Tighter purse strings could choke consumer electronics firms
The high-tech industry's near-term health depends on how badly you need that iPod or flat-panel television.
After catering to corporations in its early days, the industry has grown increasingly reliant on consumers. Even during economic slowdowns when businesses tightened their belts, Americans kept buying bigger TVs, sleeker cell phones and faster computers.
But analysts say that with people losing their jobs, home prices plummeting and retirement savings deflating, consumers won't continue to spend blithely on high-tech gear. For those who do, bargains will be more important than ever.
"Consumers are definitely scared and are going to tighten up," said Michael Spence, former dean of Stanford University's graduate business school and a 2001 Nobel laureate in economics. "If it goes on for much longer, the tech sector will suffer."
