Two UK retailers turned up the heat in the PC price war when they offered to give a machine away for free, providing that consumers sign up to their respective internet service.
Launched on 16 July, Tiny is offering a free PC to any customers who sign up to its telco, Tiny Telecom. There are three options available to customers.
The first, if customers sign a 12-month contract with Tiny Telecom and maintains their monthly telephone bill at £25 or above, they will receive a free Celeron based PC. The second option is for subscribers who keep their telephone bill above the £25 threshold. They will receive a PC after one year. The final option is to opt for a higher specification machine and pay an additional monthly charge of £7.89 for four years.
Tiny teamed up with Telia and Cable and Wireless for the service and plans to launch similar operations in the US and Far East.
Neil Stevens, marketing director at Tiny Computers, said: "The PC is worth more than £300. This will change the way PCs are sold. It's the mobile telephone model."
Meanwhile, Time Computers is offering consumers a free PC for signing up to its ISP service, Netline Plus, for two years. The free PC will be a 300 M-11 IBM processor with 32MB Ram and 2.1GB of hard disk drive.
Nick Gibson, analyst at Durlacher, said: "It's an interesting twist on the free ISP market which is very crowded now, with at least 95 companies. It would be interesting to know what the margins are from free PCs and internet usage."
Peter Day, senior analyst at Gartner DataQuest, said: "Research we have seen does not suggest that the internet is the main driving force for buying a PC. It continues the trend of the services being the main product and the box merely being the commodity."
Day added that £25 per month would be an easy target for a business.
"That level of usage may not sound a lot but it would put you in the top 20 per cent of users."
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