Beating the System: The AnandTech Guide to Economic Upgrading
by Kristopher Kubicki & Jarred Walton on January 30, 2005 5:59 PM EST- Posted in
- Guides
Quantifying Price
Something that Anand and I like to talk about is buying the best hardware that you can for your dollar, today. If you think about the long run, your time is expensive. Even if you don't have a lot of money to spend on upgrades or a new configuration, purposely procrastinating can sometimes be the worst thing. Waiting for the "next best thing" always results in a perpetual cycle of more waiting, and even more so in the computer industry. Instead of beating around the bush, let's go back to the original statement that we made about the ideal time to upgrade.
The right time to upgrade can usually be modeled around how valuable additional Quality is to you.
The principle seems fairly obvious, but it's easy to get lost in the NDA launches and rave reviews. A former executive to a very large motherboard company once told me that selling computer hardware was almost identical to selling produce. Every day that hardware sits on the shelf in a warehouse is another day that it loses value (to the company). With the exception of the short term LCD and DRAM spot markets, virtually all computer hardware sells for less today than it did yesterday. Sometimes we see small fluctuations in price where demand out-weighs supply, but for the most part, we don't see significant changes in computer hardware pricing like other commodities. Due to the extreme pace at which hardware evolves, buying computer hardware can almost always be summed up as, "What you buy today is cheaper tomorrow."
Prices don't fluctuate to the point where a product introduced today will cost more six months from now, and the path from today until then continually decreases (though not necessarily linearly). Then why do we recommend not waiting for the next best thing when buying a new component? If you feel that it's time to buy a new component, your value of that component should out-weigh the Price – even over time. If you plan on buying an Athlon 64 3200+ today for $200 versus $100 a year from now, hopefully your value of the component can be quantified at more than $100 per year. To state the obvious, if an upgrade doesn't have any value to you, it isn't worth buying.
Now, let's back up for a second. When we buy new upgrades, we tend to look at singular components – this can actually be a costly habit. As we stated on the previous page, even if you have a slower processor, the money may be better spent on a video card than on a processor. Instead of picking out a particular component set from which to upgrade, a more economic upgrade path may be to consider all components that fit in a particular price range and determine their relative Quality.
Quantifying Quality
Even though Quality is a numerical representation of performance, features and service, finding a method to determine an exact value of several different components to fit your user habits shouldn't be too hard. If you spend most of your computer experience gaming, then relying on gaming benchmarks for the games that you use is the most practical step. If you feel that the time to upgrade is now, so that you can get better performance out of Half Life 2, then the first step would be to quantify the Quality that a new hardware upgrade will bring to your system. A certain video card might double performance, so its relative Quality in the computer is 200%.
On the other hand, if we feel that we need to upgrade to maximize our storage space, then quantifying Quality over different components becomes even easier. Any video card that we add to the system would increase storage space by 0%; thus, the relative Quality of a Radeon X800 Pro when maximizing storage space is 0%. Subconsciously, we all do this same process at some level or another when buying hardware.
The dicey part gets when we start quantifying data that doesn't have a real world correlation – or perhaps data that isn't entirely complete. Determining the exact performance increase from a Radeon 9600 Pro to a Radeon X850XT is not something that you'll readily see published on AnandTech or anywhere else. The quick and dirty trick to determine relative performance on that scale is to find an intermediate product and look at the performance between those two. For a certain application, a Radeon 9800 Pro might be twice as fast as a 9600 Pro, and we also might know that an X850XT is twice as fast as a 9800 Pro. The resultant relative Quality should be about 400%.
We call that the quick and dirty method of finding relative Quality, but the only true method of determining the relative quality of one component compared to another is to have a test scenario. This is possible for more mainstream configurations as you can see in a lot of our motherboard reviews, but it's a little harder in real life. Our best advice is to pick conservative estimates for your quality assumptions.
Facebook
Twitter
RSS
50 Comments
View All Comments
PrinceGaz - Monday, January 31, 2005 - link
Just to take the above example one step further, if the quality of card A in the above example was only 90% instead of 110%, so it is slower than what you already have; the graph in your sheet still shows it as the best choice.Spend $100 and get something slower :)
stephenbrooks - Monday, January 31, 2005 - link
"What do we do to indecisive people who ask us when to upgrade?""Confuse them with graphs!!"
