Personal computers have just smashed a price barrier: today, you really can get online for £499, including delivery and VAT. What's perhaps even more important is that consumers who want cheap PCs no longer have to comb the back streets, or the even more hazardous back pages of computer magazines. The £499 market is now being targeted by Dixons, the high street's biggest PC retailer, and Dell, the world's leading direct (build-to-order) supplier, which announced the Dimension 2300 last week.
Back-to-school and off-to-college buyers are the obvious target. However, cheap PCs also appeal to people who would like to get on to the internet, but balk at paying £1,000 to £1,500 for systems that do far more than they need.
Neil Stevens, Dell Computer's UK marketing manager for home and small business PCs, says: "The important thing is that this is not old technology or end-of-life product. We're not using lower-quality components, and there isn't any compromise on support or back-up or all the testing that we go through. You may not be spending very much but you still get a product that's got a good lifespan and that can be upgraded."
Since most new consumer PCs have identical software - Microsoft's Windows XP Home Edition - it is just as easy to get online with a £499 model as with one that costs £2,499. Also, since they all use the same colour-coding for cables for mice, keyboards, monitors and so on, different systems are equally easy to plug together.
There are lots of reasons for the price drop, but the most obvious is the use of highly integrated electronics. Traditionally, PCs have put many functions on plug-in expansion cards for maximum versatility and upgradeability.
On most of today's cheap PCs, everything is on a single circuit board. This includes sound and graphics chips, at least two USB communications ports, and built-in Ethernet networking - the best option for broadband internet connections.
Geeks and gamers sneer at integrated machines, and there is no doubt that you can get better sound and faster graphics from separate cards. On the other hand, Stevens claims the graphics are more than adequate for the majority of home users who just want to surf the web and send email, for students, and for people running small businesses or working from home. And while they are not good games machines, I found that £499 PCs were more than adequate for running Command & Conquer, Tiberian Sun and Championship Manager.
Competition in microprocessors has helped a lot, with AMD pitching its Athlon and Duron chips against Intel's Pentium and Celeron lines. Intel has responded by cranking up clock speeds and cutting prices: its fastest Pentium 4 now runs at 2.8GHz and is heading for 4GHz. Expensive chips that were acclaimed for breaking the gigahertz speed barrier a couple of years ago are now end-of-life cheapies, among the slowest you can buy. Intel's latest Celerons for low-end PCs, announced in May, run at 1.4GHz and 1.7GHz, which should soon be the minimum. Dell's new Dimension 2300 uses the 1.7GHz version.
Windows XP, launched last year, has also helped a little. Based on Windows NT instead of MS-DOS, it is much more reliable, and a new interface makes it easier to use. "We get much fewer support calls from XP home users, undoubtedly," says Stevens.
Martin Reynolds, a US-based research analyst with Gartner, says we ought to thank "Steven", too. He's the dude in Dell's American TV adverts. "Dell has really rung some bells with Steven," says Reynolds. "They watch the responses and, from the sales, they know how good he is."
Steven has shown Dell that there are big sales to be made to consumers who would normally buy retail, says Reynolds. And what it has learned in the US, it will want to exploit elsewhere.
But Martin Atherton, analyst with Datamonitor in the UK, warns that there could be problems. Dell has a strong brand name in the business market, "but the kind of person who goes into Dixons may not have heard of them", he says. Also, "what lets them down here is the fulfilment process - 'when do you want it delivered?' It is an outsourced process, but your average user is going to say Dell is responsible." That helps Dixons.
Either way, Dell and Dixons are going to increase the pressure on traditional sources of cheap PCs, such as "white box" suppliers (who sell generic clone PCs made out of standard parts), the companies that shift stocks of end-of-life products, and the second-hand market. (How much is an 18-month-old £1,500 PC worth when you can buy something faster for £499?).
And by helping to create an even more competitive market, the £499 PC should bring down prices for everyone.
Bargain basements
I tested three PCs intended to get you online for about £499, choosing an end-of-life product, a retail PC, and a generic "white box" clone. When I started the project, Dell said it had nothing to offer at this price point. Last week, however, it came back with the Dimension 2300 for £399 plus delivery and VAT. It includes a 1.7GHz Intel Celeron processor, 128MB of memory, a 20GB hard drive, CD-Rom and floppy drives, Intel Extreme (845GL) graphics and a 15in monitor. Unfortunately, there wasn't time to obtain a sample for this review.
