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Wednesday, May 16, 2007

The $85 Computer

Guest Post, Andy Greenberg

In its attempts to sell you ever-more expensive PCs, the computer industry is constantly producing faster, smaller and sexier machines. That's great for gamers, technophiles and Dell shareholders.

But what about the rest of us? What do we get from all the bells and whistles piled into today's PCs?

Not enough to justify the $1,000 price tag the industry hopes we'll go for. The average consumer spends just $741 on a PC today, compared with $912 three years ago, according to the Consumer Electronics Association--even though advances in technology mean new machines have more processing power, memory and other features.

In fact, many consumers don't need to upgrade. A bare-bones computer suits them just fine--and these days, they can buy them for as little as $85.

Data Evolution's decTOP. Price: $150 To $180. Buy from: Major retailers, beginning summer 2007 The decTOP offers 128 megabytes of RAM, a 10-gigabyte hard drive and Microsoft Windows' CE operating system, all in a box the size of four DVD cases. The computer's technology was originally developed by Advanced Micro Devices as part of the chip company's "50x15" initiative, which seeks to take 50% of the world's population online by 2015.

That minuscule price is attached to Norhtec's Microclient JrSX, a desktop PC the size of a large novel. The Microclient is no Powerbook; it has only 128 megabytes of RAM and a 300-megahertz processor. And instead of a hard drive, it's designed to store data on flash cards.

Thailand-based Norhtec's founder, Michael Barnes, says he's already sold thousands of the machines.

Most of those customers have been businesses: One group of McDonald's restaurants bought 1,200 to set up their wi-fi networks, he says, and a Canadian diamond-mining Arctic expedition installed the space-saving computers in its planes. But the low cost also appeals to consumers who are tired of paying for features they don't need.

Shoppers can buy the machines directly from the company's Web site, Norhtec.com.
Norhtec's MicroClient JrSX. Price: $85. Buy from: Norhtec.com. The MicroClient JrSX is a true bare-bones machine, with 128 megabytes of RAM and a 300-megahertz processor. Rather than include a hard drive, the novel-sized PC stores data on flash cards, and it has no sound capabilities. But at $85, Norhtec's low-power, low-noise computer may also be the cheapest on the market. Still, the company's founder, Michael Barnes, wants to go even lower. "We believe we'll see a real explosion when computers get down to below $80," he says.

"Year after year, the entry-level computer costs around $495," Barnes says. "The newest computers always offer more speed and better graphics and are really made for game users. But the people who buy our computers want small, inexpensive machines that don't break down." And as low, low-end PCs get even smaller and cheaper, Barnes predicts they'll become more popular. "We believe we'll see a real explosion when computers get down to below $80," he says.

The machines have their drawbacks. The MicroClient JrSX is too small to fit a CD player, and forget about Apple's iTunes: The Microclient doesn't even offer audio. Nor will it play "Halo" or any other game that would overwhelm the machine's limited storage. And programs that use a lot of memory, like Adobe Photoshop, are probably too much for the tiny PC.

Norhtec's prices also don't include a keyboard, mouse or monitor, which will run at least $100. But not a lot more: Amazon.com, for instance, sells a Philips 107E71 15-inch monitor for $49.99, a Belkin mouse for $3.95 and a Logitech keyboard for $9.58. The site also sells an external CD-ROM drive from Procom for $9.85, and for those looking to soup up their storage capacity, Tigerdirect.com sells a refurbished 80-gigabyte Seagate hard drive for $54.97.

Almost all those components are included, however, in a machine being developed by Nicholas Negroponte's One Laptop Per Child program, which promises a fully equipped laptop for a projected $176.

OLPC claims that its machines will boast screens with four times the resolution of a normal laptop, a 12-hour battery life, a waterproof and fall-proof shell, and wi-fi reception that's 50% better than any computer on the market.

One Laptop Per Child's XO. Price: Around $176. Buy from: Not yet available to consumers. OLPC claims that its XO laptop has a screen resolution four times better than a normal laptop, a 12-hour battery life, a waterproof and fall-proof shell, and wi-fi reception that's 50% better than any computer on the market, all for a tiny fraction of a typical laptop price. Starting in September, the machines will sell for around $150 to schools outside the U.S. and $176 to schools in the U.S. Consumers should be able to buy the machine at a higher price later this year.

The OLPC laptop was designed for poor children in the developing world. But they are likely to end up in the U.S. as well, where the program plans to distribute them to youngsters in as many as 19 U.S. states. And while the project was created out of philanthropic impulses, the OLPC now sees a consumer market for their machines.

"The industry is going to have to change the way it does things," says Walter Bender, OLPC's president of software and content. "Computing doesn't have to be the way it's been defined. It can be a lot lighter, a lot friendlier and a lot less expensive."

The OLPC isn't the first group to make a small, cheap and rugged PC. Data Evolution's decTOP, a brick-sized, low-power-consuming desktop, offers 128 megabytes of RAM and a 10-gigabyte hard drive that will sell for between $150 and $180.

Like the OLPC laptop, the decTOP's innovations come out of a drive to bring computers and the Internet to rural Africa and Asia: Data Evolution acquired the machine's hardware from Advanced Micro Devices (nyse: AMD - news - people ), whose "50x15" program seeks to take 50% of the world's population online by 2015.

Data Evolution Chief Executive Robert Sowah shares that goal, but he also sees the opportunity to equip Americans with PCs that suit their needs, which he says are almost always overserved by expensive modern machines. He plans to sell the decTOP in major retail stores like Best Buy and Circuit City starting this summer.

"Word, Excel, PowerPoint, Internet and e-mail," Sowah says. "That's what 90% of people do with computers, and they don't need these massive chips with oodles of storage and memory."

Microtel's MCS7001. Price: $219 after $50 rebate. Buy from: Microtelpc.com. The Microtel MCS7001 looks like any computer, and it isn't especially small or low-power. But for those searching for a fully-functional PC below $250, it may be the best deal. The machine has a 2.2-gigahertz processor, 256 megabytes of RAM and a 40-gigabyte hard drive, and unlike some bargain machines, it includes a CD-ROM drive, a keyboard and a mouse.

One reason that a machine like the decTOP can meet the needs of so many users is that the basic functions that Sowah lists are increasingly rolled together into a single, online package. Web services like Google Apps, which allows users to edit documents, spreadsheets and presentations online, take the workload off an individual's machine and put it instead on Google's massive servers.

Data is stored and numbers are crunched online; the user's machine need only be a window to the increasingly powerful Web.

Beyond that trend, Sowah says that the movement toward cheaper, more practical machines is about computing technology meeting the needs of people, instead of vice versa."In the past, it's always been technology pushing desire, and users asking, 'What can we do with this?'" he says. "Now, for once, desire is pushing technology."

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