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PeoplePC to supply PCs to 300,000 Singapore workers

As it prepares for an initial public offering, the discount computer company lands a contract to supply computers and Internet access to workers at the National Trade Union of Singapore.

Discount computer company PeoplePC has landed another major contract in its push to emphasize affiliate buying programs, with an agreement to supply computers and Internet service to up to 300,000 workers at the National Trade Union of Singapore.

PeoplePC is pushing what it calls "corporate connectivity" programs. The company signed an agreement with Ford in February to supply discounted PCs, peripherals and Internet access for up to 380,000 workers. One day later, Delta Airlines announced a similar program with PeoplePC covering up to 75,000 workers.

More established PC makers have gotten into the act recently, with Dell Computer scoring a deal last month to supply PCs and Internet service to up to 100,000 American Airlines employees. Also last month, Gateway struck a deal to provide PCs for up to 500,000 sales representatives for cosmetics giant Avon.

Analysts have said that such programs represent a significant shift in consumer PC marketing and distribution, with some predicting that the majority of home PCs will be acquired through employers instead of through retail outlets in a few years. Employers benefit by ensuring that workers have easy access to corporate resources, while workers get the latest technology for free or at a substantial discount.

PeoplePC's Singapore deal is particularly important because it's the first such deal of any significance involving an overseas client and the first with a trade union rather than an employer. The scope is also impressive--PeoplePC chief executive Nick Grouf said it will cover 10 percent of Singapore's population.

"Singapore has really shown tremendous vision in pointing a direction in which we think PC penetration and the presence of the Internet is moving," he said in an interview.

The deal comes at a good time for PeoplePC, as the company prepares for an initial public offering. The company filed with the Securities and Exchange Commission early last month to raise up to $100 million in its IPO. Despite competition from Dell and Gateway, Grouf said the Singapore program shows that PeoplePC remains the affiliate leader.

"This has been a concept we introduced, and I think we're retaining our leadership in that area," he said.

PeoplePC debuted last year as another player in the crowded market for cut-rate consumer PCs. It offers a low-end PC and Internet access for $24.95 a month through direct sales via its Web site.