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RAM – I hate to say I told you so

by Eliot Hochberg (eliot@high-mountain.com), April 10, 2002

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RAM. I told you to buy it. Told you, told you, told you. The last time I mentioned this (December 22, 2001), Ramjet was selling 1.5GB of RAM for a Quicksilver G4 for US$259. I just wandered back over there; now the same RAM that works for last year’s G4 goes for $469. That’s almost double.

But of course you know this now. The iMac’s price is $100 more than it was. And I know what you’re saying – “Last year was a bad year. I couldn’t afford my auto insurance, let alone more RAM.” And I’m sympathetic to your plight. However, nothing says lovin’ like a gigabyte of RAM in your G4, and I was pumping this issue back in October, plenty of time to save up some credit for $100 to $250 worth of RAM-a-licious pleasure.

Well, if you didn’t save up your nuts and get RAM before this last March or so, then you’re just as badly off as you were last year, except hopefully now you can afford your AAA premium. And more power to you, if you are actually doing better than last year.

This article isn’t only about gloating, though. I want to go into why the prices of RAM have gone up.

RAM is a commodity. Usually, the big players, OEMs like Dell, IBM, HP and Apple, use their clout to buy all sorts of RAM. However, the companies who make RAM, many of them in Taiwan, have to predict how much RAM will be needed in a given time period. They overproduce knowing that consumers also buy RAM. When OEMs order more RAM than the manufacturers predict, there is less RAM left over to sell to companies like Ramjet who sell to you and me. Thus, prices go up.

Last year was a bad year for computer sales, and thus component sales of all kinds. RAM was no exception, and it’s likely that most OEMs didn’t order the additional RAM that the RAM manufacturers predicted. Thus, last year there was a glut of memory. So much so that for almost six months, RAM prices plummeted. They went down and down until they reached the point they were at in December.

It’s likely that last Christmas soaked up most of the remaining RAM surplus. Of course, RAM manufacturers try and bounce back by reducing production to realign with demand. So, that leaves us in a situation such as now where RAM is more expensive.

You may be asking, “If the price of RAM is almost double at a place like Ramjet, why is the iMac only $100 more?” Well, remember that in the iMac, we’re talking 128MB to 256MB. The price of that for you and me is up to $90 or so. Assuming that Apple gets a better price (believe me, they do), $100 can actually go a long way. I’ve been encouraging you to get more RAM than that, which is pricier.

So, is all hope lost? That’s hard to say. My guess is no, because RAM prices are cyclical. This last go ’round was the lowest point so far historically, and there were many unusual factors at work. In addition, if you buy RAM a year from now for an older G4, it’s possible that the RAM you need will get more expensive, due to the fact that newer systems might use a different kind of RAM (for example, the LCD iMac uses SO-DIMM RAM, which at Ramjet is $10 more for 256MB than the RAM for an iMac DV), and RAM prices for older systems tend to go up since the manufacturers produce less of that type of RAM.

Then, of course, there is the issue of the new kinds of RAM costing more because of higher speeds and lower yields. But on the whole you can expect that there will be another opportunity in the next year or so. If you think you’ll still need more RAM over the next year but can’t afford it now, even at last December’s prices, save up! When the next glut comes along (I’m predicting next January), you’ll be ready and able to pump up your system.

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