The bargains just keep getting better for federal buyers

Federal buyers, get ready for PC prices that won't stop their freefall when the fiscal
year ends. The market is turning into a bargain blowout.

You've heard about the fast drop in RAM prices and the arrival of 200-MHz Pentium PCs
driving down cost of slower models. But brand-new suppliers are entering the market, too.
Consider Nexar Technologies Inc. of Westborough, Mass., and CTX International Inc. of City
of Industry, Calif.--a well-known supplier of business-grade monitors that plans to market
notebook and desktop computers, too.

CTX's surprisingly high-powered first entry, the 166-MHz Pentium DP166E, is
street-priced around $2,000 without monitor but with a large 3.2G hard drive, superfast
33.6-kilobit/sec modem, 2M video memory, eight-speed CD-ROM drive, 16-bit sound card with
speakers, 256K Level 2 cache and Microsoft Windows 95.

Only a year ago, the hard drive alone would have cost you more than $1,000. Even if CTX
doesn't make a big splash in the federal market, such a price point from a big company
will drive other vendors' prices down.

Speaking of drives--if you look around, you can find quality offerings such as a 4.3G,
9-millisecond Seagate Technology SCSI internal hard drive for less than $1,000 , or a 1.6G
NEC Technologies IDE drive for less than $300. I'm seeing off-brand 8X CD-ROM drives as
low as $100 and Acer America EIDE/internal 8X drives for $130.

My first job in the computer industry was as a purchasing agent for a mainframe
installation with an IBM System/360-20 and a 360- 65, along with some Digital Equipment
PDPs. Back in those days when mainframes ran on transistors, not integrated circuits, I
could choose only among different versions of Big Blue hardware.

Today any agency user can easily buy almost the same level of mainframe performance for
$2,000 to $4,500.

There may or may not be a difference in the quality of PC components, but I'm not
talking about AMD vs. Cyrix chips. I'm just comparing Intel-based Pentium PCs. If you
consider the Pentium clones, prices drop even lower.

In fact, prices on some quality business systems now are so far below the big-brand
prices of a few months ago that you could get two of the lower-priced units for the same

This trend will accelerate through the end of 1996, as Intel introduces the Pentium MMX
multimedia chip and further drives down the price of a CPU. That will put even more price
pressure on the clone chipmakers.

In single quantities, 166-MHz Pentium chips hovered around $500 in July--the big fixed
price in any PC. Look for that to drop by about 20 percent this fall, and remember that
the average spreadsheet or word processing user won't notice any improvement from having
the new MMX multimedia chip anyway.

John McCormick, a free-lance writer and computer consultant, has been working with
computers since the early 1960s. He welcomes mail from readers. Write to him care of
Government Computer News, 8601 Georgia Ave., Suite 300, Silver Spring, Md. 20910.

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