October 10, 2005 12:12 PM PDT

Return of the $100 PC

The sub-$100 PC is back--sort of.

On Sunday, CompUSA offered a $99.99 PC from America Online, similar to the $99 and free PC deals offered by Internet giants and start-ups back in 1999 and 2000 in an effort to woo customers. The PC, powered by an Intel Celeron chip and teamed with a monitor and printer, typically would have sold for $549.99, but came with $450 of instant rebates. Only five were allotted to each store.

To get one, customers had to sign up for a year of AOL at $23.90 a month.

Although the offer expired after a day, it represented a low mark for PCs in a year of substantial discounts. And if recent activity is any indication, it or similar deals will be back. Back in July, CompUSA offered a similar AOL PC with a 17-inch monitor for $199. Consumers also had to sign up for a year of AOL. (While the AOL brand is featured on AOL PCs, Systemax makes them.)

Similarly, Hewlett-Packard one week offered a $198.99 PC with no subscription strings attached. The machine came with a 335 Celeron from Intel, 256MB of memory, a 40GB hard drive and a DVD-ROM. It once retailed for $649, but it came with $450 worth of rebates.

HP, Dell, Acer and others have tried to tout $499 laptops loaded with Windows, a previously unseen price point. With the holiday season approaching in a month, analysts expect PC makers to tout a wide variety of specials.

The $99 PC is part of what seems like a wave of late '90s nostalgia. Recent Internet initial public offerings--such as the stunner pulled off by Baidu--and multibillion-dollar acquisitions (such as Skype) resemble the sort of deals that occurred on a weekly basis back then.

Internet executives have also begun again to gather at fancy conferences where they deliver speeches to each other about the glowing future of technology, democracy and human potential.

But there's a gritty reality behind the new low PC prices. HP and Acer are trying to gain market share. Under new CEO Mark Hurd, HP is trying to regain lost ground to Dell. Acer, meanwhile, is aiming to build on its successes in the past two years that have made it the fastest-growing major PC maker in the world.

AOL, of course, is trying to boost subscriber numbers and rebuild its brand.

Component prices also continue to drop, allowing PC makers to cut the price of their retail products.

11 comments

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$287.40 for AOL&
&brings the real price to $387.39. For $12 more, you can head
over to the Special Deals section of the Apple Store and get a Mac
mini. Sure, its BYOKDM, but you dont have to deal with AOL, M$W,
or any other kind of malware. Id say that *more* than makes up
for the $70-80 a cheap monitor, keyboard, and mouse will set you
back.

Just my 2ยข&.
Posted by the Otter (247 comments )
Reply Link Flag
You have to pay for an ISP in any case
My ISP charges me $231.12 per year for dial-up, paid in advance, after a 10% discount for paying in advance. My DSL-line from my phone company costs me more than $600 per year and is extremely fast when my time-slice comes around. If I'm the only one on, it's almost instantaneous. During peak times, it's just barely faster than dial-up. Yes, I use both in my house. My point is, people have to pay for access in any case. If AOL underwrites these $100 PCs, that's great. There is no free lunch.
Posted by Des Alba (68 comments )
Link Flag
I'd rather spend more $ and get a Mac.
N/M
Posted by NeverFade (402 comments )
Reply Link Flag
hello mcfly?
when you buy macs the terrorists win

only a person with money to burn spends twice as much for an inferior product.

when intel chips start showing up in macs then ill change my tune but until then i stand by the motto. twice the money for half the product.
Posted by (1 comment )
Link Flag
I'd rather spend more to avoid the Mac
Proprietary hardware,proprietary software from a company that makes MS seem like it's open.
Posted by aabcdefghij987654321 (1721 comments )
Link Flag
Seems like a reasonable price.
The cost of hardware has been dropping for some time now. I think this is a very realistic offer, because think about it... To put together a PC with a CRT monitor, 256Mb RAM, Intel Celeron CPU, and 40GB HDD is very inexpansive. Unless you buy those components separately it would cost more only because manufacturers keep a big fraction of the price for income, the actual manufacturing price is low, but they are still able to make such offers. It's totally realistic.

Obviously its not going to be a monster gaming PC, but a decent home computer. :)
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Posted by Roman12 (214 comments )
Reply Link Flag
Still need lots of $ to take it home.
Sounds like a lousy deal. You still have to pay the full purchase price to take the computer home. I don't care if there are rebates or not. And being stuck with AOL stinks too.
Posted by lingsun (482 comments )
Reply Link Flag
Low Priced PCs A Good Thing
If we want this information age to be inclusive for everyone, there needs to be a way the less well-heeled will be able to afford an Internet PC. Public libraries and schools do not satisfy the need for everyone to have access, and there are many people who do not have access, especially in rural settings. For many, even a $100 PC may be pushing it, financially. With all the PCs that are replaced each year, I wonder how many are recycled and redistributed to those in need. I think access to the Internet, like access to a Public Library, should be a fundamental right in America. We, in the industry, need to do something to make this happen in America! With the enormous amount I pay in taxes, I believe a small portion of my taxes could be applied toward that end.
Posted by Des Alba (68 comments )
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