Expectation Inflation

It seems like every day we are getting hit with sticker shock. The iPhone X smartphone costs $1,000!!! New cars on average cost $33,000!!! The average starter home is now more than $250,000!!!

Forgive the Handy Millennial, but I’m not impressed.

Spend about 5 minutes on Rockstar Finance or CNBC, and you’ll find an endless list of articles that tell you how today we are victims of monetary inflation and wage stagnation. Again, excuse me but I frankly don’t care too much. Why? Because this is only half the story.

Let me first acknowledge that money is slowly becoming less valuable like that burning bill in the picture (monetary inflation this compound interest in reverse) and that wages in America have not kept up with inflation. Yup these are problems, but actually problems that you CAN fight.

What we really have in this country is the perfect type of inflation: expectation inflation. Some people colloquially call this “Keeping up with the Jones’.” But it’s more than that.

We are no longer simply keeping up; we are ENTITLED to the better life. We deserve to be happy. We must be rewarded. The natural conclusion of these deep held convictions is that you simply expect more than you used to, and that is costing you some cold hard cash.

Let’s discuss the current topic du jour of outrage in social media and around the country: the iPhone X. For those of you still uninitiated (or perhaps reading from the distant future), last week Apple, the world’s most valuable company and the gold standard of luxury brands, showcased their newest products.

Among them was a new version of the iPhone, a handheld computer capable of blazing fast computation, that we like to pretend is only useful for posting tweets and organizing endless rows of colored jewels. But that’s not the outrageous part; the outrageous part is that this luxury device maker had the audacity to price this phone at over $1,000.

GASP!

Okay, I’ll wait as you pick yourself up off the floor…

Are you back? Good. Now what you need to understand is that iPhone X is an amazing device. The iPhone X is a new type of device, one that is going to introduce its users to augmented reality. It responds to the user by touch, voice, and I quote “glance.” That’s right, this device will do something if you glance at it.

Pause for a moment. What do you think it takes to make a device responsive to glance? Well, my dear reader, I’ll tell you. It takes video action recognition. This means that the iPhone X is capable of monitoring its camera and recognizing when a certain action has been performed. If you think that’s easy, then you must not be employed in technology.

To recognize your actions from video, this iPhone will translate the camera videos into a long sequence of 0,1,1,1,1,0,0,1,0,0,0,1,1,0,0 and then use its ability to add or subtract these numbers to figure out what you’re doing. Does this sound easy? No, of course not. That’s why Apple has to hire all those geniuses (real ones, not the fake ones in store) to do it!

But that’s not all. To achieve facial recognition, the iPhone needs two eyes (just like you) for depth perception. So multiply that string of 0s and 1s by two and figure out how they interact.

To do all of this, the iPhone X smartphone has a microchip that can perform over 600 billion additions per second. That’s 600,000,000,000!! The entire Apollo 11 space program ran on a computer that performed 42 additions per second, and I’m rounding up here. So that’s 13 Billion times more computational power in an iPhone X than in the super computer that put Neil Armstrong on the moon. This comparison is about as embarrassing as comparing horse power to rocket horsepower.

The naysayers will of course say that this is useless. And they are right. Do you really need a device that can recognize your emotions and gestures? For most of us, that’s a no, at least not right now. Some day when this device doesn’t cost $1000, it may very well prove to be a valuable way of interacting with the world.

But today this device is a luxury item, and one which people will gladly buy in order to create weird digital emogies of their facial expressions, to play digital Jeopardy, to play candy crush, to post awesome selfies, or to text small cute snippets to potential lovers: “as if, what ev’s.”

But what the naysayers are missing is that one does not purchase an iPhone to be useful, one purchases an iPhone because they deserve it. After all, once you’ve seen the cool new features of the iPhone X, would you really look at another phone in the same way? Of course not, because you EXPECT other smartphones to match the quality of this luxury item. You expect to have the nice stuff NOW because that’s just how we operate today.

And herein lies the problem. Every time Apple has one of their flashy new product unveilings, every time the public is outraged about the price, every time the news discusses the shocking new smartphone, your expectations are slowly and seamlessly creeping up. This is a never-ending game, because not only do you want more now, Apple must do more to hold you attention. So like a cat chasing its tail, we continue inflating our expectations and then wringing our hands about how expensive life has gotten.

But expectation inflation is like tunnel vision:

It precludes you from seeing the rest of the beautiful metaphorical beach. Getting too abstract for you? Good because I was just about to tell you something practical. While the world was busy watching Apple, other companies were busy making similar devices. For example, Motorola has been designing smartphones under the name Moto. Amazingly, they are just as glossy and pretty as the iPhone:

Even more amazingly they are 80% cheaper than the iPhone X. That’s right, for about $220 you can buy a 5th generation Motorola smartphone that can do 98% of the things that the iPhone X can do. If you happen to be an Amazon Prime member, that price will come down to $184.

And this is an expensive smart phone. Look at what you can buy for under $50:

Now I’m not saying that these phones will go head to head with the iPhone X. I’m not even saying that these phones will go head to head with the Moto. But these are smartphones. And these are smartphones that are frankly unbelievable in their capabilities compared to what was available on the market just 10 short years ago.

And if you’re not dying for the latest app, you don’t care too much about style, and all you want to do is call, text and maybe use a map once or twice, then these phones might just be the answer. And most importantly, these phones offer modern smartphone capabilities at prices that even today’s wage depressed and inflation plagued consumers can afford.

6 thoughts on “Expectation Inflation

  1. I think it all depends on your needs. Very few people will actually need an iPhone X, except maybe in highly specialized fields that need lots of mobile computing power and advanced features. But I think that as technology enables more productivity, it comes to be expected – like many employers today demand that employees keep up with e-mail no matter where they are, on their smartphones.

    1. Miguel, thanks for commenting! I certainly agree with your point here. It’s definitely true that technology enables productivity. With respect to productivity, I think that most of the computational resources in smart phones are wasted. The reason is that while the original Apollo program computer calculated one or multiple versions of a trajectory, in order to make your phone visually appealing it’s constantly calculating thousands of pixel trajectories. So its increasingly difficult to argue to more powerful devices are actually making us more productive. About the only reason to get a new device these days is that companies are incentivized to protect newer models from hackers.

  2. This is so true and closely tied to lifestyle inflation. As fancier, newer, cleaner, faster, bigger, etc becomes the norm those who aren’t interested become more fringe until you give into the small voice prodding you to accept the new normal or accept that you’re now a hopeless tech averse hermit. Can’t wait to see what the world is like when I’m 60…

    1. Hi Budget Epicurean! Thanks for stopping by! This is a very interesting point you are bringing up about keeping up. Makes me think of a conversation I had a long time ago about the rotation in life. Every 10-20 years or so there is a paradigm shift. In the 90s we switched to computers, in the 00s we moved to mobile devices, in the 20s we might move to tongue phones (Katt Williams). Every time this happens large chunks of the previously tech savvy get left behind! I think this is fascinating, and I’m kind of excited to see this happen to our generation. Not because I want people to fail or anything like that, but just because its in those moments of change that we really find out if we are as cool as we think we are.

  3. I still use my iPhone 4S, which was state of the art when I bought it about 4 years ago. People make fun of me for it on a regular basis, but it does everything I need it to, and I don’t have to pay $1000 to replace it. I plan to keep using it until it dies, and then I will likely buy something that is not an iPhone X.

    1. Hi Solitary Diner! Thanks for stopping by! I agree it’s pretty silly to make fun of people for this. As long as you’re getting the security updates you’re good to go! You be very careful with your phones and are likely not a heavy app user. Great job on keeping it going to long!

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