Hear that? It's the Sound of personal computer prices crashing through the floor. That's what you heard on Oct. 29 when IBM introduced the new $599 IBM Aptiva home PC, setting a new threshold in the booming market for inexpensive machines from top manufacturers. Just a few weeks earlier, Compaq Computer Corp. held the distinction with a $699 Presario model, after a rebate. And only a few weeks before that the entry-level price for a name-brand PC stood at $799--that is, without a monitor.
Such is the new pricing order in the hypercompetitive world of PCs. Of course, that's just for the name brands. There alreAdy are plenty of upstart companies breaking the $599 barrier, including a $399 model from Emachines, a startup backed by a Korean PC maker, and a $499 unit from Future Power Technologies, another startup backed by a Taiwanese firm. The bottom line: PC prices this season will likely put a smile on even the most tight-fisted Scrooge.
But low prices don't tell the whole story. For our annual buying guide we have scoured the desktop universe from the sub-$1,000 crowd to desktops on steroids--power tools with the latest speedy 450-megahertz Intel chips that are equally comfortable running molecular modeling programs or scanning and debugging millions of lines of code by brute force. The possibilities are limitless, whether you're a newbie or an exec with a long list of software skills on your resume.
Not only do consumers get more for their money these days, they have more choices. Last year, for example, buying the most powerful PC meant paying over $3,000. This year, the only machine on our list over that price is the top-of-the line sleek IBM Aptiva--and that's only because it has a flat-panel monitor. And a revitalized Apple Computer has made a comeback with the popular $1,299 iMac, giving PC buyers a choice other than an IBM-compatible machine.
DVD, TOO. Ann Cowperthwaite is one of many shoppers in 1998 who is still smiling over the great deal she got. Three months ago, she picked up an IBM Aptiva PC with a 266-MHz chip, 4-gigabyte hard disk, a 17-inch monitor, and a 5-year service agreement--for $1,200. A sculptor, Cowperthwaite has two other machines her kids use. But she bought this one for a furniture design business she recently started. Her first piece is an elegant music stand made from maple wood and steel. Cowperthwaite uses her PC in conventional ways--to make up brochures, track her business finances, and do her banking. But she has also taught herself how to write a database program for her business.
Today, you can count on more speed for less money from the top performers, and get double last year's standard 32 Mb of memory and 4-Gb hard disk. What's more, the standard now includes a 17-inch monitor and possibly a Zip drive or DVD drive thrown in as well. It's unlikely that you'll want to watch movies on your PC, but if you use it for training or sales presentations, DVD technology can make those applications much crisper.
That doesn't mean cost-conscious buyers will feel like second-class citizens. Take the popular sub-$1,000 category. It's the fastest growing segment of the PC market, expected to make up 50% to 60% of PC sales this holiday season. This Christmas the biggies like IBM, Hewlett-Packard and Compaq are offering a wider array of models in this segment. They're taking their cue from corporate customers, who are now following the lead of consumers and snapping up the same low-priced systems.
So why buy an inexpensive PC? Many smart shoppers who make this choice assume they'll be buying again in two or three years, so why splurge? Others find that sub-$1,000 machines are great for that second or third machine in the family. Small-business owners, meanwhile, are discovering the joys of computer networks, and need the additional PCs.
Besides, some think it no longer pays to upgrade. James Akstin, a captain in the Haverhill, Mass., fire department, decided his 3-year old IBM-compatible clone was out of gas. So six months ago, he ditched that machine for a Compaq Presario 4540 for under $1,000. "I got a great buy," Akstin says. "Prices have dropped dramatically, and to upgrade my machine wasn't worth the money." Even his son, a computer consultant, thought the price was too good to pass up. Now the 54-year-old Akstin uses the Microsoft Office, Money, and Excel programs that come with the machine to do online banking, monitor investments, and keep track of the rent he collects on a few condominium properties he owns. He also likes to turn off the monitor and use the machine to play CDs. "The (music) quality is pretty good," he says.
