Anyone even vaguely familiar with the world of personal computers knows two things about the industry:
1. Today’s cutting-edge product will be superceded by an even better product within a year of its debut.
2. Deep-discounting in the PC market has eroded retailers’ profit margins, making it possible for consumers to buy mildly outdated products at attractive prices not long after they debut.
This paradox has led some retailers to retrain their sales staffs to push other merchandise-appliances that have larger profit margins.
According to The Wall Street Journal, the margin on large appliances at some retailers can reach 20 percent, while the corresponding margin on PCs hovers around 8 percent.
Is it my imagination, or is there something slightly askew here? Why is that computers-which are constantly adding more memory, more power, more features, and more bells and whistles-keep getting cheaper, while large appliances-which stay pretty much the same from year to year-keep selling at a hefty premium? Refrigerators, washing machines, microwaves, clothes dryers, leaf blowers, lawn mowers, and other household appliances have been in a technological rut for quite some time, while personal computers have taken astonishing steps forward. Yet PC makers take all the heat on pricing.
In part, the glacial pace of technological progress in the major-appliance world can be explained by the very nature of the industries in question: The public expects the latest computers to outperform last year’s models, while no one seriously expects a new washing machine to be twice as powerful as the model it replaced.
Personally, I would like to see appliance makers put their noses back to the grindstone and start developing products that are at least twice as useful as the models they superceded. Consider the leaf blower, widely admitted as the most odious invention in human history.
The leaf blower is loud. The leaf blower is obnoxious. The leaf blower ruins all or part of every fall weekend. In many small towns, strict laws establish what times of day leaf blowers may be employed. Regrettably, my small town is not one of them.
But this is an asinine policy anyway. When disk drives fail to perform, when new software products are riddled with bugs, the public insists on a recall. Why shouldn’t the same be true for the makers of leaf blowers? Why shouldn’t the public demand that the garden-products industry go back to the drawing board and design noiseless leaf blowers?
If appliance makers were held to the same standard as the PC industry, we would own talking refrigerators that would warn us when our dairy products were past their freshness date, or remind us that we had already consumed three helpings of ice cream that evening. If appliance makers were required constantly to upgrade their products, our clothes dryers would set off alarms when we placed highly shrinkable items inside them, or warn us about $20 bills concealed in our Bermuda shorts.
If appliance makers were forced to make even minor improvements on earlier models, our houses would be filled with CD players that could warn us if our children had been playing gangsta rap albums while we were at work, and phones that would electronically catalog the excuses we had given our mothers-in-law for not visiting them on their most recent birthdays. If appliance makers updated their products, our espresso makers would warn us that the coffee was burning; our lawnmowers would warn us that the grass needed cutting; and our answering machines would automatically filter out annoying financial pleas from bogus philanthropic organizations, unscrupulous aluminum siding companies, and brothers-in-law.
I’m not alone in my conviction that the major appliance industry has been laying down on the job. Let’s put some heat on these guys. The media have been hassling PC makers for 10 years when they fail to introduce a new product that is an absolute miracle. Yet refrigerator makers continue to get a free ride.
Frankly, I dream of a day when appliances improve so much from year to year that I have to go out and buy a new TV, a new washer/dryer, and a new refrigerator every 18 months, or else feel like I am living in the technological dark ages. I dream of a day when every company in this country is run exactly like Microsoft. I won’t have any spare cash around at the end of the year, but at least I’ll know that I’m right there on the cutting-edge of leaf-blowing technology. And that’s the only place I want to be.
Joe Queenan is a regular contributor on business issues, corporate culture, and financial follies to Barron’s and The Wall Street Journal.