This, however, isn’t shrinkflation. This is supply chain, demand, and uncertainty.
This has been happening in the USA way before 2001:
> In 1967, the Fair Packaging and Labeling Act (FPLA) was enacted to ensure that consumers had enough information to make an informed choice between competing products. The Act requires each package of household "consumer commodities" included in the FPLA's coverage to have a label that includes the net quantity of contents in terms of weight, measure, or numerical count (measurement must be in both metric and inch/pound units).[10]
* https://www.stlouisfed.org/publications/page-one-economics/2...
* https://en.wikipedia.org/wiki/Fair_Packaging_and_Labeling_Ac...
> In fact, it was the humorist Art Buchwald who was among the first to sound the alarm. In a column entitled “Packaged Inflation” published in 1969, he lampooned the growing tendency to conceal price increases. Tongue in cheek, he praised American industry for “devising new methods to make the product smaller while making the package larger.”
[…]
> In late summer of 1974, for example, Woolworth’s offered a packet of pencils at its back-to-school sale for 99 cents – same price as the previous year. But as a sharp-eyed reporter at The New York Times observed, the packages only contained 24 pencils, six fewer than the previous year. The same strategy affected packets of construction paper (24 sheets, not 30).
* https://mikesmoneytalks.ca/shrinkflation-is-an-economic-mons...
And in recorded history for centuries:
* https://archive.ph/https://slate.com/news-and-politics/2022/...
It most certainly is shrinkflation. It's rising input costs decreasing the product quality.
A "good salary" (or at least the median) used to be $5000:
* https://en.wikipedia.org/wiki/File:Median_personal_income_af...
* https://en.wikipedia.org/wiki/Personal_income_in_the_United_...
As the 'dollar has lost value' people have demanded more dollars in their salary. (Whether the two have kept up with each other is a matter of debate/concern.)
You'd be surprised how economically iterate average people are. I had highschool colleagues who couldn't calculate VAT/sales tax out of a price on the whiteboard.
Sure, people have heard of the word inflation, they know this word exists, but they won't be able to explain how it works and its effects throughout the economy.
I simply don't know the specifics because that was 70 years ago and I wasn't around back then. I do feel confident that I could eventually produce a good answer (or perhaps even a great answer), but I'd have to do some homework in order to produce that answer.
But without that homework, it's just not something that I can relate to because my present perspective does not include it.
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Meanwhile: If you asked random people on the streets of Anytown, USA about what they feel about price of a Big Mac or rent today compared to 5 years ago, it might be rational to expect to get some pretty direct and sometimes livid responses.
The same happens when someone mentions something about the Average income as opposed to the median income. The average income is meaningless if the top 1% keep going up while the rest of the system stays the same. The average would look like people are earning more money when they're not.
Same thing with Market economics and the price of items. If I got a choice to sell a boner pill for $1 to a million people and $1 million to one person, those are equal value propositions. So whenever a corporation raises prices, they don't care how many customers they cut off as long as the remaining ones are whales. That's particularly sharp with all the AI costs being shoved into the pipe.
So, that is to say, you really shouldn't just produce a single number about anything and treat it as some benchmark across the world.
Note: some single item shocks can lead to broad inflation (eg: oil) but that effect takes awhile to play out.
* Google's upcoming folding phone is going to have less RAM than the current model.
* Motorola has both increased the price on their Razr flip phone and downsized the minimum storage
* Sony reduced storage on the PS5 Slim
...
So when the tub of ice cream decreases in size from 64 ounces to 60, 56, 52, and finally 48 ounces while the price stays the same (or even goes up), then:
That's not necessarily shrinkflation; that might instead be a result of having learned that consumers didn't need so much ice cream.
When the changes are done precisely during a time of huge increases in the prices of all kinds of memory devices, it is hard to believe that this is a random coincidence.
See Apple as an example, who really doesn't care about telling you the newest phone has 12GB of ram. It's literally not even mentioned on the tech specs page.
If seemingly the "same" product -- in this example say 'MacBook Pro' base model for current year -- delivers less goodness, less value compared to its price year-on-year. If the price appears to stay more or less the same but the product is made weaker in service of higher margins for the seller. THAT would typically qualify as shrinkflation ... in my understanding.
This is more objectively measurable in comsumer goods where you can see the packaging being tinkered with over time so consumer thinks they are getting the same SKU but this year's packaging has less of the product tghan last year's, at similar price point so it doesnt register as price inflation.
I know Apple is escaping it due to their large contracts but I’m honestly not sure how at this point. They must have pre-purchased multiple years of memory or otherwise have a really insane contract.
But what’s puzzling about that is, why don’t other manufacturers have the same kind of deals? It’s not like Lenovo is a low volume supplier.
Obviously, the iPhone sells in volume unmatched by other devices. But still…I’d have to ask why other high-volume brands like Samsung have wildly expensive laptops.
