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The lowdown on low-priced PCs

More and more of the personal computers sold cost less than $1,000, and the consumers buying them aren't compromising on performance or features.

By DAVE GUSSOW

© St. Petersburg Times, published September 14, 1998


Unlike some computer buyers who look back at their purchase with regret, John Doney is a satisfied customer.

Doney was among last year's wave of buyers for cheaper PCs, those costing $1,000 or less, and the few-frills machine has met his needs nicely.

"I haven't found anything I can't do with it," said Doney, a semiretired college professor from Clearwater.

If Doney were buying a sub-$1,000 PC this year, he would notice a lot of changes.

* MORE CHOICES: Only a handful of companies made the inexpensive machines last year, or they were older machines on closeout specials. This year, they are commonplace. In its Sept. 1 issue, PC Magazine (www.pcmag.com) reviewed 37 models priced at $1,000 or less, not including a monitor.

* MORE POWER: Last year's models were limited in their uses by being slower, poorer cousins to the high-end market. This year's choices have more speed and computing muscle.

PC Magazine concluded that for $1,000, consumers can expect to get a PC with a 266-megahertz Pentium II processor, a 3- or 4-gigabyte hard drive, 4 megabytes of graphics random access memory, a 56K modem and a 32X CD-ROM drive.

* LOWER PRICES: The average price of a machine running Windows and using an Intel chip is currently $1,123, according to PC Data, a Reston, Va., market research firm. PC Data (www.pcdata.com) expects the average price to be at or below $999 by the end of the year.

The sub-$1,000 category has exploded, growing from about 13 percent of the market in January 1997 to about 46 percent in June. PC Data expects it to approach 67 percent by the end of the year.

Stephen Baker, PC Data's senior hardware analyst, broke it down even further: One-third of that percentage will be for machines costing less than $800, with the rest between $800 and $1,000.

"Today, products priced at under ($1,000) are not old, outdated technology but current, highly usable products that can meet 95 percent of what any typical consumer would want to use," Baker said.

The market is still being driven by first-time PC buyers as well as those who are buying a second or third machine, Baker said.

While some experts suggested last year that users would not be satisfied with low-end machines and would want to upgrade, Baker said those people generally don't need to upgrade. If they do, prices for some components are much cheaper now, making upgrades more affordable.

Anush Yegyazarian, associate editor for PCs at PC Magazine, says consumers have a number of issues to consider before buying.

"The most important thing is assessing your own needs, and realizing what you're going to be using the computer for," Yegyazarian said.

For example, consumers can choose from machines that run on AMD, Cyrix or Intel chips. For most tasks, any will be fine. But if playing graphics-intensive games is high on the list, Yegyazarian says, Intel's Pentium II is the best.

Systems bought off the shelf from retailers can give consumers the comfort of well-known brand names, she said, but they may have to compromise on quality and choice in some of the hardware, such as monitors and expansion capabilities. Some small vendors who build to order "can give you a terrific deal" for those who know what they want and are comfortable going that route.

Yegyazarian suggests consumers check into a company's service and warranty, calling the service number to make sure it is staffed, even at odd hours. In addition, consumers should check restocking fees that can run 10 to 20 percent of the purchase price if the computer is returned.

How low can prices go? Baker sees a floor of $599, given the industry's needs to make a profit. Baker does not see Apple's new iMac influencing the sub-$1,000 Wintel market because of its $1,299 price.

"It is a more expensive machine targeted at current Mac users who want to upgrade," Baker said. "For the same price a retail customer today could get a PC, a 17-inch monitor and a color inkjet printer, and probably even a scanner if they wanted."

Plunging prices on the low end also mean better buys at the high end, according to Yegyazarian and Baker. Baker says there is normally a $1,200 to $1,500 difference between the high and low ends, so as low-end prices fall, so do those on the high end.

Doney of Clearwater, featured in a Times' story in July 1997 on sub-$1,000 PCs, bought a Packard Bell with a 120-megahertz Pentium processor, 16 megs of random access memory, a 1.2-gigabyte hard drive and a modem. He chose the computer because he had a limited budget, and it has all that he needs.

He uses the machine to surf the Internet, a passion that can consume up to three hours a day ("'I'm curious and one thing leads to another"). He also uses it for correspondence, to keep track of materials, such as for his church work, and to play games.

"I really haven't come up with anything that I think I have to have that's more," Doney said. "Some of the things that are on it I haven't used."

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