[...] an x86 PC attached to a few serial terminals, the justification for this being that it saved money. This implies that serial terminals were cheaper than PCs.
Of course, as a Terminal is a way less complicated setup than a PC. Usually just one board instead of several as well as cheaper components. An 8-bit CPU with a few kilobytes of RAM and a simple character based CRTC will do the trick, vs. a full figured PC with expensive casing, large PS, an expensive 16-bit CPU, versatile video controllers and lots of RAM - plus boot media and so on. It's a bit like a home computer vs. a PC. Except terminals used even less (but better) parts than home computer.
But a terminal is not only cheaper in terms of one time, upfront cost, but as well in operations. No hassles with media, including media failure, hardware variations or software maintenance and update - not to mention whatever stupid changes in configuration the user did against company standards.
But I also remember ads in Byte magazine for products that would let you substitute a PC for a DEC terminal; one of them had a headline something along the lines of 'These are the people who cheated DEC out of $$$.' This implies that serial terminals were more expensive than PCs.
Not really. This sounds much like they just compare their software price vs. the price of a terminal, assuming the customer already owns a PC. Maybe true for small business, just not in general. Such advertisement also relays on the misleading impression a terminal is hardware that can be replaced by software. For one, a terminal does include quite some software - much the same as being offered here - but also, the appraised software would need some hardware - here not only the batteries are sold seperately :))
Conjecture: the difference was in the brand name. IBM and DEC sold terminals containing a few hundred dollars worth of hardware, for a few thousand dollars.
While brands did call a cosy price, there was as well a stiff competition - even more so during the 1980s, when hardware for a terminal was no challenge anymore - keeping the price down.
How much did a non-brand-name serial terminal cost? For a specific year, say 1980, or as close to it as data is available.
Mentioning a PC in the ad (a link would have been nice) does point way past 1980, doesn't it? For 1980 the competition are not as many machines.
But there's a great example (of 1982), to show the cost difference between a Desktop Computer (PC) and a similar capable terminal:
The Tandy Model III vs. the Tandy DT-1
The DT-1 which is basically the same machine as the Model III. Same hardware, PS, screen and case, with the RS232 board installed and a terminal software in ROM. It could as well be configurable within reason. It was meant to work with the Model II (or 16) multi user system, but could be uses with any other system as well, as it did emulate several standard terminals. In the second catalogue of 1982 it was advertised at 699 USD - which is incidentally the exact same price as the lowest possible Model III with 4 KiB (!) RAM and Level 1 BASIC in ROM. This version was offered only for a rather short time, as it was meant as replacement for the no longer available Model 1. It was intended to keep the entry level price below 700 USD, as the regular minimum Model III with 16 KiB RAM and Model III BASIC was priced at 999 USD.
To work as a terminal that minimum Model III would need an additional RS232 board at 99 USD and a terminal software sold at 39.95 USD, except, that software required 16 KiB of RAM, so another 99 USD for 16 KiB expansion ... oh, and of course a cassette recorder at 59.95 (and cable at 5.95) to even load the program, totaling at 1,002.85 USD (*1).
Now, I hardly would call this configuration a PC. More reasonable that describes a Model III with 48 KiB and at least one disk drive - right? Now, that's more like 2,100 USD (1995 USD + 99 USDfor the RS232), or 2495 for dual drives and RS232 included.
So bottom line, even when taking the lowest possible configuration, a comparable terminal is already cheaper than a PC doing the same (~2/3rd as in 700 vs. 1,000 USD)- even more so when using a serious PC configuration (~1/4th as in 700 vs 2,500 USD).
And yes, other terminals where at that time (1982) in the same price region of 500..1000 USD. Even less when buying bulk - so way lower than any serious PC.