Free PCs drive sharp upturn in US PC market

The 'free' PC appears to be having an effect on the US computer market already, according to the latest research from market analyst PC Data. The company, which monitors PC sales through US retail and mail order channels, found that computer sales rose 35 per cent during June -- an in the last two weeks of the month, in particular -- an increase it said it had not expected because of the traditional seasonal sales slowdown. PC Data named the 'free' PC the cause of the upturn, not so much because of the huge numbers of people turning to such offers, but by driving PC prices right down. According to the stats, the average price of a Wintel PC fell 20 per cent to $890. Still, PC Data's research also suggests that there may be a backlash against ultra-cheap computers as some consumers worry about the quality of the kit. Certainly, the company found that Apple's iMac continued its run of strong sales -- it was the third best-selling desktop PC in June -- despite costing around $600 more than the most popular machine, a Hewlett-Packard. During June, Apple achieved a retail and mail order marketshare of 11.2 per cent, said PC Data. That put it in third place behind Compaq (29.1 per cent) and HP (24.7 per cent). IBM came fourth, with 9.9 per cent. In fifth position, with 9.7 per cent of the market, was eMachines. Apple's position is not at all bad given its machines are available in fewer stores than its Wintel rivals. PC Data analyst Stephen Baker suggested that free PC offers are appealing to "buyers who don't want to pay anything up front". Apple has been running a similar hire-purchase style scheme since late last year, suggesting that it may well be tapping, at least in part, into the same group of buyers. ®