10/96 Cover Story: HOT STUFF!

Prices are going down, down, down--and your chances of
finding a bargain on great new hardware are going up, up, up.

Click Here to see a 159 KB bitmap image of artwork which goes with this article, entitled:
The Inside Scoop

Did you pay too much for your last computer? Did you get a real steal, only to find you were buying yesterday's technology? In the world of PC hardware, knowing when to buy is almost as important as knowing what to buy.

The new Compaq Presario 3020 (see review in the What's Hot section) makes a good case for the falling price of on-the-rise technology. It offers two components you probably haven't seen on a desktop before-USB (universal serial bus) ports and a 12.1-inch color LCD panel display. That configuration on a fully loaded Pentium PC would have been impossibly expensive, or simply impossible, only a year ago. Now, it'll set you back just $3,499.

Snapshots of "typical" mid-range PC purchases in recent years show a gradual decrease in overall cost with a rapidly expanding set of features. Fourteen years ago, an IBM PC with 256KB of RAM, two floppy drives, 13-inch color CGA screen, DOS and a dot-matrix printer was considered a great deal at about $5,000. In 1988, the same money bought a speedy 286 with 8MB of RAM, 80MB hard drive, 2400-baud modem and 14-inch EGA monitor. Today, you can put a loaded multimedia Pentium, 17-inch monitor and laser printer into your $5,000 shopping basket and still go home with a few bucks in your pocket.

Once hardware technology matures, production rates level off and costs begin to stabilize. The product becomes a kind of commodity, subject to factors as varied and complex as the low availability of glass in the Far East combined with the U.S. Federal Reserve Board's decision to raise interest rates. Purchasing professionals watch these indicators carefully before making major buys. But you can sometimes save substantially by following just a few simple guidelines.

• Don't be the first kid on your block to own one. It's always a bad idea to invest in the initial wave of a new technology, unless you can't do without the extra functionality.
• Shop the competition. The first of any new hardware generation generally can't match the price or features of the second and third products out the door.
• Consider mail order. If you don't need extensive tech support and can afford to wait a day or two, you'll save by using a mail-order house. If tech support is a must, you might save money in the long run by sticking to a local dealer with a good reputation for support.
• Watch the software. Shifts in the software arena can have dramatic effects on hardware availability and pricing. At the start of the decade, a 386SX was considered a good way to gain a foothold in 386-level performance at a bargain price-until 16-bit Windows became popular. Windows NT 3.5x's slower-than-expected acceptance has hindered adoption-and the lower prices that should have resulted from high-volume sales-of Pentium Pro systems, since there is currently no clear advantage to paying a premium for the faster chip.
• Know what's coming. A speed demon on the horizon usually spells a price drop for current models, so it pays to monitor new product announcements for a few weeks before purchasing big-ticket items. If you don't need the additional performance, you could save money by waiting for next-generation hardware to hit the streets and then buying what amounts to "the previous year's model."
• Buy in season. Hardware sales are cyclical-generally sluggish from January through April, rising gradually from May through August, then taking a final dip until they peak during the holidays, when the majority of PCs and high-ticket peripherals will be sold in the U.S. There are exceptions: Windows 95's debut last summer extended the hardware buying season well into November. You can save money in peak sales periods by watching for "come-on" special pricing when vendors need high-volume sales, or in the troughs of the cycle, when prices fall in response to low market demand.

In the following pages, we'll bring you up to speed on the speed-and cost-of computers and peripherals. Unless otherwise indicated, the prices in the charts throughout this article are averages based on actual prices of products advertised in WINDOWS Magazine since 1992. Other resources, such as TechWire, CMP Media's daily newswire for buyers and sellers of PC technology, can help you spot the beginnings of a price trend. Catch it at http://techweb.cmp.com/newsroom/newsroom.html. WINDOWS Magazine's sister publication, Computer Reseller News, offers a useful market-watch page at http://techweb.cmp.com/techweb/crn/sections/supplement/research.htm that features first indicators of price trends. These are particularly useful if your organization will be purchasing large quantities of hardware and software.-Cynthia Morgan

Back to 10/96 How To: Programming Windows

Up to Table of Contents

Ahead to 10/96 Cover Story: HOT STUFF!