A lot of companies are pushing this trend. Harder to understand is the complicity of computer makers in free-PC schemes. Manufacturers, whose profit margins already are under relentless competitive pressure, would seem to have everything to lose by shoving retail prices towards zero. Yet Compaq, the world's largest PC maker, is supplying one million machines to PC Free. Long-term survival rests on developing other revenue sources in addition to hardware sales.
Participation offers manufacturers inroads to the promising field of electronic commerce.
The PC Free machines come with Web browsing software locked to the AltaVista site - which Compaq owns. Giving machines to new users means new visitors for AltaVista, and hence more revenue for Compaq from the site's advertisers. Anderson says other major manufacturers will be forced to follow Compaq's lead. However, it may take a while for free PCs to debut in Asia. The online population is on the whole too small to be attractive to advertisers.