How Cheap Can A PC Be?

geoff lane writes "Ballmer wants a $100 computer. OK, can we build a reasonable PC for just $100 and a copy of Linux? The rules are: It's assumed that a monitor, keyboard and mouse are already available. Ethernet connectivity must be provided. All components must already have Linux support. All components must be new and currently available. The result must be electrically safe for the home. Is it possible?"

Comments

Sacrifice hardware for the good of software?

[skoda]

Why should the hardware profits be sacrificed to support high software prices?

Perhaps Windows should be cheaper to support high hardware prices. Cheaper software might also reduce piracy since the it would be more affordable.

Re:Sacrifice hardware for the good of software?

[Naffer]

Huzzaa~!
I for one would much rather spend my money on hardware then software. $100-200 for a piece of software is rather pricey. When I'm looking at pieces of software and seeing prices over $60, I get a bit suspicious. A boxed copy of Nero Burning rom cost $100, Intervideo's WinDVR is $80, and ever tried pricing a piece of data recovery software? The prices are so absurd you'd think they were just joking.
It's really weird. My secondary computer is a gentoo box, and installing software is as simple as "emerge _______." I don't even have to pay anybody.

Re:Sacrifice hardware for the good of software?

[Hawkins]

MS gets away with this because they sell the majority of their Office licenses to business users, and tons of businesses remain firmly convinced that something you pay for is always better than something that's free. A worldview that makes sense, given that a business usually makes money by selling some product and/or service. The more money something costs, the higher quality and/or more useful it must be.

Flawed but understandable reasoning.

Re:Sacrifice hardware for the good of software?

[Monkelectric]

Its a trick... 99% of people only need Word. So the only way you can get word is to buy: Access, Publishier, Power Point, Front Page, Info Path and Excel. Same thing with your cable company: you *WANT* sci fi, but you have to buy a "package" and get it with 10 other channels you don't want.

Re:Sacrifice hardware for the good of software?

[clifyt]

"Well, if they only charged $30, ppl would go, it's only $30, so i'm not "stealing" that much from mega-corp. If it's priced at $100, it could cause ppl to rethink and not make copies."

Well, my company does a lot of 3rd party sound design for different synthesizer companies and all that.

Several years back, we were doing a lot of Kurzweil support...folks were complaining after spending $5k for a synth, the sounds should be free and were pirating everything they could get -- even though it was clear that most of these sounds were designed by separate companies not related to the original company.

At the time, normal sound disc for around a cd's worth of samples were $99 for an Akai format disc. Akai is the bare basic format one could get...nothing more than mapping the sounds across the keys. The same disc on a Kurzweil was generally twice that much because of all the programming that went into it. Kurzweil developers took pride in their sounds so that if you were playing a piano sample, not only did you get different velocity levels sampled, but most of the programs were smart enough to filter the samples so that there wasn't a distinct anomaly when you hit another velocity zone. This made the sounds as much a part of the synthesis realm as it did playing back pure samples.

But people *STILL* couldn't understand why a few dozen bytes of added data to each patch caused the stuff to double the price. The fact was, it took at least twice as long to convert this stuff and the man power cost more than the equipment to record in the first place.

Ok, where am I going with this?

We ended up doing a sound disc that got scrapped as the company we were under contract went under. So, we decided to sell it ourselves and share the data with the rest of the companies we had worked with before (lots of competition in the realm, but we are all friends -- except when we release products that compete directly, which rarely happens).

To make this a true experiment, and at the same time support our community, we decided that instead of selling it at the standard $200 range, or even the $99 range the standard no-frills discs had, we decided to go $30 and included shipping worldwide (which turned out to bite us in the ass for a few overseas shipments as a few cost more that $30 to send out -- but it was important we do this for the community and not go back on our words).

Sadly -- within a week of this, we found users selling dupes of this on eBay for half the price. We found folks submitting the data to Kazaa and eDonkey. We found FTP sites with all of this. One of the pirates we caught and knew by name claimed that at $30, it probably wasn't worth much and thus he wasn't hurting us. He also said that it wasn't as professional as the other stuff as we burned the discs ourselves (as opposed to getting them printed and stamped) and thus not worth it...its not like the data suffered any from this as we gave them the same exact product we would have given them at 4 times the price.

