The Great Scam – Vendor Upgrades

Like many other businesses, PC makers often use a “loss leader” strategy. They’ll sell the basic model of a computer at a very low price, in hopes that they’ll gain your loyalty and future business. If you buy online, they give even deeper discounts. While this is an excellent long-term strategy, it costs them a great deal in short-term sales. How, then, do you suppose they make up the difference? The answer is that they make it up in upgrades.

For these comparisons, we will be using the following idea. As an upgrade, the new components are justifiably more expensive. However, we are going to examine whether the price difference offered by the various vendors online for an upgrade is substantially more than the online retail price difference, and call the remainder the “installation fee.” So the formula is:
[Price difference offered by vendor] – ([Price of new component] – [Price of old component]) = [Installation fee].
If this installation fee is more than you would be charged even at a major retailer for the same thing, you’re getting ripped off.

First, though, an aside or two. While the principles demonstrated in this post hold true across all classes of PC, when dealing with notebooks (and netbooks), processor, optical drive, and graphics card upgrades will not be considered, as these are typically either not possible, or extremely time-consuming. When these upgrades are possible, it is likely easier to have them built-in from the beginning, as the labor involved will usually take up the difference in cost-savings, if not exceed them. Also, keep in mind that when doing upgrades after purchase, you can retain the old components to sell off, or trade them in for reduced install fees.

Entry-level machines tend to have the most “reasonable” prices for upgrades, because the major vendors are aware that people in this market tend to have stricter budgets, or are simply less willing to spend more money. In this class, upgrades tend to cost what the individual component would cost in the after-market. This doesn’t sound too bad until you realize that this means you’re getting no credit for the old part. For example, Dell offers an entry level desktop with a fairly weak stock processor, but some nice upgrade choices on it. However, you could buy one of the new processor choices for basically the exact same amount Dell charges for the upgrade, and not only have a better CPU, but also the old one to sell off. Contrast this with spending the extra money to get the upgrade, and only getting the upgraded CPU. The only caveat to this is that you generally have to be willing to do the work yourself, or have someone you know willing to do it free; at the prices these machines command, it is generally not cost-effective otherwise, even after selling off the old components.

Mid-level PCs are more profitable for computer vendors. Once you start looking at these, you’re looking at prices around 25-50% above the after-market prices for upgrades. In most cases, you can buy after-market parts, pay to have someone professionally install the upgrades, and still have spent less money than you would have if you’d bought the upgrades directly from the vendor. At this point, buying after-market parts is much more logical, since you’ll save money regardless of whether you sell the old parts off, trade them in for reduced installation prices, or do nothing with them at all.

Buying a premium computer? Do yourself a favor and buy the upgrades later, make one yourself, or order it custom from a small vendor like us. Otherwise, these upgrades generally run 100+% above the prices offered at online retailers, and even soar well above brick-and-mortar store prices. No major vendor of premium computers is an exception to this rule, and those vendors that consider all their PCs to be premium machines (think Sony and Apple) are even worse. You'll be saving money in the range of $100+ per machine, and in some cases getting into the thousands of dollars. For example, Apple’s “entry-level” desktop, the Mac mini, comes with 2GB of DDR3 RAM (2 SODIMMs) standard. As of today, 6/2/2011, the cost to upgrade to the maximum amount, 8GB, is $300 on Apple’s website. The most expensive after-market RAM, 8GB DDR3, certified compatible with the Mac mini, and carrying a lifetime warranty, is $100 online from Crucial. Apple is charging a 200% premium for their name. And if you had wanted to buy the RAM from Apple after buying the Mac mini with the stock RAM, you’d be charged $500, a 400% premium. If you bought the Crucial RAM and had it professionally installed someplace with high prices (basically any retail store that does tech work), you’d spend $140, and still have the old RAM to sell off. Savings: $160+. At this level, it’s a no-brainer to buy upgrades after the fact.

