Computerized Investing PC Buyer's Guide

Another year has almost come and gone, and it is time once again for Computerized Investing’s annual guide to buying a PC. This is intended to aid those who are looking for a personal computer to perform common investment tasks. These include portfolio tracking and management, stock and mutual fund screening and analysis, technical analysis and charting, as well as general purpose computing, such as Web-browsing, E-mail, and word processing.

Our recommendations here will allow you to run the top investment software titles available to individual investors. Depending on your specific computing needs, your ideal system may be more or less advanced than our recommended systems.

Defining Your Needs

Over the last several years, prices for new computers have fallen to a point where they are no longer considered a “luxury” good. It is easy today to find above-average computers for less than $1,000 that will last you for the next few years. Given the greater affordability of PCs, there may be fewer trade-offs you need to make to find a system matching your budget. That being said, however, it is still important to purchase a system with a minimum level of capabilities so that it will serve your needs for the next few years. If you try to save money by purchasing a marginal system today, you will probably be faced with either a frustrating computing experience or with the prospect of replacing your computer sooner than you expected or upgrading it at additional cost.

On the other end of the buying spectrum are those who think they have to spend as much as possible on a new computer, even if they don’t require all the bells and whistles. However, it is equally important not to be seduced by needless options and features.

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Realistically speaking, any of today’s mid-range systems will fit the needs of the typical computerized investor. However, given the speed of innovation in computer technologies, a mid-level system purchased today will be obsolete in three or four years. To go beyond that period, you may be better off with a new system that takes advantage of the latest technology developments.

Choosing an Operating System

When buying a new computer for investment analysis, tracking, and research, you must consider the services you will be using to perform these tasks. If you tend to use software-based applications for your investing tasks, you will need to select the appropriate operating system (OS) that supports the software you use to perform those functions. As has been the case for many years, the two most popular consumer operating systems on the market today are Windows from Microsoft and the Mac OS from Apple Inc.

While there is some argument as to its exact market share, Microsoft Windows controls an overwhelming share of the worldwide market—anywhere from 86% to 94%, depending on the source. According to these same sources, Apple’s market share ranges from 4% to 7%. Today, the third most popular operating system in use is Linux, which like the Mac OS X operating system, is derived from UNIX. Today, roughly 1% to 2% of systems use some form of Linux. Linux is popular on many bargain systems, as the operating system is freely distributable, unlike Windows or Mac. Linux is typically found as a server platform, not on consumer PCs.

Windows Vista

Released on January 30, 2007, Windows Vista had several well-publicized stumbles out of the blocks that ultimately doomed it. This was despite the fact that, in many ways, the operating system was an improvement over Windows XP. Even though Microsoft addressed most of the issues regarding Vista, the damage had already been done. According to Net Applications’ Market Share report, as of August 2009 only 18.8% of Windows-based systems were running Vista.

There are four versions of Vista—Home Basic, Home Premium, Business, and Ultimate. Vista Home Premium is the version installed on most new systems geared toward the home PC market. At the time of this writing, the suggested retail price MSRP for Vista Home Premium is $239.95.

Windows 7

Unable to win over the court of public opinion, Microsoft set to work on a new version of Windows. The result is Windows 7, which was officially released on October 22, 2009.

Having seemingly learned its lessons from Vista, Microsoft put Windows 7 through extensive beta and public testing. Thus far, the almost universally positive reviews seem to indicate that it has paid off.

Windows 7 sports polished graphical features, a new taskbar, and device management and security improvements that make the experience easier and more secure.

One of the most compelling features of Windows 7 is the “XP Mode,” which is supposed to allow Windows 7 backward compatibility for programs that do not support Windows 7. XP Mode creates a virtual environment in which the old software runs. XP Mode is part of Windows 7 Professional and Ultimate.

For a complete rundown of the new features found in Windows 7, visit the Microsoft Web site: www.microsoft.com/windows/windows-7/default.aspx.

Furthermore, Windows 7 does not require the hardware upgrades needed in order to run Vista, as Microsoft has gone to great lengths to ensure that Windows 7 will work with as many systems as possible.

Continuing the trend started with Vista, Windows 7 comes in multiple consumer-oriented flavors—Starter, Home Premium, Professional, and Ultimate.

