Or maybe you don’t even own a computer. But you want to find out what all this Internet fuss is about. Too bad those newfangled PCs cost so much.
Relax. For Info Age problems such as these, big computer makers now offer an unprecedentedly economical solution. It’s called the budget PC, and it’s just hitting the CompUSA near you. If “budget” suggests something downscale and dorky, consider the specs for Compaq Computer’s Presario 2100, introduced last month. Nothing skimpy about it: the sleek black box houses a 133-megahertz Pentium processor, 24 megabytes of memory for fast multimedia graphics, a 2.0-gigabit hard drive, an eight-speed CD-ROM drive and a 35.6K modem for fast Internet access. Translation for non-techies: budget or not, this is a high-performance computer, adequate for almost anyone’s ordinary computing needs. A couple of months ago it would have cost at least $2,000; today it’s $999. Packard Bell sells a comparable model, the Multimedia Cl15, for $799. Last week Acer weighed in with yet another offering.
What’s going on? Simply a big change in the personal-computer market. Experts describe it as a technological “pause,” in which the pace of innovation has temporarily outstripped people’s willingness to adopt it. Two years ago the Internet “revolution” hit; anyone who wanted to enlist had to graduate to a new generation of computers. But with no next “killer app” on the horizon, there’s no compelling need for another upgrade. As a result, the market for the latest-and-greatest spare-no-expense computers has gone fiat. Total PC sales have slipped by I percent over the last year, according to the latest figures from Computer Intelligence in LaJolla, Calif.; sales of computers costing $1,500 or more fell by 28 percent.
The budget PC is an attempt to buoy the market. The new machines aren’t as powerful as their costlier brethren. They come with a less comprehensive suite of built-in software, lack such features as video telephony and are less well equipped to handle the new 3-D games and programs that are the latest wave in online entertainment. Yet buyers are snapping them up. “They’re our best-selling machines,” says CompUSA spokesman Larry Mondry. Packard Bell’s budget PC is its No. 1 seller, according to executive vice president Mal Ransom, accounting for roughly a quarter of the company’s spring sales. Significantly, 27 percent of Packard Bell’s customers are buying the new machines as second home computers, resolving those family tugs-of-war (Compaq reports that the bulk of its budget-PC customers are buying a second computer); another two thirds are first-time computer buyers, suggesting that budget PCs aren’t stealing sales from higher-performance machines-the PC makers’ greatest fear.
It’s unclear how fast this new market might grow. Budget PCs already account for nearly one in every 10 sales, according to Computer Intelligence. PC makers hope budget buyers will do what other generations of newly minted geeks have done: upgrade to more sophisticated (and more profitable) computers once they discover the joys of cyberspace. If they don’t, warns Howard High of Intel, average PC prices could fall, dragging down profits and potentially slowing innovation. Obviously, that doesn’t worry folks who clip savings coupons. For them, the budget PC may just be the best thing since, well, the PC itself.