It just seems like the other companies are asleep at the wheel and don’t have any passion for their strategy, to the point where a tiny company like Framework is overperforming just by caring a little bit. Sure, they can’t beat Apple on raw value but they at least they put together a laptop with a respectable trackpad and a CNC body. Where is volume leader Lenovo?
It's not like designing your own part is free, but Qualcomm charges a very healthy margin on top of their manufacturing costs.
Apple also invests in designing the tooling and processes used on their manufacturing lines.
For instance, they cut way back on how much CNC time was required to produce the Neo.
If lenovo is buying a billion chips a year, why can’t they lock in like Apple?
You can't lock in prices forever, though. The more volume and stability you have, the more a vendor will be willing to enter long-term agreements with you. Lenovo has less volume than Apple and is not in as great of a financial position, so they don't have as much leverage.
The bigger factor is that Apple already had more margin in their products. The price premium for RAM upgrades on Apple laptops is large, as everyone knows. They could absorb more RAM price increases without being forced to raise retail prices.
Lenovo controls less of the stack than Apple: CPUs (Intel/AMD), BIOS, operating system, etc. While ostensibly Apple and Lenovo are both selling personal computers, Lenovo is in a (sub-)segment of the market that is commoditized with Dell, HP, etc.
If you need to run Windows and associated (Windows-only) apps, what's special between Lenovo/Dell EMC/HP/etc? How much of a difference is there between Coke and Pepsi?
A lot of vendors hitched their wagon to the Wintel duopoly, and now they're all riding (or being ridden) herd.
In the consumer space, I recently bought a Sonicare toothbrush, and the number of models and combinations is staggering. 1000x plaque removal, 750% plaque removal, it's ridiculous.
So Dell, Lenovo, et Al end up trying to address every niche except the focused product catalog niche.
If you want a PC and your favorite brand
is missing something that a competitor has,
it's easy to switch
Like Dell Vostro, their "small business" line. Versus Latitude, their "business" line. What on earth is uniquely needed by a "small business" versus a... regular business? Why not introduce a third "large business" line? Maybe a "sole proprietor" line too?
It can only be explained as a psychology play. The dizzying array of options is designed to, I suppose, make you feel like Dell surely has the exact right laptop for you, even if that is bullshit.
It doesn't entirely make sense to me from a psyche standpoint either -- I have no idea why purchasers would possibly feel anything other than anxiety and analysis paralysis. But whatever!
My vague recollection is that Latitude were nice business laptops; coming with all the enterprise goodies, replaceable parts, service manual, next-day onsite support available and also the enterprise usual costs, lack of sexy displays, and slow model turnover.
Vostro was a lot closer to the Inspirons (sold for personal use); I think just badge engineering a couple selected Inspirons to have a bit longer of a product cycle and better parts availability.
Re: analysis paralysis, that's a real issue. I try to find some feature that really narrows the field and then it becomes easier to decide. If I required a wired ethernet port, memory slot(s), and a specific cpu family, it narrows the field a lot; then I can figure out from what's left. For laptops, off-lease entrerprise refurbs are pretty price competitive with new models targetted for personal use; then it's really a matter of what's available, and how they differ ... and then looking at the units with specific damage/defects to see if the compensating price drop makes sense; personally, I'd take several dead pixels for $100 off, cause I don't do pixel peeping work anyway.
Dell also had the Precision line, which was very posh. These cost a lot more.
The Vostro line eventually showed up. They were noisier, and lighter/flimsier, less-expandable, and harder to work on. But they did cost less to buy.
---
I would never buy a Vostro computer for myself. I think that buying cheapness as a primary feature is dumb. Given a choice between good/better/best, I tend to pick "better." I like being able to get what I think is a better design, even though it generally costs somewhat more. I don't want the cheapest car tires, the cheapest hand tools, or the cheapest PC.
But the company chose to operate as cheap-at-every-expense. The Vostro line was a perfect fit for their buying proclivities, so that's what they started buying. (I didn't like that, but those decisions were above of my paygrade.)
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Was Dell wrong for offering several different classes of computer back then?
Are they wrong for doing so today?
Why? Why not?
(Remember: In the insatiable quest for the bottom dollar, the company kept buying Dell computers. We could have began giving those dollars to one of their competitors instead, but we did not do so. This suggests that the model is not bullshit at all: After all, they are in the business of selling computers, and we kept buying them.)
Dell and Sonicare do not have that luxury. They are competing with other PC vendors and other toothbrush vendors.
The strategy is to produce so many models that you appear to serve every price point and need without requiring the user to shop around. You can find something in their lineup that fits your budget or requirements if you look long enough and you don't feel like you need to go looking around at competing vendors as much.