If you wish to upgrade your current Windows XP or Vista system to Windows 7, you have several options—buy a new system with Windows 7 already installed, upgrade to Windows 7, or do a “clean” install on your existing computer (basically, start from scratch). If you are running Windows Vista, the “in-place” upgrade to Windows 7 is relatively painless and straightforward—assuming you move from equivalent versions, such as from Vista Home Premium to Windows 7 Home Premium, or take a step up, such as from Vista Home Premium to Windows 7 Ultimate.

However, the process is more complicated if you attempt to migrate from Windows XP to Windows 7. Windows XP users will need to perform a “custom” or “clean” installation of Windows 7. The clean installation will remove all programs and files from the hard drive during the upgrade process. Microsoft’s Windows Easy Transfer utility, which comes with Windows 7, will help you save your files and settings. Before attempting such an upgrade, make sure you have all of the installation disks for any software you have installed and wish to use again. Expect to spend several hours migrating from Windows XP to Windows 7, even if you have some computing knowledge. For this reason, you may be better off buying a new system with Windows 7 already installed if you are looking to upgrade your XP system. If you are currently running Windows XP, chances are your system is nearing the end of its useful life and you may want to consider buying a new system with Windows 7.

32-bit Versus 64-bit

If you are looking to buy a new Windows system, you are probably going to run across 32-bit and 64-bit designations when it comes to the operating system. Until recently, 64-bit systems were considered the realm of technology enthusiasts or software developers. However, we found that most new Windows-based systems are now shipping with 64-bit operating systems.

Simply speaking, the 32- or 64-bit designation refers to the way a computer’s processor handles data. However, you cannot assume that 64-bit systems are twice as good as 32-bit systems. This only applies to certain functions: “normal” computing functions such as word processing and Web browsing will not reap any added benefit from having a 64-bit system. However, functions such as graphics processing and scientific calculations will see a boost in performance.

Primarily, 64-bit systems can handle greater amounts of memory. The theoretical limit for 32-bit systems is 4G (four gigabytes) of memory, although a variety of factors lowers this to around 3G. Today’s 64-bit systems are shipping with up to 8G of memory. According to Microsoft, 64-bit versions of Vista can handle 128G of memory or more, while 64-bit versions of Windows 7 can support up to 192G of memory.

If you do decide to go with a 64-bit operating system, be aware that you may not be able to run 32-bit-based software on it. You will need to check with each software manufacturer to determine whether it will run on a 64-bit system.

Mac OS X

While the Apple company still derives a majority of its revenues from Mac-related sales, the percentage is slipping. For the quarter ended June 27, 2009, $4.2 billion of the company’s $8.34 billion in net sales—or 50.4%—came from Mac sales, peripherals and other hardware, and software. Also, research firm Gartner Inc. estimated that Mac sales accounted for 8.7% of the U.S. PC shipments in the second quarter of this year, up from 8.4% for the same quarter a year ago.

On August 28, 2009, Apple released Mac OS X version 10.6, or Snow Leopard, the latest update to its Mac operating system. Snow Leopard is a bit of a departure for Apple from previous OS X updates. After touting over 300 new features when Mac OS X 10.5 (Leopard) was released in October of 2007, Apple chose to focus on improving what it already had instead of adding new features to Snow Leopard. Most of the new technologies found in Snow Leopard are aimed at software developers. Snow Leopard claims to offer better stability and performance along with 64-bit technology to support greater amounts of RAM, or memory, and optimization utilities for multi-core processors. For more information on Snow Leopard, visit the Apple Web site at www.apple.com/macosx.

New systems sold by Apple now come with Snow Leopard already installed. A single license to upgrade to Snow Leopard from Leopard costs $29; a five-license family pack costs $49. If you are running Max OS X 10.4 Tiger, the upgrade is $169.

Windows on a Mac

Historically, the Mac OS has been viewed as being more secure and user-friendly than Windows. However, this has not translated into significant market share. As a result, the number of Mac-based software titles pales in comparison to the number of Windows titles. This is even more evident in the area of investment analysis and tracking. For software companies, this is a matter of economics—they devote their resources to developing software that can be used by the largest group.

The majority of Mac software for individual investors are personal finance titles such as Quicken, although the latest version is Quicken for Mac 2007. Even when Mac-based investment software is available, it oftentimes lacks the advanced features found in equivalent Windows offerings.

