Lower Costs Mean More Computers

Do you have a computer at home? If so, count yourself lucky. Since the birth of the personal computer in the 1970s, access to technology has been largely restricted to the upper-middle class.

It only took a few years for radios and televisions to penetrate almost all American homes earlier in the century. It's been two decades since the Commodore P.E.T. and other early PCs, though, and two-thirds of households in this country still don't have computers home.

When computers were mediocre typewriters 10 years ago, few people cared about this country's income gap in computer ownership. With the rise of the Internet, however, a new buzzphrase has sprung out of the John F. Kennedy School and it's ilk: "equal access to information." The idea is that the computer itself is of limited value; it matters as an access point to the world of information online.

As it is becoming more and more frequent for jobs to posted more to the Internet, for instance, how can unwired citizens get access? How can the information-pool access the growing number of educational and governmental services virutally located in the electronic ether?

Public libraries have done their best to try to fill some of the gap with public access terminals, and tycoons like Bill Gates have poured millions of dollars into inner-city libraries to hook them up to the Internet. But the usefulness of these resources is limited; imagine trying to do real work on, say, a Science Center kiosk.

To be honest, if Americans of all income levels are going to have real access to the new world of information, they need powerful computers in their home: to prepare resumes, surf the Web and check e-mail.

Until the last few years, advances in computers were met with advances in prices--no matter what the year, a new computer would set you back $2,500, no questions asked. You could buy a Packard Bell or Leading Edge system for half that amount, but they were stripped down machines that couldn't pull their weight on the Web.

Frankly, if you wanted an IBM-compatible computer, you had to buy an Intel chip, period. And without real competitors in the CPU market, chip prices (and thus computer prices) never drifted down.

To make things worse, by the early 90s Intel had begun to turn a lucrative profit on the so-called motherboard chipset that supported the CPU. Manufacturers had to build bulky, awkward system boards to house Intel's CPU and its separate input-output chips.

Enter AMD and Cyrix with their successful Pentium-killers. Thanks to shrewd microcode licensing and intensive R&D work, these companies have developed fifth- and sixth-generation CPUs to compete with the best that Intel's got to offer. Low prices on their competitors' products have led Intel to slash prices on Pentiums by almost 50 percent this year.

What's more, Cyrix's new MediaGX chips began to integrate most of the motherboard components and the CPPU on a single chip. System integrators such as Compaq have responded by designing systems around these chips that require much less engineering and electronic assembly, slashing prices to levels unheard-of a year ago.

The prices are so low that you can get a 180-MHz Pentium-compatible system with a fast modem, huge hard drive, lots of memory, multimedia equipment and a decent monitor for less than $1,000--prices never seen for comparably priced equipment in industry history.

Industry analysts expect a shake-down in the computer market in the coming year; the new sub-$1,000 market is growing fast, with first time and returning buyers alike turning to these new bargains.

Of course, a grand isn't chump change for most people in society, but it's a lot better than the good ol' monopoly pricing we've seen in the PC's lifetime. And experts predict that prices could plummet again soon, perhaps to the $500 point in a matter of years. Whatever you think of Microsoft and Intel's hegemony over the old market, wish the new chip-makers luck; cheaper computers are in everyone's interest.

--Kevin S. Davis '98 is an independent computer consultant and student director of HASC's Advanced Support Team. You can reach him at ksdavis@fas.harvard.edu