In the latest manifestation of a predictable -- and pleasant -- phenomenon, personal computer prices are heading down again. It happens every spring. And as surely as spring follows winter, the annual round of price-cutting by clone manufacturers prompts a column in this space urging you, gentle reader, to head out and round up some bargains.
This spring there are bargains aplenty: Prices for the IBM-PC and XT and their clones have fallen faster than Gary Hart's credibility. For all that, though, my advice this year is a little different from what I've said in springtimes gone by. This spring it might be wiser to resist some of those bargains.
The sharp drop in personal computer prices -- $200 to $500 for various models of MS-DOS machines -- began right after IBM's announcement of its spanking new "Personal System 2" line on April 2. IBM itself announced some price cuts for existing MS-DOS machines that day. Within the next few days, many other PC makers were announcing cuts.
Tandon, for example, a California-based clone maker, is now selling an XT-compatible computer complete with 20 megabyte hard disk (but not monitor) for $1,400. That's about $500 less than people were paying for essentially the same system at the start of 1986. Leading Edge, the Massachusetts firm that imports a South Korean PC clone, is advertising an XT-compatible computer with a 20 megabyte hard disk and a monochrome monitor for $1,500. If you dig deeply into the small-print ads of the computer magazines, you can find a lot of mail-order houses that can beat even these prices for a complete system with monitor and hard disk.
Great prices, right? Right. Great bargains, right? Well, that one's not so certain. The problem is that all these systems, built around the technology and operating system of IBM's first generation of personal computers, were rendered obsolete when IBM announced the Personal System 2. So, yes, you can get a great price on an IBM-PC or XT clone right now. The problem is that this MS-DOS system has been relegated to the position of last year's model.
The new "PS/2" computers (or at least, the three better machines in that family: the Model 50, Model 60 and Model 80) have made all existing MS-DOS computers obsolete. IBM's new line is faster, more efficient and more reliable than the first-generation machines. The completely new graphics standard makes a sharper, more colorful picture than anything current microcomputers can produce.
The new PS/2 machines are far more powerful than the existing stuff. They can directly address up to 16 million bytes of memory for program or data storage (as opposed to 64,000 bytes for the older models). That almost guarantees that some gargantuan and powerful new programs will come along, just as Lotus 1-2-3 came along when it first became possible to put 256,000 bytes of memory into a PC. These programs will be written with the PS/2 computers in mind. Not many of the existing MS-DOS machines will be able to run these programs. That is, if you buy a standard MS-DOS machine now (a PC or XT or one of its clones), you might be like the frustrated VCR owner who bought Betamax and then watched all the good movies come out on VHS.
Of course, the current generation of MS-DOS machines can do a great deal, and there are more than 10,000 software programs for MS-DOS computers. But the business computer world is moving on to a new standard. If you buy one of these "bargain" XT clones now, you're locking yourself out of that new world. That's why it might be worthwhile to think twice if you're attracted by the dramatic price cuts on many personal computer models.
A compromise path that can let you share in the PS/2 standard without paying IBM's stiff prices for the PS/2 machines is to buy one of the MS-DOS computers based on the 80286 or 80386 microprocessors. These machines evidently will be able to use the new "Operating System 2" that is coming out for IBM's PS/2 computers. They may run some of the new software as well. Prices on 80286 machines, also known as AT compatibles, have also fallen somewhat. Via mail order, you can get a high-speed AT compatible with a monitor and hard disk for less than $2,800.
But such a computer still will not match the features and power of IBM's new Models 50, 60, and 80. And so I suggest strongly that anybody in the market for an IBM personal computer or clone take a long look at the Personal System 2, despite the ever-increasing price premium these computers command.