As a result, many Mac users choose to own a separate Windows system in order to run the Windows titles they cannot find for the Mac. However, Apple hardware today is so similar to that of Windows systems that it can run Windows software using a variety of utilities.

Apple’s Boot Camp, which is included with Mac OS X Leopard and Snow Leopard, allows users to install and run Windows XP or Vista on their Macs with the full capabilities and speed of a standard Windows machine. However, it does not allow you to run Mac OS X and Windows simultaneously—you must reboot your system to switch between operating systems.

Another option a Mac user has for turning their system into a Windows PC is to use third-party software to create a virtual Windows environment inside their Mac. The Windows machine runs at “normal” speeds and can operate simultaneously with the Mac OS, so programs native to either Windows or Mac can run side-by-side. Be aware that these virtual systems usually aren’t quite as fast as using Boot Camp, since Windows does not get complete control of some of the system’s hardware. As a result, some functions, such as 3-D graphics, don’t run as well in a virtual environment.

Two programs that allow you to run a virtual Windows system on a Mac are Parallels Desktop 4.0 (www.parallels.com) and VMware Fusion 2.0 (www.vmware.com/mac). Both programs require a “Mactel” system—a Mac with an Intel processor. Both systems also offer free trials, after which either will cost you $80 for continued use.

Be aware that if you decide to use Boot Camp, Parallels, or VMware Fusion to run Windows on a Mac, there is the added expense of acquiring a Windows license.

Laptops vs. Desktops

Once you have decided upon an operating system, there is the question of whether to go with a portable system—laptop or notebook—or a desktop PC. As portable PCs have become more and more affordable over the years, demand has risen significantly. Last year was the first in which more portable computers were sold in the U.S. than desktop PCs, with the trend expected to go international this year, according to IDC Worldwide. IDC also forecasts that almost 60% of the new PCs bought in the U.S. this year will be portable.

While both portable and desktop systems have their merits, the decision to opt for a portable system typically rests on the following questions:

• Do you need a computer when travelling?
• Do you need to use a computer in multiple locations?
• Is space at a critical premium?

If you answered yes to any of these questions, you are probably better off with a notebook/laptop system.

However, these situations are more conducive to selecting a desktop system:

• Budget constraints;
• Need or preference for a larger display;
• Require the most powerful features available.

When considering desktop systems versus notebooks, also be aware of the difficulties you may face when attempting upgrades. Desktop systems tend to be easier to upgrade and repair, mainly because there are a number of “generic” components you can install with relative ease that won’t present compatibility issues.

Notebook PCs, on the other hand, tend to have hardware designed specifically for a particular model, making them more expensive to repair and more difficult to upgrade. You may be able to pick up a new hard drive or additional memory modules from the local electronics store, but you will more than likely encounter difficulties installing component upgrades on a laptop system. Even the latest Mac laptops have batteries that must be replaced by Apple.

Lastly, there are definite cost considerations to buying a laptop—expect to pay a premium for mobility. Table 1 shows the price difference between comparable (in terms of computing power) mid-range desktop and notebook systems.

Netbooks

The popularity of netbooks—small-to-medium-sized laptops optimized for Web browsing and E-mail—has been growing at a dizzying rate over the last few years. According to DisplaySearch, netbooks accounted for over 22% of mobile PC shipments in the second quarter of 2009, compared to less than 6% a year ago. Most models range in price from $300 to $500, making them relatively inexpensive. However, the typical netbook has a display no larger than 10" and a small keyboard, and it lacks an optical drive (CD or DVD). As a result, these systems generally are purchased as a second computer, not as a primary platform. If you are looking for an ultra-portable netbook system for E-mail, Web browsing, and basic word processing, Acer, Dell, HP, Lenovo, Samsung, Toshiba, and Asus all sell netbooks costing under $500.

Where to Buy

Once you have decided upon the type of system you wish buy, the next step is actually purchasing it. When shopping for a new PC, you can buy your system either directly from the manufacturer or from a retail store. A few companies—such as Dell, Hewlett-Packard (HP), and Apple—allow you to build a custom system, place your order on-line or by phone, and have the system shipped directly to you (mail order). Likewise, these same companies and others make computers available at retail outlets such as BestBuy, Costco, Office Depot, Staples, and Walmart.

