Why are we so obsessed with driving up the cost of computing?

There currently seems to be a rhetoric that the PC is too cheap. How can it possibly be "too cheap"?
Written by Matt Baxter-Reynolds, Contributor
Social Queue on Nexus7
I want something like this, but basically for free.

Two of the best pieces I've read in a long time is Paul Thurrott's piece "Explaining Windows 8 PC Sales Over the Holidays and the related "This Best Buy Circular Says It All".

The reason why I like these pieces is that it lays bare the "damage" that was done by the rise of the netbook. To recap, the netbook was an ultra-cheap laptop computer. They were super-popular for a while, and then suddenly became much less popular when the market started to fall in love with the iPad. In Thurrott's first piece he cites NPD market data that the average selling price (ASP) of a laptop is currently sitting at $420. In his second piece he shows that Best Buy are pitching laptops for $460. It's the netbook that did that, driving down expectations of price to a point that's "unsustainable" as far as the manufacturers are concerned, yet "magical" as far as consumers are concerned.

As an individual, I want computing to be so cheap that if I pour myself out a bowl of cornflakes I want a sparking new tablet computer to plop into the bowl because they are so cheap Kelloggs can give them away as sales incentives. That right there is the target price -- so cheap that the cost can be absorbed in the price of a box of cereal at wholesale. Yum.

Plus, sociologically-speaking, cheaper, more pervasive computing is better for all of us. Most readers of this publication are in the relatively rare position (globally speaking) of being well-paid and well-off. But being able to deliver dirt cheap hardware to those in society who are less advantaged is something that we should all aspire to. Something like the OLPC currently costs about $200 -- that's much, much too expensive. It needs to be more like $20.

I'm not saying that we should all demand what Thurrott calls "throwaway, plastic crap" -- we need to get the OEMs to build good kit, but to do so cheaply. And they can generally speaking do that. Yes, a $100 Android tablet might not feel like a $400 iPad, but there's no reason why it can't deliver the same benefits to the owner. We don't all have to drive Aston Martins.

Personally-speaking, I've been working in IT for 20 years. Unless I've missed something, no change in either software or hardware pricing in either direction has ever affected me in any way. The only people who are wringing their hands about the decline in ASP are companies like Microsoft, Intel, and their partners. And I'm sure I would be too if the gravy train I'd been enjoying for decades looked like it was about to come off the rails.

Read: Windows 8 hardware "overpriced" and offers "no clear benefit in switching from iOS or Android"

Why are so many IT professional and pundits talking about the need to drive up the ASP? Sure, if the market demands new innovations that drive up the bill-of-materials and that drives up the ASP, providing it delivers value, go right ahead. But most people just need basic, commodity hardware that works well enough in order to get on with their lives.

Take the recent Adam Osborne-channeling Intel announcements from CES. On the stuff they're looking to cram into laptops it's all about driving the power requirement down and making smaller and lighter kit. That's great, if you ever actually move your PC. It's long been the case that even laptops spend the majority of their "in use" time in one place and not being moved. (For example, in the office I'm in now there are eight desks, everyone has gone home for the night, all the laptops are on the desks because their owners didn't need them at home.) I admire Intel for moving the story on, but asking me to pay more money for a device that's ultra-portable when I don't need it to be portable at all is simply siphoning cash out of my personal reserves and into the coffers of some corporate that I don't really care about. It doesn't really help me at all -- it's all about Intel and its partners.

Let's then all give thanks to tablets -- the device class that takes up the mantle of the great work the netbook did in driving down prices and takes it to new extremes. Because, given enough time, I'm pretty sure Kelloggs will be able to give away a free Android tablet with a packet of cornflakes. And that will be the start to a great day.

What do you think? Post a comment, or talk to me on Twitter: @mbrit.

Image credit: Google

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