For comparison, I ran Passmark's PC Performance Test V3.5.1002. If you already have a PC, you can download and run the same test from www.passmark.com/products/pt.htm
Acer Aspire 8000 from Technomatic
www.technomatic.co.uk
Background: Acer of Taiwan is one of the world's biggest PC manufacturers, though most of its machines have been sold under other labels, including Texas Instruments and IBM. Technomatic says it always tries to offer something for £299.99 but the product may vary from month to month.
Specification: The Acer Aspire 8000 is minitower running Windows 98SE. It has a 1.2GHz Intel Celeron processor (Pentium III equivalent) with 128MB of memory, a 20GB hard drive, CD-Rom and 3.5in floppy drive. VIA graphics and sound are on the motherboard. Peripherals include an Acer-brand USB keyboard, mouse, and mains-powered speakers. Technomatic added a 17in Samsung Syncmaster 753 S screen (£99.99) to bring the total price to £469.98 free delivery and VAT.
Opinion: The Aspire 8000 was the cheapest but noticeably the slowest of the three PCs tested (Passmark rating, 114.4). Nonetheless, it was just as fast as the 1.3GHz Pentium 4-based Gateway (Passmark rating, 116.8) that I use all day on the internet and for running Microsoft Office 2000. The lack of a CD-R or DVD drive and the use of Windows 98SE are significant drawbacks. Still, the Acer had the best keyboard and the best speakers of the three machines, and the Samsung 753 S looks great value for money. The screen is not as flat as rivals', but the display was sharp, clear and stable at 1024 by 768, and will go up to 1280 by 1024 pixels. I would not buy this PC, but I would buy the monitor, which is available separately.
eMachines e160 from Dixons
www.dixons.co.uk
Background: eMachines is an American company that grew by offering machines at low prices. The Dixons group - including Dixons, Currys and PC World - is offering eMachines and Packard Bell Legend 4040 PCs at £499.
Specification: The e160 has a high-quality minitower case with a 1.3GHz Celeron and 128MB of memory running Microsoft Windows XP Home. The Intel 82810E graphics and SoundMax audio are on an LM810E motherboard. The e160 has a 16x Samsung DVD drive, 40GB hard drive and 3.5in floppy. Two extra USB ports and a game port are located behind a pull-down door on the front on the machine. Peripherals are an eMachines keyboard, mouse, two small non-powered speakers, and a 15in E-151 colour monitor. Pre-installed software includes Microsoft Works and Money 2002.
Opinion: the eMachines e160 was the best looking, best finished and best presented of the three PCs. It was slightly nippier than the Acer (Passmark rating, 139.8), better at handling graphics, and DVD playback was good. The 15in screen was a little hard to read and, at 60Hz, flickery. Although set up to show 1024 by 768 pixels, like the Acer, this is its limit. Resetting to 800 by 600 with an 85Hz refresh rate solved that problem but dramatically reduced the amount that could be displayed. If you buy an e160, get a better 17in screen.
Graduate Value Plus from Campus
www.campus-systems.co.uk
Background: Campus is a small British company that started as a retailer. It is an authorised supplier to the Open University. The review machine bust the budget at £502.90 (£399 plus delivery and VAT), but Campus sells cheaper systems.
Specification: The Graduate Value Plus is a minitower system with a 1.2GHz AMD Duron processor and 256MB of memory running Microsoft Windows XP Home. The S3 graphics and AC97 audio are on the GA-7VKML motherboard. It has an LG DVD drive, a 40GB hard disk and 3.5in floppy. Peripherals are a Computer Gear keyboard and three-button mouse, Natural M760 speakers and a 17in AOC monitor. Bundled software includes Fax Talk and Lotus SmartSuite on CD.
Opinion: This is a standard PC clone, with the only thing unique to Campus being the badge on the front. The keyboard is light but usable, but the speakers are fairly poor. However, the system has twice as much memory as the others, and it performed much better than I expected (Passmark rating, 153.6). The monitor, while not quite as good as the Samsung, delivered a comfortable 1024 by 768 pixels at 75Hz. The GVP does not come in an attractive case, but it is made from solid metal, not cheap plastic, and the machine's internal assembly was impeccable. It looks good value.
