PCs get a new lease on life

Home Office Computing, Nov, 1998 by Sheila Kim

Maybe you didn't buy the new computer you wanted because you didn't have the cash handy. Or maybe you were convinced it would become obsolete before you could get your money's worth. In either case, take heart. Gateway and Micron are hoping to provide you with an alternative that will alleviate both concerns.

Gateway (www.gateway.com) recently launched a plan called YourWare that gives you the option of paying for a PC in 24-, 36-, or 48-month installments and claims to protect against obsolescence. Micron has responded with its MPower Upgrade and Hardware Protection Program (www.micronpc.com), offering a similar package for home-based workers who don't want to pay up front.

YourWare is not a leasing program: You own your new system, and can either keep it at the end of the agreement or trade it in toward a new model. There's no down payment to worry about--a nice feature--but you pay for this convenience. At press time, Gateway's GP6-350 cost $1,849. Buying it via the 24-month YourWare plan, you'd spend an extra $349 over the two years (based on Gateway's minimum 14.9 percent APR).

Compared to Dell's, Micron's, and other consumer leases, however, the cost of YourWare is competitive. And you don't have to give the machine back or pay extra to hold on to it.

YourWare also provides obsolescence protection by promising to buy back your current system when you purchase a new Gateway between two and four years after the purchase date. Gateway uses the Orion Blue Book (www.bluebook.com) to calculate the value applied toward a new system. The big question: How much will your current Gateway PC be worth by the time you're ready to replace it? It's impossible to say, but chances are you won't get more than a few hundred bucks for it.

As for Micron--newly focused on home office and small business PC buyers rather than giant corporations or consumers--the firm has updated its purchase options and obsolescence protection for both buyers and lease customers. With MPower, you can trade in any Micron PC toward a new one as soon as 12 months after the original purchase date--a nice feature if that 350MHz Pentium II just doesn't do it for you a year from now. Micron's RefreshTech lease customers can do the same anytime from 12 to 48 months into the lease. What's more, the company now offers cash rebates for PC trade-ins from 14 different manufacturers when you purchase a new Micron.

According to Gateway spokesman Jeff Hanson, YourWare comprised 60 percent of Gateway's sales in June. But whether such plans are beneficial to home-based workers is another matter. Prices have dropped so steeply that you can probably afford to buy a system you once thought was out of your league. If you can manage to pay up front for your PC, do it. But if you can't, and your regular credit card charges more than 14.9 percent, pay-as-you-go plans at least give you an opportunity to get into the market.