In our field, if a sound disc sells 200 copies, we are doing well. Everyone claimed if someone lowered the price, sound companies would make far more than the 200 copies sold. I can tell you, we got just under 200 copies -- and the fact the price was lowered did nothing. The next release we did for the $99 range sold MORE copies as people expected more...and it was actually a crappier disc because it was intended to work at a base level on several platforms, not just the high end (though our buyers almost all claimed they were buying it for these high end synths).

The fact of the matter is, if you price something lower, you are not going to increase your sales. You might sell less copies because of it. Price something for what its worth in the industry based on what others have already shown they will pay, and you will be in a much better position to sell. So, this isn't just a PHB theory...its the fact in many parts of the industry. No matter what you sell for, it will al

Dump...

[PaintyThePirate]

You can go to the average garbage dump and find at least one computer that will run something like Debian without a GUI. If you're lucky, you might find a Pentium II or faster, and be able to run something like DamnSmallLinux. Chances are, you'll be able to find a monitor, keyboard, and mouse there too. That accomplishes the task for $00.00.

Re:Dump...

[Trespass]

That assumes that your time is worth nothing.

Re:Dump...

[tooth]

After work, and instead of the hundred other things that need to be done around the house? Sheesh, that's why I work: to be able to afford good-quality tools that will save me time.

Reminds me of the joke about the mexican and working to buy a bigger boat:

The American investment banker was at the pier of a small coastal Mexican village when a small boat with just one fisherman docked. Inside the small boat were several large yellow fin tuna. The American complimented the Mexican on the quality of his fish and asked how long it took to catch them.

The Mexican replied, "Only a little while."

The American then asked, "Why didn't you stay out longer and catch more fish?"

The Mexican said, "With this I have more than enough to support my family's needs."

The American then asked, "But what do you do with the rest of your time?"

The Mexican fisherman said, "I sleep late, fish a little, play with my children, take siesta with my wife, Maria, stroll into the village each evening where I sip wine and play guitar with my amigos, I have a full and busy life."

The American scoffed, "I am a Harvard MBA and could help you. You should spend more time fishing; and with the proceeds, buy a bigger boat: With the proceeds from the bigger boat you could buy several boats. Eventually you would have a fleet of fishing boats. Instead of selling your catch to a middleman you would sell directly to the processor; eventually opening your own cannery. You would control the product, processing and distribution. You would need to leave this small coastal fishing village and move to Mexico City, then Los Angeles and eventually New York where you will run your ever-expanding enterprise."

The Mexican fisherman asked, "But, how long will this all take?"

To which the American replied, "15 to 20 years."

"But what then?" asked the Mexican. The American laughed and said that's the best part.

"When the time is right you would announce an IPO and sell your company stock to the public and become very rich, you would make millions." "Millions?...Then what?" The American said, "Then you would retire. Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take siesta with your wife, stroll to the village in the evenings where you could sip wine and play your guitar with your amigos."

Absolutely

[shoemakc]

Absolutely; They're sold by a company named "used".

Seriously though, do we really need a $100 disposible pc when there are so many functional used machines stacking up in corporate closets?

-Chris

Re:Absolutely

[dougmc]

Seriously though, do we really need a $100 disposible pc when there are so many functional used machines stacking up in corporate closets?

1) All PCs are disposable. Even your $4000 server. After all, a 10 year old $4000 server often isn't even worth $100 now.

2) To answer your question, it's a matter of labor costs. To make those corporate used machines usable, they need to be checked (half probably have at least one part broken), disks erased and a new OS installed. Once you consider the laber involved in doing this, it's not quite so cheap. To make matters worse, even if all the computers came from the same office, odds are good that each one is different from the others. Yes, a company may get the same box for every employee, but over time the favored boxes change, and so the back room is full of all kinds of old boxes. And let's hope these old boxes have enough RAM -- because buying old RAM for old boxes will cost more than an entire new box, including new RAM.

