The cheap computer phenomenon

One of the big stories of 1998 was the impact of ultracheap computers. The marketshare of computers which had stayed firmly stuck around 40% of US-households increased to 50%. Similarly Intel's market share collapsed in the mail-order and retail PC market: 75% of overall unit sales in the 1997 fourth quarter to about 49.5% in the most recent period. The cheapest computers reveal a trend of making money off services rather than hardware, with an associated lack of choice (don't expect to run Linux on these things): $300 PCs are shipping in France but you must use a specific ISP, zero-cost PCs are available if you agree to being bombarded by adverts even if you are not online (remember 1984: the TV things were always on), and finally zero-cost iMacs are available if you pledge to spend 3600 dollars over 3 years at some online mall. Moreover, the cost has already hit the industry: AMD is hurting while system development of Tier 1 manufacturers is leaving the US, being done instead by contract manufacturers in countries where electronics labour costs are less than a buck an hour. More people on the internet may be good, but at what cost?