PC Prices to Rise?

guinan writes "The Economist is running a story about how now that PC makers think the worst is over, it's high time to raise prices. In particular, the focus is on the steady price of flat-panels and a possible end to the decline we've seen in the price of memory. Granted, most of the /. crowd build their own boxes, but if you want to buy a computer from a major brand better go for one soon while you can still get all the perks."

Comments

Price is a weird deal

[clion999]

Many people actively want to spend more. One of my relatively clueless neighbors asked me to bless his decision to spend $2700 on a new Dell. It was top of the line. I knew he did a bit of word processing and spent the rest of the time at home playing flight simulator games. He's not an avid, fast-twitch gamer. I tried to talk him into a $700 system. He wouldn't budge. He wanted to spend that much. He wanted to make sure it was "upwardly compatible" and "expandable", even though he would just spend another $2700 in a few years. There are plenty of suckers who have too much money. It's fine by me if the computer companies take it. The only thing that worries me is that they'll increase the cost of low-end systems that I like. It's been a long time since I did anything but basic coding and editing.

Usual rumour tactics

[Baki]

These are just usual rumours to get the people buy now, and not postpone. We've seen such manipulation over and over again (e.g. with memory prices, causing huge price fluctuations; there is always a group earning lots of money on price fluctuations).

Over time PC prices shall come down inevitably, there is no fundamental reason why progress of technology (enabling more power for same price or equal power for lower price) should stop any time soon.

Example: LCD prices are bound to fall sharply in the second half of the year. New production capacity comes available in big quantities in july/august (new generation plants, higher efficiency, less shortages etc). I guess some stakeholders want to push people into buying now (out of fear for price increases) to get rid of their old inventories.

Re: "most of the /. crowd build their own boxes"

[SlashChick]

You know, I used to think building my own box was the way to go. I'd get on Pricewatch and find the best motherboards, CPUs, etc. and build the whole thing. It used to be cheaper.

Then my parents needed three new computers at once, and I decided to check out Dell Refurbished.

For $580 shipped (each), I got 2 computers with a 1.1GHz Celeron processor and one with a 1.6GHz Pentium IV. All had at least 128MB RAM and one had 256MB (I bought extra memory from Crucial.com to bring them all up to 256MB.) All had at least a 20GB hard drive, which was all my parents needed for the office. All came preinstalled with Windows XP Home (fine for office work.) And one came with a Firewire card; one came with a kick-ass video card. All had either Ethernet or a 56K modem (in card format, even, not built on to the motherboard.) All of this also came with free one-year ON-SITE hardware tech support from Dell.

I was a bit worried about the quality, since I've seen how Dell shafts its low-end users with shoddy parts. But the computers performed flawlessly upon arrival and have since, with no system crashes. Then, when it came time to swap out a CD-ROM for a CD-RW, I was truly impressed. Swapping out of a drive consisted of the following:

1. Unplugging the computer.
2. Pulling a thumb-tab at the top of the computer.
3. Pulling a latch that released the CD-ROM drive.
4. Unplugging the CD-ROM drive's cables.
5. Pulling out the CD-ROM drive and putting the drive brackets on the new drive (which just snapped on.)
6. Sliding in the new drive, plugging in cables, snapping case back together.
7. Plug in.

Done! No screws, no screwdriver, no nasty cheap ATX case with a hood you have to struggle with getting in the right place. Check out this picture to see what I'm talking about.

There was no way I could have built these computers, bought Windows XP, and had any money left over to profit at $580 a computer. Plus, I would have had to put them in an ugly case that would have caused hassle for me later.

I don't think it's economical any more to build your own computer. This is a GOOD thing -- it shows that computers have become a commodity. Do you build your own TV? Probably not. Microwave? Heck no. The quality to price ratio of pre-built computers is now such that even geeks are starting to buy pre-built computers. I, for one, am glad. Let Dell take over the hassle of being called when the computer has a problem. I'll spend more time doing things that I'd rather be doing. :)