June 13, 2005

NOTHING COSTS MORE THAN IT USED TO:

Prices of Tech Items Seem to Keep Falling -- With a Few Exceptions (Lee Gomes, June 13, 2005, Wall Street Journal)

How low can they go? Over the past few weeks, personal computers reached a significant milestone: The price for an entry-level but fully loaded system fell below $300.

Dell -- which wasn't even the first PC maker to take the step -- last week was offering for $299 a Windows computer that had most of what a beginning user would want. That list includes a 17-inch monitor, a 2.4 gigahertz Celeron processor, 256 megabytes of RAM and a 40-gigabyte hard drive.

A nearly identical system a year ago cost $499, and while it had only half as much RAM, it did provide speakers. The newer, cheaper model doesn't have any, but you can add a pair for $20.

Besides reflecting a remarkable price decline of 40% in 12 months, the fact that computers can now be had for less than $300 means they have officially entered into the territory of "consumer electronics," at least under one set of industry rules.

Ten or so years ago, when PCs cost five or even 10 times what they do now, it was common for analysts to say that they would never become a staple in homes until they were priced the way consumer electronics were, usually defined as costing less than $300. In the days when PCs were $2,000 and even more, that target seemed to be something of a fantasy.


Shhhh, you might wake Mr. Greenspan....

Posted by Orrin Judd at June 13, 2005 10:06 AM
Comments

So why is housing exempt from this rule?

Posted by: Governor Breck at June 13, 2005 10:14 AM

There's a housing shortage.

Posted by: oj at June 13, 2005 10:18 AM

Saw this hilarious article about a tech do-gooder who wanted to engineer a $100 PC to unlock the genius of the developing world. Why not wait a year until these $299 systems go on sale on craigslist.

Real estate is different. You cannot generally manufacture land.

Posted by: JAB at June 13, 2005 11:20 AM

I had to replace my 1996 era HP inkjet just last month. Not only did I get a far faster printer, it did both B&W and color and had a scanner built in too. After adding in the USB cable I needed, it equaled what I paid in 1996.

Posted by: Chris Durnell at June 13, 2005 11:52 AM

I just bought a superfast motherboard, processor, RAM and power supply for 500 beans. So, while I may not becoming a homeowner anytime soon, I'll have plenty of time to waste on evil video games that Orrin wouldn't approve of. GTA: San Andreas just came out for the PC, by the way.

Posted by: Governor Breck at June 13, 2005 2:38 PM

I am waiting for true 1080p HDTV at less than $1,000. I am guessing about 18 months.

Posted by: Robert Schwartz at June 13, 2005 4:02 PM

JAB - Actually you can manufacture land, it's just not generally cost-effective. E.g., we can drain swamps, irrigate deserts, terrace mountains, and dump dirt into harbors (which is what much of Boston currently is).

But all this is too wussy; I'm holding out for the condos on Mars.

Posted by: Tom at June 14, 2005 11:22 AM
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