From the Manufacturer

Arguably, the biggest advantage with ordering a new PC directly from the manufacturer is that you are able to customize the system to get exactly what you want. In addition, due to inventory practices, manufacturers are usually able to offer new technologies more quickly than retail companies, who usually have to move their existing inventory of older technology before restocking.

However, a major trade-off when buying direct is the lack of face-to-face assistance in case something goes wrong. Dell offers in-home system setup for $149. They also offer fee-based phone support to help you with such things as setting up your wireless network, installing software and peripherals, and setting up your Internet connection.

Furthermore, most manufacturers include in a system’s purchase price one year of on-site service as part of any warranty. These two options should cover the majority of problems you may face—at least for the first year.

For repair service coverage after the manufacturer warranty expires, many larger mail-order companies offer maintenance through third parties. Realistically, there is no reason to pay for service beyond three years. HP and Dell both offer three-year protection plans that cost $160 and $99, respectively. Apple’s AppleCare Protection Plan provides three years of telephone technical support and repair coverage ranging from $149 to $349, depending on the system.

Retail

Buying retail—either from an actual store or an on-line retailer—doesn’t necessarily mean paying more for a system that isn’t everything you wanted. Popular stores such as Best Buy, Office Depot, and Walmart are very competitive with manufacturers and on-line vendors on price and usually offer a large enough selection for you to be able to find the system that closely matches your needs. These same stores allow you to buy computers from their Web sites, along with on-line retailers such as CircuitCity.com and TigerDirect.com. However, be prepared to compromise your wants, and perhaps your budget, to fit the retailer’s offerings.

On the other hand, once you have purchased the system, it may be difficult to get a retailer to offer free consultation and technical support. BestBuy’s Geek Squad services include in-home computer setup for $220 and diagnostic services ranging from $130 to $300.

System Recommendations

The next section provides guidance on choosing the hardware components that make up your computer system.

Table 2 summarizes the recommended specifications for buying a desktop computer today that will allow you to perform the most common types of investment analysis and general-purpose computing tasks for the next few years.

Given the rapid changes in technology that are taking place, one certainty is that what is top-of-the-line today may very well be relegated to mid-line in a matter of months. We realize that computing needs can vary greatly from person to person, and what we have offered here are merely our thoughts and opinions. The ultimate decision, however, is yours to make.

For most of us, a computer is a singular item. However, “under the hood” it is a collection of components that influences the overall performance of the PC and your overall computing experience. The pieces of a computer, or the hardware, include processor(s), hard drives, optical drives such as DVD-ROM drives, and video and sound cards.

Processors

The engine that drives any PC is the processor, or CPU—executing operations, performing calculations, and coordinating the other hardware components. The processor is also the driving force behind the cost of any PC, as it tends to be the most expensive component.

Theoretically, the faster the processor, the more quickly the computer will function, although other issues can impact the performance of a computer. For example, the amount of memory or RAM a PC has can have a more tangible impact on a computer’s performance than the processor.

Historically, processor manufacturers were able to increase the speed and power of a processor by increasing the number of transistors on the chip die. Eventually, however, chip makers ran into physical limitations of adding more transistors to a single chip. As a result, the latest trend is “multi-core” processors. Today, dual-core processors consist of two independent microprocessors cores and quad-core processors consist of four cores.

You cannot assume, however, that there is a linear relationship between the number of cores a PC has and its overall processing speed. A dual-core chip is not twice as powerful as a single-core processor. However, multi-core processors allow for more efficient processing, depending on the tasks you are performing with your computer. In particular, multi-core processors offer advantages for so-called “power” users—high-end gamers, IT administrators, and software developers. If you plan on performing tasks that are extremely processor-intensive (such as heavy-duty gaming or video editing) or if you plan on running virtual systems (such as Windows in the Mac OS), you may benefit from a system with a multi-core processor. Most new computer buyers don’t need the fastest processor or the one with the greatest number of cores. To save money without sacrificing performance, you may wish to consider a system with a processor that is a couple of generations behind the newest processors.

Most of the consumer desktop systems on the market today have dual-core systems, with the more common choices being Intel’s Pentium dual-core and Core 2 Duo and AMD’s Athlon X2 and Phenom II.

On the laptop side, you will find Intel’s Pentium dual-core and Core 2 Duo and AMD’s Athlon X2 and Turion X2 Ultra processors in most mainstream laptop systems on the market today.

