January 03, 2008

January 3 Dealhack Market Report Now Live at Dealhack

• Dealhack Market Review - What trends are going to drive discounts in technology in 2008?
• Lightning Round - a quick rundown of eight great deals.
• Dealhack Deal of the Week - our pick for the best deal featured in the last week.

Chris: Many post-holiday clearance sales continue this week. As we’ve seen in years past, sales like these will continue to pop up from time to time over the coming weeks--with a particular focus on seasonal items like winter fashion extending late into the month. Watch for a wave of HDTV specials as well as discounts for new satellite and cable subscriptions as part of promotions for the upcoming NFL playoffs and the Super Bowl.
 
Michael: This week, we thought we’d take a look at some of the trends we observed in 2007 to help us make some guesses about where discounts are moving on some of the most popular items we feature here on Dealhack. Let’s start with computers.
 
Chris: Well, the price of an entry-level system, either a notebook or a desktop with an LCD display, has pushed reliably down to about $500. And those systems have improved this year--we’re seeing pretty consistently that those systems include a dual core CPU and a decent amount of RAM and a hard drive. I think the key things we can look forward to in the coming year are a drop of the price point down a bit, not a great deal, but we’ll probably see halfway decent dual core systems for about $400 but the real move is going to be a significant growth in the size of the standard hard drive and the RAM, and of course that’s getting critical. If you try to run any sort of high-order features like Vista on a PC with one gig of RAM and a single core processor right now it’s actually not a very pleasant experience. So those moves are going to make those systems pretty decent for the money but of course they can’t go a whole lot lower. The real move in computing tends to be adding the features as opposed to really dropping the price.
 
Michael: Ok, let’s talk about flash memory. We spoke in a podcast a few months ago about flash memory. Our target price at that time was about $10 per gig. Where are we headed in 2008?
 
Chris: Well, we’ve already seen a drop. Just this week we featured some Secure Digital cards that were as low as $6.50 shipped per gigabyte, and that kind of move is already pretty dramatic. You know, the chips that constitute flash memory are a commodity product and they tend to move up and down...so you can speak about a trend over the course of a year but at any one time it might not be possible to get these discounts. But I think it’s pretty clear already that in relatively low capacity cards, one gig, two gig, we’re going to see prices drop below $5 shipped, you know, if you’re shopping smartly. On higher capacity cards and USB devices, USB drives, that sort of thing, I think we can count very much on $3 per gig, especially when we start talking about an eight gigabyte card or, or a flash drive, and that’s really striking when you think about how much that’s moved in just a few years.
 
Now hopefully we’ll also see that effect RAM, which is similar but a little bit different, but it’s also moving down. So much like we talked about with computers the trend is bigger capacities but even here there’s more price savings to be wrung out of it.
 
Michael: You know, you kind of alluded to something that I think is worth highlighting. On Dealhack, what we do is we look only at the best price deals. That’s what we’re focusing on. So when we talk about something being, say, $10 a gig or $6.50 a gig, that isn’t the pricing across the board for all flash memory devices but rather a guideline of pricing we're seeing on good deals when they’re offered.
 
Chris: Exactly.
 
Michael: And so it’s worth noting, you can still walk into a big box retailer and see one of these devices priced five times higher than, what we're talking about here. I think it’s worth mentioning because if someone’s listening to this and they don’t really know our perspective, they might think that we’re saying this the average price across the board for these types of products, and that’s not the case.
 
Chris: Right, this is the threshold for making a decision about whether or not a given deal is worth getting. It’s true, there’s no question that if you're not carefully shopping on these things, if you just need it and you go to the first place you can get it, you’ll pay a lot more. So while today, right now, if you shop around and follow the deals you can consistently find flash memory for about $10 per gigabyte. But that same product, I think pretty reliably, is about three to four times that price on non-sale at your big box retailer. So if you’re not shopping carefully and you’re not paying attention to that, you’ll pay a lot more.
 
Michael: So what's happening with disk drives?
 
Chris:Well, this is interesting. Disk drives have followed one of the most consistent price reduction patterns over at least the last five years and when you look at it from year to year, you can see that for the same amount of money spent, the capacity that you get year over year is about a 60 percent addition and, you know, it doesn't sound like a huge amount, but when you look at that trend over time, it's overwhelming how fast that's grown. So what does that mean practically? I think, you know, right now we're looking at over the course of this coming year 500 gig external drives pushing from now where they're re sitting again at the best deal level. They're sitting a little over $100, sometimes as high as $120, maybe as low as $100 with rebates and so on. I think we're going to see that floor drop close to $50 and what's really I think is going to be a striking change is 1 terabyte drives--which is a staggering amount of storage, but a terabyte of storage for around $125.
 
Now, this progression of change has caught up with some practical limitations. Right now, not everybody needs that much storage. So I think one of the more interesting things we saw last year was a growth of different types of drives and configurations. For example, many more of the highly portable drives like the Western Digital Passport series. You have to pay a little bit more per gig but they're very compact and are powered directly off of USB from your drive. These are useful for some things; they can be really handy.
 