Having may models isn't a high cost because they share so many parts. I bet if you opened multiple Sonicare toothbrushes they'd share many main components like batteries or motors. Dell has a few laptop and desktop lines but they're different combinations of parts within a shared chassis.
More importantly, if you have a locked in price you can sell your products for more profit - or you can sell the things that you have locked in and not have to make the rest of the widget at all. Sometimes someone will give you a good deal to buy out your locked in contract.
Apple also makes healthy margins on its hardware products.
Apple’s only structural advantage should be their custom silicon, but I don’t think that’s a cost advantage as much as it’s a performance and battery life advantage. Apple is still buying huge dies from TSMC and designing them custom themselves which is not cheap. Lenovo shares the cost of designing an Intel, AMD, or Qualcomm chip with dozens of OEMs. Same deal with software: I wouldn’t be surprised if macOS costs more per unit for Apple than Windows costs for Lenovo considering all the employees Apple hires directly to develop it.
Apple in theory should be paying a pretty similar amount of money to make the rest of their systems. They don’t make camera sensors, displays, keyboards, DRAM chips, or anything else themselves.
Right, I'm just saying they could afford it if it came down to that. They also have enormous margins on their higher-end systems, so they've got plenty of room to lose some profitability before it comes down to that.
Apple is #4 in PC volume but they certainly make up for it with their smartphone volume.
And of course, they have a lot of service revenue to pad the balance sheet.
By the numbers, Apple is a smartphone business that has a casual side hobby of also being the #4 PC maker. Their PC sales are ~3x less than Lenovo's, but their smartphone sales are 10x their PC sales. There's plenty of commonality so the massive smartphone business surely helps with supply on the computer side of things as well.
They do this for their own reasons but it's helping them in this crisis. They can simply accept lower margins in the short term, in the knowledge that in the long term these price fluctuations even out.
From the perspective of the producers Apple are a consistent purchaser with deep pockets. AI companies may be willing to pay more for RAM in the short term, but Apple is a safer customer. The current AI bubble may or may not burst, but people will keep buying iPhones regardless. The producers do not want to freeze Apple out because Apple is their hedge against the bubble bursting.
Lenovo may not be a low volume purchaser but they are not at Apple's scale nor are Lenovo's customers willing to pay the premium that Apple's customers are.
Also, their computers have been getting more storage/RAM competitive as time has gone on. Literally just by time passing and prices staying the same.
Lenovo is beyond Apple’s scale when it comes to PC sales. They are #1 in volume. Apple is #4. Apple sells more iPhones but Lenovo does also own Motorola which is not nothing. We can also look at Samsung: a wildly high volume company who has their own production lines of major components like RAM and displays but they still sell their 2026 laptops at eye watering price increases.
Apple literally buys displays from Samsung.
- 4TB Samsung Pro 990 SSD for $150 (now $940)
- 64GB DDR kit for a laptop $180 (now $700)
- 64GB DDR5 CL30 kit for a desktop $200 (now $950)
- 9800X3D/5070Ti PC $1800
- 2TB Samsung Pro 990 $95 I think? I honestly don't even remember why I bought this
It's really depressing now. Normally at this point in the NViida product cycle we'd be expected a 50x0 Super series. I think it's all but confirmed we won't see those until next year. I think the 50x0 series will last a lot longer than the 40x0 series.
So it's going to be interesting to see what happens when this hits phone makers who also need RAM. There certainly won't be a RAM increase this year and there'll likely be a price bump. Apple may be able to absorb this to some degree because of anyone I expect them to have long term contracts.
Still, Apple has temporarily delisted the base 16GB Mac Mini and removed the 512GB Mac Studio so they aren't unaffected.
But I think this SSD/RAM price hike has basically killed the Steam Machine, which is sad. Valve obviously didn't lock in long-term contracts before announcing it. Woops. The Steam Deck is also a hard find as a result.
We've seen an almost unprecedented price hike on the PS5, which is an almost 6 year old console at this point. I wouldn't exxpect a PS6 before 2028 at the earliest.
We've had RAM price spikes before, usually because of supply crunches (eg years ago I seem to remember a fire taking out one of the major suppliers).
I honestly don't expect any of this to get better until we have an increasingly likely global recession and the AI bubble pops. OpenAI and Anthropic may not be able to cash out in time to avoid all this.
Oh, the irony
For a while, at least.
We actually don't need all the ram. Everyone was fine in 2010. The devices were fine, the internet was productive.
We have all just seriously fucked up in the software and hardware space. We are super-sizing devices and software just as surely as the car industry has done in massive pickups and SUVs and the food industry has done with portion sizing.
Many product segments peaked and the only way left to extract more money from us is to either lower the quality so that it's cheaper to make/break faster or subscriptions/ads.
By the end of the twentieth century, these decades of development and industrialization had primarily succeeded in consolidating world inequalities in income and resource use, while accelerating environmental degradation to unprecedented levels.
