Laptops originally gained popularity in the 1980s, as this novel technology was introduced to the masses at reasonable prices for the first time. But “reasonable prices” for the latest technology, back in the day, were quite outrageous by modern standards. If you look up prices of laptops that were common in the 1980s, and you adjust for inflation, you’d probably be shocked at how much people were willing to spend.

If you look for laptops on sale today, you’ll see how much more affordable they truly are. Yes, the most upgraded modern laptops with the best features are still out of budget for most Americans, but anyone with a couple hundred extra bucks can pick up a machine that can help them do just about anything.

How is it that laptops have gotten so inexpensive? And can we expect this trajectory to continue?

Diversity of Products

One piece of the explanation is the diversity of products that are now available. In the first generation of laptops, there were only a couple of models available, and they were very similar in terms of capabilities and performance.

Today, there are literally unlimited possibilities, since you can customize your laptop with any components currently offered by manufacturers as well as any older components you can find online. There are laptops that are specifically designed for certain applications, like processing video or maximizing portability, and there are laptops that are engineered to be as cheap as possible, with only the minimum components included.

This has created an environment with a very low performance floor, and therefore a very low price floor. The cheapest laptops available today are incredibly cheap because they have minimalistic components that don’t come close to reaching the performance capabilities of the best products on the market.

Similarly, there’s a very high price ceiling. The most expensive laptops today are incredibly expensive because they have the latest and greatest in a variety of different technologies. Their performance is so absurdly impressive that it’s not even beneficial for most people; even modest laptops are very impressive.

That’s not to say that cheap laptops aren’t good. On the contrary, the cheapest laptops available today are leagues better than anything that was available a decade ago.

Accumulating Inventory

The laptop industry depends on people periodically upgrading their devices to get access to newer, better technologies. People get rid of their old laptops and buy new ones quite regularly, sometimes as often as annually. This results in excess inventory in multiple categories; manufacturers and retailers are left with older models that don’t sell as easily as newer ones, and consumers are stuck with old laptops that they want to get rid of.

As a result, customers have lots of options. Supply is very high, putting downward pressure on prices and giving consumers plenty of options to choose from. Even if you have a very strict budget, you can probably find a laptop that fits it.

Sheer Competition

Competition introduces downward pressure on prices in practically any given environment. There are dozens of major manufacturers of laptops, as well as hundreds, if not thousands of retail outlets selling them. All of these businesses are fiercely competing with each other, trying to sell their laptops in a way that’s maximally appealing, so they’re incentivized to keep prices as low as possible.

Industrial Innovation and Efficiency

Laptops have also gotten cheaper because of industrial innovation and efficiency. Manufacturers have mastered the arts of sourcing raw materials, combining those components, and even distributing completed machines to retailers. Because these costs have all gone down, so have the prices of Finished modern laptops.

Loss Leaders and Similar Sales

In retail, a loss leader is a deeply discounted product designed to get people in the door, or on a website, so they can eventually buy more profitable products. Laptops are hot commodities and common gifts, so they also tend to be common loss leaders. Because of this, around the holidays, you’ll often find a variety of decent laptops at outrageously low prices.

Will Laptops Keep Getting Cheaper?

So will laptops keep getting cheaper into the future? Generally, we can expect so. Most of the factors discussed in this article are likely to continue, and some of them will continue adding more pressure in the years to come. However, we may run into physical limitations when designing and implementing new hardware for laptops, potentially complicating the diversity of products available. Still, consumers are likely to benefit from whatever combination of effects is on the horizon.

Inexpensive, yet high-performing laptops have become abundant in recent years, thanks to a variety of industrial, economic, and even cultural influences. And if these trends continue, we’ll be entitled to even cheaper, better laptops in the future.