If you're considering a sub-$1,000 machine, we suggest a basic configuration: A 300-MHz chip, 64 Mb of memory and a 4 Gb hard drive. You can probably get a decent audio subsystem and speakers as well. With prices starting at $599 for basic systems--without monitor--from the top PC makers, there's plenty of room to be flexible and swap better components or larger memory and disk storage if you like. And don't get hung up on the chip in this price category. There's very little performance difference between Intel, Advanced Micro Devices, or Cyrix microprocessors.
But be aware of one problem that has plagued entry-level machines: upgradability. PC makers haven't hit these prices out of the goodness of their hearts. To cut costs, many manufacturers have sacrificed expandability, which could get you locked into a machine with no room for that second disk drive or tape backup unit you want to install. Before you start shopping, take a few moments to think about how you plan to use your computer. If it only needs to last two years, don't worry about expansion. If you'd rather go the upgrade path, we recommend the QP6/333 desktop from up-and-coming mail order house Quantex Microsystems Inc., of Somerset, N.J., which built its machine with expansion in mind.
The other big consideration is the monitor. Most PC makers have cut corners here by throwing in inexpensive 15-inch monitors. But if you're going to be on the computer for more than three hours a day, a 17-inch screen, or a high resolution model may boost your comfort level. For most manufacturers, swapping a 15- for a 17-in. monitor will add about $200 to the system.
Another trick for folks on a budget: Approach PC shopping as if you were buying a car--and get last year's model just as the new ones are coming out. That's what Mildred Higgins did last year. The 55-year-old single mom works from her home in Great Falls, Va., transcribing medical reports for a company in New Jersey. She paid $1,700 for an IBM Aptiva S9C with 34 Mb of memory and a 4-Mb disk drive that she bought last year--but she actually picked it out a year earlier. "I got a good $1,000 off on it," she says.
FAST UPGRADES. Mid-range PCs are another hot category this fall, especially with the small-business crowd. Two of our top picks in this category are the Gateway G6-350 and Micron Millennia 400 MicroTower, priced at $1,698 and $1,649, respectively. This segment is attractive to corporate buyers for several reasons. For one thing, Compaq, HP, Dell, and IBM all bundle in desktop management software, which lets computer managers monitor the machine from afar. Manufacturers also have made it easier and quicker to upgrade and do maintenance on these systems. Compaq's Deskpro EP 6450X is designed so that the CD-ROM and floppy drives can be turned 90 degrees, making it easy to put the machine on the desktop or floor. That adds up to lower support and maintenance costs because rejiggering the system requires less time and fewer parts.
Naturally, there is still a good argument for being on the cutting edge. A top HP or IBM machine will remain top for at least a year, whizzing through complex financial databases or the blueprints for a 50-story skyscraper--and they'll still be viable early in the next millennium. Indeed, some people consider the high end the only way to avoid obsolescence. "Don't buy anything that isn't cutting edge," advises Ralph Peterson, a former Microsoft manager who is now a private investor. Peterson bought a Compaq PC with 300-MHz Pentium II and 17-inch monitor last year for about $2,600. But he found the 48 Mb of memory that came with the machine to be a little skimpy, and crimped some of the investment programs he wanted to run.
If your decision comes down to feature trade-offs--and it almost always does--clock speed, expressed in megahertz, may be a good place to compromise. Some 333-MHz PCs are faster than higher-MHz models, depending on the disk drive and other parts of the configuration. Dave Wills, a consultant who writes software for medical and telecommunications systems, uses a Dell 333-MHz machine he bought a year ago. He says his machine is faster than some of the 450-MHz PCs his clients use because the disk drive on those systems is much slower, bogging down the system. Manufacturers list access times on their disk drives, so make sure that when you buy that machine with the fast chip, you're also getting the fastest disk drive.
If you're willing to pay top dollar, what's the most computer for the money? That may be the Gateway G6-450, a blazingly fast machine that won't peel off your last dollar. For $2,499 it comes with a 19-inch monitor, rewriteable CD-ROM and DVD. But wait, what's that sound? Could it be more prices falling?