Wait Before You Buy That Gadget!

If you're in the market for Nintendo's flashy 3DS, it will pay to wait a few days.

On Friday, the handheld gaming system that delivers immersive gaming experiences without 3-D glasses will drop from a retail price of $250 to a mere $180.

While gizmo makers rarely pre-announce price cuts, Nintendo pretty much had to tip off the market early about the markdown. The 3DS has only been on the market since March, and the last thing the gaming giant wants to do is alienate the early adopters/purchasers by blindsiding them with the price cut news after the fact.

Nintendo is hoping to make it up to early buyers by granting them access to 20 free digital downloads, though many existing 3DS owners will probably be kicking themselves for not pocketing the extra $70 they could have saved if they had only waited.

If you really want a hot gadget, sleep on it. A good night's sleep may save you some serious coin in the short run.

Consider some examples:

Product
Debut
Original Price
Current Price
Apple iPhone
2007
$599
$199
Amazon Kindle
2007
$399
$139
Google TV Revue
2010
$299
$99
Nintendo 3DS
2011
$250
$180 (on Friday)

The Slasher Is Loose and Cutting Prices Faster Than Ever

Price cuts are common in consumer tech. Five years ago, the Wii, Xbox 360, and PS3 would set a diehard gamer back $250, $399, and $599, respectively. These days, the most popular versions of the consoles fetch a mere $150, $199, and $299, respectively.

Early adopters have always accepted the fact that they will be paying more for new tech, but now even mainstream buyers are starting to realize that prices are dropping too quickly to make a hasty decision.

There are a few factors speeding up the markdown madness these days.


Serious competition is the primary catalyst. When it comes to portable audio players, Apple's iPod is as uncontested as the Sony Walkman was a generation earlier. However, the same can't be said for wireless phones. Obsolescence comes around a lot quicker these days. Apple is actually not growing as quickly as the freely available Android platform that Google (GOOG) is championing through several different handset makers and wireless carriers. Instead of sticking to a pattern of annual updates, new and improved Android handsets come out every few weeks.

Competition is good for innovation: It keeps rivals busy either raising the bar on features or simply lowering selling prices to draw larger audiences.

Refurbished Kindles probably wouldn't be available for as little as $99 if it weren't for the success of Barnes & Noble's Nook. High-def digital camcorders probably wouldn't be selling for roughly $100 if it weren't a cutthroat market. Have you priced a flat-screen television lately? You will be surprised at how much you overpaid for your most recent purchase.

The 3DS price cut may hint at lackluster sales, but there may be a more tactical reason for the $70 haircut. Rival Sony (SNE) is putting out its Vita handheld gaming system at $250 in a few weeks. Now Nintendo can appeal to price-conscious parents. Let's see how quickly Sony backs off that $250 price point if it's not a brisk seller this holiday season.

Gadget makers aren't happy about the margin-chomping implications, but it's a different story for us as consumers. We're the ones who benefit from the counter-punches, and even the knockout blows.

Readers Getting Cheaper and Cheaper

Amazon.com (AMZN) introduced the Kindle at $399 just before the 2007 holiday shopping season. It was a gutsy move for the online retailer at the time. Would selling an e-book reader and digital books and publications cannibalize the physical books business that put the company on the map in the mid-1990s?

It didn't matter. Amazon was embracing digital delivery across all popular forms of media, and with the Kindle it was entering a thin niche with no clear leader. Amazon was able to corner the e-reader market, but that meant responding quickly with timely price cuts to reach more reluctant page turners. Within two years, the Kindle was already down to $259 -- with price drops at $359 and $299 along the way.

Then a price war broke out in 2010. The introduction of Apple's (AAPL) iPad last year forced the leading e-reader manufacturers into slashing prices to set their devices apart from multi-functional tablets. Barnes & Noble (BKS) also began to price its Nook aggressively. The 3G Kindle is now down to $189, and it's available for as little as $139 for buyers willing to accept ads on the reader's home page and screen saver.

Apple Slices Worth the Wait

Even waiting for a ballyhooed Apple product can pay off in the end.

Just months before Amazon introduced the Kindle, Apple raised the bar on smartphones with the original iPhone. The first generation of the iconic device sold for $599 with 8 gigabytes of capacity in summer 2007. The fourth-generation iPhone that was introduced last year -- with far more features than the original -- can be had for as little as $199 for a model with twice the storage capacity as what Apple fans were lining up to pay $599 for in 2007.

Apple has historically refreshed its iPhone product line every June or July. It's late this time, but reports indicate that the iPhone 5 will hit the market in a month or two. Another price cut is unlikely, but the rollout of a new handset with superior features will likely drop the price of the current iPhone 4 through carriers with excess inventory.

Waiting isn't only about the price cut. Apple waited a mere 10 months between iPad introductions. The prices remained the same, but the new iPad 2 upped the ante with dual cameras and superior specs.

Hungrier tablet makers have had no choice but to karate-chop prices. Motorola Mobility's (MMI) Android-fueled Xoom 3G hit the market in February at $800. It quietly sliced the price of the high-end tablet by 25% to $600 last month. Hewlett-Packard (HPQ) introduced the TouchPad last month at $499 for the entry-level model. It is already offering a $50 instant rebate to bring it down to $449.

Has waiting to purchase a gadget paid off for you? Let us know in the comments section below.

Longtime Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article. The Motley Fool owns shares of Google and Apple. Motley Fool newsletter services have recommended buying shares of Amazon.com, Nintendo, Google, and Apple.

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4 Comments

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Aisha Rasul

So true! Well said and good information. I'm going to wait a while to upgrade my iPhone and get a new iPad.

August 12 2011 at 8:47 AM Report abuse rate up rate down Reply
dterraman

so business news has collapsed too!

August 10 2011 at 3:52 PM Report abuse rate up rate down Reply
Grunchy

Hey I did even better and bought 2nd hand. I got a PSP-2001 for $50 and a PSP-1001 (original) for $40, both with batteries, cases, UMDs, charging cables, memory chips, the works. Then I shopped around and got a backwards compatible 60GB PS3 for $100. Then I got an Xbox360 for $75. Then I went into gamestop and bought several used games for as cheap as 50 cents a title, many under $5 and all of them under $10!
I had paid $1600 for a 55" Olevia LCD TV a couple years ago, now you can buy a 55" Sony Bravia for $1300 on sale and I bet it will be $1000 by Boxing Day. I replaced my desktop hard drive with a 2000 GB drive for under $100. I also got 16GB of DDR3-1600 ram for $120, it wasn't so long ago that RAM memory cost you $100 per megabyte. Then I got an Acer 7745G 17" laptop with bluray player, bluetooth, 2x500GB drives, 2 video cards for under $500 on clear out special. And prices are still plummeting!

August 10 2011 at 2:57 PM Report abuse rate up rate down Reply
ncinkman

Don't bother to click on the link re the death of the PC. It's only a ruse so they can start spamming your e mail box. Sons of bitches!

August 10 2011 at 1:24 PM Report abuse +1 rate up rate down Reply