‘94 Looks to Be an Even Better Year for PC Bargains

If you thought 1993 was a good year for PC junkies, just wait until 1994. Prices will continue to plummet, just as they did in 1993.

A year ago, a San Francisco-area PC clone dealer known for its low prices was advertising a fully equipped 33 Mhz 486 PC for $1,388. Today, that same machine costs about $1,000. Another dealer was selling 240-megabyte hard disks for $525. Now $259 will buy you a 345-megabyte hard disk. You can get a gigabyte of storage for less than $800.

Retail prices, of course, are based on the cost of components. Intel’s popular 33 Mhz 486 CPU cost PC makers $1,056 in 1990 in quantities of 1,000. At the end of 1992 it cost $329. Starting next week, it will be $272.

In March, 1993, Intel introduced its high-end Pentium processor, which is about twice as fast as today’s 486 central processing units. At the time, PC makers who ordered 1,000 Pentiums paid $878 for the 60 Mhz version. In January they’ll pay $793, and in April the price will dip to $675. Complete Pentium-based PCs are now advertised for as little as $2,800, but the number of companies using the Pentium is still quite limited. In addition to being cheaper, the chip will be ubiquitous. Intel plans to offer the chip to a wider range of PC “clone” makers. That, inevitably, puts heavy downward pressure on system prices.

*

Macintosh prices too have fallen dramatically this year. Users, who once paid a substantial premium for the privilege of owning a Mac, can now get a powerful machine for a few hundred dollars more than a similarly equipped IBM clone. The Quadra 610--which runs at roughly the same speed as a 33 Mhz 486 PC--is being advertised for just under $1,500, not including keyboard and monitor. That’s still more than you’ll pay for an IBM compatible system, but the difference isn’t nearly as much as it once was.

For Mac users, the big news in 1994 will be the introduction of machines based on the PowerPC chip. Developed by Apple, IBM and Motorola, this chip will sharply increase the Mac’s performance. Apple says its new machines will be compatible with existing Macintosh software, but that remains to be seen. Even relatively modest changes in Apple hardware and system software can render older programs obsolete until the software firm issues an update. Apple and its software developers will continue to support the existing Macintosh line through 1994 and beyond. Need proof? It was only this fall that Apple quietly stopped making its Apple II line of computers. Introduced in 1977, the venerable machine survived for 16 years--nine years after the introduction of the Macintosh.

IBM has already introduced machines with the PowerPC chip. Other companies will follow in 1994 but, frankly, I don’t expect the chip to have a major impact outside of the Macintosh world.

*

Modem prices have also taken a dive. High speed (14,400 bits per second) modems started at about $380 at the end of 1992. Today, you can get them in some places for $120. The high end of the modem market is now focused on developing 28,800 b.p.s. modems, which start at under $400. 1994 will bring down the cost of these units, putting further downward pressure on the price of 14,400 b.p.s. models.

Steven Satchell, who runs a modem testing lab for computer magazines, cautions users to be wary about buying a 28,800 modem because of problems connecting with older 9,600 modems. By June, Satchell says, the industry should have all the problems worked out.

Those of us who follow the PC industry are accustomed to falling hardware prices, but 1993 has also seen price erosion in the software industry. Borland International, for example, has dropped the suggested retail price of its Quattro Pro spreadsheet program from $495 to $99 and, until Jan. 15, is offering its new Windows version for $49.95. Microsoft, Lotus and WordPerfect have not lowered their suggested retail prices but offer a number of specials including “competitive upgrades,” where users of competitors’ products can buy new versions of their $495 programs for as little as $129.

Computer File welcomes your comments. Write to Lawrence J. Magid, 898 Chestnut St., Suite 3, Redwood City, Calif. 94063, or message magid@latimes.com on the Internet or KPVN58A on Prodigy.