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Tuesday, August 3, 1999 Published at 11:10 GMT 12:10 UK

Business: The Company File

'Free' iMac latest weapon in Internet war

FreeMac is planning to "give away" one million iMacs

The "free" computer war between Internet service providers continues, with a new firm offering to give away Apple iMacs to anyone signing up. says it is aiming to provide 1m customers with free iMacs in exchange for signing up for three years of Internet service.

The offer follows similar deals by other operators, including Microsoft in the US and Tiny Computers in the UK.

With e-commerce expected to grow at an explosive rate in the next few years, Internet service providers (ISPs) are increasingly trying to woo subscribers who will become their e-commerce client base.

Bank deal

With the colourful iMac's popularity, recognition factor and high profile, FreeMac will be hoping to stand out from the "free-PC" crowd.

Industry analyst Arnab Chanda said: "The key for the ISP is to retain the customer.

"It's much harder to maintain that subscriber base because of churn - it's kind of like the cellphone industry."

Subscribers to FreeMac must first qualify for a First USA Visa credit card and use it to pay the standard $19.95 a month Internet service charge.

FreeMac also has a deal with CyberCash Inc to offer its hoped-for million-strong Mac community fast shopping over the Internet. said it is in talks with several investors, and is finalising its funding partners.


It said it was not sure yet whether it would get its iMacs directly from Apple or from a distributor.

A spokeswoman for Apple declined to comment on

Some analysts were sceptical about the deal.

Lou Mazzucchelli, at Gerard Klauer Mattison, said: "It sounds like all the other free PC things except it's a Mac.

"I don't know who is going to make any money on this.

"I'd love to see the business model on this."

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