6. The Economics Of The Mini PC

It's quite interesting, but certainly no accident, that all of the units we reviewed for this story are priced within $50 of each other when configured similarly. In fact, two of the four units (except the Shuttle XPC 100 which lists at $999, and the Jiv which lists at $1,099) are currently priced at discounted list prices of $1,199.00. In trying to understand the explanation for the relatively high price for such petite packages, we pondered some interesting points and chewed on some equally captivating contributing factors that add up to rather more than some people might expect to pay.

To begin with, most of the components used in these mini PCs are mobile components originally designed for notebook use. This makes them small, lightweight, and low power consumers - all desirable characteristics in a super small PC, but all of which also lead to the use of higher-cost components, especially when compared to conventional desktop alternatives. The Core Duo CPUs chosen retail in a price range from $225-240 for the T2050 and prices go up by about $30 for each additional step up: T2300 $255-270, T2400 $285-300, T2500 $315-330.

All the enclosures and base components used for these mini PCs are what might best be called "specialty OEM barebone PCs" - that is, all of them come from various well known vendors such as ECS (the maker of the Winbook Jiv and PC Alchemy M2B base package), and AOpen (the maker of the PC Alchemy M1B and Shuttle base packages). In bulk, these units cost $300 and up, not including SODIMM memory modules, hard disks, or optical drives.

Add in another $100 or so for SODIMM memory, $100 plus for a small, fast, quiet hard disk, $40 for a wireless keyboard/pointing device, $35 for an MCE remote, $40 for an SDTV tuner, $100 for an OEM license for Windows XP MCE 2005, and $30-50 for other miscellany, such as IR receivers, software bundles, and packaging, and you've got costs in the neighborhood of $900 to $1,000 depending on the CPU selected, other components chosen, and what goes into the software bundled with the mini PC. That leaves razor thin margins of between 20 and 25% to cover costs of sales and marketing with small amounts left over for profit. All this information is summarized in the table below.

The bottom line is that small is not only beautiful, but the mobile components required to downsize PC gear are also costly. These prices may be on the high side when compared to conventional desktop PC deals, but the economics of the situation indicate they couldn't be much lower without pricing their sellers out of the market! Working inside these cramped cases also takes a delicate, well-trained touch, and probably helps to explain why the barebones vendors who build these units currently target them only at the OEM market.