Analysts react to $0.00 PCs -- not all they're cracked up to be

The old saying "there's no such thing as a free lunch" is even more applicable to the PC market as analysts hit back over "free PC" claims, with the channel set to bare the brunt of financing agreements and dissatisfied customers.

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 and how the vendors, retailers and ISPs will recoup their costs. The vendor channels face major challenges in managing cash flow and bad debt problems," she said.

"The provision of service and support remains a major question mark for PC consumers taking up these packages," said Toor. But ISPs stand to profit the most, she added.

The zero dollar PC marketing push comes at a time when figures released last week by the Australian Bureau of Statistics show a 50 per cent increase in the number of Australian households that had Internet access (nearly 1.3 million) compared to a year earlier.