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Thursday, September 15th, 2005, 5:11 am

How Cheap Can Computers Become?

Money on keyboard

IN previous write-ups, I was repeatedly referring to modern computers that cost no more than $300 in western countries. See, for example, Expensive Developers, Cheap Hardware or Dirt-Cheap Computers. I was also once referring to the death of commercial software due to Open Source software (OSS) and pre-loaded operating systems, wherein not much user intervation or skills are required. Plenty of software gets bundled, which makes the O/S base very self-contained. So how much cheaper can computers truly get? There was some chattering about $100 computers last year. It now turns out that Intel’s cost of chips (processors) is $40 per unit.

Published: September 13, 2005, 11:18 AM PDT

Though Pentium 4s can sell for up to $637, Intel’s average cost for making a chip comes to $40, according to a report from analysts In-Stat.

The report doesn’t consider expenses related to design or marketing…

Let us remember that inexpensive computers are a big step not only towards penetration into poor homes. This can make the difference between a business with 100 workstations or 2o0 workstations, where both options may equal in term of the total cost. IBM recently suggested that Linux TCO is 40% lower than that of Windows. As Linux continue to mature, this large gap in terms of cost should continue to increase.

One can easily identify case studies where a company greatly benefits from a saturation of low-cost machines. Google, which is a Linux ‘poster child’, can afford to distribute and operate very many servers which crawl the World Wide Web. Had it not been for OSS, where would they be? One might add the fact that OSS is significantly more effective in terms of performance once compared with alternatives. It is sometimes difficult to get those facts heard, however, as it take funds to launch a propaganda.

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