I've generally upgraded my PCs as time went on, part by part, and the old parts would accumulate in the garage. Occasionally, I'd take the old parts, and put together a PC for the relatives or friends who needed one. This worked, but I spent many many hours on it, often rememebering after many hours of frustration why I replaced that piece of hardware out -- because it was flakey! (yes, I do try to label things, but it does slip through the cracks.) And then once I gave it out, I had to support it. I may not do Windows very often, and maybe I didn't even put Windows on the machine at all, but often they end up with Windows, and so I end up supporting that.

Ultimately, it turned out to be not worth it. Now I just give stuff to Goodwill -- somebody else can deal with it. If I want my relative to have a computer, I'll give them $200 and let them buy one from Frys, already built. They even come with some tech support :) (Now, maybe if they're my favorite uncle or something, I might set them up with a computer. But I'll probably buy many of the parts news, just because it's easier than dealing with my old stuff.)

My 8 year old pc runs W2K, in your face!

[gelfling]

My IBM PC300PL is worth about 100 bucks. It's got 288MB, a 40GB drive, a 40XCDRW, an Intel P3-450 and a free Ethernet card even though it's already built in to the MoBo. The problem is NOT NOT NOT NOT the hardware it's that Steve Balmer wants to sell you a PC that needs at least twice the hardware as that. If MS just gave us a secure efficient version of W2K we could all have 100 dollar PCs.

Re:No

[AndyChrist]

Only if you want to run today's bloated software (even open source), which as far as word processing goes doesn't do much now that a well-developed product 10 or 12 years ago didn't.

A 100 dollar computer, hell a 50 dollar computer doesn't seem out of reach if it doesn't have to run all of today's windows and linux apps, but only has to be capable of running more svelte applications which do the same things.

Ok this kinda bothers me.

[headbulb]

"PCs are not selling to the lower end of the population in China and India. People buying machines there are relatively affluent. So...should the prices be lower? Not really. Until government and situational factors reduce piracy...those people...don't pay," Ballmer said. (article clipping)

Now an open letter to Ballmer
Ballmer

Shouldn't people in the lower end of the population spend their money on something a little more worthwhile then a computer.
Maybe just maybe they could spend that money on their family Before purchasing such a luxury item as a computer. Of course I am not going to be naive and say they don't need a computer for some reason. But to say that I want money from the lower end of the China/India population is selfish, Specially when they have better things to spend it on..

I don't do business with your company on those rash comments. I get by without using your software. Sorry if you feel that I am not being fare.

Not saying I haven't pirated your software before, instead of attacking me you're attacking someone who couldn't even pay you if they wanted to is just harsh. Oh and by the way I used your software to learn about and then go into computers so in a indirect way your company benefitted from it.. So the very thing that you are against has kept your company afloat, by customer awareness.

I no longer use any pirated software from your company. I get by with alternate platforms (Mac, Linux)

Daniel

But he'll want one that can run Longhorn

[Elwood P Dowd]

And that's a whole hell of a lot harder.

Linksys shows it can be done

[geg81]

You can get a Linksys wireless router for about $70. It's a machine with 16M of memory, 4M of flash, and a 125 or 200MHz chip. It also comes with a hub, a wired Ethernet, WiFi, and a power supply. So, that shows you can ship a lot of hardware for fairly little money.

Replace WiFi with a simple VGA controller and give it a couple of USB ports and a little more flash instead of the hub and you would end up, at roughly the same price, with a usable personal computer that could run a light X11 desktop and some useful apps (browser, word processor, etc.). If you add a CF slot, people even have removable storage.

Another choice is the standalone file server appliance, also for under $100 AFAIK; it already has the USB port and also runs Linux.

And some of the game consoles also show it can be done, if you get the volume high enough.

Trying to answer the question that was asked...

[rewt66]

Most of the answers are along the lines of, "I can't find the parts at that price in this catalog or that store". I don't think that was the question.

Some other comments have focused on whether what Balmer said was reasonable. Interesting topic, but that isn't the question either.

Some other comments have said, "Yes, get a used one." That still isn't the question.

