Wal-Mart and Best Buy Launch Laptop Battle

Wal-Mart and Best Buy seem intent on getting into a battle of the low-cost laptops going into back-to-school and, it seems likely, continuing through holiday.

As reported by Bloomberg and others, Best Buy CEO Brian Dunn said in a Las Vegas interview that the retailer is testing a program that provides laptops for free or for prices ranging up to $399 if shoppers sign up for two years of Internet service. The idea is to apply the cell phone sales model to computers, providing a discount on hardware as an enticement for purchasing the connection service.

In the meantime, InfoWorld reported that Wal-Mart has initiated a deal to sell a Compaq Presario CQ60-419WM laptop from Hewlett-Packard for $298, and low and behold, it appeared Sunday, with a nicely composed web offer promoting the deal. Yet, a string may be attached as the Windows Vista OS operating program that is preloaded on the machine may not qualify for a free upgrade to Windows 7.

According to Hewlett-Packard documents, InfoWorld reported, OS users won't be able to upgrade from a Vista program that has criticized as being sluggish to Windows 7, which has been well reviewed by beta testers and launches in October, without paying $120 for Windows 7.

Best Buy hit back at the Wal-Mart offer Sunday, the day it launched its $298 Compaq. The specialty retailer offered a two-gigabyte Toshiba computer in its circular for $299 versus the three-gig Compaq.

Of course, free and low-cost computer deals aren't anything new, and Verizon gives away netbooks with its FIOS Internet service, in one current example. Such deals could have a significant effect on consumers and what they are willing to pay for computers, which may concern Apple given its relatively pricey products and the advertising campaign Microsoft is running to emphasize lower personal computer costs. Still, the laptop deals may prove too cumbersome and come with too many ancillary costs to attract more than the most cash-strapped consumers. And, of course, Apple is doing pretty well with its pricey iPhones.

Oh, and one more interesting development: Wal-Mart's $298 Compaq was tough to find on its website on Sunday without the exact model number used in a search. By Tuesday morning, not even that produced the computer. Check back for a follow up with Wal-Mart.