Microsoft, AOL giving users free PCs

The free PC is almost upon us, with AOL, Microsoft and Prodigy all promising to give them away, effectively, in exchange for a three year commitment to use their services. Does this mean Microsoft intends to cut off the entire PC industry's air supply, browser style? Could happen. All three companies are experimenting with a kind of subsidy model similar to the one used for mobile phone sales. Hardware is heavily discounted or free so long as the user signs a contract to use the service for a minimum period, and three years seems to be what MS et al are going for. AOL is offering a $400 rebate on eMachines PCs (the bargain-basement Korean-built range) to anyone subscribing to CompuServe for three years. Prodigy, another of the US biggies, is offering a discount on any PC bought at the Best Buy chain, while Microsoft has been running a test offer with Staples. This is only a pilot, due to end on Saturday, but it's likely to be extended. Microsoft is offering a $400 rebate. PC hardware companies are also tipped to introduce similar plans in conjunction with ISPs, but it's not as yet clear when the experiments are going to extend out of the US. The approach could however give the paid-for ISPs a useful weapon in the fight against free ISPs in the UK. ®