Those Pricey Free PCs

Back to Contents of Issue: March 2000

by Kyoko Fujimoto

Last year in the US, the free-PC idea turned the computer industry on its head. Prices for desktops plummeted, and ISPs like Compuserve started offering PC buyers $400 rebates if they agreed to three years of their service. But the companies that jump-started the free PC movement have either folded (like Microworkz and iToaster) or merged (Free-PC joined eMachines, a maker of cheap computers).

In Japan, free-PC pioneers are so far faring better -- probably because their free PCs aren't quite as free.

An ISP service called OCN offers "free" IBM Aptivas in exchange for three years of ¥3,980-a-month Net access. At the end of the contract, users can either renew for ¥2,800 a month or purchase the box for ¥30,000 -- no returns allowed. It's hard to see how that's a good deal -- ¥30,000 is roughly $300, and at the rate PC prices are falling that could sound pricey in three years. And if you add up the monthly charges and purchase price, you're looking at a three-year total of ¥177,080.

The nation's first free-PC project, launched last June by an e-commerce service provider called Vertex Link, is called "Muryo-Pa." Muryo means free, but customers, even after three years of paying ¥3,680 monthly for Net access through a Vertex Link partner ISP, still have to cough up ¥5,000 for the box. Otherwise they have to send it back or renew the contract. And then there's the ¥3,000 initial setup fee. Three-year total? ¥140,480.

iM Club -- Internet Media Club -- doesn't even pretend to be free. Instead it lets users purchase a low-cost PC in three annual installments. But it's basically the same deal, since the ¥3,980 payments include unlimited Net access. Of course, the thing to remember about Japan is that Net access doesn't include NTT's minute-by-minute phone charges. And let's not forget the ¥20,000 setup fee iM Club levies. Three-year total? ¥163,280.

The free-PC service offered by NTT-ME, called the 128 Internet Pack, is a little different in that it gives customers fast ISDN service. But then there's the three years of ¥4,980 to ¥7,680 monthly charges (depending on computer model). The box is yours at contract's end, but the total comes to ¥179,280.

If it's too good to be true it probably is. The saying holds true across international lines, and here in Japan a free PC still costs more than one for sale.

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