Subsidized Netbooks

Wired has an interesting article about subsidized netbooks and how that trend is here to stay. We wrote about netbooks earlier on this blog. The idea is a super small, light, and cheap laptop. It doesn’t surprise me that there may be some interest in subsidizing netbooks with wireless plans, but it doesn’t seem to make sense to me. The devices are small and mobile so I could see why someone might want ubiquitous connectivity, in that case a wireless plan makes sense. The problem is that when you subsidize the price you have to sign a contract and, as of now, mobile carriers think they can control every device and piece of software that is allowed on their network. Imagine if some of the same restrictions that are placed on the iPhone are suddenly placed on your laptop (no skype or tethering of the device) though I grant you that many of those restrictions are Apples doings and not ATT the mobile carriers have a long history of restriction rather than openness when it comes to devices and applications on their network. Also the contract locks you in. Data plans are very different from cell phone calls. As long as you can get the call out you tend to be happy with your carrier, the signal could be slow or analog, but you don’t care cause you can hear the person on the other end. With data one needs speed. If you find yourself in areas where 3G or other fast networks aren’t available, or the signal is weak, than you will want to change your plan but the contract won’t allow for that.

Subsidizing phones came about during a time when cell phones, that did very little by today’s standards, cost over $500 (which was worth a lot more than it is today), and people weren’t sure exactly what the technology was nor how well it would work. The thought of signing up for a wireless phone that cost that much was only for the rich. The cell phone companies fixed this problem by subsidizing the phone (even to a cost of 0) to attract more mainstream customers. It worked and now just about everyone has a cell phone. The problem here is that it seems to be just the opposite. Netbooks are about driving down the cost of computers. Before netbooks people expected to pay over $2000 for such mobility, so, really, nothing needs to be subsidized here. The cost of netbooks start around $400. The Wired article notes that when you add up the monthly cost of the contract with the $100 payment, the Acer that could be purchased for $350 or so is now over $1500. So it would seem that the price is going in the wrong direction to me.

This is not to say that I think a wireless plan for netbooks is a bad idea. There are many good reasons why someone would want a data plan, but given the drawbacks listed above I’m not sure that a contract and barely subsidized computer would get me to buy one.

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