Thursday, August 28, 2008

Laptop With A Subscription Fee

Pricing on desktops and laptops are very fierce.  The margin on laptops are better than desktops but with laptops now approaching $500 and with netbooks occupying the $300-$400 range, there really is no room move around.  Companies are forced to bundle softwares in hopes of earning extra revenues.

On the other hand, Apple avoids doing so but bundle their own software on the Macbooks.  But the entry cost is hundreds higher even if you do get a superior OS and bundled applications that are actually useful.

Perhaps it is time for manufacturers to rethink this a bit.  In the phone and smartphone business, the practice in the US is to sell a mobile device at a loss but lock a customer into typically a 2-year contract.  This makes everybody happy.  The consumer gets the phone he or she wants with a lower upfront free, the wireless provider is almost guaranteed a steady revenue stream for 2-years, and the device maker has a sale.

Can this model work for laptops as well?  With WiMax on the horizon, WiFi services more of a presence, and a variety of wireless broadbands now available on the market, perhaps the usually suspects of wireless providers and laptop brands should get together and offer a bundle much like what is taking place in the mobile realm.

There are some companies out there that have similar offers wit iMacs and DSL services, so why not wireless.  Keep in mind, with DSL services, models are free if an annual contract is signed.  In fact, we're half way there already.

Take ATT.  I've got DSL with Ma Bell.  More than that, because of this association, I have access to WiFi at any ATT-operated hotspots.  Offer me a few hundred bucks off my next laptop purchase and feel free to lock me in for 2-years.  I'm not going anywhere.  The cable companies can also do the same.

It's a situation for everyone to gain a little something.  Now, the argument is that the consumer will pay more over time.  I get that.  For a lot of folks, if not for the initial subsidies on the iPhone, Blackberry, or Palm, the push by these respective companies would not be very successful.

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