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Hi, I am new to video editing so am currently using an old computer with i7 cpu and 8gb ram so it is struggling. I have been looking at either upgrading my computer, buying a new windows computer or getting an old iMac. My budget is around £600. Any sggestions?
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I don't think you will be happy with that budget
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What sort of budget would be sensible then?
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For that £600 budget you might end up with only a sideways-grade from your current system because Intel had been too complacent since you purchased your current system. You're trapped between a rock and a hard place at that budget level: You'll end up with either a PC that has too weak of a CPU or one that has a woefully imbalanced CPU/GPU combination (decent CPU but severely underpowered GPU).
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Would a 2018 21.5 inch iMac be a good replacement?
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Not much better. That 2017 iMac still has only a quad-core CPU, just like your current system. Only this time, that quad-core CPU that was standard in that iMac, unlike your current system, has no hyperthreading at all. And that CPU, at best, performs only about equal to your current CPU. There was no new iMac model introduced in 2018 (all iMacs sold in 2018 were just carryovers from 2017). Six-core CPUs would not be introduced into the iMac line until early 2019.
To make matters more confusing, there is a non-Retina 21.5" iMac that has only a dual-core mobile i5 CPU. Do not get that unit for video editing!