Asda to start selling £279 PCs

PC price competition intensifies...

Wal-Mart-owned UK supermarket chain Asda is set to start selling sub-£300 PCs in its stores from next week.

The eSys PCs come with 256MB of memory, an Intel Celeron 2.4GHz processor and a 40GB hard disk, and will be sold in Asda's 271 stores for £279 from 25 August.

The Asda PC is also bundled with Microsoft's Windows XP operating system, Microsoft Works and a free three-month trial of antivirus software from Bullguard. The PC also comes with a 12-month on-site warranty from IBM Global Services.

Fierce competition in the PC market led to the recent collapse of PC supplier Granville Technology, which owned the Time and Tiny brands. Earlier this year Computacenter chief executive Mike Norris predicted that the price of a PC will eventually bottom out at £200.

Electronic goods and online services are increasingly seen by supermarkets as a way of boosting profits by expanding the non-food business. Tesco is already involved in music downloads, broadband and mobile ventures as well as selling wireless networking equipment in its stores.

Asda has followed suit and recently launched an online home entertainment service selling a range of 140,000 CDs, games and DVDs from a base in the Channel Islands to avoid sales tax.

Ashish Kapahi, director of the PC business group at eSys, said in a statement: "The deal with Asda was driven by their desire to expand non-food growth within the business.

"Since 2002, Asda has added considerably to its general merchandise lines, delivering prices unheard of in the UK market, and the eSys PC is another example of this."