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| Talk,
Graham Bower,
06 January 1999 | |
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It's a free world, or at least, it is if you live in the US. The free PC revolution is sweeping across America, and pundits are speculating that it might happen here too.
As a result of highly competitive price wars, PC prices have been steadily dropping over the past few years. Manufacturers like Compaq & IBM wring their hands in desperation as they watch their perilously thin margins disappear altogether. Recently, many resellers and Internet Service Providers (ISPs) in the US have started giving PC's away free when you sign up to an internet service agreement. The closest comparison in this county is mobile phones, where the initial cost to the consumer of the phone is low (or in some cases free) and the service provider recoups this cost over a year's service contract.
At first, the free PC seems like a highly consumer-friendly proposition, but as any canny shopper knows, nothing in life is really free. The question is, where has the cost been hidden? British consumers are arguably a more miss-trustful lot than their US counterparts. PC resellers like Tiny Computers are already launching free PC products in the UK, but will British consumers go for it?
There's no doubt about the popularity of free internet access in Britain. When Freeserve launched the world's first free ISP, they struggled to meet demand. In just six months, they became the UK's largest ISP, forcing ex-market leader, AOL, to review its strategy and launch its own free service, Netscape Online. Free ISP services are credited for finally bringing the internet to mainstream British audiences.
Arguably the biggest competitor to the Free ISPs will be Digital TV services like Sky Digital and On Digital. They too have found 'free' to be a vital component in bringing their service to the masses. After initial disappointment at the slow uptake of the new digital services, bother Sky & On Digital made their set top boxes free, and were suddenly inundated with subscribers. It seems the initial outlay of around £100 was a big obstacle in the minds of consumers.
The success of Free ISPs and free digital set top boxes in the UK would seem to indicate that there is a market for free PCs here, but let me add a word of caution. Mobile phone companies were encountering resistance from consumers when it came to signing up to a year's contract. The solution was 'pay as you go' mobile phones. You pay for the phone upfront , with no binding contracts. Consumers unwilling to sign a mobile phone contract will surely be equally hesitant when it comes to internet service agreements. Especially when so may ISPs are offering a free service.
While free PCs will doubtless has appeal in some sectors, it seems unlikely they will have the same mass appeal in the UK that they have achieved in the US.
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