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According to http://smithsonianchips.si.edu/augarten/p64.htm "In 1981, they slashed the cost of 64K RAMs from some $25 each to about $5, and the price hovered at that level throughout the following year."

This was a surprise to me; the Commodore 64 cost $595 on introduction in 1982, and answers to When did 64K RAM become about as cheap as 16K? basically discuss 64K becoming cheap in the 1982-84 timeframe. Ads in the back of Byte support my previous impression e.g. December 1982 doesn't even list a price for the 64k chips, just "Call" which suggests they are still scarce and expensive.

Is the above quote inaccurate? Or is it that the wholesale price of 64k chips did indeed fall to $5 in 1981, but for some reason it took a couple of years for this to filter through to consumers? If the latter, why?

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    It's doubtful that C= was paying $200 for just the RAM in a retail $595 C64. $40 seems much more realistic. Also ads requiring you to "Call" for a price just means the price is volatile, not necessarily that it is high. So those Byte ads may be indicating rapid price declines at the time.
    – Brian H
    Commented Aug 26, 2018 at 12:29
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    @BrianH I was about to write much the same thing, particularly about volatile pricing. A small company (and many of the ads in the back of Byte were from small companies) couldn't take the risk of losing money on RAM but wouldn't want to list a high price (e.g., the real price at the time the ad was submitted) because in the 2 months from ad submission -> publication -> mailing -> responses the price probably would drop significantly.
    – manassehkatz-Moving 2 Codidact
    Commented Aug 26, 2018 at 14:25
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    Why was there so much volatility? Were process yields varying wildly? Rapid expansion of fabs? Unexpected product demand? Or were buyers going bankrupt causing flooding?
    – hotpaw2
    Commented Aug 26, 2018 at 14:38
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    @JimMacKenzie - yes, the chips in question would almost certainly be 4164s, which are 64K x 1-bit.
    – Jules
    Commented Aug 26, 2018 at 19:08
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    As mentioned in another comment, I think the misleading thing is that these were 64k bits per chip not bytes. You had to buy banks of eight chips for 64kb, and I seem to recall that being about the price in 1982 or 1983 at least - about $40-$60 per 64kb. You had to buy an AST (I think?) board to expand your memory beyond 256 KB on the motherboard (128kb in some cases?) and it was not cheap to populate it fully. Took me several paycheck portions (starving programmer in silicon valley had to eat, too)
    – Bill Hileman
    Commented Aug 27, 2018 at 18:58

1 Answer 1

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In ‘81, $5 was closer to a negotiated large volume pricing than the “consumer” single unit retail price. This phenomena is common during the roll out of a new technology to a new market, as channel arbitrage hasn’t yet matured.

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