Wayne Thorp will speak at the 2015 AAII Investor Conference this fall; go to www.aaii.com/conference for more details.
In my 15-plus years writing for Computerized Investing, I can’t recall a time when the PC industry was undergoing such profound change as is happening now. Consumers are holding onto their systems longer, as we benefit from better technology that is lengthening their useful lives. Instead of spending our money on upgrading our personal computers, we are buying smartphones and tablets. Add in the macroeconomic headwinds around the globe, and the PC industry is on the verge of its first year-over-year decline in sales in 11 years.
As consumers, we are faced with an exciting array of options to satisfy our computing needs. With this, however, comes questions and confusion. This is the environment we are facing as I sit down to write our annual PC Buyer’s Guide. I hope to dispel some of these issues and help you decide what you need when buying a new PC. This guide is intended for those looking for a PC to aid in the computerized investment and analysis process. This includes such tasks as portfolio management and tracking, stock and mutual fund screening, and technical analysis and charting. In addition, the systems we recommend will be able to handle common everyday tasks, including email, Web browsing, word processing and spreadsheet work.
These recommendations are based on my own experiences as well as the current trends in the software and computer industries and should allow you to run today’s crop of investment-related investment software titles. Since everyone’s needs are different, the systems we recommend here may be too powerful or lacking in resources to accomplish everything you do with a PC. This buyer’s guide is unique in that our recommendations are intended to allow you to run the widest variety of investment-related software titles both today and over the next few years.
Do you need a new PC? Chances are you are buying a new PC because you need one, or at least you think you need a new one. Even I can admit to being seduced by the latest technological gadgetry, but just because your PC isn’t the latest and greatest doesn’t necessarily mean it’s time to discard it. If you bought a mid- or high-level desktop system within the last four or five years, all you may need is a bigger display and an upgraded operating system. If you are a Windows user not running Windows 7, it’s time to upgrade both your operating system and hardware. Mac users running anything previous to Mac OS 10.6.x Snow Leopard should also consider upgrading.
If you find yourself constantly having to delete files to free up hard disk space or if your system runs very slowly, you have a few lower-cost options to upgrade your system to boost its performance. These include adding more memoryor adding hard disk space either with an additional internal hard drive or by offloading files such as pictures, music and video to an external drive.
Notebook/laptop systems tend to have shorter life cycles, as they tend to be more difficult to upgrade. Furthermore, advances in display technology and improved energy efficiency increase the rate at which they become “obsolete.”
As we mentioned earlier, the recommendations we make here are intended for “typical” computerized investors. However, everyone’s needs are different. Therefore, if you are thinking about buying a new computer, the first thing you need to do is assess your current and future computing needs. Ask yourself what you need from a new computer and answer it thoughtfully and truthfully.
These days, there is very little to distinguish one computer from another (at least on the inside). More and more, computer manufacturers are competing against each other based on styling and price. As a result, computers aren’t the “big ticket” items they were a few years ago, even as their power has risen exponentially. Sub-$1,000 Windows PCs are the rule, not the exception, yet they will still give you at least a few years of use. Unless you go with the most budget of budget systems on the market today, it will be hard to find a system that isn’t powerful enough for your needs. In fact, it is much easier to overspend on a PC with features you don’t need for your level of computing.
Our goal with this guide is to focus your attention on the key factors that are most relevant when buying a new computer. This means helping you find one that fits your needs while avoiding unnecessary extras.
When discussing computers, few topics evoke as many opinions, or as much passion, as which operating system (OS) one should choose. Luckily, the choice is pretty clear-cut: it all comes down to the types of software you are looking to run. This is especially true if you use specialized investment analysis, tracking and research titles, as many are written for only a single OS. As a result, your software needs will have a direct bearing on which operating system you choose.
Today’s marketplace is dominated by two operating systems: Microsoft Windows and Apple Mac OS. For many years, Windows has controlled an overwhelming share of the global marketplace. Depending on the source, Windows’ market share ranges from 76% to 92%. This figure is becoming muddied by the inclusion of mobile operating systems in some calculations. According to NetMarketShare.com, which tracks market share trends in Web browsers and operating systems, Windows controlled nearly 92% of the global desktop market in September 2012. This excludes mobile and tablet devices and represents a slight downtick from a year ago. Meanwhile, the Mac OS had nearly 7.2% of the global market, which is an increase from 2011.
Linux, the open-source operating system that, like Mac OS X, is derived from UNIX, controls roughly 1.1% of the operating system market. This is steady from a year ago, after seeing its percentage drop the previous year. Because it is open-source and freely distributable, Linux is a popular choice for many budget systems, which are cheaper because the manufacturers do not have to pay Windows licensing fees. Furthermore, Linux is popular among hobbyists and “tech heads.”
