Compaq, Hewlett-Packard and Micron Electronic each joined the PC rebate throngs last week in the US, announcing that you can get $US400 back on a PC when you sign up for three years of Internet access.
The PC makers are the latest in a string of computer makers attempting to boost sales and offset weak profits by subsidising low- cost systems with Internet access contracts.
The US rebate promotions follow similar initiatives by smaller PC manufacturers with Compaq, Hewlett-Packard, and Micron Electronics struggling to offset low margins and lost sales to startups such as Microworkz and eMachines.
Micron chairman and chief executive officer Joel Kocher has stated that Web services carry gross margins as high as 80 per cent.
Micron, unlike Compaq and Hewlett-Packard, has its own ISP as of last week. Micron says once its newly acquired Micron Internet Services are integrated into the company, it will offer its own Internet access package.
However, Compaq Australia has not followed the lead pioneered on the local scene by competitors HP, IBM and Edge Technology to offer low-cost PCs bundled with Internet access.
A Compaq Australia spokesperson told ARN that the low-cost Internet bundled PC strategies being explored in the US "will not be offered in Australia".
On the direct front, Gateway is now offering its own Internet service and is said to be in negotiations to buy Earthlink. Dell says it plans to offer its own Internet access service in the US; the company already sells Internet access in Europe.
Micron and Internet access provider Earthlink will offer consumers who sign a three-year Internet contract a rebate of $US400 on the purchase price of Pentium III powered Micron computers. Not priced as aggressively as its competitors, Micron's cheapest Millennia PC will go for $970, after the rebate, for a system powered by a PIII 450MHz processor, with an 8.4GB hard drive, 64MB of memory, 40x CD-ROM, modem, and a 17 inch monitor.
Compaq offers a limited-time $US400 rebate with the purchase of any Presario PC through its "iSAVE" Internet Savings Rebate Promotion. Customers must sign up for three years of CompuServe 2000 Internet access at $21.95 a month. Compaq offers a further $200 in savings if the customer purchases a three-piece Presario Internet PC bundle (printer, monitor, and PC). The total cost for a Presario 5304 after rebates is $299.
The system is powered by a Cyrix-M2 366 processor, and includes 64MB of memory, a 4.3GB hard drive, and a modem. The CompuServe $400 rebate expires on November 15 and Compaq's $200 three-piece system bundle expires on October 15.