1995-2012: How much the cost has dropped?

3/28/2012 7:01:26 PM

1995-2012: How much the cost has dropped?

Description: Description: Price cash

How much the cost of technology has dropped since October 1995?

In our early days, we were committed to giving sound advice such as World Wide Web: How to cruise the internet and How to set up and use email. Sixteen years later, our commitment to providing expert advice is as strong as ever. But one thing that has clearly changed is what you can get for your money.

Here, we look at tech pricing in 1995 and compare it to today's market. Of course, most of the components and peripherals of your beloved 1995 PC have since evolved beyond recognition - and fair comparison.

Your monitor would have been of the bulky CRT rather than flat-panel LCD type that now adorns almost every computer user's desktop. And your dust-collecting trackerball mouse has likely been replaced with an optical rodent that resembles something out of Terminator 2. As for a keyboard, well, you may not even use one.

There are just two components that are directly comparable to the parts found inside a 1995 PC: the hard drive and the RAM, Memory and storage are now both faster and boast a larger capacity than their 1995 counterparts, but we can draw some comparisons. Prepare to be amazed.


Description: Description: Memory

One of the advertisers in our launch issue hoped to tempt readers into purchasing a whopping 16MB of memory for an enormous $510. That's $32 for just 1MB!

A quick search on eBay - which, like all great things, also launched in 1995 - turned up 4GB of new RAM for $32. This works out at $8.0 per 1GB or roughly $0.008p per 1MB. The price of memory has thus decreased by a staggering 99.75 percent in 16 years, and is now 1/4,000 of its 1995 price. Ridiculous.


Description: Description: Storage

The largest internal hard disk sold by an advertiser in our launch issue was comparatively tiny to today's terabyte drives at 1GB. And it broke the bank at $269. You can't buy a hard drive with such a low capacity in today's market, although 1TB models are available in their droves around the $56 mark. We calculate the price per 1GB at 3.5p, meaning prices here have fallen even further than in memory - by 99.98 percent.

To put this into perspective, if houses depreciated in value at the same rate as hard drives since 1995, an average two-bedroom semi-detached house in a coastal south Devon town would now be worth just $247. We'll have 10, please.


Description: Description: Software

Interestingly, software hasn't experienced anything like this devaluation. Take Windows Office as an example. In essence the package you got in 1995 is the same as you get today, albeit that some features have changed and the whole thing is a lot snazzier and snappier.

When our first issue came out, Microsoft was offering an Office Standard package consisting of Word, Excel, PowerPoint and Schedule for $526. Today, Microsoft charges $301 for Office Home and Business 2010, which includes Word, Excel, PowerPoint, OneNote and Outlook. In essence, this suite offers the same capabilities as the 1995 package: you get a word processor, spreadsheets and presentation programs, plus an email client. Although the price has dropped by a not-to-be-grumbled-at 42.7 percent, this reduction isn't particularly impressive when compared to storage and RAM, which have both seen great technological advances in the past 16 years.

Moore's Law put to the test

What's interesting is how these technological advances compare with Moore's Law. For those of you who are unfamiliar with this particular edict. Intel co-founder Gordon E Moore espoused that the number of transistors that can be placed on to a circuit doubles every 18 to 24 months. To put this to the test, let's take the 16MB of memory in 1995 as a starting point and double that every 18 months until 2012. According to Moore's Law, we should now have 16.384GB of memory fitted in our high-end desktop PCs. Amazingly, we do. Look to the Eclipse Matrix i726R697 (, for instance, which has 16GB of DDR3 memory as standard. Well done, Gordon.


As you can see, technology has continued to snowball since PC launched in October 1995. Whereas 16 years ago our PCs might have had 16MB of memory and 1GB hard drives, today they have 16GB of RAM and terabytes of storage. Both have come down in price by more than 99 percent. So in what position can we expect the market to be in 2028, another 16 years down the line?

This is where things get complicated. It's widely agreed that the aforementioned and scarily accurate Moore's Law will expire in 2020, due to the fact it will not be possible to fit any more transistors per square-inch. If, however, Moore's theory remains broadly accurate up until then, we can expect memory sizes of up to 8TB in 2020 and hard drives with the storage capacity of 512TB.

Just for fun, let's pretend that Moore's Law wasn't set to expire in 2020, If that were the case, you can expect to find PCs for sale with 17TB of RAM and just over 4PB (4,096TB) of storage.

Given that 1GB of RAM costs around $8 today, 17TB would set you back $138.7. And with 1GB of storage costing around 0.035p at present, a 1PB hard drive would be priced at $233,955 today.

Such is the nature of this feature, that we could go on forever and a day. But in an attempt to include at least one succinct point, we'll leave you with the bombshell that memory size and storage capacity technology appears to be expanding at a rate of 1.28 percent per week.

GL0SSARY: 1,024kb = 1 megabyte (MB) Ÿ 1,024 MB = 1 gigabyte (GB) • 1,048,576MB = 1 terabyte (TB) • 1,073,741,824MB = 1 petabyte (PB)

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