Data Storage

Over the years, operating systems have become more complex and powerful and software makers are designing products to exploit the latest technology. Also, more and more users are getting involved in digital photography, video, and music. All of this requires an immense of amount of hard disk space—both internal and external—to store all of this data and provide room for expansion over time. This section discusses key hardware devoted to data storage.

Memory

Computers have two types of memory—temporary and permanent. Any data saved in temporary memory is lost when you shut the computer down. The most common type of temporary memory in a computer is RAM, or random access memory. RAM is the primary storage for a computer processor—it is the working area used for loading, displaying and manipulating applications and data. Therefore, the amount of RAM your system has impacts several aspects of the computing experience—most importantly, the types and number of software programs you can run simultaneously at an acceptable rate.

Even with a top-of-the-line processor, a lack of physical memory can have a significant negative impact on the performance of the PC. Furthermore, applications such as anti-virus software that are always running in the background can quickly use up a system’s memory (as well as processor) resources.

It is relatively easy to add more physical memory to your system, if needed. However, it is probably worth paying for as much memory as you can afford up front.

Most of today’s budget PCs running Windows ship with at least 1G (one gigabyte) of memory. However, given the low cost of memory, we recommend going with no less than 2G and suggest 3G (the limit for 32-bit systems). Adding an additional gigabyte of memory when customizing a new system will cost you less than $50, while adding two extra gigabytes of memory should cost less than $100.

Internal Hard Drives

Temporary memory, as we have discussed, plays a vital role in the operation of a PC. However, it is equally important to have the capacity to store data for future use. This is where permanent storage comes into play, which allows you to retain data even after you shut down the PC. The primary type of permanent storage in personal computers is the internal hard drive.

Hard Disk Drive HDD vs. Solid State Disk SSD

Over the last few years, solid state drives SSDs have gained in popularity, especially for portable systems. Just like traditional hard disk drives HDDs, SSDs allow you to save data, images, and music. Where they differ is in the execution. Solid state drives store data on memory chips, whereas HDDs write data to and read from spinning platters. Simply put, a solid state drive is a much larger version of the flash drive you may have in your digital camera.

Three advantages SSDs have over HDDs are speed, power, and longevity. Traditional hard drives, no matter how fast they are, still have to move their read heads over the platters—envision a needle on a record. Solid state drives, in contrast, have no moving parts. This allows them to read and write data at much higher speeds.

Also, since there are no moving parts, SSDs use less power and produce less heat than a traditional hard disk drive. This means they don’t draw down a laptop battery as quickly as HDDs, which is why you tend to find solid state drives in portable systems.

Lastly, the lack of moving parts significantly lowers the likelihood of mechanical failure with a solid state drive.

However, like most things in life, these benefits come at a cost. Whereas a 32G internal solid state drive generally costs between $100 and $200, one terabyte (1T)—or 1,024 gigabytes—internal hard disk drives are plentiful for less than $150.

Most observers agree that solid-state drives will eventually overtake hard disk drives as the storage medium of choice, especially in notebook computers. SSDs have definite advantages over traditional hard disk drives, but SSDs are currently overshadowed because of their price premium. For the time being, a hard disk drive HDD is the more prudent option.

Hard Disk Drive Considerations

The most important factor to consider when selecting an internal hard disk drive HDD is the size, or storage capacity. The explosion of digital media has also placed greater emphasis on the need for adequate storage capacity. Digital photos, music, and video can take up a large amount of your hard drive very quickly.

Budget systems today offer at least 160G of hard disk capacity, but we recommend you go higher if you can afford it. Many mainstream desktop systems today ship with hard drives between 300G and 1T in size and, unless you have no interest in digital photos or music, we recommend a minimum of 500G in hard disk capacity.

Notebook systems tend to have smaller internal hard drives. This is especially true for “value” notebook computers, which can ship with hard drives as small as 80G. Most mid-range notebooks offer hard drives that are at least 250G in size, while higher-end notebooks can offer 500G or more of hard disk space.

Beyond size, a secondary consideration for internal hard drives is the speed at which they spin. The faster the drive rotates, the faster it is able to read and write data. While not a major concern for casual computer users, those who are into gaming and other multi-media applications will want to pay attention to drive speeds.