It’s not entirely bad. There are some exceptions to this rule. For example, since I picked on Apple earlier, I’ll give them something nice in return; the SSD upgrade to the largest MacBook Pro is actually cheaper than all but one of the SSDs I could find online or at retail. The only cheaper one was a no-name brand I wouldn’t have trusted for anything. In this case, Apple’s upgrade is actually the best one possible, since they tend to use mainstream component brands in their PCs. By and large, though, you can really tell that the premium PC manufacturers make money hand-over-fist on their hardware, particularly since you mostly have to compare their prices to the next most expensive equivalent out there just to make them seem at all good.

Now we’re at the end of this somewhat large post. I’ll leave you with two more tidbits. First, we’re not comparing these upgrades to no-name, low-quality parts. We’re using mainstream brands as a comparison. For example, the Crucial RAM mentioned above; Crucial is actually the retail arm of Micron, one of the Big Four of RAM manufacturers (the other three being Hynix, Samsung, and Nanya). When you buy RAM, even the RAM in a preassembled PC, and even if there’s a different name on the package, there’s a 90% probability that either the chips or entire RAM modules inside are made by one of these 4 companies. The company on the label usually either assembles the chips onto the module, or simply runs an additional QC process on preassembled modules and slaps their name on them. And all the major PC makers buy their RAM from these guys; it doesn’t matter whether it’s HP, Dell, Sony, Gateway, Acer, ASUS, Toshiba, Lenovo, Apple, or someone else I’ve neglected to mention. They all buy RAM from one of these 4, even if indirectly. So, it’s not as if we’re saying that the stuff from “Joe Schlubb’s Komputer Korner” is a better deal.

Finally, we’re running these comparison on retail prices, or online prices; the profit is already built in. Also, there are places that offer these products at near-online prices, such as Fry’s Electronics or CompUSA (part of TigerDirect). These stores typically charge up to $5 extra on top of the online price, plus tax, which is not bad considering the convenience factor. So, it’s not like we’re plumbing the depths of the low-cost internet here. These manufacturers are not paying anything close to retail for these parts; they’re paying wholesale prices, which are a good deal lower than anything you’ll be able to find. An example off the top of my head is Windows. A copy of Windows 7 Home Premium will typically cost the vendors around $40-60, because (as I said) they buy in massive quantities. The lowest price a consumer will find is around $100, for an OEM copy, with no customer support, that’s tied to the machine it is originally installed on. Apparently, obscene profit trumps the goodwill of your own customers, from whom those profits flow in the first place. Just think about this; these guys are shipping out PCs with upgrades costing more than the retail price of whatever component got upgraded, but just how much of the savings they get on the parts are they actually passing on? In my opinion, it’s nowhere near enough.

The Great Debate: Windows vs. Apple OS X

Yes, I'm finally weighing in on this. I'm also going to try to be as impartial as possible, because your typical search (in any search engine) for "Mac vs. PC," Windows vs. OS X," et cetera, usually ends up with users finding horribly biased posts that are demeaning and belittling to the opposing camp, while being of little to no actual use. Try adding the word "unbiased" to the second query, and Google's first result summary shows a site with a comparison geared towards "creative professionals," which means it's biased towards Apple from the beginning. The remainder of the articles are either just as biased, or out-of -date. So I figured it was time for a real comparison, with as little BS as possible.

Costs:

Here's a list of cost considerations for choosing between a Windows computer and OS X computer.

