The rising cost of computing
Ever since the first PC, we have been used to seeing prices fall each year whilst the power of the kit goes up, but now this state of affairs could be coming to an end.
Several factors affect how much we pay for our PC kit. The stabilisation of the US dollar, the current fragility of the Eurozone, and the strength of the South East Asian economies are all playing their part in pushing up prices in the UK. The market is also affected by supply and demand. No longer are we seeing chip plants churn out huge volumes of memory chips or finding new ways to fabricate higher capacity chips at lower cost. And of course, rising fuel and energy costs are adding significantly to the manufacturing and shipping costs.
Walter Deppeler, the senior vice president of the Taiwanese PC giant, Acer, has said that in the short term, prices later this year could be 10 to 12 per cent higher than they were a year ago. There is some evidence that we've reached the pricing low point. Memory cards for cameras cost about 5% more now than this time last year, and the 2GB of memory chips which cost me £21 in 2009 would now cost closer to £35. Despite this, adding memory chips to a PC is still the most cost-effective way of improving its performance and PCs themselves are still great value for money.
If computer costs rise then inevitably people will extend the life of their current systems which will be bad news for software producers, especially Microsoft, which depends on the inertial selling of the Windows operating system pre-installed on new machines and which is forever bringing out new versions of software such as Office which grows increasingly bloated and less capable of running on older machines with less memory and slower processors. For website developers and owners it may also mean it extends the lifespan of IE6 on these older computers, or alternatively may see more people switching away from Internet Explorer altogether, to a lean but standards-compliant browser such as Chrome.
It may also mean that people may be more inclined to see their computer as little more than a terminal for displaying web pages, and make more use of server side resources. This is especially true as communications costs continue to fall and speeds increase. Virgin, for example, has announced that it will make 100Mb broadband available by the end of 2010, which would allow you to download a movie in under ten minutes, and is already testing a 200Mb service although has not yet announced any plans for its deployment.
26th March 2010
This article comes from the SKILLZONE email newsletter, published monthly since January 2008, and covering topics related to technology and the internet. All articles and artwork in the SKILLZONE newsletter are orignal content.