Part 1: Hey buddy, wanna buy a $1,000 calculator?
The transition from electromechanical calculators to completely electronic models is an amazing story. Today I'll focus on one interesting aspect of this story, "the saga of the plummeting prices". In future issues I'll discuss other topics such as the great "US-Japan calculator war" and (of special interest to collectors) attempt to estimate the total number of early electronic calculators produced each year. But for now let's get on with the money story.
Many of the first electronic desktop calculators cost over $1,000. But I'm not talking about one thousand 1996 dollars, I'm talking about one thousand 1966 dollars. As many readers will recall, that was one heck of a lot of money. In fact, a new calculator could cost more than a new car! "What do you think honey, a new car or a new calculator?" Today this seems truly absurd. By the dawn of the pocket electronic calculators in the early 1970's prices had fallen significantly but a simple four-function model could still set you back more than a week's salary. I know this for a fact... my first Craig four-banger (which I still own) cost me over $200 and wiped out my bank account! Why were the early machines so expensive? Were manufacturers cranking them out for pennies and selling them for huge profits?
No. In reality the early electronic calculator business was highly competitive and prices were closely linked to the cost of raw materials. As the cost of raw materials fell, calculator prices plummeted and profit margins shrunk. Within a few short years dozens of upstart calculator companies went belly-up. Here are some brief details. Pre-integrated circuit electronic models used thousands of desecrate components and required huge amounts of assembly costly time. The introduction of the first integrated circuits (ICs) had an immediate effect on overall price. But as can be seen from the graph, in 1969 the cost of the integrated circuits needed to build a calculator was still on the order of $300. The typical electronic desktop calculator of 1969 used about 15 ICs which ate up almost 40% of the retail cost of the machine.
Other components like gas-filled display tubes were not cheap either. Fortunately, in addition to the IC, the development of the light emitting diode (LED) display was another major breakthrough. In 1972 LED displays c ould be bought in quantity for about $2 per digit. By 1972, the single IC "calculator on a chip" could be purchased in quantity by manufacturers for about $10-$15 and the pocket calculator quickly crashed through the $100 barrier. By the 1980's four-function calculator prices broke through the $10 barrier. This would have seemed impossible a decade earlier. A few days ago I saw a brand new four-function calculator on sale for $1 at a discount store. Hey buddy, wanna buy a $1,000 computer?
© Text & photographs copyright Nigel Tout 2000-2017 except where noted otherwise.