PC Giveaways Proliferate, But Tied To Internet Plans

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A second wave of free PC promotions is now crashing on the Internet beachfront, but unlike earlier such offerings, none of the latest giveaways require recipients to view advertising or divulge marketing information (see TWICE, February 22, p. 26). Most, however, do require customers to sign up for multi-year service commitments much in the manner of cellular phone providers.

For example, New York City-based Gobi is promising a free 300MHz Intel-based PC to customers who agree to sign up for three years of an Internet service plan at $25.99 per year. Customers must also pay a $29.99 start-up fee and $45 to cover shipping and handling.

They also agree to pay a cancellation fee -- $699 during the first year, $499 in the second, and $249 in the third year -- if they terminate the service before the 36-month period expires. They do, however, get to keep the PC, a 300MHz Intel Celeron-powered model that comes with 32MB of RAM, a 3.2GB hard drive, CD-ROM drive, ATI graphics, 56K modem, speakers and a 15-inch monitor.

Gobi said it hopes to attract 1 million subscribers in the first year of business. The firm has contracted with Solectron to build the PCs, and Concentric is to act as the Internet service provider (ISP).

The deal is very similar to one offered by Woburn, Mass.-based Connect Plus, which began offering free PCs to Internet service plan customers back in early February.

Connect Plus, which was one of the pioneers in offering free cellphones to its customers in exchange for service plan commitments, is giving a free PC to customers signing up for 36 months of Internet service provided by regional ISP Empire.Net. A $29.95 per month fee is charged for Empire.Net's top service offering, which includes 300 online hours per month, up to five POP mailboxes, and 20MB of personal web space.

"This promotion is aimed at the consumer who does not currently have a computer or who has an old 486 or Pentium 75/90 which they would like to pass down to their children," said Connect Plus VP Thomas Johnson, who said other customers have fast PCs but switch to Empire.Net's Internet service so they can obtain a second computer for their family.

"Our original focus, however, was the consumer who was not hooked up to the Internet because they simply do not have $800-plus to buy a computer, [but] they do have $29.95 each month."

The Connect Plus PCs are e-Machine models powered by a 300MHz Intel Celeron processor. They include 32MB of RAM, a 3.2GB hard drive, 24X CD-ROM drive, 56K modem and a 14-inch monitor. Customers can pick up their PC from one of five area outlets after filling out the necessary paperwork.

Last week, a Mount Laurel, N.J.-based company called DirectWeb began rolling out a free PC offer to Philadelphia-area residents who agree to sign up for unlimited Internet access. A unique twist to DirectWeb's offer is that by paying a higher monthly fee, subscribers can receive a more powerful computer.

The company said it hopes to bring 25,000 consumers online in the Philadelphia area by June and will roll out the offer in multiple markers later in the year.

Consumers paying $19.95 per month for basic service will receive a 333MHz Intel Celeron-powered PC with 64MB of RAM, a 6.4GB hard drive, 32X CD-ROM, 56 modem, speakers and a 15-inch monitor.

Select Plan customers, who pay $29.95 per month, move up to a 366MHz Celeron machine with 128MB of RAM, an 8.6GB hard drive and 17-inch monitor, while $49.95 Premium customers receive a 450MHz Pentium II PC with 128MB of RAM, a 10.2GB hard drive, 6X DVD drive and a 17-inch monitor. The PCs are being assembled by Ingram Micro.

To order, customers pay a $150 deposit, which is refunded after 12 months, although the deposit is waived for consumers who successfully apply for a DirectWeb credit card. Customers can cancel at any time by returning the PC to DirectWeb and have the option every three years of upgrading their PC.

Finally, a slightly different tack is being taken by a start-up auction site called NuAuction, which is using free PCs to drive customers to its site, NuAuction.com. The company will randomly select 12,000 winners from among those who sign up for its auction service. Winners will receive a free entry-level Cyrix-based computer but no monitor. The odds of winning a PC were about 3,000-1, the company said.

The first 12,000 free PCs will start shipping in June, NuAuction said, and it may make more free PCs available if the promotion is successful in drawing people to its site.

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