The majority of hard drives in desktop systems spin at 7,200rpm (rotations per minute), although you may find 10,000rpm or even 15,000rpm drives in high-performance systems. Many laptop hard drives spin at a slower 5,400rpm to conserve power and to generate less heat.

Optical Drives: CD, DVD, & Blu-ray

Another type of data storage device is the optical drive, which uses lasers to read data from and write data to optical disks such as CDs and DVDs. It is virtually impossible to find a PC without an optical drive, such as a CD writeable/rewriteable drive, a multi-format CD/DVD writeable/rewriteable drive, or a DVD writeable/rewriteable drive.

DVD, which stands for digital versatile disc, is the preferred optical drive on the market today. DVD drives can now also read all types of CDs—standard music CDs, CD-Rs, and CD-RWs. The applications for DVDs on desktop systems are limited mainly to storage, unless the computer is a media center offering a cinematic viewing experience for DVD movies. With laptops, however, many users like the ability to view DVD movies while traveling.

Recordable and re-writeable DVDs offer impressive storage capacities of up to 4.7G for single-layer (SL) single-sided discs and up to 8.5G for dual-layer (DL) single-sided discs, or 9.4G for single-layer double-sided discs and 17G for dual-layer double-sided discs.

With recordable DVDs, there are two competing standards: DVD-RW and DVD+RW. DVD+RW drives cannot write to a DVD-RW disc and vice versa. With the advent of multi-format drives that can read and write to both DVD+RW and DVD-RW discs, it is unlikely the industry will arrive at a single standard. Therefore, we strongly recommend purchasing a multi-format DVD±R/RW drive if you are planning to write or burn DVD discs. The majority of internal drives such as these cost less than $50. Furthermore, standard DVD-R and DVD+R discs, purchased in bulk, can cost between $0.18 and $0.35 apiece.

Blu-ray, the next generation of DVD devices, is a high-definition (HD) format based on blue lasers. Blue light has a shorter wavelength than red (the laser used in standard CD and DVD formats), so it can burn, or write, roughly three and a half times more data onto a disc—50G on a two-layer Blu-ray disc. Combination Blu-ray readers/ DVD±R/RW burners are now available for between $70 and $175. Blu-ray DVD burners, on average, cost between $150 and $250.

However, unless you are looking to take advantage of the higher-storage capacity of Blu-ray or play Blu-ray discs, we don’t see any reason to spend the extra money for these drives.

External Storage Devices

All of the hardware components we have discussed thus far have been internal in nature—meaning they reside within the case of the PC. However, in this age of portability, many PC users do not want their data “tied down,” so they are making use of portable storage media, such as external hard drives and flash memory devices that you can connect to your system via either USB or FireWire.

USB vs. FireWire

Universal Serial Bus USB 2.0 is a high-speed method for connecting all sorts of peripherals to a PC—mice, keyboards, printers, external hard drives and CD/DVD drives, compact flash drives, etc. USB’s high-speed competitor, which Apple developed, is IEEE-1394 or FireWire.

While FireWire offers significantly higher data transfer speeds—up to 3.2Gbps (gigabits per second) for FireWire 800, versus up to 480Mbps (megabits per second) for USB 2.0—it has failed to achieve the same mass-market appeal as USB 2.0. Therefore, most peripherals, including external hard drives, use USB 2.0 connectors.

However, FireWire is the preferred method of connecting digital-video-related electronics such as digital camcorders. Therefore, if you intend to do video editing on your PC, we suggest getting a system with a FireWire card, which will cost less than $30 for the upgrade.

In November 2008, the USB 3.0 “SuperSpeed” specification was completed. The major new feature is improved data transfer rates, with maximum throughput of 4.8Gbps, several times faster than USB 2.0. At this time, no systems ship with USB 3.0-compatible ports. However, expect to start seeing them—and USB 3.0-compatible devices—show up in 2010.

No matter what type of system you purchase, make sure it has several USB 2.0 connectors, including some on the front of the case for easy access.

Flash Memory Devices

For secure and highly portable data transfer and storage, there are a number of flash memory devices available today. Unlike an internal or external hard disk drive, flash-based devices store data on a chip instead of writing data to and reading it from a “platter.” The lack of moving parts makes flash memory much more durable. In addition, flash memory devices require very little power to operate, so they do not require their own power source.