The question is: Could we spec out a PC that, in volume, could sell for $100 and run Linux?

An interesting twist on the question: Can we consider it "a PC" (for purposes of this question) if it doesn't have an Intel-compatible processor? Say, a StrongARM CPU? (Note that the criterion was that it run Linux; well, Linux runs on a wide variety of CPUs.)

Re:Trying to answer the question that was asked...

[mcrbids]

Yes, I know the software has value when I sit down and type with it, but tangible property will always have more physical value than intellectual property, simply because there's a physical representation of the money spent.

Except that the purpose of the hardware is to run the software. It's not "We have the hardware, now what are we going to run on it?", it's more like "What do I have to buy to get NNN?".

The intellectual property is not an afterthought - it's the central point. Case in point - at numerous points in the past (including the present) you can/could buy hardware far better designed for day-to-day use than the X86. But, the X86 reigns supreme.

Intel has twice tried to shift away from X86 towards other hardware with numerous benefits over x86, only to bomb twice, despite massive advertisement, promotion, and spending.

Why, you might ask?

Oh, because those other platforms did a sucky job running software developed on x86. That Intellectual Property is what counts! Without it, the hardware is worth next to nothing!

End of the MS tax?

[EmbeddedJanitor]

That's going to be a big pain for MS.

In the old days of mini-computers, sellers would charge more for the minicomputer version of software than for the PC version, even when less people were using the PC version (ie. there was no volume discount argument). The reason they could get away with this was that people who'd paid for a $10k computer would balk less at paying more for the software.

Turning this around, while MS charges a fraction of the cost of a new PC, people are prepared to see it as a relatively insignificant expense (eg here in NZ, I'd pay probably NZD1K retain for a computer (inc monitor etc and WinXP)) and WinXP is only say NZD200 of this.

If however the computer price came down to say NZD400, of which WinXP was half that, then I'd have a much harder time brushing the WinXP cost under the carpet.

Lower PC costs will force lower software prices.

Now I have RTFA, but Ballmer probably has it in his head that people will pay NZD1K for a computer and if the hardware costs only NZD200 then he can put NZD800 in his pocket. People are not as dumb as that.

Re:End of the MS tax?

[EmbeddedJanitor]

Uou entirely miss my point. The user (and, by proxy, Dell, Gateway etc) see that they're selling a $2000 computer of which WinXP is only say 10% of the cost. In the case of the $800 computer, WinXp is only 20% of the cost. It is hardly worth fighting MS (by switching to Linux etc) to reduce the cost by 10%.

If, however, the cost of the computer came down to say $300 of which $200 was software, the picture changes completely. Now by switching to say Linux you'd be able to get your computer for a third of the cost.

For a lot of lower income countries (India, China, etc), the difference between a $1800 and $2000 price tag is academic, it is still too expensive. For an IT department buying computers 10% here or there is not a huge deal. However a $100 computer is obviously far more easy for the lower income earner to buy than a $300 computer. Similarly a 60%+ saving will make a huge difference to the IT department.

Ballmer must be nuts! A low cost computer will kill MS.

Re:You know, we did word processing before...

[Reziac]

[laughing] My first PC was a 2-floppy, 2MHz XT, with Herc mono graphics. WordPerfect 5.0 was crisp, even running off a floppy. After a dedicated word blender, it was heaven. And when I replaced that with a 12MHz 286 (also with Herc mono, but it had a HD, and WP5.1 along with various other apps of the day), it was, like, WOW!! Everything ran like the wind. Well, Ventura Publisher 2.0 took a while to load, but it ran fine. I still have the 286, and in a pinch... it still does everything I can't live without.

Nowadays... we struggle to get decent performance out of machines THOUSANDS of times faster than those relics.

BTW I'm writing this on a P3-550, somewhat slower than the average of what's now found on the curb. (Methinks I need to look at a better class of curbside. :)

But I still use WP5.1 every day. :D

What's wrong with you geeks?

[vicnot]

Look, a sub $101 computer isn't rocket science. There are landfills full of say 500Mhz and below machines...

