Analysts tip upgrade to increase costs by up to 20%

Upgrading to Microsoft’s Windows Vista operating system from its predecessor XP will push up PC hardware component costs by as much as 20%, according to research by analyst company iSuppli

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By  Administrator Published  December 29, 2006

Upgrading to Microsoft’s Windows Vista operating system from its predecessor XP will push up PC hardware component costs by as much as 20%, according to research by analyst company iSuppli.

The operating system was launched for businesses with volume license accounts on November 30 — with general release scheduled for the end of January next year — and iSuppli said that there had been a lot of misinformation concerning what PC hardware was required to run Vista, and that this had not helped the industry or end-users.

The analyst firm disagreed with Microsoft’s statement that the minimum requirements to run the Vista operating system are an 800MHz, 32-bit or 64-bit microprocessor, 512Mbytes of DRAM, a graphics card able to support SVGA resolution, a 35Gbyte hard drive and a CD-ROM optical drive. It said this would not be adequate, especially if businesses wanted headroom for future upgrades.

ISuppli said parts for computers would rise by an average of US$100 per machine, increasing the cost to manufacturers of a desktop to over US$600 and to over US$800 for a notebook.

Businesses will pay significantly more than this, as these figures only represent the cost of components to OEMs and not the actual price of the PCs.

ISuppli said much of this increase in cost would come from the additional memory required to run the new OS and was not related to other specifications such as graphics or CPU power. The firm said the cost of the memory in both notebooks and desktops would jump 50%, while that of the CPU and other components would hardly increase at all.

It said today’s typical mainstream desktop and notebook PCs included between 512Mbytes and 1Gbyte of DRAM, and while Microsoft states this is adequate to run Vista iSuppli contended a more realistic configuration would be in the range of 1Gbyte to 2Gbytes of DRAM.

“The cost implications are that a typical PC OEM pays roughly US$40 for 512Mbytes of memory or US$90 for 1Gbyte,” explained Matthew Wilkins, principal analyst for compute platforms at iSuppli.

“Therefore, if a desktop PC is specified with 2Gbytes of memory, the cost to the OEM is approximately US$180, but the price to the consumer — which amounts to OEM cost plus margin — is higher.”

ISuppli suggested the other big cost worry — the graphics technology needed to power Vista’s new Aero user interface — should not be a concern for businesses as it can be turned off, meaning that there would be no need for a user to fork out over US$100 for an advanced graphics card.

“The real issue behind Aero is not its technology, but rather the cost of the graphics hardware required to run it,” Wilkins added. “The ideal solution is an advanced graphics card,” he went on to say.

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