People throw around the idea of things being or becoming “commodities” but there is little clarity about what “commodity” status implies.
If you look up the word, it has nothing to do with technology or innovation. In economics, a commodity is something that is substitutable (fungible) and roughly equal to competing versions of the same thing. A mineral good (oil) or agricultural product (pork bellies) is roughly of equal value regardless of where it comes from or who produces it. Commodities also have very liquid markets and are therefore easily priced according to demand.
Commodities have a “fixed” quality which cannot be and most likely never was improved. It’s a product that is essentially frozen in terms of innovation.
But in technology and especially in terms of complex, rapidly improving and evolving products with uneven distribution a commodity is not easy to identify and there can be a lot of arguing about what is and isn’t. Continue reading “Is the smartphone a commodity?”