Buy a computer today for $2,000, sell it tomorrow for $1,000.
Doesn't sound like a very good proposition, unless you're buying used.
With PC sales flat, some computer-makers think the market for $2,000 computers is saturated. They've decided the $1,000 PC is the way to rev up sales.
There's another PC market quietly gaining momentum: used and refurbished computers for less than $1,000.
According to Bill Schaub, an analyst with computer industry researcher Dataquest, about 16 percent of PCs are purchased used. And since computers lose value quickly, used is a good buy. Computers, with few moving parts, don't wear out.
Yet the makers of computer hardware and software relentlessly upgrade their products and try to convince us to buy a new PC every couple years.
Market has gone upscale
In the corporate world, many computers are replaced every few years - Dataquest says the average is three years - creating a huge supply of perfectly good, older machines. And smart entrepreneurs are buying up these PCs, refurbishing them and selling them for $1,000 or less.
While Mr. Schaub estimated most used computers are bought from individuals, many stores are springing up that buy, refurbish and resell older machines.
Forget those antique DOS clunkers you see in flea markets. The used market has gone upscale.
Computer Renaissance is buying and selling clean, used 486 and Pentium-level systems from a showroom in Symmes Township. Computer Renaissance is a national franchise with stores across the United States and Canada http://www.cr1.com Deborah Para, one of the Cincinnati store's owners, said business has been very good - once customers learned used computers are a good value.
"It took a few months to get that education out there," she said.
The price of used equipment is a good selling point. Computer Renaissance sells refurbished 486 and 586 (AMD processor) computers starting at $299. For $599 you can get a 486 system with 14-inch monitor and 10 megabytes of RAM.
Computer Renaissance even has some 386 systems for $250, including monitor. Notebook computers start at $399.
All systems have a seven-day money-back guarantee, and a 90-day warranty on used equipment and a one-year warranty on new. You can check inventory at their web site http//www.recycledcomputers.com
Deals on the Web
While many customers may prefer a store where they can see and touch the used equipment - plus the security of a walk-in service department - equally attractive deals can be found on the Web.
Recompute of Austin, Texas, sells reconditioned systems from its web site http://www.re-compute.com It advertises a brand-name reconditioned Pentium 133, fully outfitted with 32 MB of RAM, CD, 28.8 fax, monitor with 3D video card and software for $1,499 - about $500 less than a comparable new machine.
The company also sells Pentium 90 business systems for $899 (including monitor) and notebooks from $999. How low will they go? About $600 for a 486 system.
Recompute says it purchases only top-name machines from lease companies and major corporations. Its ads identify the machines as Compaq, Dell, Hewlett-Packard or IBM.
The company says all machines are thoroughly cleaned, tested and recalibrated to manufacturer's specifications. The company also offers a money-back guarantee, warranties from 90 days to a year (depends on the system), and a new keyboard and mouse.
Are these machines a good deal? It all depends on your needs - and your wallet. If your high school student needs a basic computer or your budget is limited, it may make sense.
A 486 might sound a bit antique compared with Pentium II and MMX, but it's perfectly sufficient for word processing, spreadsheets and surfing the Web.
And while all computer equipment depreciates quickly, good-quality used won't lose value as quickly as the newest hyped-up gizmo from the Silicon Valley.
E-mail Charles Brewer with questions, comments and suggestions at CBrewer@enquirer.com Charles Brewer's columns can be found athttp://enquirer.com/columns/brewer