Flash media cards have long been the removable media choice for digital cameras, handheld devices such as personal digital assistants PDAs, and the like. Flash technology also has been integrated with a USB interface to arrive at USB flash drives, which are small enough to fit on a keychain yet offer storage capacity far greater than CDs or even DVDs. An 8G USB flash drive, on average, costs under $35.

Ultraportable Hard Drives

Just like with their internal cousins, the capacities of external hard drives continue to climb, with capacities in excess of one terabyte (1T; one trillion bytes, or 1,024G). Such large amounts of storage are also available in relatively small packages in the form of external 2.5” drives. A 160G external 2.5” drive, on average, costs less than $75, while 320G drives typically cost between $50 and $100.

The price per megabyte for these drives is only a fraction of the cost of flash memory. A Western Digital 320G My Passport Studio external hard drive, which supports both USB 2.0 and FireWire 400, retails for $150 (www.westerndigital.com), or $0.00046 per megabyte. By means of comparison, an 8G Sandisk USB flash drive costing $20 at Walmart has a per-megabyte cost that is more than 400% greater than that of the Western Digital My Passport Studio drive.

Video & Sound

Anymore, computers are as much personal entertainment systems as tools. Some even allow us to watch and record TV programs. However, even if you aren’t looking to buy one of these “media center” systems, chances are at some point you will listen to audio clips or music or watch video clips or movies with your computer.

Depending on how much multi-media usage your PC will get, you will want to be sure to buy audio and video capabilities to match.

Video

Earlier we discussed the CPU, which controls much of what goes on with the PC. However, computers also have a GPU, or graphics processing unit; these chips create the images you see on the display. Three-dimensional graphics (3D) are becoming the norm, especially with high-end gaming applications. The latest Windows and Mac OS X operating systems are implementing advanced graphics that push the envelope of traditional computer capabilities. Most desktop systems today have dedicated video memory that offers better graphics capability compared to “integrated” video memory. Some value desktop systems and many notebook systems still have integrated video memory, where the system uses the primary memory for video and other operations. If you are not sure, ask if memory is dedicated specifically to the video system or if the video memory is integrated with the main memory.

If you plan to use your new PC for gaming, graphics, or other serious multi-media applications, a dedicated graphics card is a necessity. Upgrading a desktop PC from integrated graphics to a 256M dedicated video card usually costs under $50. Depending on the line of laptop you are looking to buy, you may not have the option to upgrade from integrated graphics to a dedicated video card. When such upgrades are available for the laptop, the cost is usually under $100.

Audio

The vast majority of new systems today come equipped for stereo sound, although you have options that will affect the overall sound quality. Some desktop systems and many notebooks have integrated audio, which should suffice for listening to MP3s and CDs or performing general computing tasks.

However, if you are looking for enhanced audio, you may have the option to upgrade to software-enhanced audio or to a dedicated sound card. Software-enhanced sound, which typically costs around $25, is a step up from basic integrated audio. It is usually the only internal audio upgrade available for notebook systems.

If you want the highest quality sound, especially for watching video or recording audio, hardware-driven sound is the best option. This entails a dedicated sound card, which is typically an option only for desktop systems. An upgrade to a dedicated sound card direct from the manufacturer will cost under $100.

Displays

While the computer itself does the heavy lifting as far as running software and performing calculations, the monitor is equally vital since it allows you to view the fruits of your PC’s labors.

When shopping for a new desktop system, be sure that the quote you receive includes the cost of a display; some companies quoting “low” prices for new computers may be selling them without a monitor. As you compare prices of new systems, do not look to the monitor as an area where you can save a lot of money. The increased viewing area and clarity of a larger display is well worth reduced eyestrain through the years.

LCD

LCD (liquid crystal display) is now the norm for both desktop and laptop/notebook systems. However, manufacturers such as Dell and Apple have begun flirting with displays backlit by LEDs (light-emitting diodes). While LED does not change the overall viewing experience, it does allow for much thinner systems overall compared to traditional LCDs, and LED displays consume less power—two definite benefits for portable systems. However, there is a slight premium for this option—Dell offers WLED display upgrades for select laptops for $100; Apple offers LED displays on all its MacBook Pro models, which start at $1,199.

Screen Size

Almost all new consumer desktop systems today offer widescreen displays that are at least 19" in size, with upgrade options up to 24" common. At the manufacturer level, upgrading from a 19" to a 22" LCD is less than $100. We recommend this, especially if you plan to use your PC for extended periods.

