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The Cost of Technology

Posted by Matthew Greensmith at 3:26 PM on February 26, 2009

With the release of the Kindle 2 from Amazon this week, we techies are faced with another financial pitfall. Do we buy or do we not? How many of our gadgets end up being pricey, not just for the initial purchase, but for the continued upkeep or subscriptions for the device in the long run? What is the TCO (Total Cost of Ownership) on the product?

One of the biggest complaints about the Kindle is the cost, around $360. And while you are presumably getting unlimited wireless download service for years to come, the books themselves aren’t free. Okay, some books are free, but those are public domain. Books range in price from $4.36 (Feng Shui A to Z) to $6,431.20 (Selected Nuclear Engineering Systems, Part 4). The Kindle holds 1500 books, so even if you look at the low end of about $5 per book, your Kindle could cost you $7860.00. Or more, if you are into Nuclear Engineering Systems. So total TCO for device could really get up there at some point.

The iPhone presents the same sort of issues, in a different way, than the Kindle. The higher-end iPhone will cost you about $400 plus an ATT wireless contract locking you in to two years of service with a base price of $70 per month. Then there are the applications you are expected to buy to make your iPhone be all that and the kitchen sink, and you’re talking a pretty good chunk of change in the TCO department.

And I’m not going to let the iPod slide either…Mine was $350 for a 60 gb video model, plus another chunk for the extended warranty, and I purchase all of the music I am storing on my iPod, whether electronically (eMusic, iTunes, Rhapsody), or by CD. I’ve had my iPod for 3 years and have about 6000 songs on it; I estimate I’ve spent another $400 buying music that I didn’t already own. That’s a chunk of change too, although it’s a bit more spread out and may not be so obvious.

There are times when I want a device to do just one thing and do it well (like the iPod). But then there are times when devices that serve multiple purposes can have lower TCO. For example, if I want to read eText, my laptop can already do that, and I can even have it read it to me with text-to-speech. My laptop is reasonably portable, as well, and would hold a lot of eBooks, too. And it holds my entire iTunes/iPod library as well. It’s just a little hard to carry around in my pocket, and it isn’t very good at making phone calls on the run.

But when it comes to TCO, it is something we have to consider, especially in these scary economic times. It’s not just the initial cost of the gadget. It is the long-term costs of service and support for that gadget as well. How many of us have made this decision when it came to home printers, and went from ink jet to laser jet, because of the TCO when it came to ink and toner?

For me, the Kindle and the iPhone have not hit my “must have” list because of TCO. How about your must-haves? Is TCO not a consideration, or are they a good return on your investment?

One Comment

  1. From Mike Wills at 11:41 am on February 27, 2009

    I bought an iPod Touch recently for a couple reasons.

    1) I can check my email (and let’s be honest here, Twitter) while spending time with my family at home. My computer is in my office and isn’t easy to sneak away.

    2) gReader off-line reading. I hate reading on my computer. While the Touch isn’t the best, it is much better to read on than sitting at the computer.

    3) eBook reading. Similar to above, but unlike the Kindle, I can do just about anything I can find an app (or website) for on the Touch.

    4) Remember The Milk. Enough said

    5) The lesser things would be Calendar, and contacts.

    6) I can safely take it to the gym with me.