We're also seeing more and more configurations that include multiple drives in one device and the value of that is the ability to configure those drives not necessarily just as one big block of storage, but either mirrored or in those devices like the Buffalo TeraStation, where there's multiple drives, (typically four) you can set them up in different RAID configurations. So what that means is you have much higher reliability and redundancy at still a shockingly low price. You know, right now we're looking at a few hundred dollars for a terabyte of redundant storage. It would have been hard to imagine that much storage at that price even a couple of years ago. There's just a constant downward pressure on prices for storage and that has also opened up some creativity on the part of the manufactures, so it's not just simply the drive prices that have dropped but actually there's more choices--you can figure out what you really need. Are you a student who's working with big graphic files? Do you need higher portable storage, or is your hard drive just sitting on your desk all the time, so you're just looking for a more reliable back-up option?
 
Michael: Okay, well, let's hit one more. How about digital cameras?
 
Chris: Well, this is a tougher subject to peg. You know, we saw this in 2007 and clearly it's going to continue in 2008, that for a long time...I think back say about eight years ago, I think about the first real consumer digital cameras that were available, very expensive, very low, you know, one megapixel cameras or two megapixel cameras. There was a practical advantage to an increase in megapixels, all right. At those specs, the resolution was too coarse to be useful. Maybe it was okay on your computer screen, but you'd never use it for printing. Photos taken at that resolution didn't have any real long-term value, but of course, the trends were improving. We've now reached a point where the sensors are very, very small in these cameras, in a compact camera, so when you move from seven megapixels to 10 megapixels, there's really no more data available. In some cases, if the image processor that's in the camera isn't of the highest quality you'll actually introduce more noise moving from one level to the next as opposed to getting any more useful detail in that image.
 
So the problem is, the idea of improving image censors sounds good, but what happens when people stand in the store and look at the shelves. They go, "Well, this one has eight and that one has six...eight’s better." And it’s hard for the manufacturers to overcome that. And so sure, there’s plenty of folks, obviously often like the people who, who pay attention to Dealhack who are paying attention to deeper details. Like what is the image quality, what is the noise result? Does it produce the best image or not? But that’s not true for everybody. And it’s easy to get caught up in, no question about it. So I think, when we look at it, there are some things we can say pretty reliably.
 
Right now an entry-level camera, a true, current model, entry-level camera, is about $125. You can find things at $100 that maybe came out 18 months ago and, depending on what you’re doing with it, that may be fine. I think clearly, in the coming year, we’re going to see that $100 price point get broken by current model cameras, sort of six megapixel decent models, but the real change will be regarding the features. For example, we're seeing more and more cameras that feature image stabilization, that’s becoming more common, including the more useful, more highly functional optical image stabilization, where the stabilization is not just in the post processing but it’s actually when the image is being captured.
 
We’re also going to see improvements in the sensor technology; but a lot of that stuff is stalled out. Now the one thing that’s been moving is the megapixel count has been going up. But we haven’t seen as many revolutionary changes in the internal functionality, so hopefully we’ll see some of that. And, of course, as flash memory gets cheaper, we’re going to see more and more internal memory to boost storage, as well as the other main area, I think for, for improvement, is in the movie recording capabilities. And it’s surprising, even at the low VGA resolution that a lot of cameras do a pretty good job of capturing a feeling of the scene in video. I think there’s going to be a lot of interest in seeing the frame rates go up and seeing the resolution of that recording go up.
 
Michael: Well, at this point, the camcorders are at a tremendous quality level, but they’re still pretty big; and the digital cameras have really kind of taken the size thing down. So I definitely an opportunity for manufacturers--the convergence between the two. When you can take a high-quality video image using a device the size of a portable digital camera, I think that’ll be pretty compelling.
 
Chris: Absolutely. Well, we’re, we’re seeing some attempts to do that crossover. The Canon TX1 is, is a good example. It’s clearly a first generation hybrid device but it’s in that space. They’re trying to bridge it and I know, even in my own experience, I go back a couple of years thinking of working with the Panasonic Lumix camera, that did a pretty good job of recording a video and especially in low-light conditions, it actually did a better job. Granted it was only a 640 by 480 video, but if I wanted to capture sort of the feeling of a scene in a low-light situation, it actually worked pretty well. You know, to capture 15 seconds or 30 seconds of video in that same environment.
 
Michael: Right.
 
Chris: So, your goal of having that really be in one device is still a few years away. We’ll start seeing more experiments in that space, although they’re going to be expensive this year. But the real progression is closing the gap and, depending on what you’re doing, it doesn’t take the place of a video camera yet, but it definitely gives you a flavor of that. We’re seeing things like the U-Tube seal of approval on some of these cameras. It’s the same sort of idea as "good enough for web video." And that’s going to satisfy a lot of folks who, who don’t necessarily need the HD capabilities of a full camcorder. But even the TX1 is a 720 resolution. So, so the, the, you know, the gap is certainly closing.

Jan 03 09:28 PM in Announcements

• LG 32LG10 32-inch LCD HDTV $630 Shipped at Circuit City
• JBuds Hi-Fi Noise-Reducing Ear Buds only $16 at Amazon
• Universal RCU-3205 Remote Control $6 Shipped at Meritline
• McAfee Total Protection 2009 3-User Pack only $15 at Buy
• Gateway M-6827 Core 2 Duo Notebook PC $500 at Office Depot
• Up to 70% off Clearance Footwear + Free Shipping at Nike.com
• Today: Garmin eTrex Vista HCx Color GPS $200 at Amazon
• Save Extra 10% off Almost Everything Store-Wide at Sears
• Save 20% off Widescreen Flat Panel LCD Monitors at Dell
• Top 10 Book Titles for September 30 at Amazon