The $500 PC

What you get -- and don't get -- from the new crop of cheap computers.

By Jeff Bertolucci, Contributing Writer

From Kiplinger's Personal Finance magazine, May 2005

Computer pricing has come to this: For just $330, you could recently buy an eMachines PC with a CD-RW drive, plus a 17-inch monitor, plus a Canon color inkjet printer.

This Circuit City package may have been a loss leader (and the quoted price is after $300 in rebates), but the fact is, PCs are long past being luxury goods and now border on impulse buys. With retail prices in the $500 range for complete systems (and sale prices often much lower), how could you go wrong? Well, you might end up buying much less computing power today than you will want in a few months or a year. But if all you want is a word processor, e-mail and a way to browse the Web, today's crop of $500 machines should suffice.

What they lack, however, is horsepower. Random-access memory, or RAM -- a lubricant that helps a computer run quickly -- is minimal. And the processor is a weaker cousin of Intel's Pentium 4, so you'll have only the bare minimum for Windows XP. When you run several programs at once, speeds may begin to lag noticeably. And don't expect top-of-the-line word-processing and spreadsheet software.

There are other limitations. Need a big hard drive to hold your digitized vinyl collection or loads of digital family videos? Forget it. You'll get only 40 to 80 gigabytes of storage. There's also no separate graphics card with the muscle to let you blast space aliens at the highest resolutions. And although ads for these cheap systems often tout a "flat screen" monitor, that's just a sneaky way of making a cathode-ray-tube (picture-tube) monitor sound like a sleek LCD.

Basics breakdown

Given the constraints, we scaled back our expectations of what these machines could be expected to handle. Of the four we tested, three were $500 Windows-based machines, and the fourth was from Apple Computer. Each comes with a drive that plays and burns CDs, and plays DVDs (but doesn't burn them).

Never one to compete in high tech's bargain basement, Apple nonetheless recently introduced the $500 Mac mini, a petite machine that is roughly the size of a cigar box. The catch is that the mini comes without a monitor, keyboard, mouse or speakers. To outfit the Mac mini, figure you'll spend another $170 for very basic peripherals -- equivalent to those that come with the Windows machines.

Although Windows PCs may be cheaper, they are also susceptible to some things you don't want: computer viruses and spyware, which are programs that steal information about your Web-browsing habits and sometimes your personal financial data. And as any Apple user will tell you, viruses rarely infect Macs. That's because the Mac operating system is more secure against hackers than Windows, and the delinquents who write viruses prefer to attack the more common Microsoft operating system.

Our Windows favorites are the $547 Dell Dimension 3000 and the $500 eMachines T3828 (made by Gateway), both of which are a bit faster than the $468 HP Pavilion a705w-b that is sold at Wal-Mart. (The Pavilion lags the others by two or three seconds when booting up programs or switching among them. That's not dramatic, but if you're a speed demon, it grows annoying over time.)

Apple aficionados won't have to look further than the Mac mini for a bargain. And we suspect it'll capture a passel of Windows users who are tired of battling viruses.

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