Vendit:
re:Free PC's.
Gobi's PC's are supplied by Compaq, I understand.
It is hard to predict the ultimate impact on the big box makers; MD has opined that this business model will not thrive.
There is also the matter of the impact on AOL in terms of being a threat to their position as the ISP of choice to many newbie buyers of low cost PC's.
Srini.
PS: I just found the WSJ link, it does not mention COMPAQ.
interactive.wsj.com@4.cgi?vigraham/text/wsjie/data/SB922934812904790419.djm/&NVP=&template=news-search2.tmpl&form=news-search2.html&dbname=wsjie/index&words=gobi&any-all=%26phrase%3D+&maxitems=30&HI=
April 1, 1999
Gobi Joins Firms Giving Away
Personal Computers for 'Free'
By LEE GOMES
Staff Reporter of THE WALL STREET JOURNAL
A New York City company plans to give away a million
free personal computers this year to customers who sign
up for three years of its Internet service, the latest in a
string of such offerings.
Gobi Inc. said it will give the computers to people who
agree to pay $75 in setup and shipping fees, and who
agree to buy Internet service from the company for three
years at $25.99 a month -- slightly higher than most
Internet service providers charge. Moreover, users must
pay $50 to keep the PC at the end of the three years.
While nominally free, the Gobi machine will end up
costing users roughly $340, considering the shipping and
other charges and the roughly $6-a-month premium the
company is charging for its Internet service.
Gobi is one of a series of companies that in recent
months have shaken up the computer industry by offering
cheap or "free" computers. The business model for these
new companies borrows from the cellular-phone
industry, in which hardware is given away in exchange
for a subscription agreement for the relevant services.
The new agreements are putting pressure on traditional
PC makers, which are seeing their average selling prices
drop as the market shifts to this new business model. The
average PC today costs nearly 20% less than it did a
year ago.
Gobi executives said they hope to make most of their
profit by developing electronic-commerce services for
their customers.
Gobi said it won't raise the monthly Internet rate for the
duration of the agreement. Users canceling before the
three years are up can keep the PC, but must pay $699 if
they cancel in the first year, $499 in the second year and
$249 in the third. At the end of three years, users can
keep their machine in exchange for a payment of $50 or
less, the company said.
The Gobi machine is available from the company's Web
site. It contains a 300 megahertz Intel Corp. Celeron
processor, 32 megabytes of memory, a 3.2 gigabyte hard
drive, a CD-ROM drive, a 15-inch color monitor,
speakers, a modem and Windows 98.
Other companies with similar business plans include
DirectWeb Inc., Mount Laurel, N.J.; Free-PC.com,
Pasadena, Calif.; and Microworkz Computer Corp. of
Seattle. |
