything from automobile electronics to Smartphone components are in short supply. According to Terry Macalister, SMH, “a growing group of electronics, steel and car makers in Japan has suspended operations, creating the prospect of shortages of products further afield. Japanese electronics are in particular demand for televisions and audio equipment, but also as components in solar panels, computers and even vehicles. Japan is the world’s biggest supplier of silicon used to make semiconductor chips. NEC, Panasonic and Fujitsu are among the companies that have halted production and have reported damage to some of their factories. Sony has suspended production at seven plants and analysts say this will have an impact on lithium ion batteries and DVDs.”

The Japanese economy is being devastated by this crisis. Not only are there an estimated 18,000 lives lost in this disaster, but Japan will suffer economically while they regain their footing. The world looks to Japan for most things in the electronic market. Not only have factories been shut down, but ports are in jeopardy as well. All-in-all, it doesn’t look good for the Japanese. According to Macalister’s article, “massive daily monetary injections from the Bank of Japan have reached a total of ¥34 trillion ($425.8 billion) so far in short-term loans. An indication from the government that it could buy into the sharemarket helped shore up the Nikkei after dramatic declines earlier in the week.”

What does this mean for the consumer? As far as Smartphones go, there will likely be an increase in prices as well as some postponements for new product releases. I wonder if this will affect the release date of the new iPhone 5? Since Apple is already having trouble finding components for the iPad 2, it stands to reason that they may have trouble finding parts for the iPhone as well. So far, no one is speculating on a delay, but don’t be surprised.

Does this affect you personally? Were you waiting for the new iPhone 5 this summer? Do you think it will be delayed? We can only speculate and watch and wait.

By: CellPlaza

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