Archive for the ‘collecting as a hobby’ Category

The RANDOC Index: Part 2: Examples

May 1, 2020

Here are some examples of RANDOC Index values for some models as I see them.

 

model Rarity Specialty Attractivity Impact
C64 1 3 3 4
Atari ATW 4 4 4 1
ZX Spectrum 2 2 3 4
Apple I 4 2 4 2
Mattel Aquarius 3 1 1 2
Canon Cat 4 3 2 1
MCM/70 4 4 3 1
Tatung PC-2000 4 1 1 1

The RANDOC Index: Part 1

May 1, 2020

I like to classify things, and rare and old computers are no exception. Here is my classification scheme for Rare AND Old Computer, the RANDOC Index. As you might know or not know, current prices of old computers fascinate me, and so the Index aims mainly at explaining these prices. My secret hope is that it can also be used for other purposes, but I would not bet on it.

The target of the RANDOC Index is to cluster old computer models according to a number of categories. After having explained the categories in this post, I will give a short list of examples in the next one and try to explain some price phenomena based on the RANDOC Index values of these examples in Part 3.

The RANDOC Index is based on three categories with four values each. As these three categories cannot explain everything, I added a fourth one in case it is needed. This table names all the categories and values:

RandocIndex

Rarity

The “Rarity” category tells us how rare currently a computer appears to be on the market. You can think of it as the inverse value of the supply of a model on the market. It does not say how many units were built. We can safely assume that a model that has been produced in low quantities will never be in high supply on the market, but on the other hand, a rare-but-not-too-rare model with a certain value might be sold more often than a low value model. As this category depends on the market, it can move over time.

When one tries to explain why some models are rarer than others even if the same amount of them were produced, one can have some interesting theories. One (quite probable) theory is that computers meant for industrial or clerical use are much more often scrapped than home computers. That’s why e.g. a Canon Cat (which hides its talents quite well) is much rarer than a Commodore SX64. My favorite theory is what I call “supply retention”. An owner of a computer does not feel the urge to sell it simply because he does not know the price (because it appears rarely on the market) or because the known price is so low that the owner thinks that it is not worth the effort to sell it. A connected theory of mine is the “avalance theory” that says once a model suddenly appears on the market to a price attractive to the owners, it triggers several selling decisions. As a result, a model is not seen on the market for a long time, and then suddenly, some of them pop up in a short period. I always wondered whether one can trigger this by offering such a model on the market without having it, achieving seemingly a certain price, and then be able to buy such a model afterwards 🙂 This would cost only the ebay fee on the achieved price, but you would have to ensure that a) you win the auction yourself (else you are in trouble) and b) that the price is not so high that the ebay fee makes you poor. As it is too dangerous for my taste, I never tried it.

From time to time, also the market changes radically due to technical innovation. When you watch programs like “Antiques Roadshow”, sometimes you hear how different the market pre and post Internet are. When your market is restricted to a country or a region and if you do not really know how many things of a models were made, your perception of rarity might be quite different from a world where things like ebay and a more globalized trade suddenly reveal that a model is much more common than what you thought. For some antiquity types, this drove prices down quite a lot.

The values of the Rarity category are:

abundant
The supply of this model is plentiful at all times, and this seems never to change. A Commodore C64 is e.g. certainly always available even in the next 5 years.

available from time to time
These models might not be available every day, but with some persistence you’ll find them offered once every three months. A Sinclair ZX80 might be such a model.

rarely seen
Now for such models, you need some effort. They are not impossible to find, but rarely, maybe once every year, a few of these pop up. An Enterprise 128 might be such a model.

practically unavailable
You have read about these models, you might have seen pictures, and you might even want to own one, but even when you scan ebay for a year you will not find them. Some people have them, but these are probably not the people that will sell these models to *you*. An Atari ATW 800 is currently such a machine.

Technical or Historical Specialty

This category tells us how much a certain model differs from its “run of the mill” competitors at about the same time. This difference can be due to different technical features or because it played a certain special historical role (although sometimes, both aspects coincide or are caused by each other). Once stated (probably with a little bit of hindsight), this value basically stays the same.