If you are looking to buy a new Windows system, you may run across 32-bit and 64-bit designations when it comes to the operating system. Prior to Windows 7, 64-bit systems were considered the realm of technology enthusiasts or software developers. However, today most new Windows 7–based laptops and desktops are running a 64-bit version of the operating system.
Basically, 64-bit systems can handle greater amounts of memory, or RAM. The theoretical limit for 32-bit systems is 4G (four gigabytes) of memory, although a variety of factors lowers this to around 3G. Most of today’s 64-bit systems are shipping with up to 8G of memory. According to Microsoft, 64-bit versions of Windows 7 can support up to 192G of memory.
The benefits of 64-bit technology become apparent when you are using large amounts of memory. However, even then 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 get a boost in performance.
If you are upgrading from an older 32-bit version of Windows to a 64-bit version of Windows 7, be aware that you may not be able to run 32-bit-based software on it. For this reason, it is a good idea to check with the software manufacturer to determine whether a program will run on a 64-bit system.
By the time you read this guide, Microsoft will have released the newest version of its Windows operating system: Windows 8. This replaces Windows 7, which was released on July 22, 2009, and marks the third Windows upgrade in less than six years. It is the first Windows version designed for desktops, laptops, tablets and smartphones, and it is optimized for tablets. According to a recent Gizmodo review, Windows 8 marks the “first time you will have to re-learn how to use Windows since 1992,” when Microsoft introduced Windows 3.1. An article in Laptop Magazine refers to some design decisions for Windows as being a “cognitive burden.” Microsoft’s co-founder Paul Allen has referred to Windows 8 as being “elegant” and “puzzling” at the same time. This is quite apparent to me after having used Windows 8 for the last several months in both its preview and final release versions. I have yet to experience Windows 8 on a tablet, but I am quite certain that “traditional” PC users will find the experience more than a little confusing at the onset. The entirely new user interface (UI) will leave many first-time users scratching their heads. The “Start” button used in previous versions of Windows has been replaced by a Start screen that takes more than a little getting used to. The Start screen displays a customizable array of tiles linking to various apps and desktop programs, some of which can display constantly updated information and content through “live tiles.” A vertical toolbar, known as the charms bar, provides access to system and app-related functions, such as search, sharing, device management, settings, etc. The traditional desktop environment for running desktop applications is accessed via a tile on the new Start screen. And, Windows 8 includes a new online store—similar to Apple iTunes—where you can obtain new applications.
New security measures were added as well. In addition to a built-in anti-virus program, the BIOS (basic input-output system) firmware code has been replaced with the Unified Extensible Firmware Interface, which requires that an operating system be digitally signed before the PC will allow it to load, reducing the potential for malware attacks. Also new is the Early Launch Anti-Malware ( feature, which allows security software to be first in line once a PC starts up, improving the security of the computer at an early stage. Most security experts agree that this is the most secure version of Windows ever.
Like previous versions of Windows, Microsoft is not content with just one version. There are four editions of Windows 8: Windows RT, Windows 8, Windows 8 Pro and Windows 8 Enterprise.
Windows 8 will run on any PC that runs Windows 7, so users won’t need to make any hardware changes to upgrade. Those wishing to upgrade to Windows 8 Pro can do so for $39.99 until January 31, 2013. The Windows 8 installer checks your system, peripherals and software for compatibility when you start the upgrade, so there is little or no risk of installing it on a system that cannot handle it. To help in the upgrade process there are also third-party apps, such as Laplink’s PCmover Windows 8 upgrade assistant, that allow you to retain applications, settings and data from your older Windows PC. It is currently available for $14.95 from www.laplink.com.
Usually, I am on the bleeding edge of technology, having immediately jumped on the Vista and Windows 7 bandwagons within days or weeks of their respective releases. With Windows 8, I am more hesitant to upgrade the Windows notebook and desktop systems I use on a daily basis. Apparently, I am not alone. According to research and analytics firm Net Applications, just 0.33% of all Windows-based computers ran on Windows 8 in September. By comparison, 1.64% of Windows-based computers were running on Windows 7 the month before it was released in 2009. This means that the early adoption rate of Windows 7 was roughly five times that of Windows 8. If you don’t wish to upgrade to Windows 8, but are running a version older than Windows 7 (it’s time for an upgrade), I suggest upgrading to a Windows 7 system. Anyone who purchases an eligible Windows 7 PC between now and January 31, 2013, can purchase a Windows 8 Pro upgrade for $14.99.
For the last decade or so, Apple has been the gold standard in the technology industry for innovation, quality and customer loyalty. Apple has revolutionized the way we interact with technology, starting with the PC and then moving on to personal audio with the iPod, communication with the iPhone and finally mobile computing with the iPad.