When corporations relocate manufacturing to the imperial periphery, they successfully export the social contradictions of mass production (like class conflict and labor unrest), but they do not relocate the wealth that historically allowed high-wage countries to afford social safety nets and high living standards.
I also don’t think inequality is intrinsically bad. Depending on type and timeframe it may even be good. Especially if the inequality is increasing while everyone is also doing better than they previously were. (note that internal US inequality is actually shrinking)
A 10% increase on a larger base will produce more inequality than a 20% increase on a smaller base. However, I don’t think the smaller base person would prefer neither of them get an increase.
Because the West used to have tons of manufacturing and unusually large amounts of social unrest? Shitholes are gonna shithole. No one is stopping them from being the next South Korea or Singapore (if they really wanted it, lol) except themselves.
Wow, brilliant insight.
Yes, the US used to have tons of manufacturing and unusually large amounts of social unrest. Is that your only question?
Why do we always act like there's an immutable social obligation to march right along believing the prior generations had freedom to start marching in that direction, but we are forever locked in to such a direction.
You know all the people that made those choices are dying and future generations have zero obligation to carry on linearly from where they left off?
Women would not have the right to vote. We'd all be speaking Latin.
Two things that would remain true if society of the living was tightly coupled to exactly how the past worked.
Certain "have to" are imposed by the physical world. The world will have to use less oil in 2026 than in 2025, because production has been so heavily impacted by the war. What happens beyond that .. well, only a fairly small number of people get to make that decision. Next US presidential election is in 2028.
The reality is the West has been leaning on cheap labour for decades. That can’t continue as the rest of the world is catching up.
This is a good thing even though it will be painful for people used to consuming cheap goods from Asia and other parts of the world.
You're not struggling to understand my comment. You're struggling to think altogether when your argument is "well because random political choice in 1979, we must today in 2026..." type reductive, functional illiteracy.
But ok; we must coddle the past to satiate some. Well, debt jubilees are things humans have done before. Wipe the ledger and start counting again. What is grandpa going to do? Rise from the grave?
What obligations did I mention?
You seem to want to say something whether it has any relation to the parent comments or not.
If he did, he'd jump right back in
If you don't have the guts to pick a side, if you remain at the level of just disciplining sentiment, if you can't even say what you mean, then you are no better than a swindling preacher--you are part of the problem you are nominally fighting against.
Or is this just dead internet?
This has already been happening quietly in several industries.
I remember many years ago when I was working in a bike shop (early aughts) and the Specialized engineer was talking about how Taiwan used to be the brunt of the jokes in the bike world for decades. He went on a rather long rant about how over that same time, they had essentially dumped billions into becoming a technological behemoth when it came to bike manufacturing. Their factories were so far advanced, and their engineers were so highly qualified, that many bike companies (including Specialized) were moving their manufacturing back to states because it had become too expensive to continue using the Taiwan factories.
Sure, there is some market manipulation, ads are the best example (how can any adult with even a smidge of self-respect accept any ads in any form is beyond me, thats mind slavery 101) but since forever masses wanted bread and games more than literally anything.
All those companies making high quality expensive products that lasted decades? Barring tiny exceptions, they either went down with quality (less control, move to china etc) or went bankrupt.
Parent is right in 1 aspect - if we elevate whole world to similar income levels, the income of previously-rich countries will have much less purchasing power, can't escape simple numbers. But who cared in the past about slave kids in sweat shops, right, they didn't have the right skin color, passport or religion to worry about.
"It's impossible." They said.
"Simple" numbers generated by Machiavellian computation given the economy.
So it turns out that difficult computation and going to the moon are possible.
Problem you asserted as in the way is solved.
Maybe it seems like this strategy leads to a permanent decline in global labor power, but history shows a different pattern: "where capital goes, conflict goes". Relocating capital to exploit cheap labor does not permanently resolve crises of profitability; it merely reschedules them in time and space. By moving to new regions, multinational capital inevitably creates and strengthens entirely new industrial working classes in those areas.
Conversely (complementarily) when an industry becomes too crowded and profits are squeezed, capitalists do not just cut corners; they rely on what Beverly Silver terms the product fix—shifting capital entirely out of mature, highly competitive sectors into new, innovative, and more profitable industries.
Historically, the epicenter of capitalist accumulation (and subsequent labor unrest) shifted from textiles in the 19th century to automobiles in the 20th century. In the first decades of this century, capital shifted toward semiconductors, the "education industry," and producer services (like finance, telecommunications, and consulting).
Because a product fix involves withdrawing capital from an established industry, it usually brings about mass layoffs, deindustrialization, and the breaking of existing social compacts. In response, the workers who previously benefited from those compacts have, historically, risen up to protect their jobs, pensions, and established ways of life.
Unfortunately, they are often doomed by their diminishing economic leverage.