America Online has announced a $299 PC for customers who sign a 12-month agreement with the service. This business model mirrors that of the cellphone industry. The promo ends on 31 December.

The computer has a 1.7GHz Celeron processor, 256MB of DDR SDRAM, a 40GB hard drive, a CD-ROM drive, a 17-inch CRT monitor, and a color printer from Lexmark. The operating system is Microsoft Windows XP Home, with an AOL-custom-designed desktop, and the computer is being sold via the Web.

Links: PC World (4 Dec); cNet (4 Dec)