OS:
There's almost no contest here, since most people get the original OS with their computer. However, a new copy of OS X 10.5 Leopard would cost about $200, plus the $20-30 that the upgrade to OS X 10.6 Snow Leopard would cost, as Snow Leopard is not sold as a full edition as of yet. On the other hand, you can get the retail edition of Windows 7 Home Premium (which is just fine for the vast majority of users) for only $149. If you don't mind a few limitations, you can get an OEM edition of the same version for only $99. I'll cover OEM vs. retail editions of Windows in a future post. What Microsoft has against it is its incredibly complex pricing scheme. There are four different versions of Windows 7 available in the U.S.: Starter, Home Premium, Professional, and Ultimate. The first is only available pre-installed on netbooks, so does not really qualify as a choice. The remaining three, though, are available to install in OEM, retail, or upgrade editions. That's a total of 9 combinations, each of which has its own price point. However, it should be noted that only 2 of these prices exceed the cost of OS X, the full retail versions of Windows 7 Professional and Ultimate. In all other cases, Windows is actually cheaper than OS X. So, I'll call this a draw, because it really depends on which version of Windows you'd want if you chose a Windows PC.

OS upgrades:
This is actually a hard one to call, due to a couple of factors. First off, Apple has had 7 total iterations of OSX in the same time it took Microsoft to release 3 operating systems and a total of 5 service packs for those three. However, the upgrades to OS X range from what the typical Windows user might call a service pack to pretty much a full OS upgrade, with most of them falling in between the two extremes. In addition, regardless of the content of the upgrade, each one costs $129. The only exception to this is the upgrade between version 10.5 and 10.6, which only cost $29. So, assuming one bought a Mac capable of running OS X 10.5 back when OS X first came out, the total paid for upgrades would be $645. Unfortunately, any Mac bought this early would be based on a PowerPC processor, so this would be the limit to which you could upgrade the machine, as Apple switched to Intel processors right about the time OS X 10.5 was released (about 2005). By contrast, you could only exceed this value for a Windows machine by having paid for the full retail versions of Windows Vista Ultimate & Windows 7 Ultimate; the upgrade editions of these versions would have left you comfortably under this amount. So we'll call this one even too, just because it's highly dependent on when you bought your computer, as well as its capabilities or potential.

The Computer:
I'll tell you right now, this is where you'll get slammed by Apple. Windows machines are not only cheaper for an equivalent level of hardware, you could get even more capability for the same money you'd pay for a Mac. Let's take a look at what each has to offer.
For notebooks, you can get a Windows machine with hardware that is roughly equivalent to Apple's entry-level notebook for 45% (or less) of the price. And while Mac enthusiasts will make claims about the quality of the hardware used by major suppliers like Dell, this applies even to Windows computers custom-built with mid- to high-quality components. Not only that, but since Apple's switch to Intel processors, Apple is pretty much pulling from the same smallish pool of hardware suppliers, so any claims of hardware superiority hold no real water.
Desktops are a little harder to price out, since Apple does not compete in the traditional desktop market. Apple's offerings for desktops come out of three desktop subcategories: all-in-one PCs, mini-PCs, and workstation-class machines. Only the latter actually comes in a tower.
All-in-one PCs generally have a higher price point. However, if you're looking for a Mac, they are very competitive in this category, with price differences that are usually in the $100-200 range. That being said, you still get more features on the Windows versions. For example, both Gateway & HP currently sell all-in-ones a touch lower than the starting price for an iMac. Each has certain trade-offs, of course, but the extra features make up for it. Each has a slightly slower processor and only an integrated graphics chip. But for the price, you get Blu-ray and HDMI output on one, a built-in TV tuner on the other, and a larger hard drive and touch-screen on both.
As far as mini-PCs go, Apple's only offering is the aptly-named Mac mini. You want desktop power in a small form factor? The Mac mini is the way to go. No Windows PC comes close to the size and power of this thing. The ones that match the size use the Intel Atom series of processors and possibly Nvidia Ion graphics, which, while they make for very energy-efficient and inexpensive PCs, don't even come close to the performance of the Mac mini. And of course, to match the power, you'd need to get at least a slimline PC, if not a tower, which are both much larger. That being said, Windows machines do run cheaper in this form factor, and make reliable basic computing machines.
And finally, we come to the workstations. This is the place where Apple achieves price parity with Windows machines. The only thing Apple has against it here is its tendency to use consumer-level graphics cards instead of workstation-grade cards in their cheaper Mac Pro PCs. However, workstations are not intended for typical consumer use. They are designed for CPU- & GPU-intensive tasks like rendering movies and the like.
So, as far as consumer-level PCs go, if you don't mind a tower, Windows is still king. You can buy or build a Windows PC in a tower that is better than the Mac mini or the iMac for less money. But, if you're looking for a mini-PC or all-in-one anyways, Apple is definitely worth a look.
Sorry OS X lovers, Windows wins here, if only slightly.