The values of this category are:

like any other
This model is no different from the typical model of the era. Basically the same technical features, the same original price, the same historical value. Nowadays PCs (of the same time period) are like any other PC.

a little bit different
For these models, there is at least one clear difference to the competition of the same era. Let’s take the ZX Spectrum. It is technically nothing special at the time, but it packages its abilities in only a few, cheap chips. Therefore, it can be offered for a much lower price. This is the economic difference (coming from a technical difference). As a consequence, it triggers almost single-handedly the creation of a thriving games development industry in the UK.

quite different from average
For this model, there is more than one difference to the competion, but these differences are still within the theoretical technical reach of the competing manufacturers. A Commodore C64 has a better sound than all its competitors and comparable graphics to other top end models, but it offers the entire package to a lower price.

disruptor
This model has features that change the market. It has not only differences, but these differences has the potential to make the competition look old and to be needed to be replicated by the competition. However, this does not necessarily mean that this potential was fulfilled historically (this information is represented by the “Impact” category). From this point of view the Apple Lisa and the Apple Macintosh were disruptors. The Lisa was famously unsuccessful on the market, and only after the Macintosh got some traction (which took time), all new computers needed a GUI.

Attractivity

This category represents how attractive a certain model is for the market. Therefore, it is a sort of demand (like in supply and demand). Attractivity results from a multitude of factors. Each of these factors typically addresses a different slice of the market, and the more of these boxes are ticked by a model, the more people want to have it. Some of these factors (and their corresponding market slices) are:

  •  rarity
    there are only a few people that are drawn to rare computers. In itself this does not motivate too many people, but as an additional aspect it is important to a lot of people. One example is the guy who collects Commodore computers and wants to differentiate from other Commodore collectors by also owning e.g. a P500.
  • attractivity (and unattainability) at the time when this model was on the market
    One strong motivator to buy a model is when one always wanted to have one, but couldn’t afford it at the time. Now that prices are (maybe much) below the original price and the own income is much higher, the old desire is re-awakened.
  • specialty
    Also for this factor there are relatively few people that buy something solely out of this reason, but as an additional factor, it often motivates people.
  • having it owned at the time (of when this model was on the market)
    Another strong motivator is having once owned a certain model, often when one was young. As a consequence, often positive feelings are connected to such a model and re-owning it might connect one to these positive feelings.
  • other reasons
    Of course, there are many more reasons to find a certain model appealing. Maybe you know one and want to add it in the comments?

This value changes over time. The values of this category are:

unattractive
(Almost) noone is interested in this model. It was never attractive at the time, maybe it was an industrial model that was never in young ownership at the time. It has maybe no specialty merits, and the current rarity completely satisfies the few people that wanted to have one. In my opinion many generic PCs fall into this category, many yet-another-CP/M machines.

attractive to some
This model ticks a few, not so important boxes. A Canon Cat is not a houshold name and probably not many people knew about it when it was new. However, the connection to Jef Raskin, its technical speciality and its rarity makes it attractive to some people. If you have never heard of this model, that’s exactly my point. If you have heard about it, well, you are the target audience of this blog, aren’t you?

attractive to most
This model ticks some important boxes. A C64 was (almost by definition) never rare, but it was either owned by a lot of people, or wanted by some of the others. It is a historically important computer and has a few technical merits.

attractive to all
This model ticks all boxes or ticks some important boxes strongly. A NeXT Cube is (not very, but quite) rare, it was at all times very attractive, but at the time also very expensive. It is a historically interesting computer, and is of a very attractive design.

Impact

This category represents the influence of a computer model on the further development of the industry. It is sometimes needed to explain effects outside the other categories. Also this value stays basically the same.

The values of this category are:

no impact
This value is for models that made no lasting impression on the market. Either because they appeared to early and the market was not yet ready for them or they appeared only in small numbers. Good examples for “no impact” computers are the MCM\70 and the Atari ATW 800. You’ve never heard of them? That’s what I mean 🙂

local impact
Such models had a strong impact in their local market, but not outside. The Micronique series of Hector computers were very well known in France in the 1980s, but outside France barely anyone knew them. Typical reasons for that (as in this case) is that a product is exclusively available in a certain language which is not English :-).

regional impact
Such models had a large impact, but, for some reasons, only on a certain region of the world. A good example are MSX computers. A household name in Asia, but only an exotic appearance e.g. in Europe.

global impact
Such models changed the industry. Either because they were so innovative that the advantages they offered could not be ignored by the competition (like in the IBM S/360 family case) or they came from such a strong competitor that this fact alone ensured market success and orientation of parts of the industry towards it (like the IBM PC).

Now, you might object heavily to some of my examples. First, the values in the categories are not fine-grained, and their definition gives much room for interpretation, and that’s all true, but I wanted to keep the thing manageable. Second, and more importantly, all these categories look at computers purely from a market’s perspective. This perspective changes over time, but it changes even more significantly with different markets, e.g. different countries. A Sinclair ZX80 is much more common in the UK than in Germany.

