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Telecom giant offers sub-$500 PCs

October 2, 1998
Web posted at: 2:15 PM EDT

by James Niccolai

(IDG) -- Telecommunications provider GTE has teamed up with PC refurbisher Recompute to offer no-frills desktop PCs in the U.S. that start at $499 and come preloaded with GTE's Internet access software, the companies announced Thursday.

The systems are aimed at consumer, small business, and education markets, where the companies hope the low price and easy Internet set-up procedure will make them popular with first-time buyers or users looking for a low-cost PC upgrade, said GTE spokesperson Darlene Janis.

They offer a quick and cheap way for users to buy a PC and get connected to the Internet, but they offer fairly limited computing performance, commented Roger Kay, industry analyst with International Data Corp.

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The PCs come preloaded with Internet access software from GTE's Internetworking division. Clicking an icon on the computer screen allows users to automatically register for the Internet service and to configure their browser and dialer, Janis said. GTE's Internet service costs an extra $19.95 per month, and includes 5MB of GTE server space where customers can set up a basic home page, she said.

The standard system includes a 90-MHz Pentium processor, a 1GB hard drive and 24MB of memory. The Pro version, priced at $599, includes a 133-MHz Pentium chip, a 2GB hard drive and 32MB of memory. Both include a 56-kbps modem, a 1MB graphics board, a sound card, and a 14-inch SVGA monitor, the companies said.

The PCs are available Thursday and can be ordered through Recompute's Web site or by telephone at 800/953-6759.

Rebuilt machines

Recompute's systems are remanufactured, which means the company takes used top-tier PCs from the likes of Dell, strips them down, rebuilds them, tests them and resells them, Janis said.

Such refurbished machines are typically as reliable and durable as brand new ones, IDC's Kay said. However, many sub-$1000 PCs today include at least a 233-MHz processor, and the relatively low processor speeds in the GTE/Recompute offerings will make their functionality "pretty limited," Kay said. "You can use it for basic stuff; it'll just about let you browse the Web," Kay said.

In addition, the companies face stiff competition from other PC makers releasing lower-priced machines onto the market.

For example, one Korean manufacturer plans to offer in the fourth quarter models priced at $399 and $499, Kay said. The company has not announced the machines publicly, but they will likely include faster processors than Recompute's 133-MHz offering, Kay said.

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