Compaq may offer free PCs

COMPAQ, THE world's largest computer-maker, has hinted it might offer free PCs to consumers in a move that could turn the industry on its head.

Eckhard Pfeiffer, president and chief executive, said it was looking at the idea, pioneered by Free-PC, a California-based company, this month.

Mr Pfeiffer said: "We are the world market leader ... and we are looking at what is happening here." The initiative could make PCs available in millions of homes that do not have them. Mr Pfeiffer's comments come a week after Free-PC rocked the industry by proposing to give away 10,000 computers. Customers will have to agree to spend at least 10 hours a week in front of their computer. Free-PC plans to pay for the cost of the PCs by permanently showing advertising messages and links to Internet sites on the screen.

The idea struck a chord with customers. In the past week about 500,000 users have registered for a computer with Free-PC by filling out a detailed questionnaire on their incomes and spending habits.

PC prices have been falling rapidly and basic machines are as little as $600 (pounds 375) in the US. But the notion of giving away hardware to sell more services has yet to be tested in the highly competitive PC market.