Hardware upgrades:
Windows wins here, too, sorry to say. Apple is incredibly restrictive as to what hardware it will accept in its machines. Not only that, but most of its PCs are sold in small form factors, which severely limits your upgrade options, as well as making it physically difficult to upgrade. So, while you can make minor upgrades like RAM (from an Apple-approved manufacturer) and hard drives fairly easily, major upgrades like motherboards are made by buying a new Mac. If you happen to have a workstation, you'll also be able to easily upgrade your video card, assuming you're willing to pick from one of about only 15 choices, not all of which will actually constitute an upgrade. You also be aware that most authorized dealers of Apple parts will charge a premium for being one of the select few. All of this, of course, assumes you might be able to do the upgrade yourself. If you've got one of those wonderfully-designed unibody MacBooks, you either look up the (complicated, time-consuming) way to do it yourself, which voids your warranty, or take it in for service, which will of course cost you more than just the parts. This, by the way, includes the battery too.

On the other hand, it is generally possible to upgrade any component or components of a Windows-based PC. Just like Macs, easy notebook (and nettop) upgrades are generally limited to hard drives and RAM; other upgrades are possible, but usually time-consuming and difficult for the typical user to perform. However, with a standard desktop machine, any upgrade is possible within the limits of the space your case provides, the cooling required, and the wattage your power supply can provide. Most desktop upgrades are simple to make, and guides abound for those that are slightly more complex.

Other considerations:

Well, the cost section ran longer than I planned. Fortunately, we're done with that now, and can continue on to better things.

User interface/ease of use:
This is largely up to user preference and what you're used to. You're more likely to keep doing things the way you've always done them, and also to believe that it's the best way. There are things OS X does better than Windows 7, and there are things that Windows 7 does better than OS X. However, a listing of each would be pointless, as the relative value placed upon each feature is almost entirely dependent on the individual user. I will say that I'm fond of stacks and the Dock from OS X, but Windows 7's new taskbar, which I admit is Dock-like, is probably the best idea Microsoft has integrated into their OS in years. In the end, I think that Microsoft's recent push towards easy access has benefited them greatly. I truly think that someone new to PCs could start using either OS X or Windows 7 and learn the ins and outs just about as well. I'm calling this a draw.

Design:
Really, do you even have to ask? Apple is the winner here, hands-down. They've made their computers (and their other products) just as sleek and nice-looking as their OS. Windows machines are a hodgepodge of various designs; some look good, most are okay, and some are truly horrific. Apple's designs have almost always been inspiring. The only black mark Apple has against it is its unibody products. They look good, but, really, not being able to replace your own battery? It's ridiculous.

Software:
The first rule here is to buy the OS that you need for your software if it's not available on both. Period. If this is a consideration, there is no better or worse, it's just what you need.
Also, if you plan to create music and/or movies, buy a Mac. The software available for the Mac in that particular area is just plain better, and some of it actually ships with OS X.
If, however, you have no need of a specific program or suite, Windows wins on strength of numbers. By virtue of its market share, Windows has more software available for it than any other current platform. This includes a huge market in free software, whether the software is open-source, ad-supported, or supported by voluntary donations. The only thing to be wary of is that not all this software, paid or free, is of high quality. A lot of what is available can be considered junkware, created by people that are simply trying to cash in on Windows' popularity. That being said, there's software to do almost anything. There's bound to be someone else with Windows who's had the same need or want you have. Are you, like me, a fan of OS X's dock? Look up Rocketdock; the interface can be almost identical, and even runs docklets, one of which can emulate Stacks. Need a few more configuration options for Windows Aero? Try out AquaSnap. There's almost limitless possibilities when you have Windows. Windows is also the platform of choice if you want to do serious gaming.

