Free PC’s for subscribers to Internet

By : |July 6, 1999 0

Major Internet services and computer makers are joining forces to offer an unbeatable deal
to entice millions more to join the Web revolution: free PC’s. The deal would boost the
number of computer users connected to the Internet, especially among the lower income
consumers who have been shut out of the market.

America Online Inc., Microsoft and Prodigy are promising free personal computers to anyone
who agrees to buy their service for 3 years.

The deal, which includes a minority investment by AOL in Korean backed E-Machines Inc.
reflects a growing trend by personal computer makers to join Internet providers in
offering bundled services at low prices. The companies will launch within a week a special
promotion to sell computers with a $400 rebate to anyone who subscribes to AOL’s $21.95 –
a – month Compuserve Internet access for three years. The lowest price E-Machine computer
is $399, in effect making it free (monitor isn’t included) and this means that the
consumers get the computer for the cost of the online service, about $20 a month.

AOL is expected to join similar marketing deals with other PC makers and is in talks with
Seattle based – Microworkz, maker of a $199 computer.

Prodigy announced a similar deal for any brand of computer bought at Best Buy consumer
electronics stores. Its Internet access costs $19.95 a month.

Microsoft Corp. is offering a $400 rebate to customers who buy a personal computer Staples
office supply stores.

Computer makers are feeling pressure to offer Internet services because of price pressures
in their core market and the Internet has become the key driver of sales.

The computer is beginning to follow the cell phone model – where you get the product free
for signing up for a monthly service.

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