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A special investigation into PC price-cutting

Too good to be true?

THE JANUARY sales period has given rise to some remarkably cheap PCs. Seemingly impossible prices have emerged, with basic spec machines being offered for a couple of hundred pounds in some cases. These offers are having an adverse affect on smaller businesses who can’t afford to discount on anywhere near the same scale.
One offer that stood out was a recent promotion from Dell, offering a desktop PC for £249. The specs weren’t great, but that was understandable for a bargain basement PC. The package as it stood included an Intel Celeron D processor 325, 256Mb of memory, an 80Gb hard drive, integrated sound and graphics, a 48x CD-RW/DVD combo drive and a 17-inch CRT monitor.
As I clicked the button to initialise the ‘customise and buy’ process, the next screen informed me the price had shot up to £343 and I now had 512Mb RAM. That’s still cheap for a PC. However, all reference to the £249 price tag seemed to have evaporated without explanation. The specs of the PC as it stood were slim, to the point of realistic inoperability, both in terms of fundamental usage and when considering the modern expectations of PCs (ie. no speakers
or modem).
I then went back and sifted through the two pages of customisable features. The cost of
my PC continued to rise as I took Dell’s advice and selected the features it recommended I would need. Upgrading to a Celeron 345 processor for £58.75 wasn’t essential, but seemed necessary if I wanted to future-proof the machine for any length of time, while the thought of buying a PC without a modem or speakers seemed absurd. A ‘resource CD’ won’t break the bank at £5 and presumably contains drivers you would often get for free, but the recommended monitor (a 19-inch flat screen at £256) might. Accidental damage insurance was recommended for £70.50.

The reality
Dell also recommended less crucial features such as a digital camera and memory card. However, most people would probably ignore Dell’s advice to buy a digital projector and a handheld. If they didn’t, and selected every single add-on Dell recommended, the total
cost would be £3,456. Being realistic, I wouldn’t need the camera and memory card, nor, for
that matter, nearly all of the upgrades and products Dell recommended.
For arguments sake then, the features not included in the original package that would be needed in run the machine like it belonged to the 21st century were: the recommended CPU, the recommended modem and speakers, resource CD and a 160Gb hard drive. The cost of these components brought the total of the package to £502, over double the advertised price.

The result
This type of offer is deceptive for the consumer. Smaller retailers are feeling the effects – if consumers believe they can get a PC for £249, why pay more? There’s nothing wrong with trying to undercut the market with cheaper offerings, but when price signals are sent out, especially by a firm with the marketing spend of Dell, which promote systems deficient in certain fundamentals and have prices that inflate significantly as soon as the punter attempts to buy, the relationship between the industry and the consumer can become compromised.

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