One of the advantages of buying a Mac is that the software and the computer itself come from the same company. (Microsoft, by comparison, is, for the most part, a software company that licenses its operating system to PC makers.) This integration between software and hardware has led to systems that tend to be more stable than Windows-based PCs. Furthermore, the Mac OS has, historically, been more secure than Windows. This was due in part to its much smaller install base. However, earlier this year the Flashback botnet struck more than 600,000 Mac computers worldwide, with more than 300,000 of the machines affected in the U.S. Hackers took advantage of a weakness in Java programs to gain access to Mac users’ machines. Perhaps most embarrassing to Apple was that nearly 300 of the Flashback attacks were aimed at computers in Apple’s Cupertino, California, headquarters. As a result, Apple quietly revised its antiviral language on its website. Its former, blunt message — “it doesn’t get PC viruses” — has been replaced with a more vanilla: “It’s built to be safe.”
The latest version of the Mac operating system—OS X—is version 10.8, or Mountain Lion, which was released on July 25, 2012. If you are running OS X 10.6.8 or later, an upgrade to Mountain Lion costs $19.99. Mountain Lion is the second version of OS X that can only be purchased through the Mac App Store. Unlike Microsoft, Apple produces only one version of the OS X, eliminating the confusion about which version is right for you.
Much like Microsoft is doing with Windows 8, Apple is working to integrate its mobile operating system, iOS, with OS X to give users a similar experience across different devices. To that end, OS X 10.8 Mountain Lion borrows heavily from iOS.
Those who have used an iOS device before will be familiar with the Notification Center added to Mountain Lion. Here you choose which applications can send you alerts and how the alerts are displayed on your screen. In Mountain Lion, iChat has been replaced with Messages, the desktop variation of iMessages from iOS. This instant messaging service is similar to Google Talk and AIM. Mountain Lion also offers fully sync-enabled versions of Reminders, Notes, Calendar and Contacts that tie directly into iCloud (Apple’s cloud storage service). iCloud plays a prominent role with Mountain Lion: Besides allowing users to sync their data across multiple Apple devices, in Mountain Lion, iCloud is also a primary means of saving documents, which can then be accessed from other iCloud-enabled devices. Finally, after creating a splash with its introduction on the iPhone 4S, Siri—Apple’s voice dictation—is now available with Mountain Lion.
With AirPlay Mirroring now in Mountain Lion, you can wirelessly transfer movies and other content from your computer to an HDTV at up to 1080p using Apple TV.
The new Gatekeeper in Mountain Lion prevents any apps that have not been downloaded from the Apple App Store. While Apple claims this is a security feature that will prevent you from installing apps that could potentially harm your system, some believe this is another of Apple’s strong-arm tactics to eliminate “unauthorized” apps. By default, Gatekeeper blocks all non-App Store content. However, you can modify the settings to allow applications downloaded from anywhere.
Lastly, the new Power Nap feature that is enabled with the latest Mac hardware—recent MacBook Air models and the new MacBook Pro with Retina display—allows Mountain Lion to download software updates, iMessages, mail and perform backups while the system is asleep.
Like most OS X upgrades, Apple claims hundreds of new or updated features with Mountain Lion. To learn more, visit the Apple website: www.apple.com/osx/whats-new/features.html.
Perhaps the biggest complaint against OS X 10.8 Mountain Lion is that it doesn’t represent the same quantum leap that Microsoft appears to be making with Windows 8. There have been grumblings that Windows 8 may “out-innovate” OS X. Eleven years since the release of OS X, many are wondering when Apple will take the next step forward with its operating system.
On a weekly basis, I get emails from readers who have switched to a Mac, only to find that their Windows-based investment software won’t run on their new systems. This is because, even with their rise in popularity over the last several years, Macs still lag Windows in terms of sheer numbers. Many software writers, therefore, have chosen to focus on the larger potential pool of users, which is why there tends to be a dearth of quality investment software titles for the Mac, the majority are personal finance managerssuch as Quicken Essentials for Mac. Even when there is a Mac equivalent of a program, however, it often lacks some of the more advanced features found in the Windows counterpart (as illustrated by Quicken).
If you’ve taken the plunge and switched to a Mac from Windows, you have two options for running your Windows titles: Either maintain a separate Windows system, or use a utility that will allow you to install Windows on a Mac. For many, the former isn’t overly convenient. However, as the hardware used on both Mac and Windows systems have converged over the last several years, a number of utilities now make it possible to run the Windows operating system, and therefore Windows-based programs, on a Mac.
Boot Camp is Apple’s multi-boot utility included with Mac OS X, which allows users to install Windows on Intel-based Macintosh computers. Previous versions of Boot Camp supported new installations of Windows XP, Windows Vista and Windows 7. However, with the release of Boot Camp 4.0 for Mac OS X 10.7 Lion, only Windows 7 installations are officially supported. Boot Camp 5.0 began shipping with Mac OS X 10.8 Mountain Lion in July of this year. The biggest drawback with multi-boot utilities such as Boot Camp is that you cannot run Windows and Mac OS simultaneously; you have to reboot your system in order to switch between Mac OS and Windows. Currently, Boot Camp 5.0 doesn’t officially support Windows 8, since it has yet to be released.
