Throwing hard-earned cash down for computer purchases is never an easy task. Computer hardware can be a particularly tricky purchase, considering the sheer number of revisions, designs and price points at any one time. ATI and NVIDIA have over 100 cores combined for the AGP video market on shelves today. Yet, somewhere in that haystack of video cards lies the perfect video card, equally balanced in performance and price. Finding it can be a bit of a pain though. What we have decided to do today is step away from the specific type of guide format and look at buying components on a more general basis using mathematical modeling and historical data. We aren't going to tell you which hardware to buy per se, but we will show you the same methodology that we use when determining our picks for the week. We get really theoretical for the first few introductory pages before we get into the historical data, so bear with us if we sound like a college text book for a little while.

Let us cut right to the chase. When buying computer hardware – at least with a sane perspective – there exist only two goals in mind: minimize the Price and maximize the performance. Performance can be somewhat ambiguous, so in this analysis, we will refer to performance and features as Quality. We find later that Price and Quality are both predictable, yet dynamic equations, but the most basic building blocks of any economic model for computer hardware exist as Price (P) and Quality (Q).

It is actually very easy to put a data type on Price - it's just the dollar/yen/euro amount that the component costs. Quality, Q, is a little harder to quantify in the general sense. Everyone has different computing needs, and thus, it's virtually impossible for us to put a numerical value on the performance of a processor or video card in every application – but fortunately, we have benchmarks to simulate a vast majority of real world scenarios. The most critical and difficult step when computing your next purchase cost comes when we attempt to quantify Q. Don't let the name "quality" fool you either. CPUs, for example, make it easy for us to quantify Quality in specific applications because one product is always arbitrarily faster than another. Video cards, on the other hand, make it a little harder, since we need to put a value on additional features like TV tuning or Image Quality. We will get more into these concepts on the following pages.

When to Upgrade?

The million dollar question that we get asked every day, thousands of times a day is "When should I upgrade?" Actually, the questions are usually phrased like:
  • "Should I wait six weeks to buy a Radeon X800 XL?"
  • "Is it worth it for me to upgrade to an SLI motherboard?"
  • "Should I buy more RAM?"

Finding the right time to upgrade shouldn't revolve around the next best thing or even a particular component. The right time to upgrade can usually be modeled around how Valuable additional Quality is to you. The moment when you feel your Athlon XP 1700+ has put you behind a performance curve is the most opportune moment to start calculating how valuable an upgrade is to you. However, this can actually be quantified as well, and we will get more into that in the next couple of pages.

Another thing that we stress in our Buyer's Guides and Price Guides is to look at the entire picture when upgrading and not just a single component. You may feel that your Athlon XP 1700+ is too slow and that you need a new processor, but perhaps we can achieve better performance or Quality for cheaper by upgrading the video card instead. The solution actually hinges on looking at everything in the picture and not just individual components.

On the next few pages, we are going to determine the Value and Quality of some components and determine where the best upgrade path exists. This should answer the few example questions above, but the methodology can be applied anywhere we like when buying new computer hardware.

Quantifying Price


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  • Jedi2155 - Monday, January 31, 2005 - link

    Anand should really have a VGA and a CPU chart of some sort as well! I don't really trust tomshardware all that much.
    But then, most of us don't anyways :P.

    I like the article and its calculations tho...believe it or not....i use similar ones....
  • kmmatney - Monday, January 31, 2005 - link

    sorry about the third post - but there is one statement that I think hits the nail on the head:

    "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."

    We can "almost" get this from Toms Hardware, from the VGA charts.

    They don't have half-life 2, but there are enough benchmarks to at least allow for an informed decision. In fact, I used the article to help a friend buy a Radeon 9600 Pro, which was the best bang-for-buck at the time.

    Why can't Anandtech have something similar, or the ability to create a similar graph on demand? Having the ability to chart both video card and cpu upgrades would be the ultimate tool for the upgrader.

  • kmmatney - Monday, January 31, 2005 - link

    This article reminds me of something I always wanted. The ability to pull up benchmarks dynamically. I could put in my system specs, or select a similar procesor from a list. Untested speeds can be estimated to first order. Then I could pull up benchmarks from different video cards and compare exactly what I want.

    For now, I use the Toms Hardware video charts, as Anandtech doesn't have anything so comprehensive. A "Real-Time benchmark Engine" would be awesome for this.
  • kmmatney - Monday, January 31, 2005 - link

    I'm a bit qith #19. It pains me to pay more than ~$100 for a video card. My plan was to stay with my Ti4200, but I managed to Ebay off $120 in old hardware last week, which brings my 6600GT upgrade down to an affordable $90, minus whatever nmy old card sells for. I'm definately sticking with my Athlon XP for a while, though.

  • roostercrows - Monday, January 31, 2005 - link

    excellent article kristopher, as i have had all the components for my new anandtech high end computer (except the video cards) just sitting on my bench for three months now just waiting... i can't help but think about what a price gouging graph would look like for the 6800gt pci-e sli video cards...... Reply
  • Googer - Monday, January 31, 2005 - link

    #13, I agree; but for some of us doing cost benefit analysis is part of the fun too. I really enjoy doing my mathmatics when I have the opertunity to do so. For me It is all part of the research that goes in to learning about new hardware. Its a hobby for me too. Reply
  • JarredWalton - Monday, January 31, 2005 - link

    The point of this articles wasn't to give everyone a specific decision. Some people are always waiting for the ideal time to upgrade. If you're happy with your current computer, then by no means do you need to upgrade. If you're disappointed with performance, however, and you start thinking something like, "I'll wait for SLI..." or "X800XL is coming soon..." or soemthing similar, is it really worth the wait?

    That's the whole point behind the "cost to not upgrade". How much are you willing to spend per day for a better computing experience? We arbitratily chose 25 cents, but suppose you're willing to spend 50 cents or a dollar? Given the model in the spreadsheets, you can plug in various prices and estimated depreciatioin rates, and suddenly it may not look so important to wait for the X800XL or whatever.

    The article certainly wasn't meant as a joke. It was intended as some reasoning behind our price guides. We don't often suggest people wait for the Next Big Thing, and the models presented here help to show why. We didn't even touch on the topic of market segmentation, which will often keep high-end parts at a higher price despite decreased production costs (witness SCSI, for example). There were plenty of other concepts that could also be applied. Hope that helps.

    (I helped quite a bit with the article, so I feel I can safely put in my two cents.)
  • roostercrows - Monday, January 31, 2005 - link

  • Poser - Monday, January 31, 2005 - link

    Thinking about it a bit more, I guess my situation (#19) could be wedged into the model you built pretty easily -- I don't have a Cost to Not Upgrade (CNU) of $0.25 a day, instead I have a NEGATIVE CNU. The longer I wait, the more cool gotta have 'em games will be released which I can't play on my old rig. That'll push up the value of current gen hardware. Reply
  • Chuckles - Sunday, January 30, 2005 - link

    It looks like an interesting model. With some tweaking it looks like it may be valid for a variety of market segments. Cool. Reply

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