Component cost in historical ads versus wholesale

Question

To get an idea of how much various components such as CPUs, RAM chips, disk drives and monitors historically cost, and therefore how those costs influenced design decisions that were made, a good source is the ads in the back of magazines like Byte.

There is a caveat: what stage in the wholesale-retail chain did these correspond to?

While it depends on a number of factors, a widely used guideline was that recommended retail price would be about three times manufacturing cost. So if a component cost a computer manufacturer $1, it would add $3 to the retail price.

Taking an example from December 1981 Byte, 16K of RAM (in the form of eight 4116 chips, 200 ns), is advertised for $16. There's no mention of minimum order quantity, so presumably the bulk price a computer manufacturer would pay, was less. Is there a figure available for what the corresponding bulk price would have been?

Or looked at another way: in that year, 16K was quite a common configuration for a personal computer. How much would 16K of RAM have added to the retail price of a computer?

Would the answer be similar for other components such as disk drives and monitors? One data point is the ST-506 hard disk ST-506 price: wholesale or retail? - the answer in that case was that the advertised price was full retail.

Answer 1

For a set of 8 not really cheap, already way above what I remember as street price for that time frame.

In this case I got personal memory, as I was searching for acceptably priced 4116 for my Apple II in the spring of 1980. The dealership I bought the machine from did quote me 120 Mark (~75 USD back then) for a set of 8. The cheapest local parts dealer was only 40 Mark (~25 USD), including tax, and wholesale would have been considerably less than that. So 16 USD excluding tax almost two years later seems extreme.

You may need to look at more than one ad, as even within one Byte issue there's a wide range of chip prices, often spanning 1:3 for (mostly) the same chips. Different advertizers had different markets in mind. In general, with a healthy competition, magazines are a good way to research prices - with a lot of work involved to not only collect data but judge reliability and intention.

(Care to share issue and page?)

Answer 2

One point of measure: The 6502 was $25 in unit quantities when released. Atari contracted them for the VCS only a couple of weeks after release and was paying $12 for a 6502 and a 6532 RIOT.