Another option for those looking to run Windows on a “Mactel” system (since 2006 Macs have been using Intel processors) is to use virtualization software, whereby multiple operating systems can be running simultaneously. Keep in mind that running multiple instances of an operating system in a virtual environment can place a significant burden on your system’s resources; in addition, Windows does not get full control of the Mac’s hardware. As a result, these virtual systems tend to be slower than what you experience with multi-boot utilities.
Two programs that allow you to run Windows in a virtual environment on Mactel systems are Parallels Desktop for Mac 8.0 (www.parallels.com), released on September 4, 2012, and VM Fusion 5 (www.vmware.com/products/fusion), released on August 23, 2012. Both support Mac OS X Mountain Lion as well as Windows 8. Parallels is available to try for free for 30 days, after which a new-user license costs $79.99. VMware Fusion 5 also comes with a free 30-day trial, after which a new-user license costs $49.99.
It is important to keep in mind that, in order to run Windows on a Mac, you must also purchase a Windows license in order to install it.
Once you settle on an operating system, the choices don’t end there. You must then pick the platform to run it on. Historically, this has meant selecting a laptop or desktop, but the mobile market has widened over the last several years to include traditional laptops/notebooks, netbooks, ultra-mobile PCs and more. Globally, portables outsell desktop PCs, and their prices have fallen while their power and functionality have increased. The line between desktops and laptops has blurred over the years; some new desktops are actually smaller than some laptops, while some laptops offer features and capabilities rivaling those of traditional desktops.
Portable PCs and desktops each have distinct advantages and weaknesses, and the decision as to which is best for you often rests on the answers to the following questions:
If you answered yes to any of these questions, you may want to consider buying a notebook/laptop system.
Another consideration is the ease with which desktop systems can be upgraded compared to laptops (generally speaking). Desktop systems tend to be easier to repair and upgrade, mainly because of the availability of “generic” components that you can install with relative ease and that won’t present compatibility issues.
Notebook PCs, on the other hand, tend to have hardware designed specifically for the model, making them more expensive to repair and more difficult to upgrade. You may be able to find a new hard drive or memory modules from a local electronics store or through an online retailer, but you are more likely to encounter difficulties installing component upgrades on a laptop. Even the latest Mac laptops and Windows Ultrabooks have batteries that can only be replaced by the manufacturer.
Lastly, there are definite cost considerations when buying a laptop (and cost advantages to buying a desktop). Expect to pay a premium for mobility. As Table 1 shows, there is a definite price difference between comparably equipped mid-range desktop and laptop/notebook systems.
Popularized by Apple’s iMac, the all-in-one PC is a desktop with a built-in monitor. The desktop components (processor, memory, hard drive, etc.) may be in the base or hidden behind the flat-panel display itself. Because the display and the computer itself are enclosed in a single box, they’re generally more space-efficient than a traditional tower-and-monitor combination. On the other hand, the PC components will become obsolete faster than the display, one drawback of having the two so tightly integrated. Furthermore, it is more difficult to repair or upgrade an all-in-one PC. Also, keep in mind that if the display goes, the whole system is useless, unlike a tower-and-monitor system, where you can swap out the monitor.
Also, all-in-one PCs tend to use notebook components, which mean they don’t offer the same power as traditional tower-and-monitor systems. Otherwise, plan on paying a hefty price premium for equivalent computing power.
If you have a small space in which to setup your computer, but are looking for a larger display than what you find with a notebook/laptop system, an all-in-one may be worth considering.
Mobile devices have been the driving force in the computing world over the last several years. The devices deliver varying levels of computing power in a highly portable package. These devices include netbooks, ultraportable notebooks and media tablets.
This may very well be the last time we mention netbooks in this annual guide, as their life cycle, at least in mature markets such as the U.S., is reaching its end. These small-to-medium-sized laptops took the world by storm four years ago, as consumers looked for lightweight, inexpensive systems for routine tasks such as email and Web browsing. However, the market and tastes have changed. Research firm Canalys reports that netbooks account for 5% of global PC shipments, which is a 13% drop from two years ago. In 2011, 29.4 million units shipped, which was a drop of 25% from the previous year. At this point, there is still some potential in emerging markets, where consumers need a cheap PC or a basic notebook. At the peak of their popularity, many consumers purchased netbooks as secondary computers to use while traveling. Today, however, they are increasingly turning to tablets for the same functionality. Furthermore, the writing was on the wall when ASUS, the pioneer of netbooks, recently announced it was ceasing production of these systems, along with Dell and Lenovo. The arrival of Windows 8 will also expedite the decline in netbooks, as the platform’s limited hardware capabilities will compromise the Windows 8 experience. The absence of touchscreen capability with netbooks will also make them relatively outdated.
