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Warnings sound over free PCs

Warnings sound over free PCs

Smaller retailers fearing the emergence of the low- or no-entry-price PC will be pleased to see the phenomenon is attracting its fair share of criticism from industry analysts and consumer watchdogs.

The old saying "there's no such thing as a free lunch" seems even more applicable to the PC market, according to analysts who have hit back over "free PC" claims from large retailers.

Forever changing the way computers can be marketed, free PCs with bundled Internet access have been dubbed by industry analysts IDC as "chameleons".

Rupinder Toor, market analyst with IDC Australia, said: "The chameleon, now with no entry price, is set to stimulate new growth in the consumer market, as vendors, retailers and ISPs all pursue the new marketing approach."

However, Toor claims the repercussions for existing sales channels may prove severe. "Unanswered questions remain about who's financing the deals while vendor channels face major challenges in managing cash flow and bad debt problems," she said.

ISPs stand to profit the most, she added.

Meanwhile, the Australian Competition and Consumer Commission (ACCC) released a statement warning consumers that "free PCs" may come at a cost.

The ACCC's acting chairman, Allan Asher, said there were some benefits from the deals but also voiced some concerns about consumers being "misled".

Similarly, the Computer Industry Association of South Australia (CIASA) has voiced its worries that consumers are being sold hardware which will be seriously out-dated by the time the long-term Internet contracts have been completed.

"This is the type of offer that could be too good to be true," CIASA president Lissa Haprov said recently. "Does anybody who knows anything about PCs seriously think that 32MB will be enough for quality Net service into the year 2002? I think not."


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