For laptop users, there is a trade-off between screen size and portability. Today’s ultra-portable notebook systems, which usually weigh less than five pounds, have screen sizes that average around 13" or 14". Desktop replacement notebook systems with screen sizes ranging from 17" to 20" can weigh over seven pounds, an important consideration if you plan to travel with such a system.

Resolution

A display’s resolution is the number of pixels that make up the actual viewing area. LCD displays have what is called a “native resolution”—generally the highest resolution that it can best display. Again, a 22" display with a 1680 × 1050 resolution is a worthwhile investment, especially if you plan to use your system for gaming or for watching movies. The cost of such a display, on average, is currently between $140 and $250.

Internet Connectivity

Very few people these days use a home computer without accessing the Internet. There are several on-ramps to the information super highway—dial-up modems or high-speed connections such as DSL, cable, or satellite.

Dial-Up Connection

These days, those of us with high-speed Internet connections take them for granted. However, a number of people live in areas where connecting to the Internet with a traditional dial-up modem (using a land telephone line) is their only option.

Depending on where you live, there may not be providers of high-speed Internet such as DSL/ADSL and cable. Even if satellite Internet is available, for many the costs are much too high. If you fall into one of these categories, you will need to have a system with a built-in modem. However, you cannot assume that a standard modem is included with a new PC. Adding a 56.6Kbps internal modem costs less than $20.

High-Speed Alternatives

High-speed or “broadband” connections offer data transfer speeds that are vastly superior to dial-up but, again, their availability is tied to where you live. Ranked in descending order based on data transfer speeds are fiber-optic, cable, DSL/ADSL, and satellite.

In order to access the Internet using either a cable or DSL/ADSL modem, or if you are considering networking multiple computers at home, you will need a PC with a built-in Gigabit network adapter. On average, a five-port 10/100/1000 (1000BASE-X) Gigabit network adapter costs under $50.

Wireless

Wi-Fi technology offers wireless high-speed access to the Internet using Wi-Fi–enabled devices such as PCs, cell phones, or personal digital assistants PDAs. Wireless access points, or hotspots, have sprung up in almost every place imaginable over the last several years, from coffee shops to hotels and airports. If you are planning to buy a new laptop, make sure it has a built-in wireless network card so you can make use of these hotspots.

Cellular phone companies—including Verizon, AT&T, and Sprint—are also entering the high-speed Internet market by offering Internet access over their cellular networks (where they are available). Some laptop makers offer built-in mobile broadband adapters. Please note, however, that these services require a wireless subscription, similar to a cellular phone plan.

For those with broadband Internet connections at home, you can also set up a wireless network and use Wi-Fi to connect to it. In order to have wireless at home, you would need broadband Internet access, such as DSL/ADSL or cable, a wireless router to connect to your cable or DSL/ADSL modem, as well as a wireless card for your PC.

Printers

While not technically part of the computer itself, printers, like monitors, play an important role and should be considered a part of a complete PC system. It is highly unlikely that you can use a computer for any length of time without having to print something, whether it is an E-mail message, a Web page, a digital picture, or a price chart. Printers, just like computers, come with numerous options and issues to consider and have varying price points. Keep in mind that the quoted price for a computer system rarely includes a printer. This is usually something you need to purchase separately.

Inkjet Printers

Inkjet printers are the most common printers on the market today for the average PC user. They are inexpensive, reasonably fast, quiet, and achieve good print quality.

If you are spending the money for a printer, color is the way to go. This is especially important if you want to distinguish between data on printed graphs with multiple lines or bars—often a concern when printing reports from investment software and information from the Internet.

You can find color ink-jet printers that cost as little as $30, but remember that “you get what you pay for.” For standard color printing, expect to pay between $50 and $130 for a good-quality color inkjet printer.

Over the life of a typical inkjet printer, the greatest cost will be for ink. Sometimes, printers that are more expensive are actually less costly to run in the long term because they often have higher-capacity ink tanks and separate tanks for each color (instead of multi-color ink cartridges).

Laser Printers

Compared to inkjet printers, laser printers offer superior printing speed and quality. While the prices of laser printers continue to fall, they are probably overkill for the average computer user.

Personal monochrome (black and white) laser printers start at around $75, while personal color laser printers tend to run between $175 and $750.