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Tuesday, May 24, 2011

Computers for Father's Day? -- Think About It

I got the usual flyers in the mail for Father's Day bargains, including several from computer retailers. Every model offered had a retail price stated and the amount of the "discount." Is there really a bargain in computer sales? Let's look at the facts of computer prices today. I propose several rules for computer purchase.

Rule #1: Computers are very nearly a commodity and the price of any particular computer is reflected in its components.

If you take two computer models by different manufacturers and compare them side by side, feature by feature, assuming you can find two similarly configured computers, you will find them priced almost exactly the same. The manufacturer's price, often referred to as the "retail" price, is a complete fiction. Let me take a newer laptop computer for an example. I will use some real models and some prices from the Internet, but they may not be the "best" deal available, but will illustrate my point. Without searching at all, I decided on a laptop with a 14" or 15" screen, a Core i5 Intel processor and at least 4GB of Ram. I also want at least a 500GB hard drive. Here is the first one from Google Shopping sorted by price: $388.00. Interestingly, the lowest priced model in the ads I got today in a free newspaper dropped on my driveway was $550 and it was a Core i3 processor.

The next model in the list on Google was about $530. Why the difference? Was the first computer a really good deal? The $388 model did not have an optical drive. The laptops starting at $530 or so, all had DVD+/-RW Drives. Hmm. Looks to me like I had better pay attention to the components. Slight differences in price are insignificant but look closely at the specifications. There might be a difference in the configuration of the memory or something else.  Note the "standard" online price for an Core i5, it is less than the "special Father's Day" price on the flyer for an Core i3.

Rule #2: New models of computers do not go on "sale" until they are ready to be replaced.

If you have any knowledge about computers at all, you know that over time they get faster, have more memory and come down in price. For example, if you want to move up to a Core i7 laptop, the price jumps to a bottom of $740.00. Computers are like Chinese menus, take one component from each category with lists and lists of categories. If you want to see what is the latest and greatest, sort the list on Google by price from high to low rather than the other way around. What do you get for your $3000 at the high end? High-grade aluminum and carbon fiber. Light weight with higher performance. Is there any real difference other than a few pounds? Not really.

Rule #3: Components are no different than computers, they vary in price by model, introduction date and measurable specifications.

If you examine every component of a computer from the mother board to the DVD drive, you will see the same almost exact relationship between its price and its features and specifications. You can count on it. If a component drops in price, there is a newer faster model or one with more capacity. Hard drives are a good example. The capacity and speed of the drives keeps increasing as the price decreases. Manufacturers have to discount the older models because they intend to sell the newer ones at the same price or lower than the models they replace.

Rule #4: New technology always costs more until the demand equals the supply.

Apple computers always command a premium price that people are willing to pay because Apple always has the latest technology. People were willing to by iPads at any price, but are not running out to buy the newer lower priced tablet computers because now the technology has already changed again and tablets are old news. Apple has already come out with an iPad 2. Pundits endlessly theorize whether or not Apple can keep ahead in the game. Whether it is Apple or some other company's product, the winner is the innovator at the edge of the technology. Will people keep buying new technology for its own sake? No, tech history is littered with failures that were innovations in their time. But whatever it is, the new technology will command a premium for as long as it is new.

Rule #5: Buying a computer is not like buying a tie for Father's Day, make sure you know what you are buying.

This rule does not apply, of course, to the fathers who buy their own Father's Day gifts.  It is dangerous to buy someone a computer. They may be insulted or amused but not likely pleased.  If your gift recipient is at all computer savvy, you will likely have to take them to the store with you or get online with him to buy the product. Any other course will result in an immediate return. If you fall for one of the sale promotions, you had better make sure there is a return policy. Buying a computer as a gift might work if you have written specifications from the intended.


Rule #6: Anyone who actually needs a computer, likely already has one.

There is the old dichotomy between needs and wants. There always seems to be a gap between what you think you need and what you already have. I find that new computers always seem faster and better than the older ones. Eventually, the new computer starts to feel slow and unresponsive. Then it is time to start looking at the manufacturers production cycle. When will the new chips be out? When will the new operating systems come out? This has nothing to do with holidays or sales, it has to do with the upgrade cycle. If you buy a computer because it is on sale, you will almost always be buying down from where you need to be.

I am not against holidays as a concept. I just think they have little to do with work and productivity in genealogy.

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