The low prices you're seeing on PCs these days are no mirage. Big manufacturers such as Dell are in a hot battle for market share. In Dell's case, the problem is HP, which dropped prices in October. Further price cuts from both camps may deck the halls before Christmas arrives.

Market researcher Gartner predicts a mere 1.8 percent increase in PC shipments over the fourth quarter of 2001 -- anemic growth indeed in a formerly go-go industry. People have to see a good reason to buy. And besides, they're spreading their digital dollars around to cover more devices, including home entertainment systems, hand-held computers, digital cameras, MP3 players and game stations.

These slow sales offer a nice buying opportunity. But in a weak economy, the question is whether to buy a new machine or upgrade the one you have. Here are some points to keep in mind as you make that decision:

* Some upgrades are easy. Boosting your memory from 64 to 128MB is a fast and cheap way to improve performance. As with any upgrade, ask yourself whether you're comfortable getting inside the case of your machine. If not, you'll need to find a local shop that handles PC sales and repair, paying them to add the new chips.

* Some upgrades are hard. No matter how much memory you add, there are things that a Pentium II can't do. One of them is run Windows XP, and if you want to go with Microsoft's latest, you'll opt for a Pentium IV. Increasingly, new software is going to demand a faster processor, especially if you get into digital video, or if playing the latest generation of games is important to you.

* Motherboards can be upgraded. The motherboard is where that Pentium chip is attached. You don't necessarily have to buy a new computer to switch processors, provided that your motherboard can be changed out for a better one. A good PC technician can give you an idea of what's possible and how much it will cost. As you evaluate the cost, be sure to keep the following point in mind.

* One thing leads to another. I wanted to swap motherboards on a 5-year old machine, but my PC's case wasn't a standard size. I looked into buying a new case, putting in a new motherboard, and using my old components. But my old memory wouldn't work with the new motherboard, and changes in technology meant I would also need a new floppy disk. Then there was the time and labor involved in swapping my other hardware into the new case. The cost of buying a new machine turned out to be only slightly higher.

* Maybe you don't need to upgrade. I have a friend who does most of his work at home on an old 386. He simply uses it as a word processor and needs few other programs. So ask yourself what you use your machine for. Is there something it won't do; and if so, is that really a problem?

* Think of the Net. If you do buy a new machine, chances are the Internet will be the reason. Moving into Pentium IV range with a solid 512 MB of RAM will boost your browser's performance and speed up sluggish Windows applications. And because storage is cheap, you can afford to buy a big hard disk. I'd recommend at least 60 GB.

* The point is we're at a real low in computer prices as the sales slump bottoms out. Don't buy more than you need, but consider this an opportunity to move up if your Pentium II or lower machine no longer packs any punch. With so many people switching to fast cable and DSL connections for Internet use, the case for buying a new PC that can get the most out of all that bandwidth has never been stronger.