Hawai'i Tech
Computer prices fall
By Vicki Viotti
Advertiser Staff Writer
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| Photo illustration by Stephen Downes • The Honolulu Advertiser |
He owns a three-year-old computer and, thanks to an extended service contract, the fact that the machine just crashed still has not propelled him to the computer stores for a replacement.
"Two weeks ago, we just purchased a new office computer," the Kane'ohe resident said. "We got state-of-the-art speed and power, with Windows 2000Professional loaded ... about $1,022 with a 17-inch monitor.
"The difference between my computer at home and mine at the office, well, it wasn't so great," he said. "A three-year-old computer will do most everything you need."
But for those who do need a new computer, it's a good time to buy. Shoppers are the winners in a price war that's raging nationwide, as manufacturers offer huge rebates and incentives in an attempt to stimulate demand.
Dell Computer Corp. led the way with aggressive markdowns, forcing smaller PC makers to shut down or compete.
From October to March, overall prices of mainstream computers sold by major U.S. vendors dropped by 22 percent, according to computer researcher IDEAS International. Prices by Dell, which captures nearly a quarter of the U.S. sales, fell by more than 30 percent.
Such dramatic price cuts follow months of steady declines, partly because of the availability of cheaper components. Alongside the price war among PC manufacturers, the companies that make the chips that power a computer's central processing unit (CPU) are waging their own battles.
As a result, the average retail price for desktop PCs was $880 in February, compared to $1,700 in 1996, according to NPD Intelect. And the new computers are far more powerful.
For example, Hewlett-Packard Co.'s Pavilion desktops with 128 megabytes of RAM, a CD-rewritable drive, a 15-inch monitor and 20-gigabyte hard drive start at $699 today, including AOL service. Several months ago, consumers would have paid that price for a model with only half the memory and without the CD-RW drive, according to NPD.
Shoppers who want to leap into this soft market have a tremendous advantage, said Kaka'ako resident Phil Sharp, but only if they know how to interpret the road signs.
"If you know how to read those ads and what that system contains, and if it meets your needs over the life of the machine, which is about three years, you're safe," he said.
Sharp is president of the Hawaii PC Users Group, an association that helps PC owners in operating their computers, not in buying them. He particularly avoids making specific recommendations on what to buy, lest members blame him once they hit a snag with their purchase.
However, after dealing with the care and maintenance of the machines for years, Sharp has read a lot of ads and spent untold hours prowling the aisles of computer emporia. He has learned a few generic truths that he doesn't mind sharing.
"The theory is, a basic box (CPU) costs about $400," Sharp said. "Everything after that is just incentive.
"Once you realize that's a pretty fixed price, it depends what you can get over and above that price: a rewritable CD as opposed to regular, a DVD as opposed to a CD ... more RAM, or a larger hard drive."
When comparing a lower-priced model with a high-end machine, he said, shoppers need to identify the difference in components and then decide whether or not they need the extra pop.
If the hard drive is the bonus item, for instance, there had better not be a big price differential, Sharp said: A 40-gigabyte hard drive costs only $100 these days.
A common difference between the price points is the speed of the processing chip, or sometimes even the manufacturer. Pentium has commanded a higher price than the competitors, but for most people the quality gap is inconsequential, he added.
"A low-end computer might have a 750 megahertz Celeron; a high end will have a Pentium 3 or 4, 1.2 gigahertz.
"They're all good chips," he said. "If you are a heavy-duty number cruncher, or graphics user who does video editing, or if you're in a heavy usage category of any sort, a P3 or P4 will be your better bet."
The Associated Press contributed to this report.
Under $1,000? Can't you do better than that?
2001
Hewlett Packard Pavilion 6835
- 800 MHz Intel Celeron processor
- 128 MB RAM
- 30 GB hard drive
- CD-RW (rewritable) drive
- HP 15-inch monitor
- $349.91 (after rebates and with CompuServe Internet service contract, $21.95 monthly/3 years)
1998
Hewlett Packard Pavilion 3265
- 233 megahertz (MHz) Intel Pentium processor
- 32 megabytes (MB) RAM
- 2.1 gigabytes (GB) hard drive
- CD-ROM drive
- $799.92 (monitor sold separately)
