Re: PC prices

Michael S. Lorrey (
Sat, 23 Jan 1999 14:00:53 -0500

Alexander 'Sasha' Chislenko wrote:

> Just read some review of recent trends in PC prices.
> The author explains the appearance of sub-$1000 PCs
> by the Moore's "Law".
> But personal computers were getting better for the last
> 15 years. Why haven't been the prices falling then?

Each new generation of operating system and major applications required so much more processing than the last, but the market was still in high growth and was nowhere near the size it is now. Now that growth has slowed but is large, manufacturing economies of scale are really kicking in, and there is more commodity pressure on the market to lower prices. Also the advanced computers we have now are markedly reducing R&D&E costs, and are making plants more productive. Note the high gains in productivity in the last few years, its lowering unit costs so prices can come down.

There is also a limit to how much the average person needs in a computer, or how much their minds can handle using the mouse/keyboard/gui interface, which may presage a reduction in productivity in the future. Voice technologies are still not 'smart', and the user must use a very mechanistic syntax to operate their machines using voice technology. Once smart voice technology that can interpret conventional spoken english (or other languages) into a set of commands, developing and learning subroutines that are adaptable, like a huge library of macros, then people will again be able to rapidly epand their rate of increase in productivity with the normal desktop PC.

> My explanation is that the computers just got easy enough
> to use to move down to the poorer social groups for whom
> a "sweet price spot" is lower, and also that there is no
> software that would make a $2500 machine universally
> more attractive than a $1000 machine, to justify the additional
> expense for all people - while alternative ways of spending
> the difference promise greater utility.
> This process will probably continue, so we may soon see
> easy-to-use general-purpose PCs for $100 that kids can carry
> in their backpacks, etc.
> There may be a new life in higher-level part of the market after
> the next waves of software products [?] hit the market.
> Another interesting question is, why the computers are not
> getting more expensive? Even the richest people wouldn't
> buy a $50,000 machine, let alone a million-dollar machine.
> This machine would just take more space and require more
> maintenance, while giving no perceptible advantage in personal
> productivity over a $6,000 PC. Even this machine is already
> a bit of an overkill, unless you do something professional on
> it - compile lots of code, optimize some systems, etc.

I am still learning new things I can do with my computer everyday, but I've noticed that I also have a limited size of my minds toolset, and there are many apps which I haven't used in months. I really don't need much more processing capability. I'm currently using a 233mhz PII. I have been thinking about going to a 333 for a while, but I'm not in any big hurry. I will probably get much more hard disk space and more RAM first. I'm already at 64 megs of ram and 6.4 gigs of hard drive space, which I've had for over a year and a half. I've recently bought more peripherals, I've got a 24x cd rom ($25.00), a 2x/4x CD writer, a zip drive, an LS-120 drive, an internal FM tuner card, and a 17" monitor. I haven't changed my moden in a year and a half (33.6k), but added a network card since I'm starting an ISP and have brought my home machine into that office to use there, where I'll have a 762k connection. I also have a digital camera and a scanner, and will be getting a larger 11x17" scanner. Note that many of the components I've listed do not come with the standard desktop PC. I think that more money is going into these expansion peripherals, so the technology 'basket' that people have is still in the $2000.00 budget size every 18 months, but they are putting it toward more than just the desktop unit.

> If we see applications that can work well on a mass-market PC,

> but would perform much better on more and more expensive
> machines, people would buy these machines. (Though I am not
> sure even here; unless this power is needed locally all the time,
> it may make sense to dispatch computational requests to
> the specialized distributed machines rather than execute them
> locally). What would these applications do? Speech and image
> recognition? AI? All-purpose personal extensions?


> Then, if the price range of general-purpose machines stretches
> from $100 to $1M, they would probably need different hardware,
> OSs, architectures, and applications - and the mass-market of
> essentially identical machines will become a thing of the past...

There is not real consumer market for high end machines mainly because none of the software for such high end machines is terribly user freindly or aimed toward consumer uses, nor is it a significant gain over low cost systems in anything but a few specific applications for users that are not systems experts. The cost goes into performance for large amounts of pure number crunching that occurs in the background en mass, like large database processes, or graphics work.