Several companies, such as Acer, have vowed to continue making netbooks for the time being. Most models range in price from $200 to $400, making them relatively inexpensive compared to traditional laptops/notebooks. However, the typical netbook has a display of only 10 inches to 12 inches, a smaller keyboard and no internal optical drive (CD or DVD). As a result, these systems are considered a complementary product—consumers purchase them in addition to a desktop or “traditional” laptop notebook, not instead of one.
Attempting to satisfy the need for highly portable computers with more power, a bigger keyboard and a larger screen than a netbook, computer manufacturers are producing ultraportable notebooks with larger higher-resolution screens and more powerful processors. The same devices offer some of the characteristics of tablet PCs, including instant-on activation and long battery life.
This segment has been defined, thus far, by the Macbook Air, which has a high-definition screen ranging from 11 inches to 13 inches, the latest Intel Core processor and a solid-state drive, all while weighing less than three pounds. The price for a new Macbook Air currently ranges from $999 to $1,499.
In an attempt to counter Apple’s dominance, as well as the emergence of tablet devices using ARM processors, Intel, which is not licensed to produce ARM chips, has defined (and trademarked) a new class of ultraportable laptops running Intel chips called Ultrabooks. They are intended to offer the convenience of tablets and the functionality of larger laptops/notebooks, as well as a Windows alternative to the Macbook Air. The specifications that Intel has submitted to manufacturers looking to produce Ultrabooks are as follows: thickness of less than 0.8 inches; battery life of at least five hours; 13- to 15-inch display; weight of less than three pounds; solid-state drivestorage; and price less than $1,000. In addition, most Ultrabooks lack an internal optical drive ( . If this is something you require, you will probably need to purchase an external DVD drive, which generally costs around $50.
When Intel first announced its $300 million Ultrabook “initiative” in 2011, the company predicted that Ultrabooks would represent 40% of all consumer laptops by the end of this year. According to IDC, Ultrabook sales in 2012 will be less than one half of one percent of notebook computers worldwide. A slightly rosier forecast comes from iSuppli, which has Ultrabooks accounting for less than 5% of notebook sales worldwide.
According to NPD DisplaySearch, adoption of ultra-slim PCs has been modest because of their premium pricing combined with a lack of differentiation from traditional notebooks/laptops with lower price points. I have reviewed several Ultrabooks as part of my “Gadget Corner” segment, and I have to agree with this assessment. While the Ultrabooks currently on the market are incredibly light, very powerful and have impressive battery life, it’s hard for the typical consumer to rationalize their higher price.
NPD believes, however, that ultra-slim PC shipments will grow to 65 million by 2015, a quarter of all mobile PC shipments. This will be aided by falling prices due to manufacturing improvements, new processors and the introduction of Windows 8.
While Windows-based Ultrabooks themselves may have gotten off to a slow start, there is a definite movement afoot to squeeze as much excess weight out of notebooks, with better success. So-called “ultrathins” are notebooks that, for some reason, do not meet Intel’s Ultrabook specs. These ultrathins are thinner and more portable than traditional notebooks, but are often cheaper than Ultrabooks.
As netbooks have faded into the background, tablets have burst to the forefront of the industry with little indication that their popularity will fade anytime soon. With the Apple iPad in the vanguard, the impact of tablets has been felt at all levels of the computing industry. The market is now flooded with a number of tablets, all vying to be the “iPad killer.”
Generally speaking, a tablet PC is a portable computer equipped with a touchscreen as the primary input device. True tablets lack a physical keyboard, offering instead a virtual, on-screen substitute. However, convertible tablets are coming to market that have a physical keyboard similar to that of a netbook or ultra-portable PC and a swivel screen that converts it into a tablet. Expect more of these systems in 2013. Like netbooks, tablet PCs lack the computing power of a typical notebook/laptop computer, both in terms of processing power, full-featured programs and storage capacity. Also similar to the netbooks they are quickly replacing, tablets are best suited for Web browsing, email and running native applications, or “apps.” For this reason, tablets are not a replacement for notebooks if you need to run “standard” software titles and are performing tasks such as Web development, editing videos and photos, or creating long documents.
With the release of Windows 8, you will find tablets running Windows RT, iOS from Apple and Google’s Android.
Only Apple iPads run iOS and the third generation iPad, unofficially the iPad 3, was released in March 2012. The new iPad sports the new dual-core A6X processor with quad-core graphics, and a 9.7-inch Retina display with a resolution of 2,048 by 1,536 pixels. There are two models, a Wi-Fi only model and a Wi-Fi + Cellular model, and they have storage capacities of 16G, 32G or 64G. Prices for the third generation iPad are between $499 and $829, depending on storage capacity and connectivity. Perhaps to steal a little bit of Microsoft’s thunder with its October 26, 2012, release of Windows 8, Apple launched a “mini” version of the iPad on October 23.
