“Build Your Own and Save a Bundle,” the ads read. They’re talking about personal computers, and as recently as a few years ago those ads were true.
But two decades of relentless competition among major PC manufacturers have pushed prices for pre-built machines so far down it’s no longer a bargain to buy parts and put them together yourself.
The build-your-own tradition dates back to the mid-1970s, when the only way to get a personal computer was to scrounge up individual electronic components. You had to be handy with a soldering iron in those days.
That era began fading in the 1980s as packaged PCs took over both the home and corporate markets. There was a brief resurgence in the late 1980s as PC buyers standardized on Intel Corp. microprocessors with Microsoft Corp.’s DOS operating system, and later Windows. This so-called “Wintel” design became so popular that it was easy to shop for the building blocks of a PC.
And you no longer had to build from individual electronic components. You could buy ready-to-go subsystems such as a disk drive; a “motherboard,” which contains the processor and other key chips; a power supply, which converts the electricity from your wall socket into the right kind of juice for the computer electronics to feed upon; and so on.
Technically adept people discovered the total cost of these subsystem parts was a lot less than the big-name computer companies were charging for ready-built computers. That’s how some of the big mail-order firms such as Gateway and Dell caught fire. They bought parts, typically from Taiwan and other Asian sources, then assembled them in “screwdriver factories” and sold them through toll-free numbers and mail order.
“Screwdriver” was the sarcastic term applied by more traditional computer companies that made more of their own parts. They promoted the idea that a “real” computer company was more deeply involved in the design and manufacture of its systems, not simply screwing subsystems to the inside of a case and then putting a company label on the front.
Turns out, though, that the screwed-together computers generally performed as well as the systems from traditional companies–no big surprise, since the subsystems in both often came from the same factories.
But the prices on complete systems kept falling, with profit margins getting slimmer all the time. And in the past year, the price for a new PC system from big-name manufacturers has dropped as low as $800. Finally, “direct” buying now includes not just toll-free numbers you can call, but World Wide Web sites where you can specify precisely what you want in your computer, which is then built, tested and delivered to your door.
Does build-your-own–in the traditional sense of hefting a screwdriver–still make any sense when there’s supposedly so little price markup from the factory, and such flexibility in choosing parts for a pre-built PC?
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I visited a Northern California “self-service” computer chain called Dnet to see. Actually, the chain has been around since 1989 and the stores used to be called “Domino.” It’s still on some of their literature. But I guess in this Internet era it is snazzier to add a “net” to the name.
At a San Francisco Dnet store, I was briefly shown the price list for parts and then told no copy of the list was available or could be made for me to take away. The excuse was that “the prices change so frequently.” A clerk at that store said I could either build my computer on their premises for free, or build it there with constant technical advice for $25 per hour or have the store build it for me for $70.
In San Rafael, I was quickly given a price list. This list included mention of the minimum assistance charge of $25 an hour and gave the cost of store assembly as $45 an hour. But the store representative told me they would actually build my entire system for free if I would agree to buy “most” of my parts there.
So let’s get to the meat of that matter: The cost of build-your-own versus pre-built.
Here are the elements of a $1,799 Dell Dimension XPS D300 with the corresponding part prices from Dnet in parentheses: 300MHz Pentium II ($370 to $475), 64 megabytes of SDRAM ($85), 5.1-gigabyte hard drive ($190, plus $18 for controller), 17-inch monitor ($345 to $605), 3D video card with four megabytes of video RAM ($130), 32X CD-ROM drive ($115), mini-tower chassis ($80), 3.5-inch floppy drive ($20), Dell QuietKey keyboard ($25), Microsoft mouse ($25), 10-100 Ethernet network card ($60), and Windows 98 ($105).
Those comparisons aren’t always precise, because the parts don’t exactly match what’s in the Dell.
The Dnet total is a minimum of $1,568, or $231 less than the Dell.
But if you choose the better motherboard and monitor at Dnet, the total climbs to $1,933, or $134 more than Dell’s price.
But Dell also gives you “McAfee VirusScan,” “Microsoft Office 97 Small Business Edition” and “Bookshelf 98.” With current rebates, “VirusScan” only costs $10 by itself. But “Office” is $485 if you buy it separately, or $180 as an upgrade, assuming you own a previous version.
Adding this software pushes the Dnet total to a range from $1,758 to $2,428.