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Hardware & Systems : Chips & Upgrades: What's Slowing PC Sales? Cheap SDRAM

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What's Slowing PC Sales? Cheap SDRAM
August 28, 2001
By Vince Freeman

For the First Time, Even Technophobes Would Rather Upgrade Than Buy New

For the First Time, Even Technophobes Would Rather Upgrade Than Buy New

As you know, the computer industry is in a slump, with companies slashing profit projections and headcounts alike. Much of this downturn has been blamed on the economy, the fall of the dot-coms, or just plain customer apathy. I think the last is closest, but misses the point: Our entire PC purchase structure is based on buying new and improved equipment for a changing software environment. It's also linked to the historically accurate belief that it's too expensive and too much trouble to upgrade most computers. But with SDRAM prices at incredible lows, I think it's time to toss out that old chestnut.

While the majority of users never open or fiddle with their PCs, those that do (and that number is growing steadily) are usually adding system memory. This has long been the simplest system upgrade, as well as the most cost-effective. Even long-time holdouts like Compaq have come to understand this consumer need and supply detailed upgrade instructions with their new PCs -- although plugging in a new memory module hardly needs them; it's just a bit more difficult than changing a light bulb.

And even with today's cheap CPUs and huge hard disks, nothing beats the price/performance benefits of extra RAM. If you're running Windows 2000 Professional on a 128MB PC, the performance gained by jacking in a second 128MB module can be phenomenal -- usually more beneficial than spicing up your system with a new processor or graphics card. The same can be said for Windows 98 or Me, where boosting a 64MB system to 128MB is the single best move you can make to increase speed and responsiveness.

Lately, I've been examining the possibility of moving all of my PCs up the memory ladder -- to 256MB for the secondary units and 512MB or more for my main desktop. The reason is simple: For what I spend on coffee in a week, I can buy a 128MB stick of PC133 SDRAM and get noticeably better PC performance. This is especially true since I run Windows 2000 in a dual-boot environment, which can get quite choppy at only 128MB.

As with most of my PC hardware purchases, I needed instant gratification, so I started my usual search through the local clone shops. All my usual haunts were out of stock, or missing the sizes or quantities I was seeking, but I finally found a place that stocked name-brand PC133 at a very attractive price. More interesting, I was far from the only customer stocking up on RAM; a few other fellows were nabbing large quantities, and the clerk even told me I was lucky I'd reserved some by phone, due to inquiries in the few hours between the time I called and walked through the door. There's certainly no shortage of SDRAM, but a store only holds so much in stock.

This got me wondering where all the memory was going, so I talked with a few shoppers and learned they were taking advantage of low prices to literally fill their PCs to the brim -- an increasingly common trend these days, with everyone from friends and family to computer journalists recommending that you grab as much memory as you can before any price spike or shortage.

But what sort of effect does bargain-basement SDRAM pricing have on the industry as a whole? Today, you can walk into a dealer, grab 256MB of PC133, and get change back from a $20. Contrast this with a few years ago, when RAM prices were painfully high and made up a large portion of any system purchase -- and the bigger the percentage of total PC price, the bigger the deterrent to upgrade memory alone.

Why Pay a Surgeon When You Can Put On a Band-Aid?

The price/performance ratio is now in favor of upgrading memory, especially SDRAM, rather than buying a whole new PC. And SDRAM has become a virtual standard for computer memory -- I can remember the days of differing RAM formats, speeds, sizes, and other factors, but most systems have relied on SDRAM for some time. You can even use PC133 in an older PC66 or PC100 system, so just about any desktop from a Pentium II/233 on up can profit from today's giveaway prices.

When I hear about mass-market consumer aversion to new memory technologies like DDR and RDRAM, I suspect at least part of it is due to self-interest: Nobody likes owning obsolete equipment, and you can bet that SDRAM won't be obsolete anytime soon. Just mull over the fact that Intel's forthcoming, highly anticipated i845 Pentium 4 chipset will use virtually the same basic memory technology as the old Pentium II. When was the last time you could say that about any new hardware release?

Even more than avoiding obsolescence, of course, we all want to save money, and given an adequately fast processor -- found in almost any PC built since, say, 1997 -- adding more memory means a PC will have a longer lifespan. That postpones having to open your wallet for a whole new computer, which postpones the influx of cash into the hardware market.

Not even bloated software can put the nail in the coffin for an old PC. Microsoft's upcoming Windows XP has a stated CPU requirement of 300MHz and disk space demand of 1.5GB. Both are easily attainable specifications for virtually any current PC, and then Microsoft brings down the hammer by requiring 128MB of memory -- although there's a lame 64MB mode, although we all know we'll need 256MB to run XP smoothly. So will Windows XP herald in a new age of PC buying? Maybe and maybe not, but I see more people making use of ultra-low SDRAM prices to help their current PCs make the grade than rushing out to buy new systems just to run the new OS.

Low price points for SDRAM, processors, and hard drives should be a tonic to the computer industry, but low profits and hefty layoffs continue. Razor-thin margins and cutthroat competition are partly to blame, but ironically, so is the fact that today's PCs are built to last: Performance PCs come with 256MB standard nowadays, and it's not uncommon for buyers to rack their new systems with 512MB of even 1GB.

Remember the days of skyrocketing RAM prices and system vendors scaling down their configurations to 32MB? It wasn't all that long ago, but the situation has reversed itself today -- memory cost is no longer a limiting factor, and the sky's the limit as far as SDRAM goes. No longer can new software releases force users to buy new PCs, nor can changing technologies accelerate the obsolescence of existing ones.

SDRAM is king, and cheap memory is extending the life expectancy of almost every personal computer. This isn't good news for the vendors who depend on turning today's flagship systems into tomorrow's boat anchors, but that's the road we're headed on. Speaking of roads, I'm thinking of warming up the car for another trip into town -- I'm wondering why I stopped at 512MB and whether Win 2000 Pro would benefit from 1GB of breathing room.


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