Hi Meathead; I stand by my prediction that an average
PC compatible purchased by the public will be in the
$100 to $150 range within 3 years, though I should note
that I am not including the cost of the monitor or printer
in that figure. With the monitor and printer, the price
will be around $300 or so.
Anyway, lets talk about what keeps the price of
computers as high as they are.
You quoted Linley Gwenapp VP of the Microprocessor report:
First of all, trying to squeeze another $200 out of today's
bare-bones $699 PC is tough. The total semiconductor
content of these systems costs about $100, so even if
Moore's Law drives this down to zero, we're still a hundred
dollars short. The rest of the system is motors and metal that
aren't likely to get much cheaper in the near future.
The person quoted above clearly has never built a computer
from parts. If they had, they would know that what keeps
computers expensive is not the "motors and metal", but is
instead the electronics. This is the internet, and I will now
prove my assertion with the use of links. I went to the
Yahoo shopping guide for computer hardware, and picked
the first vendor on the list that had computer parts. Now
Linley's statement is that the electronics are not now the
driving factor on computer prices. We can check this
by looking at the retail prices for some of the parts used
in computers that are left over from previous generations
of technology. The manufacturers of these parts have
presumably paid off all their R&D expenses, and are now
down to the bare-bones costs of manufacturing, at low
margins:
Keyboard $12.88:
168club.com
I think I bought keyboards for a lot less at Frye's
down in SI valley, 18 months ago when I had to
assemble a couple 200MHz Pentiums for use as
routing workstations. But keyboards have a lot
of plastic in them, and are cheap.
Power Supply and case. $20.88:
168club.com
A damn good proportion of the metal in a computer
consists of the case and the power supply. Here
they are (225W) retail for less than $21. And that
power supply is about as heavy as any other part.
Floppy disk drive (3.5"). $17.88:
168club.com
Last I looked, a floppy disk drive included a
motor, so that isn't what is keeping the price
of computers above $500.
So much for "metal and motors". The fact is that
if the metal and motors are from previous generations
of computers, they are cheap as water. This is what
commodity pricing really means. Commodity pricing
means that there is no R&D in the price, but instead
that the price corresponds to the cost of production.
Newer parts, such as 24x CD roms, and 2.1G hard
drives are more expensive. But these parts will drop
in price just like the others.
Anybody who has been a (successful) hardware
designer knows the facts that I have shown here,
and knows how little production costs are in even
state of the art computers. The public believes that
it costs $500 to build a computer cause that is what
they are sold for. Not so. And Linley Gwenapp VP
has clearly not analyzed anything.
I have a lot to say also about the cost of monitors
and set top boxes. But I'm going to put that into
a following post.
-- Carl |
