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Why the hell… aren't PCs getting any cheaper?

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Moore's Law states that the processing power of a chip will double every eighteen months, and the common caveat is that it will also halve in price. So the question has to be why are there not free or at least dirt-cheap PC's available?

Well, it has to do with what is known as a "floor price" of a component. This is determined by the cost of the basic materials and production associated with the component.

Obviously there is a physical constraint on the lowest possible price: the raw materials do cost money after all. Depending on the purity, silicon can cost between $30 and $300 per 100 grams.

Lisa Clark, the consumer and business marketing manager at Compaq says: "No-one would by a 550MHz CPU if there was a 700MHz one available for the same amount of money. There is a floor price of a component, and it will never go to zero."

But even taking into account everybody's overheads we still end up with PCs costing around £500 once you include VAT. And if you are one of those funny people who like to have a monitor, you are looking at shelling out upwards of £800 for a machine with a PIII 600MHz processor.

And the overheads are not inconsiderable. As Evesham Micro's marketing director Luke Ireland points out, "...sales people don't work for the fun of it, and we have over 100 people working in out storage and production departments. The major overheads are distribution and support."

It is no secret that building a PC for yourself can be cheaper than going through a reseller, but if you don't know what you are doing you run the risk of frying all your nice components to a crisp, and getting a decent Einstein "do" in the same move.

Clark would, of course, recommend against it. "You do need to know what you are doing to build a PC," she says. "And then you need support for it. Some combinations of components don't work so well for example, so there would be a bit of trial and error involved."

Evesham's Ireland also points to tech support as a factor in the cost of a PC. "People want proper after sales support, but are quite reluctant to pay for it in any way. Our support costs are quite substantial," he said.

A reader who knows a bit about building PC's told The Reg: "Often if you're building up your own computer, you're basically 'upgrading' certain parts. Its easier if you want a complete system to get the store to order you what you want as they are often excellent for customising systems."

However, if you know enough about system building to successfully build your own PC and can manage without tech support, it is unlikely that you would be happy with a bottom end version of what you could get, especially if you are at all into gaming.

So, working with the idea that people who want a low spec computer are unlikely to be able to build it, what are the options? According to Oracle, there are plenty, if we incorporate the thin client model espoused by Larry Ellison into the equation.

In this scenario a person would be able to access all their data from anywhere, moving towards a utility model for computing, where all the complexity is centralised, and the end user only deals with the browser software. And you'll rent your applications from a provider. Carolyn Patterson, Internet platform manager at Oracle UK, described it as a kind of "global hotdesking."

"Of course there will still be people who need a higher spec piece of hardware," she said. "If you are into gaming, you'll still need graphics cards and more speed, and some people will want to do more than just access the net." ®

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