The Value of a Computer over its Lifetime

April 13, 2020

I’m currently in the process of compiling a presentation on “Collecting Old Computers as a Hobby” for the upcoming VCFB 2020 event. I’m not sure whether it really fits in that presentation, but I made a highly speculative, subjective chart on, what I think, the value of a computer over its lifetime looks like. Here it is:

Lifetime

Let me explain. First, I differentiate the lifetime of a computer into 4 phases.

The “phase of usefulness” starts when the model comes onto the primary market, i.e. when it’s new. Obviously, the manufacturer thinks that it will be bought because it offers some benefit to the buyer. It is sold at the initial price (which typically will decrease over the time the model is offered by the manufacturer). I think it is not unreasonable to assume that the value of the computer, once bought, drops exponentially in this phase, especially when it it a state-of-the-art model. As it approaches the end of the usefulness phase, it typically drops to a more symbolic value that is basically determined by the minimum amount a seller is willing to accept in order for the entire transaction to make sense at all (i.e. compensating for the effort of the seller to offer, handle, and sell the thing. If the offered price would be any lower, it would not be worth the effort of the seller to do anything. If this computer model was bought originally by a company, it is most probably written off since some time anyway, to the company cannot put any value on it. The length of this phase depends probably on different factors, but maybe something like 10 years is not completely wrong for a computer. This phase transitions into

The “garbage phase“. The computer has no usefulness anymore, but it is not so old already that there are sentimental feelings connected to it. In this phase, the value is minimal and probably quite stable around the symbolic value I tried to establish in the last paragraph. Maybe in this phase it is not handled by the original owner, but by traders who specialize in surplus goods, making the price of the computer maybe even a tad lower because such traders are more efficient at low prices. I put a length of this phase also at around 10 years and try to substantiate that in the next paragraph, because the next phase is

The “sentimental phase“. This phase has a lot to do with the average age of a typical collector of a computer. Typically, they either had this computer model when they where young, or they were around when this model was fresh on the market. Since this phase probably 20 years or more has passed and they remember this time in retrospect with positive feelings (who does not remember his/her youth with joy? The music was much better than nowadays, the world was not that complicated and there was much less hatred and selfishness in the world). Also, being his his/her late 30s, 40s, and early 50s, things start to settle down for yourself. Often, there is less shortage of money, and less time needed to find a partner. For sure you don’t have a midlife crisis, but all this urge to buy a motorcyle… 🙂 Now, this is the time to feel young again with the dream machines of your youth, to fulfill unfilled dreams of owning cool stuff for a bargain. As a result, people start collecting computers. This process starts slowly, only a few people start collecting, but now the prices raise again. More and more people collect computers, maybe collecting becomes cool, and , with the raising prices, maybe even a good opportunity to invest money.

My theory is that the prices of a computer a collector wants to buy are:

  • not dependent on the initial price
  • dependent on a bunch of other factors, e.g.
    • how rare the model is
    • how many other collectors the model want
    • and, almost more importantly, what the buyer is willing to pay for a sentimental, or decorative, or conversation piece

I have also the impression (although I did not invest time into this to prove it) that these new values are clustered (and I put some estimation of how large these clusters are in the figure). Also, these price clusters increase over time as inflation and salaries increase over time. Finally, people think that the prices will go up forever and start thinking of them as investments (which will draw in also non-collectors that will act as investors).

This phase ends when the majority of the collectors starts getting so old, cool stuff from one’s youth is getting less important. This happens when no younger collectors replace the old ones, e.g. because the age of computers being cool stopped at some point. There are some areas where new collectors seem to continously “re-grow”, e.g. art and antiquities. There are other areas that flourished over many years, but suddenly came to a lack of collectors, e.g. stamps. My assumption is that, as computers became utilitarian in the 2000s instead of being fresh and not understood by parents, they aren’t as magical to millenials as they are to earlier generations (this is probably different to consoles and game-related computing, these will probably thrive much longer). If my prediction is correct, then prices at the end of this phase will drop dramatically as the market vanishes and the budget per collector gets much smaller.

It is also no clear to me what the next phase after the sentimental one is, and how this changes the prices for old computers.

In summary, here some conclusions:

  • most computers have their highest value when they are sold initially
  • the best phase to buy an old computer is the garbage phase (which is long gone for computers up to the year 2000)
  • do not buy old computers as a long-term investment

So, here you have it, my wild, highly speculative look into a crystal ball. What do you think?