Obviously there's no such thing as a free lunch but some of these deals on
"free" computers might be worth exploring, especially if you are already
paying to be online. Details on the MicronPC deal can be found at:
http://www.micronfreeware.com/
The web page indicates it is under construction until 7/12 but gives a
contact phone number.
July 10, 1999
Micron Electronics Joins Free PC Wave, With a Twist
By REUTERS
SAN FRANCISCO - In the latest wave of companies embracing the move to offer
free personal computers, Micron Electronics Inc. said Friday it is now
giving a free PC to consumers who subscribe to its premium Internet service.
But consumers must sign up for and pay in advance for three years of
premium Internet service. The three years of monthly service, $21.95 a
month, is equal to $1,087, plus an activation fee of $49. The signup fee is
waived if one signs up online.
"We are in the midst of a transformation in the way technology companies
must service the computing needs of consumers," said Joel Kocher, chairman
of Micron Electronics, a direct seller of PCs. "Consumer behavior is
changing the economics of our industry every day," he added in a statement.
Nampa, Idaho-based Micron Electronics said that it is offering a free PC to
consumers for life. When consumers resubscribe after three years, they get
a new PC and they get to keep the original PC. Micron's offer also includes
a three-year on-site hardware warranty, valued at $99, plus other
educational services and subscriptions.
Most of the companies which have been offering free PCs in exchange for
signing up for Internet service are not requiring customers to pay for
their long-term commitment in advance.
For example, late last month, Dulles, Va.-based America Online Inc. signed
a pact with low-cost PC provider eMachines.
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"A PC and Internet service is the thing people are buying."
In their deal, Irvine, Calif.-based eMachines is bundling AOL and
CompuServe software into all eMachines PCs. Consumers signing up for
three-year memberships of the new CompuServe service will receive a
limited-time rebate of $400 toward the purchase of three eMachines PCs,
including a $399 model.
"There are more elements to the (Micron) program," said Roger Kay, an
analyst at International Data Corp. in Framingham, Mass. Kay pointed out
however, that Micron Electronics's move is significant because it is one of
the biggest PC vendors yet to embrace the trend.
"This is nearly a major vendor coming out with it, as opposed to some new
company made up to do this kind of thing," Kay said, referring to companies
such as the privately-held FreePC in Pasadena, Calif., which gave away
10,000 free PCs in exchange for market research information from consumers.
Both Dell Computer Corp. and Gateway Inc., two rival direct sellers of PCs,
are now offering free Internet service in different parts of Europe, as
part of a huge rise of free Internet services across Europe in the past six
months.
"It's all part of the idea that the combination of a PC and Internet
service is the thing people are buying," Kay said. "I think this is going
to be a lot of experimenting with this model. You might see other vendors
join in.
July 8, 1999
STATE OF THE ART
It's a Land of the Free (Computer)
By PETER H. LEWIS
Swept up in the phenomenal rush of the global Internet that it helped
create, the personal computer industry is undergoing a fundamental
transformation.
The PC has become inextricably linked to the Internet, causing the two
formerly distinct businesses to blend. Several PC makers have begun
offering free Internet access as an inducement to sell more machines, while
several Internet service providers have begun giving away computers, or
subsidizing their purchase, to entice more customers to sign up for online
services.
Still another group of companies has started giving computers to customers
who agree to look at online advertising. The companies hope that they can
attract advertisers who are trying to reach a population that is spending
less time in front of the TV and more time in front of the PC.
The personal computer, which gained popular acceptance in the 1980's for
its ability to perform a wide variety of business and scientific tasks, is
increasingly being recognized in the late 1990's as primarily a
communications device that enables anyone to send and receive e-mail,
participate in discussion groups and browse for information on the
Internet's World Wide Web. Marketing surveys confirm that Internet access
is the main reason people buy a PC today.
And now, the PC is following the model of the cellular phone, which is
often given away or sold at low cost to customers who sign up for service
contracts.
Three of the largest Internet service providers, America Online's
Compuserve unit, the Microsoft Network and Prodigy Internet, now offer $400
rebate programs that cover at least part of the cost of a new PC.
Meanwhile, several of the largest PC makers, including Compaq, Dell and
Gateway, are driving the cost of their basic computers well below $1,000
and experimenting with free Internet access to get more customers.
