Monday, May 29, 2006

Procuring School Computers

I've had numerous discussions on this topic at Board meetings and privately. Bruce Silva gets it, few others do.

I have long advocated the following formula.
Invest in the most inexpensive PC equipment you can get that fits a need.
Invest in the best monitor you can afford [min. 17", 19" if you can swing it, flat screen].
Rotate PC boxes out every two years, monitors every three or four.
For laptops spend no more than $800/unit.

Everyone thinks I'm demented. School procurement policy is to by the best, most bulletproof item they can. They want it to last for years. That's all wrong.

As Kurtzweil points out in The Singularity Is Near, technology [especially PCs] is advancing at exponential rates. Actually faster. By 2009 or 10, the PC in the classroom will be smarter than any teacher in the school, equivalent to a humanoid tutor per student. Why invest long term in PCs that today are no smarter than a mouse?

The answer is to not invest heavily. Invest inexpensively and turn over older units to needy kids, as fund-raisers, or as donations. Every year from now on will mean profoundly improved machine intelligence that must not be confused with today's primitive products.

Also note that this article indicates schools can shop wisely and save big dollar amounts.

Look and learn from this snippet [click the link for the full story];

Your Money
Timing the Electronics Market for the Best Deal on a New PC
Published: May 27, 2006

Some analysts had expected coming into the year that prices would actually go up slightly. Instead, the average price of a notebook computer dropped to $963 in April, an 18.5 percent decrease from a year ago, according to Current Analysis, which is based in Sterling, Va.

When an electronic device breaks through the $1,000 psychological barrier, sales take off. Samir Bhavnani, director for research at Current Analysis, said 37 percent more notebooks have been sold so far this year. About 60 percent of all notebook computers sold last month were priced below $1,000. He credits Dell, saying, "They love getting down in the mud."

Dell is running a promotion, which it bills as a celebration of its 22nd anniversary, with a $400 discount on PC's, plus a free monitor and free shipping.

Another statistic will tell you just how good consumers have it. While the number of notebooks sold is up 37 percent, revenue growth in the period is up only 15.5 percent, Mr. Bhavnani said. Companies are making less money on each notebook. Desktop computers are literally being given away. Retailers sold 14.8 percent more of them in the first five months of the year, but revenue declined 4 percent, Mr. Bhavnani said. Half of the computers sold for less than $500.

Consider the Hewlett-Packard Compaq Presario desktop offered this week at Office Depot. For $300 you get a PC with 512 megabytes of RAM and a 100-gigabyte hard drive. Office Depot tossed in a 17-inch CRT monitor and a printer.

"The material cost, before the printer, was around $400," estimated Mark Hill, Acer's vice president for sales in the United States. "It's crazy." Not that he's complaining. Acer has gained one point of market share this year by artful pricing.

So how does a consumer play this? As always with electronics, it is worth waiting. Expect even better deals around the Christmas season. But if you need to get one now, you certainly won't suffer. Deals will abound during the back-to-school season, which starts in June just as the school year ends.

1 comment:

Tom Hoffman said...

I think you're basically right, although I dearly hope the big change we'll see isn't so much drastically more powerful computers at the same price, but laptops similar in power but much cheaper.