IBM Offers $23-a-Month PCs

SAN FRANCISCO (06/08/2000) - A four-year commitment will get you an IBM Aptiva PC and free Internet access for life. That's the deal IBM Corp. and Lycos Inc. will make with buyers who agree to 48 monthly payments starting as low as $23.

Both companies are targeting consumers and small businesses with the promotion announced on Thursday. The deal is only available through IBM's Web site and telephone sales.

Aptiva on Installments

After you sign a four-year contract, IBM will ship you an Aptiva desktop PC powered by an Intel Celeron 533-MHz processor and featuring Lycos's free unlimited Internet access. The system, which otherwise sells for $799, is configured with 64MB of memory, a 4.3GB hard drive, a CD-ROM drive, and modem.

After making 48 payments of $23 per month, the total cost of the system is $1104.

IBM also offers a more robust Aptiva, configured with an Intel Celeron 566-MHz processor. This system will set you back $30 a month for four years, or you can opt for a one-time payment of $1060. The system comes configured with 128MB of memory, a 10GB hard disk, a CD-ROM drive, and a modem.

Each of the Aptiva systems includes a 15-inch monitor, a one-year on-site warranty, and a software bundle that includes Windows 98 Second Edition and Lotus Smart Suite Millennium. You can shorten the duration of the contract by boosting your monthly payments.

IBM competitors such as Gateway 2000 Inc., MicronPC.com, and Compaq Computer Corp. also offer competitive financing plans for PCs.

For example, through Compaq's DirectPlus plan you can lease a Prosigna or DeskPro PC for one to four years. Once the lease is over you can purchase the PC for $1. Compaq has partnered with free Internet access provider NetZero, which preinstalls its software on the systemsWhere Lycos Comes InLycos Free Internet Access, powered by CMGI-owned 1stUp.com, will supply the Aptivas with free Internet access. Lycos-powered access to the Internet is advertising sponsored, meaning it comes with a revolving banner ad that stays on the screen when connected. A My Lycos Homepage will serve as each system's default homepage.

IBM and Lycos will share advertising and e-commerce revenues as part of the agreement. The two firms say future joint offerings will be rolled out over the next several months targeting consumers and business computer users.

The move is Big Blue's latest attempt to revive its struggling Aptiva line of consumer PCs. In January the company pulled Aptivas from retail outlets, calling the move a "strategic retreat."

IBM was the tenth largest seller of U.S. consumer desktop computers during the first quarter of 2000, according to research firm IDC. Compaq, Hewlett-Packard Co., and Gateway are the leading U.S. sellers of consumer desktops.

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