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."

Comments

been there and done that

[Frisky070802]

This doesn't seem new or noteworthy. Such deals have been around for years. for intstance, googling appropriate terms took me to an article from 1999 about this sort of thing.

Also, the numbers for how much this computer is worth don't factor the right things in. Anyone who'd go for this deal needs some sort of ISP to begin with, and the $23.90/month may be higher than other ISPs, but does give the customer something of value beyond the PC. On the other hand, is that really a $699 computer?

Re:So wait

[Chordonblue]

I guess what I'm talking about are OPTIONS. No, Lindows won't be for everyone either. OTOH, maybe someone would like to have a computer cost $199 instead of $299 and be willing to learn.

And what's the big dealio about Lindows defaulting root for the primary user? So what? So does XP! This can now be changed in Lindows 4.0 just as easily as creating a user in XP. Problem solved.

Re:$299 is financed at 21.7% APR

[NetJunkie]

So pay it off the first month. BOOM! You get the PC for $299. You only get charged interest if you float the balance.

Re:So...

[laird]

"$299 with a $20+ a month lock-in contract, so what they really mean is something closer to about $450."

You're exaggerating by leaving out the fact that they're getting AOL access, which millions of people are paying $20+ a month for without getting a cheap PC. If you think that AOL service is worth nothing, then your math works, I suppose, but...

Re:$299 is financed at 21.7% APR

[RackinFrackin]

That's a good idea, but I'd bet that there is in the contract saying that the buyer will pay a certain fee if the loan is payed off before a certain time. This is a common practice for auto loans -- if the finance company isn't guaranteed that they will make a certain amount, the loan isn't worth their time.

already been done, long ago, in other news:

[valmont]

You can get dial-up Internet access with no AOL bullshit and a cool PC starting at only $20/month from PeoplePC while paying NOTHING down.

You can buy a PC for $200 at wal-mart.

... and that's just a few of many MANY options out there. Now why the fuck would you shell out $300 for an OK computer on-top of having to pay $24/month for internet service that'll suck phat donkey ass?

go AOL. tsk.

Re:wha?

[donutello]

Have you ever used AOL? Would you like to be stuck paying for AOL for a year even if you don't like it just to get a "new" PC? Sure, you can install Linux, but try to get support from AOL if something needs to be replaced under warrantee, and forget about even getting on to AOL with Linux.

The terms of the deal are clear. It's your choice whether you want to take the deal or not. Sounds like you've already decided you don't want to - that's your prerogative. Someone else may decide it makes sense - that is their prerogative.

They're trusting customer laziness, duh.

[mbauser2]

I used to work in a camera store that sold cell phones, too. (Don't ask me why a camera store would bother will cell phones, because I'm still not sure.) One thing I learned: mobile phones still cost the phone companies more than the 99 dollars they sell them for -- the companies are swallowing the cost of the phone because they hope to make it up with a few years of phone bills.

It works, too, because... (wait for it)... people don't want to change their phone numbers. (Another reason the cell companies dislike number portability). AOL is assuming the same thing will happen with their service -- customers will decide it's too much work to change it, stick with AOL for years, and repay AOL's investment.

(Besides, AOL is an evil megacorporation. If they don't make their money back, they'll just find a way to write it off on their taxes.)