The Price is Right

By SmallBusinessComputing Staff | Posted January 17, 2001
by Eric Grevstad

I just got back from the Consumer Electronics Show in Las Vegas. That may not be the best way to start a Web column about small business, but bear with me. It's got me thinking about how you'll equip your office in 2001, and how much you'll spend to do it.

You see, the CES show--like Comdex a couple of months before it--was full of talk about the "post-PC era," with pundits buzzing about countertop appliances, wireless Web tablets, smart phones, and PDAs. Market mavens are more or less ignoring plain old PCs, except to note that demand has stalled big time: Most folks are still using word processors and spreadsheets instead of editing streaming video, so almost nobody needs the newest 1GHz or faster super-systems. Intel's Pentium 4 has made the smallest splash of any processor introduction in memory.

Combine that with a Christmas selling season that was flatter than an LCD monitor, and you've got blood in the water: Last week, Gateway responded to a $94 million fourth-quarter loss by laying off 3,000 workers and declaring a PC price war. A Bear Stearns analyst bearishly told ZDNet that two of today's top 10 PC vendors would quit the market this year.

OK, now let's turn from this consumer hubbub to your small business. Are your employees doing their budgeting, databasing, and e-mailing on colorful plastic, touch-screened 3Com Audrey tablets? Um, no, they're using PCsand the next few months are going to be the best time in history to buy PCs.

If you need new hardware, Gateway's fire sale should fire you up. The company's Professional v933, a 933MHz Pentium III desktop with a capable 64MB of RAM, 20GB hard disk, CD-ROM, 17-inch monitor, Ethernet adapter, and Microsoft Office 2000 Small Business Edition, is going for $1,099. Dell's comparably equipped Dimension 4100 is only $10 more, albeit with a 15-inch monitor.

Those are jaw-dropping deals. Reading them, you should already be thinking about how you can afford to equip every desktop with 128MB instead of 64MB of memory (perhaps trading off by stepping down to a perfectly speedy 866MHz or 800MHz processor).

Ironically, the only better deals you'll find are among vendors' home, not business, computers. My fantasy for the coming price war is that PC makers stop tacking a surcharge on systems destined for work instead of play.

I just went on Compaq's Web site and configured a Deskpro EXS (business) desktop with a 1GHz Pentium III chip, 128MB of RAM, 30GB hard disk, CD-ROM, Ethernet, modem, and Office 2000 Small Business Edition, and no monitor for $1,514. I then plugged identical specs into the company's Presario 7000 (consumer) menu for $1,376. (Yes, both systems came with Windows 2000 rather than Win 98 or Win Me.)

To be sure, getting network management tools instead of preinstalled home-finance or children's software is worth something to the business buyer. More important, though, is that small office operators as well as family Web surfers should profit from this year's PC price carnage.

Will mass-market PC makers' loss be your gain, or do you secretly plan to splurge on Pentium 4s? Tell me your 2001 buying plans in the Small Business Memo thread in the online discussion area.

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