The iPad mini has a 7.9-inch LED-backlit display (non-Retina) with 1024 by 768 resolution. Similar to the “regular” iPad, the mini comes in two models: a Wi-Fi only model and Wi-Fi + Cellular with storage of 16G, 32G or 64G. It also has the new Lightning connector that was introduced with the iPhone 5. A 16G Wi-Fi only iPad mini is priced from $329. This is an interesting price-point, since a 16G 9.7-inch iPad 2 costs $399.
The Android marketplace is decidedly more fragmented, with companies such as Acer, Asus, Google, Motorola and Samsung competing against each other as well as Apple. One popular tablet is Amazon’s Kindle Fire. Released in November 2011, the Kindle Fire has a color seven-inch multi-touch display, runs a custom version of the Android operating system and has 8G of storage. The device includes access to the Amazon Appstore, streaming movies and TV shows, and Kindle’s e-books. It also allows you to check email and surf the Web. Since its release, many industry experts have labeled the Kindle Fire as the iPad’s strongest competitor. In September, the Kindle Fire price was reduced to $159, memory was upgraded to 1GB and processor clock speed was upgraded to 1.2GHz. A new and more video-friendly version, the Kindle Fire HD, with 1280 x 800 HD display and dual-band, dual-antenna Wi-Fi, has also been introduced and costs $199. There are also 8.9-inch versions of the Fire HD that range in price from $299 to $599.
With the release of Windows 8, Microsoft will also launch its first tablet, Surface, running Windows RT. It will have a 10.6-inch HD display with a resolution of 1366 by 768, 2G of memory and Wi-Fi. Firing a shot across Apple’s bow, a 32G Surface RT will sell for $499, making it $100 less than the retina-display iPad.
Once you have settled on the operating system and platform-type, you are now ready to make the actual purchase.
However, here, too, you have several options: you can buy a system directly from the manufacturer or from a retail store. Some companies—such as Apple, Dell, Hewlett-Packard (HP) and Lenovo—allow you to customize your system and order it online or over the phone to be shipped directly to you (mail order). Likewise, these same companies and others make their computers available at retail outlets such as Amazon.com, the Apple Store, Best Buy, Costco, Office Depot, Staples and Walmart.
Arguably, the greatest advantage to ordering a new computer directly from the manufacturer is that you are able to customize it to get exactly what you want. In addition, due to inventory practices, manufacturers are usually able to offer new technologies more quickly than retailers, who usually have to move their existing inventory of older technology before restocking with the new. However, ordering directly from the manufacturer can sometimes work against you, such as when a lack of critical components delays the delivery of your new system.
One of the biggest trade-offs when buying direct is the lack of face-to-face assistance should something go wrong. Dell offers a variety of computer setup and support services, either over the phone or via third-party technicians who come to your house. These include a new computer setup for $149 (in-home only), Internet and email setup for $59or $99 (in-home) and Windows operating system installation for $89 or $149 (in-home).
Furthermore, most manufacturers include in a system’s purchase price one year of on-site services as part of any warranty. These options should cover the majority of problems you typically might face—at least for the first year of owning your computer.
For repair service coverage after the manufacturer warranty expires, many larger mail-order companies offer extended warranty coverage through third parties. Realistically, there is no reason to pay for extended warranties lasting more than three years, as anything serious that happens at that point may warrant buying an entirely new system. HP and Dell both offer three-year protection plans that cost between $85 and $200+, depending on the level of service you choose and the type of system you purchase. Apple’s AppleCare Protection Plan provides three years of telephone technical support and repair coverage ranging from $149 to $349, depending on the system you buy.
Buying retail—either from an actual brick-and-mortar store or an online retailer—doesn’t necessarily mean paying more for a system that isn’t quite what you are looking for. Popular stores such as Best Buy, Office Depot and Walmart offer competitive prices compared to manufacturers, and online vendors usually offer a large enough selection for you to find a system that closely matches your needs. These same stores allow you to buy from their websites, as do online retailers such as Amazon.com, CircuitCity.com and TigerDirect.com.
You may have to be prepared to compromise on your list of wants, and perhaps your budget, to fit the retailer’s offerings. However, there are enough options that, if you “shop around,” you shouldn’t have a problem finding a computer system that matches your computing needs and budget.
Table 2 summarizes our recommended specifications for those buying a desktop computer today to perform the most common types of investment analysis as well as general-purpose computing tasks for the next few years.
|Operating System||Windows 7 Home Premium 64-bit||Mac OS X Mountain Lion|
|Processor||dual- or quad-core AMD A4 or A6; dual-core Intel Pentium, 2nd Generation Intel dual-core Core i3, or quad-core Core i5||2.7GHz quad-core Intel Core i5|
|Memory||4G RAM||4G RAM|
|Hard Drive||1T HDD||1T HDD|
|Video Card||dedicated AMD or NVIDIA DirectX 11-capable graphics||512MB dedicated graphics memory|
|Sound Card||built-in audio||built-in audio|
|Network Adapter||wired Ethernet||wired Ethernet|
|Monitor||20" widescreen LCD||21.5" widescreen LCD|
|Price*||$450 - $800||$1,668|
|*As of October 15, 2012.|
Given the rapid changes taking place in the computer industry, one certainty is that today’s top-of-the-line PC will be relegated to middle-of-the-pack status within a matter of months. Generally speaking, however, don’t be seduced by the latest technologies, as you are most likely paying for performance and options you don’t really need.
