Windows Vista to make PCs 20% more expensive, says iSuppli

El Segundo (CA) - The introduction of Windows Vista will have an immediate impact on the investment that is required to build a PC. The often discussed memory upgrade that is required to achieve a decent Windows Vista experience, will increase the bill of materials by about 20%, market research firm iSuppli estimates in a report released today.

If you are somewhat interested in computers and if you are among those who are already planning to ditch an old PC in favor of a new one when Vista will be introduced, then it isn't news to you that the software will need a lot more hardware horsepower than XP. iSuppli is one of the first companies that provides some numbers on how much more cost to expect.

The market research firm took at what most of us would consider an upper-end mainstream PC and found that pretty much all of today's components, including a performance chipset are sufficient to run the operating system, as they are pretty much all labeled as "Vista ready" these days. iSuppli's example system included an Intel Core 2 Duo E6400 processor, a Q965 chipset with integrated graphics, 1 GB of memory, a 250 GB hard drive and a 16x DVD- drive. The total bill of materials came to about $539, including $35 for an OEM copy of Windows XP, but excluding a monitor.

1 GB is widely believed to actually hold back the performance capability of Vista, so iSuppli checked the wholesale cost for a 2 GB upgrade. That upgrade isn't cheap given current shortage in the DRAM segment and will add another $91 to the bill. Including the Vista copy, which is $4 more expensive than XP, the bill of materials comes to $633, which translates into roughly 20% more cost.

This cost, of course, refers to the investment the system builder has to make for what iSuppli thinks will be an average Vista PC.

This estimate leaves out of consideration a potential upgrade of graphics hardware. While Matthew Wilkins, principal analyst at iSuppli, said that Intel's Q965 (and comparable ATI chipsets) is sufficient to run Vista Premium, an "optimal Vista performance" will only be achieved with a discrete graphics card, typically equipped with 256 MB of memory. The analyst told us that, when Vista is introduced, he expects to see an uptick in discrete graphics card sales. However, he believes the overall trend towards integrated solutions to continue even with a more demanding Vista covering the PC market.

In iSuppli's view, memory may be the Achilles heel of Vista PCs: "When configuring the memory, think today - and think tomorrow - because application and user demands on memory change over time," Wilkins.

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