Price of computers and peripheral equipment

The price of computers has fallen steadily since their invention. The steady price fall is caused indirectly by Moore's Law, an observation that the number of transistors that can be inexpensively placed on a circuit board doubles every two years. As computing capacity grows each year exponentially, manufacturers can create more powerful chips using less and less expensive silicon. Due to the highly competitive nature of circuit manufacturing and computer manufacturing, these savings are extended to the consumer every year. However, the decrease in computer prices has steadily decelerated as Moore's Law approaches its absolute limit. This limit is the production of transistors that are the size of an atom. As this limit is approached, chip development becomes increasingly expensive. As a result, the reduction of computer prices slowed from an annualized rate of 8.4% from 1998 through 2003, an annualized rate of 7.0% from 2003 through 2008 and an annualized rate of 4.8% from 2008 through 2013. This trend continued as low-cost manufacturing and competition along with enhanced productivity and the introduction of substitute products continued to put downward pressure on the price of computers and peripheral equipment.

While mandates amid the COVID-19 pandemic encouraged people to stay at home and rely on technology for work and recreational functions such as streaming media or communicating with friends and family, prices weakened by 2.4% A reason for this being stems from challenges manufacturers suffered early in the pandemic when mandates prevented them from operating at full capacity. Consumer spending at the time decreased with consumers going out less despite lower interest rates and increasing stimulus in the period. With these factors, the value of computers and computer-related equipment suffered early in the year as consumers that already have access to computers beforehand or can buy used computers as a more budgeted response to the period led to computer prices decreasing in 2020. However, these declines slowed in 2021, as computer-chip shortages temporarily increased the prices of certain components. As the shortage continued into 2022, prices rose due to pent-up consumer demand and rising inflationary pressures raising costs in the year. Necessary components soon reached supply in 2023 however, allowing for downward pressure on computers and peripheral equipment prices. As a result, the price of computers and peripheral equipment decreased by 0.1% and 0.3% in 2024 and 2025, respectfully.