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Emachines to offer own-brand ISP

Net access service to bolster narrow hardware margins

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Leading US budget-priced PC vendor Emachines is to launch its own Internet access service next month with the aim of making it easier to live with hair's breadth hardware margins. The plan is quite canny. Emachines will initially offer the service as an optional extra, charging buyers who pick up on the deal a fixed monthly fee. Later, however, the company will begin to reduce hardware prices, more than balancing the cut with a commitment on the buyers' part to subscribe to the Emachine ISP for an extender period. The company may also seek deals with ecommerce companies whereby Emachines users are encouraged to use the ISP service to buy products from those suppliers. In exchange, Emachines gets a percentage of the sale. The move is typical of the methods PC vendors -- even those not at the cutting edge of cut-price machines -- are exploring to regain money lost as PC prices fall. Yesterday, for example, Gateway said it is looking to increase the amount of revenue it generates from service and software sales to 20 per cent from just eight per cent. ®

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