For the world of consumer electronics, the next 18 months were supposed to field a series of brutally decisive battles in the larger war to dominate your living room, your pockets and your handbags. Instead, last week’s implosion of stock, currency and bond markets may generate the kind of consumer disaster that every technology company’s chief financial officer dreads: an indefinite armistice.

When it comes to technology, the biggest threat to the “innovate or die” business model of the digital age is that peace will break out in the shopping centres and high streets of the developed world. Moreover, while the consumer procrastinates, the battles become expensively prolonged or, some fear, end in the cheaper technology triumphing over the better one.

In the boardrooms of Japan, South Korea and Taiwan, there has long been a recognition, according to one Sony insider, that in the consumer marketplace war is good. Indeed, this year, with consumers being asked to take sides in a disproportionately large number of showdowns, war is vital. In video games, Nintendo’s Wii takes on Sony’s PlayStation 3 and Microsoft’s Xbox 360. In next-generation DVD formats, Blu-Ray takes on HD-DVD, with each standard backed by a 150-strong consortium of hardware and software makers.

In flatscreen televisions, liquid crystal (LCD) takes on plasma as old cathode ray tube sets disappear from living rooms everywhere. In mobile phones, Apple’s iPhone takes on the established players such as Nokia, Sony Ericsson, Samsung and Motorola.

There are many hundreds of players that want such wars to be over quickly. Every time that two technologies are pitted against each other in the consumer marketplace, the chief executive of one leading Japanese memory-chip maker said, “you go to bed praying that the war will be quick, decisive and utterly destroy the losing technology, even if it is yours”. If battles are swift, companies are instantly in better strategic shape, even if their bottom line is temporarily in tatters.

When wars are finished, companies can start to build machines that use the technology that emerged victorious or they can press on with designing something new in the hope that it triumphs next time. If you were Sony in the aftermath of the VHS versus Betamax battle, you did both.

When Henry Paulson said last week that the current sub-prime crisis “will extract a penalty on the growth rate” of the economy, precisely what the US Treasury Secretary meant may take some months to become clear. Wal-Mart’s recent profits warning, at least in the eyes of the markets, hinted at something dark on the horizon.

Even if outright recession is avoided, economists say, it may be some time before consumers feel wealthy enough to upgrade to a 52in flatscreen television or to start replacing their entire DVD collections with Blu-Ray discs. One emerging theory for the success of Nintendo’s Wii games console over Sony’s PlayStation 3 is that it has nothing to do with the relative merits of the rival machines or the gaming experience that they provide. It may simply be that the $250 price tag on the Wii gives it an edge against the $500 PS3.

Unprecedentedly huge bets, mainly using corporate capital expenditure in Asia, have been placed on various rival technologies. The risk is that as the stakes get higher, consumers become increasingly reluctant to pick winners. Sharp gambled one trillion yen (£4.4 billion) on LCD technology only because it was assumed that consumers would go for higher-definition, larger-sized flatscreen TVs. If they don’t, Sharp shoulders all the risks inherent in a format battle. However, the rewards of winning it will be immense.

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