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There is no such thing as a free lunch, of course, and caveats abound in
these new schemes.
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Best Buy, CompUSA, Microcenter and Circuit City are among the large
national retailers that are offering similar deals in conjunction with
Internet service contracts, making the cost of a PC comparable to the cost
of, say, a video cassette recorder. During test marketing at some stores,
they have offered weekend specials: a PC for $400, with a $400 instant
rebate. Circuit City offered a bundle of a monitor and printer for $99 extra.
There is no such thing as a free lunch, of course, and caveats abound in
these new schemes. There are no complete PC systems available for $400, and
the PC's that come closest are typically bare-bones machines with minimal
features, dubious warranties and limited free technical support. The offers
typically do not apply to Apple Macintosh computers or PC companion devices
like the Palm Pilot. The Internet service contracts require payments of
$700 or more over three years, and if the customer gets frustrated by the
quality of the PC or the Internet service during that time, three years is
a very long time to stew.
On the other hand, there is no doubt that these programs make owning a PC
and getting connected to the Internet much less expensive than ever before.
For example, a customer can buy a $399 Emachines PC with Compuserve
software already installed, sign up for a three-year Compuserve account at
$21.95 a month and get a $400 rebate check from America Online. The
Emachines computer does not come with a monitor, which adds $100 or so. And
while Compuserve is owned by America Online, it lacks the strong lineup of
family and child-friendly features that have made AOL the world's most
popular online service.
Prodigy, once the largest online service in America before it fell on hard
times, this month announced a rebate plan with the Best Buy Company, the
country's largest consumer PC retail chain. A customer who signs a
three-year contract for Prodigy Internet access at $19.95 a month will get
a $400 rebate that can be applied to the cost of any desktop or portable PC
at Best Buy. A two-year contract will get a $250 rebate; a one-year plan,
$100.
The Microsoft Network, or MSN, is testing a $400 rebate plan in 15
Microcenter computer stores, and last weekend it conducted a limited "free
PC" test with Staples office products stores. Like the others, MSN requires
a three-year commitment at $19.95 a month. Microcenter has a $449 PC, but
it does not include a monitor.
Compaq offers free Internet access with its Presario line of home
computers, including one model that costs $599 with a monitor, through a
rapidly growing Internet service company called Net Zero. Net Zero requires
customers to reveal personal information and to agree to watch
advertisements geared to their interests. Compaq also offers Internet
access under its own Compaq.net service for prices starting at $11.99 per
month.
Gateway offers one year of free Internet access with any machine priced
over $1,000 and is said to be negotiating to buy Earthlink, a major
Internet service company.
Global demand remains strong for powerful and expensive PC's that can
perform complex operations like managing large customer accounts, designing
software or playing the latest three-dimensional computer games. But in the
past year, consumers have come to see PC's -- especially those that cost
less than $1,000 -- mainly as the boxes that say "You've Got Mail!" and
allow them to buy books, trade stocks and participate in electronic garage
sales and auctions without leaving home.
Although low-cost PC's are not suitable for designing rocket ships or
playing the latest 3-D games, most are more than adequate for handling
simple applications like e-mail, Web browsing and online shopping.
Until recently, PC's appealed mainly to consumers who were technologically
adept or brave enough to put up with such a notoriously complex,
frustrating and expensive device. The penetration of PC's into American
homes reached about 40 percent, then stayed there for several years,
suggesting that most people who wanted a PC already had one.
The Internet has changed the landscape. The superiority of e-mail over
postal mail for keeping in touch with friends and family, coupled with the
ubiquity of "www" Internet addresses on television and in print
advertisements, is piquing the interest of many consumers who until now had
resisted owning a computer. They may still hate the idea of having a
computer, but they love the idea of being on the Internet.
With their new "free PC" plans, the Internet companies are hoping to reach
many of the 45 million American households that have lacked either the
interest or the money to bring PC's into their homes. The "free Internet"
schemes of the PC makers are heading toward the same goal from the opposite
route.
If the most optimistic forecasts come true, computers may soon become as
ubiquitous as telephones or television sets. For that to happen, PC's are
going to have to be as easy to use as telephones and television sets, which
is definitely not the case today.
But the price is right, finally.
Peter H. Lewis at [log in to unmask] welcomes your comments and suggestions.
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