We realize that computing needs are as varied as investment styles. What we have attempted to do with this PC Buyer’s Guide is to provide our thoughts and opinions. Like investing itself, the ultimate decision of whether to buy, as well as what to buy, is up to you.
The next section provides more in-depth discussions and guidance on choosing the hardware components that make up your complete computer system.
A computer 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. Knowing what each component does, and its relative impact on the performance of a computer, allows you to choose the best system for your budget.
The engine that drives any PC is the processor, or CPU, which executes operations, performs calculations and coordinates 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—as measured by its clock speed—the more quickly the computer will function. However, certain processor chip designs can squeeze more power out of a lower-speed chip than one with a higher clock speed. In addition, the hardware setup of your PC can also impact its performance beyond the processor. For example, the amount of memory, or RAM, in a PC 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 norm today is “multi-core” processors. Today, dual-core processors consist of two independent microprocessors (, quad-core processors consist of four cores, etc.
Realize, however, that there is not a linear relationship between the number of cores a processor has and the computer’s 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.
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 one or two generations behind the newest processors.
Most consumer desktop systems on the market today have dual-core systems, with quad-core becoming more common. The typical PC buyer will currently be choosing among Intel’s Pentium and Core i3 (dual-cores), Core i5 (dual- and quad-cores) and Core i7 (quad-core or six-core), and AMD’s A-Series (dual and quad core), Athlon II X2 (dual-core) and Athlon II X4 and Phenom II (quad-cores).
On the laptop side, you will generally find Intel’s Core i3 (dual-cores), Core i5 (dual- and quad-cores) and Core i7 (quad-core and six-core), and AMD’s A-Series (dual-core and quad-core) and E-Series (dual-core) processors in mainstream systems on the market today.
Over the years, operating systems have become more complex and powerful, and software makers have designed products to exploit the latest technology, all of which require greater amounts of hard disk space. Also, more and more users are getting involved in digital photography, video and music. This, too, requires an immense 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.
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. Therefore, if you are on a tight budget, you are better off going with a somewhat less-powerful processor in favor of additional memory.
You may also find memory modules that operate at different speeds. While, like a processor, faster memory is better, it is unlikely that you will notice the difference. Therefore, you can save money by choosing the slower-speed memory, if you have the option.
It is relatively easy to add more physical memory to your system, if needed. However, it is probably worth it to pay for as much memory as you can afford up front to avoid having to add more in the future.
The typical mainstream PC now ships with between 4G and 8G of memory. You need to have a 64-bit operating system to utilize that much memory (see the sidebar “32-Bit Versus 64-Bit” for an explanation). Given the low cost of memory, we recommend no less than 4G if you are running a 64-bit operating system. However, if you plan on performing a lot of high-definition video editing, you may want to consider more memory.
Adding an additional gigabyte of memory when customizing a new system will probably cost you less than $20, while adding two extra gigabytes of memory should cost less than $40.
While temporary memory, as we have discussed, plays a vital role in the operation of a PC, 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 Drivevs. Solid-State Disk
Over the last few years, solid-state driveshave gained in popularity, especially for portable systems. Just like traditional hard disk drives , 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 or the thumb drive you use to transfer files between computers.
SSDs have three advantages over HDDs: 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 it doesn’t draw down a laptop battery as quickly as an HDD, 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, these benefits carry with them a pretty steep price premium that still place SSDs out of the realm of the mainstream user. Whereas a 128G internal solid-state drive generally costs between $150 and $250, one terabyte (1T, or 1,024 gigabytes) internal hard drives for less than $100 are plentiful. Given the significant price premium of SSDs over HDDs, we still recommend buying a system with a hard disk drive for “typical” computing functions.
Hard Disk Drive Considerations
The most important factor to consider when selecting an internal hard disk drive 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 desktop systems today typically offer at least 250G 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 500G and 1T in size; 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 120G. Most mid-range notebooks offer hard drives that are at least 300G in size, while higher-end notebooks can offer as much as 750G 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 (however, these high-speed drives generally have somewhat limited storage capacities). Many laptop hard drives spin at a slower 5,400rpm to conserve power and generate less heat.
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, and rewriteable DVD drives are now the norm for PCs.
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. However, many users like the ability to view DVD movies on a laptop 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. However, with the advent of multi-format drives, which can read and write to both DVD+RW and DVD-RW discs, this is no longer an issue. 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 $20. Furthermore, standard DVD-R and DVD+R discs, purchased in bulk, can cost between $0.15 and $0.65 apiece.
