Technology Prices

[ajd344]

Is anyone amazed at how fast the price of components drop? Ever since I really started following prices of computer parts (about a year ago), I've been amazed of how fast prices drop. For example, just 4 months ago I bought a stick of ram for $80, and now it's available for $40. Of course the processor prices have dropped too (i bought my cpu for $165, now it's $115 just 4 months later). I mean, how can they make stuff THAT cheaper in such a short period of time?

Amazing. Anyone feel the same way?

[Cricket]

Originally Posted by ajd344 Amazing. Anyone feel the same way?

Nope. Been watching the same thing happen for the past 10 years...I'm used to it by now.

Cricket

[HAL9000]

You think those are price drops? I remember in 1995 when I bought two 4MB 30 pin DIMMs for $200 each and that was CHEAP... 6 months later, I bought two more for $40 total.... At the time, hard drive sales were $1 per megabyte, todays TB drive would be a million dollars, you don't have to pay quite that much for one.

[mbossman2]

computer components are all commodities (especially memory chips - they are traded on some commodity exchanges) so the prices will yoyo up and down mainly depending upon the 2 famous economic indicators: supply and demand.

the overall decline in pricing is a supply/demand thing too: as demand increases, more and more companies begin to make the products and newer, more efficient processes are developed and both have the impact of increasing supply and dropping the prices.

The funny thing tho is that there does seem to be a "bottom" to the pricing - current products never seem to drop below a certain $$$ amount.

[LeftyAce]

Well, at some point the old stuff doesn't get any cheaper because fewer people are still bothering to make it.....so despite reduced demand, there's a more sharply reduced supply. (Socket 939 processors, for example, aren't being produced anymore, so any you see for sale are the end of someone's warehouse stock).

And yes, even over the one year I've been watching this stuff, the price drops have been spectacular. I can't imagine what we'll be putting into a $1000 'gaming rig' in 10 years' time :-)

[EzyStvy]

Hmmm lest see....

IBM XT
(before 286 processor)
10 MEG hard drive
5 1/4 floppy drive
no ram sticks
15" monichrome monitor
wide carriage printer

all for ONLY $2,500.00
I ordered a few dozen of these way back when..

[XenaWP]

Originally Posted by HAL9000 You think those are price drops? I remember in 1995 when I bought two 4MB 30 pin DIMMs for $200 each and that was CHEAP....

My most painful memory like that is adding 2x16 MB DIMMs to my Power Mac 7100 ... each one was $400.

[Cricket]

Check this out.

That's a newspaper ad from 1989.

Cricket

[HAL9000]

I remember my first hard drive upgrade from a 210 MB to 850MB, $300.. that was only a year after the $1 per MB sale.

[Negeva]

Supply and demand is only part of the story. One of other factors is more efficient manufacturing processes which in turn mean higher yields on parts/components.

For example, when a new CPU comes to market the yields are generally quite low, as the manufacturing process still has a few kinks in it. This means more is wasted so the manufacturer increases prices to cover the cost of all that loss. Over several batches the process is streamlined which reduces faulty parts and thus increases output; this also means that the fabrication units are able to pump out more product. Since profits are not lost via waste and they're is more product they can afford to reduce costs - but only after some initial returns are made.
One thing you do see is that many manufacturers will sell off these 'faulty' products as lower specc'ed chips - think Celeron and lower end GPU units.

One thing that is amusing is that whilst the cost of hardware has reduced the price of software is increasing. Back when I got one of my first computers - a PI 200mhz it cost nearly £1000 (UK Sterling) but the OS was less than £100 (Win95 Retail); a tenth of the PC price. However, now I can get a PC for less than £400 and an OS for £155 (OEM) or Retail for £300 - Vista Ultimate; nearly over 50% the cost of the PC. Maybe I missed something here...

[David M]

No offense, but whats missing is that in the long run manufacturers don't determine price, the laws of supply and demand and how those laws affect price is what determines price. Essentially, consumers and not manufacturers determine price. Manufacturers can set the price of course but if something does not sell or there is a shortage then they have set the wrong price. Ultimately, consumers determine price. Us consumers are not at the mercy of manufacturers, not like many think. Of course there are monopolies and oligopolies which are still at the mercy of the laws of supply and demand. Unfortunately in those cases the laws give them the advantage...still though, the laws apply. Even a company that has absolutely no competition cannot dictate price absolutely. Even then, if they price something so high that nobody wants to purchase it then they make no money...therefore even monopolies still have to price their product so that at least some of it sells.

Economies of scale also affect price. The more a company produces, the lower is the cost per unit and therefore the more they can drop the price per unit and still make money.

[edfair]

My first hard drive was in exchange for design and labor on an interface card. Customer bought me a Shugart 10mb drive for somewhere around $699.00. I still have it but it has been in storage for at least 20 years. It was HH 5" MFM.

[Statica]

I look at it more in terms of how much more I'm getting for the same $. I've always spent about $1000-1200 CDN on a desktop computer
~12 years ago it got me a 386SX from Sears
~10 years ago it got me a 486DX4/100 customized
~5 years ago it got me a P4 2.4Ghz/HT customized

I find that the bloat/features in software quite effectively negate any savings in price cos I seem to end up spending the same amount just to boot up

The biggest difference I've noticed is in the price of monitors .. 5 years ago I bought a 17" NEC LCD for about $700 .. I got a 19" Widescreen LCD for my parents last month for $170

The least amount of difference I've noticed in my computer components is the price of printers! If only they'd offer me the same bleh printing speeds for reduced prices I'd be happy .. instead they insist on giving me more pages per minute (dont care much for a printer at home) .. smaller ink cartridges and so called better DPI (dont care much cos I haven't really changed the quality of my paper) .. for roughly the same price.

[alanebro82]

I almost "hate" the fact that prices drop constantly. It makes me want to wait for the price to drop... but when I do that, I simply want the next new thing that still has an inflated price (read: 8000+ GeForce Video cards). It's always a waiting game.

[TimPoet]

I just got the Blackberry Pearl for $0 and a $50 M.I.R with a 2 year contract! Last September when they were released they went for $300 with a 2 year contract.

I loooooove the price drops in electronics!