Maybe you’ve heard of Moore’s Law. It’s a cornerstone of tech engineering that has been a point of reference since 1965.
The law is based on an observation made by Intel (NASDAQ: INTC) co-founder Gordon Moore. His observation, to paraphrase, is that the number of transistors on the average integrated circuit doubles every year.
This has mostly held true, although the rate of doubling has slowed slightly to every 18 months.
This trend has an impact on data storage, imaging sensors, and processing power. They all have grown in big leaps for the last 50 years. As capacities increase, generally speaking, price has decreased.
Chipmakers think this observation will have run its course by 2030. As circuits shrink in size, it becomes increasingly difficult to fit more transistors on circuit boards. At some point, atomic microscopes and cleverly orchestrated chemical reactions will be required to build tiny circuits.
But that bottleneck will only apply to the cutting edge of computing materials, not commodity hardware.
Before we get to computer systems so small we can’t even see them, we are going to have computerized everything.
Commodity computers continue to decline in price, and companies are racing to make the cheapest single-board computer possible.
The Next Thing
A team of artists and engineers from Oakland California called Next Thing Co. have developed a single-board computer called Chip. Its retail price is slated to be just $9.
With a 1 GHz processor, 512 MB of RAM, and 4 GB of solid-state storage, the machine is built from mass-produced Chinese parts that have gone into all manner of low-cost tablet computers.
By stripping out the batteries, touchscreens, speakers, I/O ports, and cases, Next Thing has gotten to the root cost of commodity computing.
And it’s ridiculously cheap. 
The mainstream use of smartphones and tablets has created a market scaled for extremely cheap components.
While Next Thing Co. is trying to raise money to mass-produce these tiny computer units, other companies are already in their second, third, and fourth generations working with similar commodity parts.
Raspberry Pi, Beagle Board, Edison, and LinkIt all produce development computers that are small, rough, and cheap.
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The idea behind many of these computers is that they are informing the next generation of computer engineer, who is going to be working in the Internet of Things era.
That engineer who builds systems will have to work with tiny, resource-constrained nodes that do simple tasks. High-level system engineers will have to deal with the swarm mechanics of many of these nodes. These are early versions of those machines.
The cost of commodity hardware is a major indicator of the progress into the Internet of Things. We’re not there yet, but eventually a single-board computer will be thrown into parts inventories alongside screws, nuts, bolts, and washers.
Low-level computer technicians won’t have to worry about software layer problems anymore. Whole systems will be so cheap that they can be yanked out and replaced without a thought.
While their value is major, their cost is inconsequential.
Good Investing,
Tim Conneally
For the last seven years, Tim Conneally has covered the world of mobile and wireless technology, enterprise software, network hardware, and next generation consumer technology. Tim has previously written for long-running software news outlet Betanews and for financial media powerhouse Forbes.
