Sprint is not the first mobile operator to subsidize a netbook in order to sell mobile data contracts, but it is the first to do so at such an aggressive price point.
Sprint Nextel is teaming with Best Buy to offer consumers a 99-cent netbook with a new two-year mobile data contract.
The deal means users can get a Compaq Mini netbook for less than a dollar, and it comes with an embedded modem that uses Sprint's EV-DO 3G network. The mini-notebook also has a built-in webcam, Intel's Atom processor, a 10-inch screen, 160 GB of hard drive memory, Windows XP, and built-in Wi-Fi and digital media readers.
Sprint is not the first mobile operator to subsidize a netbook, but it is the first to do so at such an aggressive price point. Rivals AT&T and Verizon Wireless offer a similar netbook for about $199 with a new two-year contract, and the Compaq netbook costs $389 without subsidies. The promotion is only available in-store at certain Best Buy stores.
The subsidy model has been the traditional way for the major U.S. carriers to sell phones and services, and Sprint is trying to capitalize on the hottest-selling segment of the PC market. While standard desktop computers and laptops are expected to see a decline in sales this year due to the recession, Gartner estimates netbook sales to increase 80% over last year to account for about 8% of the PC market.
For Sprint, the move potentially enables it to have a new revenue stream as it sees traditional voice revenues decline. The mobile data plans costs $60 a month, which means the average consumer will pay roughly $1,440 over the life of the contract.
The netbook subsidy model is still in its infancy, so it's unclear how strong consumer demand will be. One issue that has already come up is that most major mobile operators have a 5GB monthly data cap for mobile data services. This has already led to lawsuits regarding overage fees.
Netbooks and mobile broadband can be ideal ways to arm your road warriors, but there are still questions about connectivity and security. InformationWeek has written an independent report on how to equip your mobile workforce, and it can be downloaded here (registration required).
InformationWeek Elite 100Our data shows these innovators using digital technology in two key areas: providing better products and cutting costs. Almost half of them expect to introduce a new IT-led product this year, and 46% are using technology to make business processes more efficient.
The UC Infrastructure TrapWorries about subpar networks tanking unified communications programs could be valid: Thirty-one percent of respondents have rolled capabilities out to less than 10% of users vs. 21% delivering UC to 76% or more. Is low uptake a result of strained infrastructures delivering poor performance?