Speed:
Apple technically wins here, but there's a few considerations to be made. First, the magnitude of the difference is often less than a second; the typical user won't even notice that. Second, most/all of the poor speed seen by Windows machines isn't Windows' fault at all. Windows PC vendors typically load a suite of proprietary and trial programs that bog down your start-up times; if I buy a prebuilt PC, the first thing I do is uninstall all non-Microsoft software that's not related to my hardware. You'd be surprised at the difference that can make. Also, it seems that every Windows program and its brother wants to install some junk toolbar, or add something to your startup list. Apple itself may be sabotaging your Windows PC; on a Mac, iTunes is a seamlessly integrated beauty. On Windows, it's a bloated piece of crap, taking up a lot of system resources and adding at least 2 entries to your startup list. If you take the time to control your startup program addiction, you may find that Windows is far snappier than you think. I'll just go ahead and call this a draw.

Security:
Apple does win here, as you might expect. This will not go on without a qualifier, though. Windows 7 is by far the best effort Microsoft has put forth to keep their OS secure. When a former Windows user talks about the security nightmare that convinced them to switch, the OS they were using was most assuredly not Windows 7; most likely, they were using Windows XP or earlier. And from my standpoint as a PC tech, they're right about the nightmare; by modern standards, those older versions of Windows just don't cut it anymore. Also, no matter what an Apple enthusiast tells you, security through obscurity is real. I'm going to reiterate a point I made earlier: "By virtue of its market share, Windows has more software available for it than any other current platform." This unfortunately includes viruses, Trojans, spyware, and other general malware. Macs, by the way, are not immune. Apple releases security updates, just like Microsoft; if Macs were totally immune, there would be no need for any of these. Also, your computer does nothing for you if you fall for a socially-engineered hacking attempt or a phishing scam; these are platform-agnostic and can affect anyone. And before anyone says anything about it, there's no way to prove (either way) what would happen if the market shares of Apple and Microsoft were reversed. Security does not have to cost anything, by the way; I use a set of entirely free security programs on my Windows machine, and I've not had a virus or anything else since I moved to my single-user PC. If you want a list of my recommended free security applications, drop me a line at geek.god.repairs@gmail.com; I'll be glad to send it to you.
As a final note, malware authors are finally wising up. They're no longer attacking the OS, or rather, they're attacking the OS less often. Instead, they're starting to go after common internet programs, like Flash, Java, Adobe Reader, and Quicktime, as well as your browser. At that point, it doesn't matter what OS you're running if your applications are compromised. This is, by the way, the real reason Apple bans Flash from the iTouch & iPad; they're trying to enhance their reputation for security by blocking a potential hole, and costing users accessibility in the process.

Hardware:
The latest and greatest is only available with a Windows machine. If you want the absolute bleeding edge of technological innovation, Windows is where it's at. Some powerful custom configurations, like quad-SLI, are only available to Windows users. Macs use good hardware, no doubt, but it all has to go through Apple's approval process before it's available.

Final Thoughts:
Here's my list of recommendations.
For those on a budget: Get Windows.
For basic computing (including small form-factor PCs): Get Windows.
For gaming: Get Windows. There's more games, and you'll spend a lot less on the hardware that gets the best performance out of them.
For the media creator: Get a Mac. If you're a professional and you want more clients, get (and be able to use) both. Professionals are also the only segment I think should use Boot Camp; buying a Windows license on top of an expensive Mac is really too cost-ineffective for anyone else
For those looking for a notebook: Unless you're going to doing some light media creating, Windows is a better choice.
For those looking for an all-in-one PC: Go with what you're used to.
For those looking for a small yet powerful desktop: Get the Mac mini.

I know this was a gargantuan post. Thanks to those who finished it.