AOL tempts subscribers with cheap PCs

Intel and AOL have announced a partnership which they claim will lead to cheaper PCs and Internet access for European consumers.

Customers who sign a long term Internet access contract with AOL's Compuserve 2000 division will get a rebate on an Intel Pentium III based PC.

The first PC manufacturer to adopt the scheme is Fujitsu Siemens, which will offer a 25 per cent rebate on its PIII machines when buyers sign a three year contract with Compuserve 2000. Other PC vendors are expected to join the scheme.

However, at £7.50 per month Compuserve 2000 subscribers would pay £270 over the three years. On a Fujitsu Siemens PIII computer costing £999, users will receive a cash rebate of £250 - less than the subscription costs.

Moreover, most home users in the UK are paying nothing for Internet access through ISPs like Freeserve and BT Click+.

The scheme will begin next week and will be extended across Europe.

The companies claim they are tackling low PC penetration in Europe. Only 14 per cent of European households, compared to 44 per cent in the US have PCs, due to higher hardware costs in Europe, the companies said.