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So Cheap, It's Just Another Appliance

Computers for $499 appeal to nontechnical, cost-conscious crowd

A good computer is getting easier to afford.

Six months ago, a $1,000 machine was a deal. Now, $799 personal computers are beginning to appear with near-cutting-edge technology. Analysts expect more such price cuts in coming months.

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"There's certainly no reason you won't see $499 PCs" from brand-name manufacturers, says Stephen Baker, senior hardware analyst at PC Data, a market-research firm in Reston, Va.

Figuring out what you need and how long you plan to use the machine are the keys to buying the right desktop computer.

Let's take a look at how your needs stack up against the capabilities of one of America's lowest-price computers today: the $499 PowerSpec 1880.

Like most computers sold, Microsoft Windows is the core software for this machine. (Apple Computer, maker of the rival Macintosh platform, has discounted its prices, too.)

The PowerSpec is currently sold by Micro Center, a computer chain with stores in eight states (

First, the basics. The PowerSpec sports a 180-megahertz chip and 16 megabytes of memory. (The faster the chip and the more memory, the faster you'll be able to do things.) It also has a 1.6-gigabyte hard drive (for long-term data storage), and a 33.6 kilobit-per-second (kilobaud) modem (for communication, such as linking to the Internet).

Most of these elements are unexceptional. They meet the bare requirements for running today's software, but high-end machines boast twice the memory, a 2- or 3-gigabyte hard drive, and one of the new 56 kilobaud modems.

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Also, as with many sub-$1,000 machines, the monitor is sold separately. So the $499 computer really costs about $750; more if you buy a big 17-inch monitor.

The biggest surprise is the PowerSpec's chip. Although it's made by Cyrix, not industry-leader Intel, the 180-MHz microprocessor is relatively fast for such a low-end machine.

Such speed at this price represents an industry sea change.

"There has always been the $500 computer," says Howard High, a spokesman for Intel, based in Santa Clara, Calif. "It used to be the dumping ground for old technology."

Starting 18 months ago, however, the industry began designing systems specifically for the low-end market (see story, below).

Given its limitations, the Micro Center computer represents a good buy for users who want to do word-processing, home finances, and Internet e-mail. But people doing graphics-intensive work or extensive Web surfing are probably better served by a higher-end machine. (For a bit more money, PowerSpec sells a machine with a faster modem.)

Then there's the question of brand names. PC experts are split on whether off-brand manufacturers, such as Micro Center, match the quality of top-tier names, such as Compaq or Dell. The cheapest Dell computer is $1,400. But it's backed by a three-year guarantee - something most off-brands don't offer.

Finally, consider how long you plan on using the machine. One strategy is to buy a cutting-edge machine and use it for several years until it is so obsolete you need a new one. Or you can lag the market, buying slightly outmoded models at big discounts.

The latter strategy means you'll buy computers more often. But with today's aggressive low pricing, you could save money in the long run.

Sometime next year, some retailers will be showcasing a $350 machine, predicts Rob Enderle, a senior analyst at Giga Information Group in Cambridge, Mass.

"The $350 box is fully functional, but it's by no stretch of the imagination your high-performance machine," he says. "For some people, that's all they need."

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