PC Economics — Time to Upgrade?

There is a price/performance war going on in the x86 CPU processor market, which is driving performance up and prices down. AMD and Intel are in a race to out-clock, out-talk, and under-cut each other with almost daily announcements. The result, for the smart consumer, are some very fast processors at lower than ever costs. AMD and Intel are the only real competitors in the x86 marketplace these days, with all other manufacturers being shunned for poor or even buggy performance. There are other processor families of course, like the Motorola PPC and 68xxx series which power the Macs, or Alpha and Sparc processors which run many Unix machines, but none of them are experiencing the kind of shrinking price/performance ratio we’re now seeing in the x86 market.

AMD has been working for years at building a x86 processor comparable to those being offered by Intel, and made a killing by offering low-cost, medium performance processors for the so-called “sub-$1000 computer”. Intel were only offering high-end chips at the time, and had to play catch-up with their Celeron processors.

A couple of weeks ago both AMD and Intel announced availability of Giga Hertz (1000 MHz) versions of their processors, the “Giga Chips”. At the same time, both companies announced further price reductions for all their chips already on the market. Now, to put the Giga Chips performance into perspective, these processors can execute an instruction in less time than it takes the light from your monitor to reach your eyes.

But don’t bother trying to buy one of the Giga Chips anytime soon though; Intel can’t actually get any of them out the door yet, and you’d be paying way too much of a premium, either. Where the smart consumer is looking are the lowest to mid-range processors still available. These include the AMD K6-2 and K6-3, the Intel Celeron, Pentium II or IIIs in the 300 to 500 MHz range. These can be purchased for between $50 to $300 currently, depending on model, speed and your luck, and offer performance only dreamed of a short while ago. Be sure to ask for the OEM version, and save $10 on the pretty box.

At the same time, almost all other raw components of a computer are also available at low pricing. For example, RAM, or random access memory, is available for between $1 and $1.50 a Megabyte now, so there’s no reason for any computer to be with less than 64 Megabytes. RAM is as important as processor speed to overall performance, if not more so. If putting together a new system, get 128 Megs RAM. Windows 2000 needs it.

Hard-drives now sell for $10 to $15 a GigaByte of storage, depending on size and rotational speed. Only down-side is you can’t find anything smaller than 10 GB any more. If the machine is only going to be a 2D desktop, a video card can be had for $30. If high-speed “hardware” 3D acceleration is desired, $150 to $500 will give you better 3D performance than you used to get with $10,000 of SGI hardware.

Even computer monitors, the last vacuum tube commonly in use, are inexpensive enough that it’s hard to justify not giving everyone 17″ displays. The improvement in productivity when workers are given “big glass” are realized only when higher resolutions are used though; 17″ displays should be set to 1024 by 768. On the other hand, flat-panel displays are still extremely expensive and are hard to justify in any but mobile situations. They’re very sexy on the desktop, but can easily triple the cost of a workstation.

As a result of all this, it’s now possible to buy a complete computer, with monitor, for less than $1000 here in Victoria. If you’re willing, and able, you can put a machine together from parts for even less. The time may be right to buy that new machine; both AMD and Intel are cutting off production of their lower end chips, hoping to generate more profit to pay for those expensive fabs they needed to build the Giga Chips with. Ah, it’s a good time to be a geek.

Published in the Victoria Business Examiner.

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