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AOL's $299 PC
cmj writes "Internet.com reports 'Looking to attract households that still aren't online, AOL is offering new customers a $299 PC system if they sign a one-year $23.90 dial-up Internet service contract.' A click through AOL's ecommerce site reveals the the specs as 1.7 GHz Celeron with 256 MB RAM, 40 GB hard drive, 56K modem, 10/100ethernet card, 17" monitor and Lexmark printer. The PC is running Windows XP, and includes 'AOL Office Powered by Sun'. Also of note is the fact that the $299 appears to be financed at around 22%. The math ( (12*23.90)+299 ) seems to suggest that you can get a $699 computer for $585.80 plus any finance charges. Setting aside the question of whether this is a good deal or not, one has to wonder whether AOL is desperate for new customers and resorting to bribery, or just progressing to the next step of branding. With this action AOL controls everything from the OS to the Word Processor to the web sites their customers browse."
I distinctly remember Microsoft doing something similar with their $400 rebate for signing up for three years of MSN. They dropped it after a year or two. AOL's deal seems more financially risky to me, I wonder how they can pull it off.
Auto-reply to ACs: "Truly, you have a dizzying intellect."
...maybe they could get the price down to $199, hmmm?
;)
Don't flip out on me, it was just a thought...
"...Well, there's egg and bacon; egg sausage and bacon; egg and spam; egg bacon and spam; egg bacon sausage and spam..."
Considering you can get a much better machine for much cheaper. Check out:
http://gotapex.com
You'll find BETTER Dell machines for ~$400 with 6 months of AOL included!
It IS StarOffice (with obligatory AOL logos). One step closer to an AOL-Linux release I think.
"...Well, there's egg and bacon; egg sausage and bacon; egg and spam; egg bacon and spam; egg bacon sausage and spam..."
They give you the fine print in gif form just to make sure it's difficult for you to read the text. The resolution isn't really fine enough for the text to be legible at any magnification, but it appears that the finance rate is 23.9% or 25.9%
Democracy Now! - your daily, uncensored, corporate-free
You really need to review this. I saw the story this AM (EST) and throughly reviewed the deal because I'd like to upgrade my mother's computer which is a currently a pc200mhz with 64mb of memory as a Xmas present.
l egal1.as p?vcid=a2&srccode=subp2b447688
Here's the fine print (beware the fine print is a image file):
http://www.aolcheckout.com/aol-pc/aol01b-
"$299 Financed plus a one-year committment to AOL for 23.90"...did you read financed?
my take on the deal...
according to the fine print, you are issued a Tiger Gold Card with approve credit from Wells Fargo, furthermore, the regular APR is 21.9% (i think, the fine print is very small).
so now you have a credit card from a company with a really high interest rate! "Boom!" as Madden 2004 would say. That is the hook for AOL, they can make some money by establishing new customers for a credit card company.
Its seems like a nice deal on the front end.
-- ladies and gentlemen we are floating in space!
You cannot consider the entire cost of AOL access to be "interest" in this interesting calculation. You must consider that you are receiving something of value in addition to just the computer. THe way to calculate the effective financing rate is to take the difference between the cost of AOL and the cost of another equivalent access service, say, Earthlink, which I believe is $15/mo or so...
So, (12*(23.90-15))+299 = $405.80...
Ok, so let's see what I can buy that system for.
I just purchased two small machines, Athlon 1900+, 256MB Ram, 40GB Hard disks, with integrated I/O and everything for $280 each delivered. A 17" monitor can be had for about $100 and a cheap-ass Lexmark printer is about $50. What's that come out to? $430? and it's a MUCH MUCH MUCH faster machine...
So the bottom line is that this deal is marginal at best, and with AOL's buying power, it's probably very profitable in the end. They can probably put that machine together for about $200-250.
Uh no - it is actually somewhere in the $25 dollar range (plus the cost of any media that they ship along with it, and also first line tech support)
I have mod points and I am not afraid to use them
"The math ( (12*23.90)+299 ) seems to suggest that you can get a $699 computer for $585.80 plus any finance charges"
This math is only correct if you assume that there's no value in having AOL dial access. If you think that AOL access is worth the $23.90 a month that millions of people are already paying for it, you're getting a $699 computer for $585.80 plus any finance charges, plus agreeing to stay on AOL for a year.
This doesn't sound any more sleazy than cell phone companies giving you a heavily discounted cell phone in return for a commitment for longer service. If you don't want to make the commitment, don't sign the contract, and don't take the up front discount.
To me, this looks like a decent way for people who aren't online to get online very cheaply and learn whether they want to spend more for broadband, etc., later.
Enable 3D printed prosthetics!
The 17" monitor goes for $83 retail.
The printer is probably worth less than $20.
So, if getting a [$200+$83+$20=] $303 PC for about $600 sounds like a good deal, then AOL is your savior! (!!)
Sadly, AOL is going after those least-informed of consumers with this deal, so they'll probably find a fair number of takers.
For those who don't consider AOL worthless, let's consider the cost of ISP service on top. A quick query here tells me that it's easy to get dial up for $8/month or less.
So....[$303+($8*12mths)=] $399 worth of "internet experience" for $699.