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Are Government-backed Plans For £98 PC Bad For Tech Business?

The announcement by Martha Lane Fox that the government would back the sale of £98 refurbished computers with subsidised wireless broadband connections to the millions of adults in the UK who have never used the web may be seen as a threat to computer retailers such as DSGi.

By distorting the market with a lower than average selling price for a product that offers roughly the same features as alternatives costing several times more, Remploy may face the wrath of many competitors - especially as the deal includes a flat-screen monitor, keyboard, mouse, warranty, dedicated telephone helpline and delivery.

Although the £98 PC will likely run on open source software such as Ubuntu, the fact that it will be distributed through a network of 60 centres across the UK and will be available for at least 12 months as part of the Race Online 2012 scheme may mean that Remploy's expectations to sell about 700 computers per month are desperately low.

In addition, the package will include a cheap wireless Internet package from 3 UK, which will offer web access from as little as £6 per month, one which will be only available through the Race Online 2012 scheme.

Martha Lane Fox did not say whether there would be some sort of means testing for those looking to acquire Remploy PCs. Find out more about UK Online Centres and Race Online 2012.