Blu-ray, the next generation of DVD devices, is a high-definition (HD) format that can store roughly three-and-a-half times more data onto a disc—50G can be stored on a two-layer Blu-ray disc. This makes the Blu-ray drive a good choice for those looking to back up a large number of files—such as documents, photos or music—to a disc.
Combination Blu-ray readers/ DVD±R/RW burners are now available for between $55 and $80. Blu-ray DVD burners, on average, cost between $70 and $110.
The most compelling reason to opt for a Blu-ray player is if you have Blu-ray movies and wish to watch them on your PC.
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 they can connect to their systems via a variety of port types.
USB vs. FireWire vs. Thunderbolt
Universal Serial Busis a high-speed method for connecting all sorts of peripherals to a PC, such as mice, keyboards, printers, external hard drives and CD/DVD drives, and compact flash drives.
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 (gigabits per second), several times faster than USB 2.0. No matter what type of system you purchase, make sure it has several USB 2.0/3.0 connectors, including some on the front of the case for easy access.
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 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 $50.
In February of 2011, Apple introduced a new connection interface with its updated Macbook Pro lineup—Thunderbolt. Designed in conjunction with Intel, Thunderbolt supports throughput of 10.0Gbps. In addition, you can daisy chain up to seven devices from a single Thunderbolt port. Currently, the available Thunderbolt-ready devices include the Apple Thunderbolt Display as well as several external hard drives and video capture devices.
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 (, 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 $20.
Ultraportable Hard Drives
Just like 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 500G external 2.5” drive, on average, costs less than $75.
The price per megabyte for these drives is only a fraction of the cost of flash memory. A Western Digital 500G My Passport Essential external hard drive, which supports both USB 2.0 and USB 3.0, is currently available for $70 from TigerDirect.com, or $0.00014 per megabyte. By means of comparison, an 8G Sandisk Cruzer Blade USB flash drive costing $12 at Walmart has a per-megabyte cost that is nearly 950% higher than that of the Western Digital My Passport Essential external drive.
Anymore, computers are as much personal entertainment systems as tools. Some PCs allow you to watch and record TV programs. Even if your multi-media desires aren’t that ambitious, chances are at some point you will still listen to audio clips or music or watch video clips or movies with your computer.
Depending on how much multi-media usage you intend for your PC, you will want to be sure to buy audio and video capabilities to match.
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. Most mid- and high-end desktop systems today have dedicated or discrete 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. When looking at a system, inquire as to whether memory is dedicated specifically to the video system or whether the video memory is integrated with the main memory.
If you plan to use your new PC for gaming, graphics, high-definition video or Blu-ray disc viewing, or other serious multi-media applications, a dedicated graphics card is a must. Upgrading a desktop PC from integrated graphics to a 256M dedicated video card should cost less than $50. For laptops, depending on the line 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.
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 either to software-enhanced audio or to a dedicated sound card.
Software-enhanced sound, which typically costs around $20, is a step up from basic integrated audio. Furthermore, 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 requires 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.
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 (liquid crystal display) is the norm for both desktop and laptop/notebook systems. However, manufacturers including Apple, Dell, HP, Lenovo and Toshiba have been adding LED (light-emitting diode) displays to their product lines and adding LED-backlit displays to their laptop lines. 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.
Almost all new consumer desktop systems today offer widescreen displays that are at least 19” in size, with upgrade options of up to 24” or even larger that are not uncommon. At the manufacturer level, upgrading from a 18.5” to a 21.5” LCD is around $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 ultraportable notebook systems, which 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” often weigh over seven pounds, an important consideration if you plan to travel with such a system.
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 21.5” display with a 1920 × 1080 (full HD) 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 $120 and $250.
Nowadays, very few people 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.
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 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. It is rare these days to be able to add an internal modem, but an external USB modem can also be purchased for between $20 and $50.
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 $30.
Wi-Fi technology offers wireless high-speed access to the Internet using Wi-Fi–enabled devices such as PCs, cellphones or personal digital assistants. 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/Nextel—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.
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 email message, a Web page, a digital picture or a price chart. Printers, 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.
When looking at printers, print resolution is an oft-quoted statistic. Reported in dots per inch, the higher the resolution—all else being equal—the better the image quality. However, resolution is not as important as it once was, as manufacturers have found ways to manipulate resolution without actually increasing the number of dots per inch.
Ink-jet 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 $150 for a good-quality color ink-jet printer.
Over the life of a typical ink-jet 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). Looking at the page yield of a printer’s ink cartridge(s)—how many pages a cartridge can print before running dry—will give you an idea of how costly a printer is to operate.
Compared to ink-jet printers, laser printers offer superior printing speed and quality. The prices of laser printers have fallen to the point where, depending on your needs, a personal laser printer may be an option.
Personal monochrome (black and white) laser printers start at around $80, while personal color laser printers tend to run between $150 and $400.