The press release below speaks volumes about a lot of different subjects. But the two main points are:
1) Michael Dell: "People want more and more powerful PC's as they get involved with the internet". Hayuk yuk! Looks like people want more and more free PC's as they get involved with the internet, Mike. Maybe it is clear why you're dumping your own stock after all.
2) James Nicoll: As providers start to give this "iron" away gratis, do they want to incur an infinite obligation to hire support staff to explain "invalid operations" and register dumps? In which direction do you think these free internet appliances will evolve? Into ever-more-elaborate PC's with more and more local peripherals and "customizable" software confusion? Or into a thing that does indeed look like a "dumb terminal" in the sense that you don't need to take a screwdriver to it every other week? And what goes in the home will go on the majority of corporate desktops.
Regards,
--QwikSand
AOL, Microsoft Offer Free PCs
By DAVID E. KALISH AP Business Writer
NEW YORK (AP) - Major Internet services and computer makers are joining forces to offer a seemingly unbeatable deal to entice millions more people to join the Web revolution: free personal computers.
While the freebies have conditions, a flood of offers this month will hasten the day when PCs are routinely given away just like cellular phones.
America Online, Microsoft and Prodigy, three of the biggest names in Internet access, are promising free personal computers to anyone who agrees to buy their service for three years. Other major Internet providers are expected to add similar deals with computer makers later this month.
The giveaways don't provide a $100-$300 monitor and demand a 3-year commitment to the Internet services, which adds up to as much as $790.
But home computers, which used to cost as much as a used car, are clearly hitting bargain basement levels. While smaller companies started giving away PCs last year, announcements on Wednesday by AOL and on Thursday by Prodigy show how plunging prices are fast making PCs into just a delivery mechanism for services and software. A steady drop in prices of parts, such as microprocessors and hard-disk drives, has helped make giveaways possible.
''I think it will be nearly universal,'' said Roger Kay, an industry analyst with the International Data Corp. research firm. ''It's like the old AT&T model, where they gave you the phone.''
AOL said it would give a $400 rebate on selected computers made by eMachines Inc. to anyone who subscribes to AOL's $21.95-a-month CompuServe Internet access for three years. The lowest-price eMachines computer is $399, in effect making it free, but the monitor isn't included. The deal also applies to all computers bought at the Circuit City retail chain.
The arrangement is expected to help AOL finally bolster the subscriber base of its CompuServe service, which is targeted to small businesses and home office users, but has only 2 million subscribers. AOL's flagship online service has 17 million subscribers.
Prodigy announced a similar 3-year 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 at Staples Office supply stores. The one-week trial ends Saturday, but Microsoft officials said they are considering extending the offer, as they did with a 3-month old offer at the small computer chain Micro Center.
The major PC makers, including Hewlett-Packard Corp. and Compaq Computer Corp., are expected to announce similar deals with Internet service providers later this month.
The moves will squeeze already thin profit margins at PC makers, which may be forced to offer lower-priced machines to compete with eMachines' budget product.
But they may have little choice. EMachines, a startup in Fremont, Calif. that launched its first major sub-$600 PCs last September, has vaulted into No. 5 among PCs sold at retail with 9 percent of the market in May, according to the research firm PC Data. Compaq was No. 1, followed by Hewlett-Packard, Apple Computer Corp. and IBM.
A chief reason many consumers don't want to spend a lot is because many use PCs mainly for Internet access.
''People are beginning to look at the Internet expense as a monthly annuity, just as you pay the telephone company,'' said Stephen Dukker, the chief executive of eMachines.
Thanks to the Internet, people are quickly getting conditioned to free stuff. Nowadays, it's possible to get free Internet access, e-mail, faxes and voice-mail messages sent to your computer for playback over its speakers. Many of these freebies require users to watch advertising or give up personal information to marketers.
Not that the PC offers are without risks. Signing up for a three-year contract is a lifetime in Internet time. New methods of accessing the Internet far faster than traditional telephone modems, such as through cable TV lines, are becoming available to more Americans. And customers who break their three-year contracts with Internet providers face penalties. |
