Rants, Raves, and Rhetoric v4

Quarter the 2006 Price in 5 Years

I love it when I run across a prediction about the time of the deadline. Jakob Nielsen made one on November 20, 2006 that computers will be 1/4th their current price of $379 in five years. Five years later is November 20, 2011. That is today!

In areas like North America, Europe, Australia, and Asia’s advanced countries, computer cost is no longer an issue. Dell’s cheapest computer costs $379 (with a monitor) and is about 500 times as powerful as the Macintosh Plus I used to write my Ph.D. thesis. While it’s true that a few people can’t even afford $379, in another five years, computers will be one-fourth their current price. Would that all social problems would go away if we simply waited five years.

So $379 / 4 = approximately $95.

Dell, the company Nielsen picked on, the cheapest I found was in Dell Outlet a Latitude laptop for $239.

Walmart’s cheapest non-refurbished I found was $212 laptop. (There was a Pentium 4 refurbished desktop for $115 which is old even for 2006 but adding the cheapest $89 monitor is still $109 too expensive. You would be better off going to a garage sale and picking up the same computer for $25 and getting a kid in the neighborhood to refurbish it.)

Best Buy has a $205 laptop.

I guess after five years they are getting close to half? Maybe this is why the FCC started a $4 billion program to help close the digital divide at $150 a refurbished computer + training + $10 a month broadband. Even this is not Nielsen’s a quarter of 2006 prices. (FCC and “Connect to Compete” Broadband Fact Sheet)

Ezra S F

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One response to “Quarter the 2006 Price in 5 Years”

  1. Ezra S F Avatar
    Ezra S F

    This could be related:

    How whole sectors of the economy are dying

    Christensen retells the story of how Dell [DELL] progressively lopped off low-value segments of its PC operation to the Taiwan-based firm ASUSTek [LSE: ASKD]—the motherboard, the assembly of the computer, the management of the supply chain and finally the design of the computer. In each case Dell accepted the proposal because in each case its profitability improved: its costs declined and its revenues stayed the same. At the end of the process, however, Dell was little more than a brand, while ASUSTeK can—and does—now offer a cheaper, better computer to Best Buy at lower cost.

    Source:Clayton Christensen: How Pursuit of Profits Kills Innovation and the U.S. Economy

    Making computers cheaper for consumers runs counter to improving profits.

    Reply

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