Sorry. It was a good idea. But as previous posters have said, what would be über-cool is to have the realtime pricing and entire benchmark database linked up to your formulae, and then let the user tweak the weighting factors on which things they find most important, and see what the site says. I guess it's a heck of a lot of work, though... maybe in 2010... :)
PrinceGaz - Monday, January 31, 2005 - link
I'm afraid your calculations are fundamentally flawed from the point of view of upgrading.You assume that a product which is equal to what you already have (so it's not an upgrade at all) has a quality of 100%, and something twice as fast is 200%. That's fine if you are not upgrading but buying something totally new instead, but when upgrading you have to deduct the quality of what you already have from each of the potential upgrades, so subtract 100% from the quality as you already have that before upgrading. That would mean something that is the same as what you already have has a quality of 0% when considered as an upgrade, an upgrade twice as fast has a quality of 100%, three times as fast has a quality of 200%, and so on. Something half as fast would have a quality of -50% as it is not an upgrade.
If selling your existing hardware when performing the upgrade, you should also deduct the amount you expect to sell it for from the cost of each potential upgrade option. The amount you can sell it for is likely to go down over time so that needs to be taken into account as well.
To take a theoretical (but plausible) example and use the sheet you presented-
Card A- $100, 110%
Card B- $200, 170%
Card C- $300, 240%
Card D- $400, 260%
the graph clearly shows card A is the best option, followed by B, then C, then D. But who in their right mind would spend $100 to upgrade to a card that is only 10% faster than what they already have?!
Deduct 100% from the quality of each of those cards and the graph makes a lot more sense, with card C coming out on top, then D, then B, then A far behind the rest. Which is what you would expect as an upgrade to something 10% faster is a waste of money.
Until the sheets and article are corrected, it is a very poor guide to upgrading.
KristopherKubicki - Monday, January 31, 2005 - link
It should be Quality to Price - that will be fixed very soon.Thanks,
Kristopher
CannonFodderjm - Monday, January 31, 2005 - link
"Price to Quality" is best when high?!This confused me until the end, when I just gave up trying to understand your analyses and realized you made a "naming" mistake. It should be reversed.
Great analysis, but this was too distracting.
Please fix for the sake of others' sanity!
gimper48 - Monday, January 31, 2005 - link
This was a great article but really leads to analysis paralysis. I am happy you guys do this for us. We really really appreciate it especially those of us who forget to carry the zero.MarkM - Monday, January 31, 2005 - link
#32, "I don't see those charts and formulas changing this all that much. You can tell which group you're in by checking your needs and your bank account," with all due respect, that was exactly the issue that the article so thouroughly addressed - for people who fit into ANY of your 3 categories, to identify the place in which to most effectively apply resources to address the perceived problem. You are the exact kind of person who could use a methodology like this, the person who's computer is slower than they want and/or need to do some specific task(s), but whose current approach to addressing a quantifiable need is nothing more rigourous than "Look at the Price Guide for the hardware you want [ed: I thought we were addressing a NEED, not a WANT?] to upgrade. Look at the components from lowest performing and go up from there. When you see the big price jump stop" Where in any of this methodology do we find ANY attempt to answer the question "will this upgrade resolve my slowdown"???guest - Monday, January 31, 2005 - link
Maybe now should be a good time to post an article about when to stop buying hardware :)In some cases it's better I think not to upgrade at all.
Like when you don't buy anymore games or just do the occasional OS upgrade or just browse the internet.
LordConrad - Monday, January 31, 2005 - link
People who upgrade (or buy a whole new computer) fall into one of three categories, either by choice or due to financial concerns:1. People who upgrade immediately when their computer starts to get a little slow.
2. People who wait until the slowdown gets annoying.
3. People who wait until their computer laughs at them when they try to run a program.
I don't see those charts and formulas changing this all that much. You can tell which group you're in by checking your needs and your bank account. Why over-complicate things.
LordConrad - Monday, January 31, 2005 - link
What the heck was all that crap? Upgrading is much easier than that and has two steps:1. Keeping your performance needs in mind, find the bottlenecks that are keeping you from reaching that performance.
2. Replace the component(s) that are causing the biggest bottlenecks, while staying within your price range.
Choosing Price/Performance:
Look at the Price Guide for the hardware you want to upgrade. Look at the components from lowest performing and go up from there. When you see the big price jump stop. The item just before the big price jump is usually the best as far as Price/Performance.