Fujitsu Computers Ltd and British Telecommunications Plc yesterday launched an internet-PC package in which UK consumers can pay a monthly subscription for a mid-spec Fujitsu PC and net access via BT’s BT Internet service. Fujitsu estimates that the BT Internet PC Package, as it will be known, will attract at least 50,000 subscribers by the end of the year and will play a part in increasing the new Fujitsu-Siemens Computers Ltd joint venture’s market share to number one in Europe.
The three-year hire-purchase style agreement sees the user pay 25.99 pounds ($41.60) per month for a Fujitsu PC with 400MHz Intel Celeron processor, 64Mb RAM, a 4.3Gb hard drive, CD-ROM drive, graphics and sound cards, speakers and monitor. The machine is pre-installed with Windows 98 and Microsoft Works as well as BT Internet software, and the monthly fee includes subscription to the service, usually 11.99 pounds per month ($19.20). BT Internet includes unmetered dialup at weekends via a toll-free number, but is charged at usual BT rates during the week.
Users pay 935.64 pounds ($1,498) or 751.50 pounds ($1,203) if they pay the full three years in advance. Deducting what a user would normally pay for BT Internet, this puts a price of 504 pounds ($807) or 319 pounds ($511) on the PC, much less than the usual retail price.
Bryan Taylor, UK managing director of Fujitsu Computers, declined to clarify how the revenue from each deal would be split, except to say both BT and Fujitsu were taking a very small margin. He dismissed claims that the failure of Tiny Computers Ltd’s free PC with phone subscription means that the model is not viable. The Tiny offering was of a much lower specification than Fujitsu’s offer, and BT has a better brand among non-PC owners, he said.
Fujitsu’s aim, said Taylor, is to increase brand awareness among consumers and steal a march on its competitors with new pricing models. Having previously focused on the business PC market, Fujitsu has been trying to grow its UK and France operations by driving growth in the consumer sector, to achieve its goal of usurping IBM Corp’s European PC throne. But Fujitsu has avoided the high-street retail chains in favor of supermarket sales, which can keep prices down for consumers. According to Taylor, the cost of selling on the high street is inflated by stringent terms that push all the risks back at the manufacturer and thus inflate prices.
BT will be responsible for marketing the offering, and selling it through its chain of phone stores and order lines, while Fujitsu will pick up the delivery, installation and support. It is also near-certain that some manner of upgrade path will be introduced to enable subscribers to pay extra for a higher-spec machines with extra peripherals, though Taylor said plans had not been finalized on this count.
