Other electronic goods such as computers (and perhaps even camera bodies) become cheaper to manufacture as time goes by, thus their prices seemingly drop.
Inflation has almost no impact on the big numbers of electronic goods production. I'm sure that the staff of any given company looks into it, but you wouldn't price according to it because you've already sold your stock and repurposed the proceeds (dividends for stockholders, campaign donations, corporate junkets, possibly new factories, etc.) by the time inflation could start to take a toll of your sales. The time frames are too short. Exchange rates are a more common factor - a company might choose to ship more of its devices to a place where the exchange rate is to their advantage (Nintendo did this temporarily a few years ago; I forget the specifics). The currently very strong yen helps Japanese importers (meaning, Japanese people who import things) because they buy more of many other currencies with their yen, meaning they get more goods; but the strong yen makes it less profitable to make something in Japan and sell it to a country where suddenly more dollars are needed to equal the same amount of yen from before. The person overseas doesn't care about this difference, because their currency hasn't really changed value from one day to the next, but the manufacturer does (the purchaser has money to spend on a certain day - maybe they've saved it - but the manufacturer was planning that they'd be able to sell for a certain amount, so a change in exchange rates can be pretty big, bigger than inflation was to the purchaser). Ultimately, you want to serve all markets, and I don't know of any big reputable company saying "gee, we aren't going to sell to you anymore / we are going to hike your price substantially, because the exchange rate is poopy." Japanese (and many internationally-selling) companies will try to use diverse currencies, so that when the yen goes up or down they don't find it harder to turn a profit or buy things overseas. They may take their money from overseas sales, and keep it in that currency, so that the "loss" on the exchange rate may turn into a profit later. In the meantime the money is still useful, perhaps in arranging shipping or paying other costs in that country. You get the idea - this is almost like an investment shell game, and if you are big enough, it shouldn't drive your business. If a company is at all skillful, they will not let their customers even know it's an issue, because that would look unprofessional and bad.
Inflation again, then:
The simple rule for inflation is that when you buy the
same exact good repeatedly, the price goes up because of inflation. Eggs cost a few dollars per carton where they used to be only so many cents. It's not that eggs are markedly more expensive to produce, or cheaper (though they may be), it's that the purchasing power of your jingle has decreased. You know - the old saying "a million dollars, back when a dollar was still worth a dollar." (Or Doctor Evil's grand extortion figure.) If you bought eggs in 1929, 1935, and today, they would have been about as easy to procure in each era (assuming you had a similar source of income in each period, and especially if you didn't age, which kind of puts a crimp on things). It usually takes long enough for inflation to affect things that you hope to be able to use your money before it's being affected.
In short cycles, the price of price of computers (and camera bodies - I'd suspect this is true of even film cameras, but certainly of digital bodies) does
not drop, seemingly or otherwise, because you are not buying the exact same model. Unless you are, but are Packard Bell and Compaq still out there selling 486/66MHz PCs and Luggables? Or even 10-year-old computers? No, and nobody else sells like models either - yes, Z-80 and 68000 CPUs have been made until at least very recently, and they're cheaper, similar to the eggs, but that's beside the point. Instead, you are buying the new model which is priced to take the spot of the old one. From one year to the next year, inflation does not make a major difference in pricing. (Now, from 2008 There is no market for cameras that have identical specifications with those made ten years ago, partly because manufacturers won't make them, as I will mention below.
About what I called short cycles: Yes, there's a pile of old computer magazines within my sight with ads inside for the original early 1980s PC / Apple generation, which as we all know were outrageously priced for what you got (just like Roberta Williams and her theory that PC owners were better edu-wait, let's not go there). If you can wait 10 years between camera purchases, that's great. This is not the cause of new lenses or cameras costing considerably more in a new cycle compared to recent models. The prices of new, similarly-placed (entry, top of the line, HTPC and some other new-as-of-2001 categories) computers and cameras seem to me more or less stable in recent years. Obviously, the industry is relatively stable and mature compared to the late '70s to early '80s. The difference is most likely mostly in the placement of any product, or its cost.
Kind of a tangent: Many computer equipment manufacturers have built up massive cash reserves by milking essentially the same production processes for years - as you suggest, they don't cost more (after inflation) to make something now than they made before. This is not the same as it becoming cheaper, though (because of inflation). New Intel or AMD CPUs still require a new production process, and they have to retool for that. Hard drives are maybe five years (or more) from reaching the end of the projected lifespan (apparently recently extended) of the current recording technology, called PMR (heat-assisted recording is the next step apparently, and apparently it's at least five years away also). Preparing to go to the new stuff is costing hard drive manufacturers a large fraction of their capital right now. Intel and AMD processors, and especially camera sensor manufacturers, have a different setup because the lithography production technology is so widely spread throughout the industry. Lots of people share in the cost. But it doesn't become cheaper.
The moment that people stop using a particular production process in great quantities, it generally becomes more costly to use the old process than the new one, because there's fewer people to share in the cost. Imagine how much it would cost to one-off make a Model T, or a 1980s computer, compared to making a new car or new computer, where you have machines that have belts of semiconductors to fire into circuit boards as fast as a machine gun, and where the time spent on any part may be measured in seconds, as opposed to making that Model T or 1980s computer, which would be a research project. Even though we know a Model T could be rapidly made by modern technology, it's not being done.
So why aren't people making lots of Model Ts or Corvairs or 1980s computers or five year old camera models? Aside from lawsuit issues, the making of such things means that you can't make other, better things. That's opportunity cost. And I'm even further off the original topic than before, but I thought you might like to know.
The reason cameras and computers get cheaper after being on the market is because people demand new features, more power, and so on, and newly developed cameras and computers supplant old ones in the market, naturally. Manufacturers want to sell them to get some return on their investment. They might still making the older cameras a while, as long as there is enough demand, and they are making enough money to profit, and they are not able to make something else that would make them more money with those same resources (i.e. would anybody buy a T1i at $1000 if only it had a magnesium alloy body? Or does it make sense to crank out Model Ts when you don't have enough production capacity to make all your current models - okay, being from Michigan, this seems like a joke right now, but they have been shutting production lines down so it still applies). In the case of cameras it's a bit more complicated still because of product lines; old cameras tend to get priced down for a while so there isn't a "hole" in their lineup, which could lead somebody walking out with a competitor's camera because they have a specific price in mind. This last bit we talk about here a good deal.
To convince people to buy the older models, the price is intentionally revised downward by manufacturers (and, if not them, by retailers; otherwise manufacturers end up taking in unsold merchandise). I don't think inflation has much of a chance to effect DSLR camera pricing before the time they're liquidated - and of course steadily during that period they are losing value. It's always fun to look at the prices Canon suggests on its website and compare those to the prices you can find online or at your local retail store.
Okay then, back to the original question: How could inflation factor into a current camera model being more expensive than the old one in the same lineup? Let's go to the Westegg.com inflation calculator, say the 5D Mark II came out in 2007 (because it only goes to 2009, not to this year) for $2600, and see what it would cost Canon to have the new (2009) model be worth as much, after inflation, as the old one was in 2007 dollars. In 2009 dollars, the new one would have to be worth $2688. Is Canon going to add roughly $100 to a new 5D? Who knows. There is more to marketing and to production costs than just "how much does it cost." People in marketing talk about the "mental jump" going from $99 to $100 (from two to three) digits, but like most people realize $100 isn't worth a lot anymore, people also aren't likely to jump up and down about a small price jump from $2500 to $2600. But it is more money, and the theory of $2500 being a heck of a lot of money, and even more being
really expensive may still hold them back a bit. And failing that, there's always competition.
