Subsidized PC market

Published: 2 May 1999 y., Sunday
A start-up called Enchilada will launch yet another free-PC plan tomorrow that will allow customers to get the combination platter of Internet access and a PC for a low monthly price. It will recover the cost of the box through long-term Internet access contracts with the PC owner. These deals are expanding PC usage by lowering the initial investment involved in getting wired. And, if Enchilada is any indication, the initial investment is getting lower all the time. Enchilada will offer a free PC complete with a 300-MHz AMD K6-2 processor, Windows 98, a 15-inch monitor, and unlimited Internet access for $19.99 a month. The company will also send technicians to consumers_ homes to set up their PCs. Participants have to agree to a four-year contract for Internet access, said a spokesman for the company, or pay $799 in advance for the entire package. The company, which is a division of Simple Solution, also charges $99 for shipping and handling. PC upgrades are permitted after two years. Along with providing free installation, the company is creating its own help site, SOS Enchilada, that will answer basic questions about navigating the Web, purchasing products online, downloading plug-ins, and how to use chat sites. The company_s PCs are fairly complete, especially compared to some other free-PC offers. Other product bundles are also available. The "Enchilada Grande" package includes a Lexmark color printer, an office suite package with word processing, database, graphics, assorted games, and a four-year on-site warranty for an additional $9.99 per month over four years, or $1,199. Enchilada_s monthly fees are on the lower end of the scale for companies following the "cell phone" business model of givingaway the hardware with a service contract. How this market will develop and which strategy will win has yet to be seen. What is certain is that the free-PC phenomenon will endure. Intel executives, among others, have said that numerous companies are experimenting with free PC business modelsat present. Intel for instance, is now working with some of these free-PC companies, showing them processor road maps, providing them other technical information, and in general treating this as a new branch of the PC market.
Šaltinis: CNET
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