A 400Mhz machine, even a 166Mhz machine is suffice to run lots of stuff...

Face it, we all use to use them...

A 400 Mhz machine with 128mb RAM is quite a lot of machine for what the average person wants it for:

1. Word processing
2. Calculator
3. Web browser
4. Lousy paint program

A majority of cycles are wasted with the user sitting there..

Here's an old Dell that meets your lofty needs :) $99
http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem &cate gory=51110&item=5133297107&rd=1

For $200 you could get the keyboard, mouse and LCD monitor all in the nice form of a portable computer. Be it 500Mhz or so, Linux will run just fine.

What the hell does everyone need a 1Ghz or 2Ghz spec'd machine for? It produces tons of heat, typically noise too and eats up tons of electric with that huge power supply you all want...

Re:No

[djdavetrouble]

I saw an apple 2 gs go for 35 bux on ebay last month.. bastard sniped me at the last minute. It came with a monitor, 5.25 and 3.5" disks, a dot matrix printer, and a box of software. That computer can do word processing, spreadsheets, AND play hundreds of classic games! (aztek, threshold, wizardry, wolfenstein, karateka, sigh I love apple ]['s)

We sell pentium 2 and 3 cpu computers to employees for $75 at my company when they get swapped out. These computers are able to run all modern business software, browsers and email. They just don't have the speed and snappiness that we are all used to. Everyone wants flat panels and small form factor PC's these days, so they just sell of these old computers and do some wacky accounting magic to write it off or depreciate it or god knows what.

New $100 computer? Only if you are a manufacturer. Used $100 computer? totally do-able.

flawed question

[barchibald]

Hey:

Its great to ask this question, and I'm all for cheap hardware. But...given that hardware must be manufactured, consume raw materials etc. I would expect that the floor cost for hardware should _never_ go as low as the floor cost of software - especially after you get past some R&D point for both.

Can you say "monopoly"? It seems much clearer to me that software ought to have some fully commodified components and that the OS ought to be that component. Given that the world of software has (intelligently) landed on layered architectures, we'd expect to be spending money at the higher layers and have ever increasing commodification at the lower layers. Again...can you say monopoly?

Now...I"m not arguing that hardware should NOT fall under this rule, but....well....some costs associated with hardware are a given, and those costs will forever be higher than the "given" costs of software.

Just my 2cents.

Re:This is easy.

[barawn]

One IDE channel. No floppy, serial, parallel, or PS/2 ports. Kill IrDA support.

The problem is that virtually none of this saves money.

Legacy support costs virtually nothing. The only expensive parts are the connectors (the interfaces are all integrated: if you want IDE at *all*, you basically get everything else) and you can just put them on a pin header if you want.

IrDA, serial, and PS/2 are all the same thing - parallel, floppy, and even IDE are usually supported on one chip. They're so cheap that there's no point not to put them on. For one thing, they're useful enough to the people testing the board that they earn their keep just that way.

The CPU and RAM chips could be soldered onto the board. Bundle it with a cheap mass-market OEM hard drive, a case with a 40W power brick, and you've got a PC.

RAM prices fluctuate too much for this to be succesful. CPU integration makes sense, although again, the price drops quickly enough for you to be left with a platform that's far overpriced in just a few months. Keep in mind, that's one of the main reasons you don't integrate the CPU and memory - price concerns.

For one thing, in the time it takes the system to get to market, the board will be a bit overpriced/underpowered for its price point. Systems that have socketed CPUs/memory are viable on the market for a long enough period for people to sell off their supplies.

The way you make a cheap motherboard is to only use the integrated peripherals in the southbridge, and then volume, volume, volume.

Re:Computers are FREE

[Jeremi]

If we're going to start plugging things, then I'll seize the opportunity and throw in a plug for FreeCycle. FreeCycle is a great way to get a good used computer (or anything else) for zero cost, and also an easy way to clear out all your old junk by giving it away to local people who find it useful. No packing or shipping hassle, since the recipient typically will come by to pick it up, and you'll earn more karma that way then you ever will posting to Slashdot. :^)