Subject:
Low-end in PCs high enough for some firms
Date:
Thu, 19 Mar 1998 09:22:26 -0800 (PST)
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News Alert from Puget Sound Business Journal via Quote.com
Topic: (NYSE:HWP) Hewlett Packard Co,
Quote.com News Item #5818221
Headline: Low-end in PCs high enough for some firms
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Several brands of PCs are available for $1,000 or less and they
have more muscle than computers costing twice as much just a few
years ago. These cheapies aren't adequate for the needs of most
small business and telecommuters. But some firms live simply and the
cheap PCs do just fine.
Companies like Gateway and Dell sell custom-ordered computers
where a customer could specify a $1,000 computer.
Merit Distributing, a Bothell wholesaler of computer products and
value-added reseller, can do the same thing.
"If I put a $1,000 computer together for a business, it would be a
very limited device using backwards technology," says Patrick Lloyd,
a Merit salesperson. "It would be pretty much obsolete within six to
nine months, and then the user would be back into the buying cycle."
Lloyd suggests that a better business solution would be the NT 4.0
server, where the employer wouldn't have to worry about employees
using their desktop computers for more than their jobs. The system's
activities can be limited to the tasks at hand.
Until now, a desire for the latest bloated, resource-hogging
software has driven the need for high-capacity, high-speed
processors. PCs with chips a generation or two old have always been
cheap, but the market was extremely limited because customers wanted
the latest software. That may no longer be true.
Unnetworked computer
Steven Queyrouze, owner of the Seattle and Portland Ruth's Chris
Steak House franchises, says the $1,000 unnetworked custom PCs can
be more than adequate, even desirable for an employer. "You get just
what you need," he says, without all the software bundling that
comes with more expensive computers. "I don't want my employees
playing video games and solitaire."
Accounting and word processing programs are all that Queyrouze
requires on the job. He orders modems for only the computer
operators who require them. "The Internet is the biggest problem for
an employer," he says. "It's a total distraction with all the e-mail
and junk going back and forth." Queyrouze feels it's just too easy
for an employee to download software with possible bugs.
The average computer price is still about double that of the
$1,000 models. For 15 years the standard price for an up-to-date
computer package has been about $2,000.
Nearly all the leading retail computer makers have PCs on the
market between $800 and $1,300. Some industry analysts figure these
could account for 40 percent to 50 percent of this winter's sales.
Up to 40 percent of computer sales are made in the final three
months of the year.
Helping to keep the prices down are lower costs of processing and
memory chips.
The $1,000 computers are really aimed at the first-time user,
since only about 40 percent of homes in the U.S. have computers.
That figure has remained the same for the last two years, according
to the Consumer Electronics Manufacturers Association
"Hotels are having to keep up more and more," says Pamela Graber,
general manager of The Woodmark Hotel at Carillon Point in Kirkland.
"All this software uses space and RAM. The $1,000 computers are
wonderful for home use, but the programs running in most businesses
need 32 RAM minimum and two gigabytes of hard drive memory," she
says. "We still have a 486, but it's slow.
"They may be OK to add onto a network, if I were to look into it.
They allow the average individual to have a computer at home, for
their kids in school. But software takes so much memory."
Have limitations
The ingredients of three $999 PCs show the limits of lowballing
for an office computer: The Aptiva E16 comes with 256 kilobytes of
level II cache, which is a temporary storage bin that helps in moving
information between RAM and the processor. The computer has a 166
Mhz Pentium processor, 2.5-gigabyte hard drive, 56k modem, 2
megabytes of video memory and a CD-ROM player.
Hewlett-Packard's $999 Pavilion 3100 has just 32 kilobytes of
cache, and Compaq's $999 Presario 4500 has no cache.
All three have only 16 megabytes of RAM. This at a time when
computer buyers are advised in every consumer column to get at least
32.
All three have hard drives of about 2 gigabyte capacity, but a
quarter of it is already used up by operating systems and software.
All three have printer ports, a serial port and two Universal Serial
Bus ports. None comes with a monitor.
These three $999 computers, even with their present-day
limitations, are far more powerful than a $3,000 computer three
years ago.
One columnist suggested a "general purpose" computer should have a
Pentium II chip running at 266 or 300 Mhz with a minimum
four-gigabyte hard disk. He advised to pay no more than $3,500.
Even that advice may be behind the times. Toshiba feels the PC
market has already moved toward the basic, stripped-down models, and
has stopped making its Infinia, a multimedia home PC.
A fourth $999 PC, that includes a color monitor, is the Packard
Bell E154 Multimedia. It has a 150Mhz Pentium processor, 32
megabytes of RAM (expandable to 128 megabytes), 2.1-gigabyte hard
drive, 16-speed CD-ROM drive, 33.6/14.4 data/fax modem and 16-bit
Sound Blaster-compatible sound system.
In January, Compaq offered new $799 PC that included a 200Mhz
processor, 32 megabytes of RAM and a 2.1-gigabyte hard drive, but no
monitor.
Maybe the software market is glutted, or possibly computer users
are taking longer to catch up, allowing more time to absorb their
current software and waiting an extra generation before upgrading.
Could there be some "less is enough" thinking among computer buyers. |
