Best PC Prices Ever: Should You Buy?

Kevin McKean

Consider this: A 1-GHz Pentium III-equipped Dell with a 20GB hard drive and 64MB of RAM for just $789. Too little memory? How about an IBM NetVista with an 800-MHz PIII chip, a 30-gig drive, and 128MB of RAM for just $60 more? Still too expensive? Find a manufacturer's ad, like the one for the Dell Dimension cited above, and take it to Gateway. That vendor promises to beat any price from Dell, Compaq, IBM, and three other competitors in a promotion fetchingly titled "PC Price War...? Cool."

PC price war is right. As PC World has been reporting, desktop and notebook prices are down an average of 30 to 40 percent this year. Prices for many peripherals and components (except CD-RWs) have fallen, too. And discounts on individual items can be startling, such as the Qbe Cirrus Personal Computing Tablet--introduced a year ago at $4745--that I saw on sale at AOL recently for $999.

An Unprecedented Fire Sale

The reason prices are so low is that nobody is buying. Businesses trimmed their technology spending to get through the economic slowdown. Consumers seem to be waiting for higher stock prices or the George Bush tax rebate--or perhaps just better products--before they return in force.

All of which raises the question, is this a good time to buy? If price were the sole issue, the answer would be a resounding yes. In the 20 years since IBM introduced the PC (see Lincoln Spector's retrospective, "The PC at 20"), there has never been a time when you could buy more power for less money.

But prices may swoon even lower. Our sister company IDC recently predicted that domestic sales of PCs will register their first-ever decline this year, dropping by 6 percent. The result, says Roger Kay, director of Client Computing, may be continued bargains throughout the year.

Some buyers may also be waiting for PCs preloaded with Windows XP, due out this fall. Sure, Microsoft's new operating system has drawbacks--chief among them an annoying copy protection scheme (see Scott Spanbauer's report on user reaction to this feature). But Microsoft has a right to enforce its license agreements, and our tests suggest that, in other respects, Windows XP will be a winner.

Of course, you could buy your PC now and upgrade to XP later. But then you might miss important hardware enhancements. "Today's machines are bottlenecked beyond the CPU," says Rob Enderle of Giga Information Group in Cambridge, Massachusetts. "That's why you see so little improvement in performance when you go from a 1.2-GHz chip to a 1.7-GHz chip. But when you look at new technologies coming from companies like Intel, NVidia, and AMD, the machines 12 months from now will largely render obsolete anything selling this year."

So what's a buyer to do? My advice: If you really must have Windows XP or the new hardware configurations, wait it out. If not, start shopping. Look for deals on midrange Pentium III- or Athlon-powered systems (our new Product Finder can help). Demand serious discounts if you're buying in quantity. And negotiate even if you're looking to acquire only a single system.

One more note: Next month, we'll be introducing a redesign of PC World that has been in the works since late last year. The new look is simple, clean, and modern, and we hope you'll like it. But be assured: The changes are mostly cosmetic. You'll find all the usual features, writers, and ratings under that shiny new skin. As usual, you can send me any thoughts or comments at eddir@pcworld.com.

Coming Up In September

Pump Up Your PC: Want more speed, storage, or multimedia pizzazz? Here's how to upgrade or build a system from scratch.

Monitor Madness: Our comparison testing reveals the best values among today's 17-inch, 19-inch, and 21-inch displays.

Search Party: Finding information online is a lot easier if you know which search engine to use--and how to use it.

Wanna Buy Cheap Stuff?: PC World editors go shopping and offer tips on how to avoid getting burned when you purchase online.

Antivirus Roundup: Melissa isn't your friend. Neither is that tennis player. Learn which products keep viruses away.

Kevin McKean is editorial director of PC World.

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