2022 will go down in history as one of the most difficult years at an economic level due to high inflation, but everything indicates that 2023 will not be left behind. As confirmed by the main consumer electronics firms, prices are going to rise in the next year and everything will be more expensive, from mobile phones to hardware and even software.
More than a year ago, the US Federal Reserve contemplated the possibility of a temporary rise in inflation, however, the war in Ukraine changed everything. Energy began to skyrocket, raw materials escalated uncontrollably, and as if that were not enough, China continued with its Zero COVID policy, imposing restrictions that further strained the supply chain. The response was immediate and the main central banks began to raise interest rates at a speed never seen before, pushing the economy to the limit. The Nasdaq, an index that brings together the main technology companies in the United States, has fallen by 30% so far this year and the SP500 registers the third worst year in its history. The problem? According to experts, there are still obstacles to overcome at an economic level and we could see how the FED raises rates next year above 6%, leading companies and households that need financing to a limit situation.
Return to the year 2000
The famous year of the technological bubble when giants like Amazon came to lose more than 90% of market capitalization could be repeated again. If inflation does not end up coming down as the central banks want, JP Morgan experts believe that the Federal Reserve could place the price of money at levels not seen since the year 2000. This would have a direct side effect, taking the S&P ahead. 500 and with it the main companies in the world. It is precisely this situation that is causing households to be exhausting the savings generated during the pandemic and consumption is slowing down very rapidly.
According to the main mobile phone companies consulted by our site, between 20 and 35% fewer smartphones have been sold this Black Friday compared to the previous year. Computer companies also confirm a significant decline in the sale of laptops, but it is also true that we came from record years thanks to the pandemic and the increase in teleworking.
The main retailers are not having their best year either. Amazon was forced to launch a second Prime Day for the first time and experts predict that Black Friday has not been as expected. In fact, the electronic commerce giant has begun to lighten its workforce after the markets have punished it with a drop close to 50% so far this year. To put it in context, Amazon has left 900,000 million dollars of value in 2022.
Widespread price hikes
We have already seen how technology companies have begun to raise the prices of different subscriptions (Apple skyrocketed its music service), streaming services have raised prices and most companies that offer software as a service (SaaS) have also increased. their rates throughout 2022. Looking ahead to the next financial year, smartphones will rise between 10% and 20% on average , computers between 5 and 10% and other gadgets could skyrocket above inflation to support the increase in prices. energy and raw material prices. Industry sources assume that consumption is going to slow down significantly and the best formula for weathering the storm is to reduce costs and increase margins.
A very difficult year is coming up and after almost 20 years of economic prosperity in the technology sector, everything points to the fact that we will continue to see collapses in leading companies. It should not be forgotten that Apple has barely fallen 20% so far this year and is the company that has the most weight in the SP500. If the apple falls, it drags down the entire market and everything indicates that the demand for the iPhone is well below expectations.