AT&T, America's largest land-line phone company and second-largest mobile service provider, is launching a trial program of subsidized netbooks with two-year contracts for wireless and wired internet access, with initial buy-in starting at fifty bucks. The AT&T trial program will be offered only at eight company owned retail …
And in other news...
...Bank of America announced that they would begin offering BoA locked-in toasters to those opening new accounts with their bank. Such a move indicates the end of traditional toaster sales, in which customers picked their own bread warmers and then subscribed to an electrical package and financing of their own choosing...
Ooooh, how the author does NOT like this model - after all, if PCs become complete and utter commodities, what WILL the PC industry journalists have to crow about?!?! It's hard to get worked up about the latest netbook or laptop review, when they are being GIVEN away as part of a service contract, isn't it? And what would that do to El Reg ad revenues? Certainly can't do them any good...
So dear readers, before wondering just how bad this new world order is, perhaps we should examine the motivations of the messengers?
for fuck sake
This "massive change" is pure marketing bullshit...in the UK quite a few mobile providers are doing free netbooks with contract mobile broadband.
New and exciting my heary Scottish arse...go back to give apple written blow jobs...
Manufacturers won't give a sh*t
Let's face it, a phone without a network is as useful as chocolate bogroll, but laptops will still be bought outside of this sales channel, and you can bet that the manufacturers will make sure they gouge the telcos for access to the latest and greatest bundles of wizardry...
The big loser is the consumer, as we have already seen with the lock-in a la iPhone/O2, with the same firm the only one offering the NC10, and so on, so soon if you want, say, a Mac in this type of deal, you will have to get some sh*tty T-Mobile SIM and just hope that they have deigned to put a mast near where you want to use it. Now the big question is how do they lock-in a PC platform to a particular telco?
This is perfectly natural. AT&T doesn't even need to lock the hardware, because they already lock you in with the long term contract. If you cancel the contract, they'll make you pay a "early termination fee" big enough to recoup the hardware cost. It works especially well for AT&T because they provide cellular, WiFi, and landline DSL connectivity services, and therefore can bundle them for one lower price.
"The big loser is the consumer, as we have already seen with the lock-in a la iPhone/O2"...
No, the consumer did not "lose" from the iPhone lock-in: in fact the consumer gained quite a bit in the UK especially. When the iPhone 1.0 was introduced, it only ran on EDGE networks, which did not exist in the UK and most of the rest of the world that uses GSM. To deploy the iPhone 1.0, O2 had to build out an entire new set of network radios and switches from scratch, across the entire UK - all for the use of ONE phone model.
Imagine if O2, Voda, and T-Mobile had ALL built their own EDGE networks, and then spent the money certifying the iPhone on their systems (very time consuming, btw). What do you think the ACTUAL price of an iPhone would be to the consumer if all three had undergone the same expenses? A lot higher than it was with just one of them doing it...
Even then, with the massive cost of a new network for one model handset, is it unreasonable for O2 to expect some period of exclusivity to offset their investment? Remember, when they did this, there was NO firm expectation as to just how wildly successful the iPhone would be - not even the industry watchers predicted just how fast and how far Apple penetrated the market from a standing start. But the network had to be paid for if the iPhone was or was not successful, and so O2 took the risk, and has profited from it - and made the iPhone available in the UK as a result.
So now, for the consumer - are O2's network tariffs THAT uncompetitive with T-Mobile, Voda, and Three? Don't seem to be as far as I can tell...slightly higher in some plans, but they also offer the best coverage model especially outside the M25. (the best comparision is of course Voda's RIM Storm on a similar contract - like for like with unlimited data for the Storm)
So the consumer can get a subsidized phone, on a competitive tariff, on a network that took a risk to bring that phone to the UK, and port their existing number from any other mobile operator to keep it. So Mr. Bear, please, detail how this is a loss for the consumer...
And frankly, the market for NETBOOKS, which rely upon the high-speed transfer of wireless data for a lot of their functionality (not having optical drives, everything tends to get downloaded on 3G or WiFi) will probably evolve just the same way...
Not exactly a new concept
In the UK at least. Surprised you yanks being the masters of the gimmick hadn't cottoned on already? ;)
re: Robert Hill
"It's hard to get worked up about the latest netbook or laptop review, when they are being GIVEN away as part of a service contract, isn't it? And what would that do to El Reg ad revenues? Certainly can't do them any good"
And yet I'd wager The Register Hardware's reviews of mobile phones get an awful lot of hits. I've certainly read plenty, and the networks/handset makers use this model.
Looks awfully familar to me
If Rik wants to see what it looks like after a couple years he should look at the UK market were this model has be in operation by all of the major operators for quite a while (before the arrival of netbooks in some cases).
As someone who doesn't even buy a contract phone (for the cellularly challenged, here in the UK you can buy a SIM only contract for monthy billing as well as pre-pay (PAYG)), I am unlikely to buy a netbook from a telco.
I'm waiting for the SIM only contracts to be discovered by the US telcos.
having worked in pc customer service i can see this as fun, people blame the computer and demanding fixes because they got a virus/
How, in this day and age, can a manufacturer on the scale of Lenovo, sell a laptop for more that $1000, and still have the cheek to load it with Vista Home Basic?
Especially when the next model up, (only $130 more) comes with Vista Business.
Hardly a bargain, is it?
The Lenovo in question....
... is $1100 here [ http://reviews.cnet.com/laptops/lenovo-thinkpad-x200/4505-3121_7-33184078.html], so down to $850 is nto exactly a bargain.
Why would you do it ?
If they took $850 off the price, that might be a different issue.
Then there is the question of 'who owns the machine....' ?
At most, 02 put one card into some rbs's.
EDGE is a GPRS enhancement, not a 'new network' and it is oft' argued that 02 delayed the roll out of the enhancement, simply becuause nobody uses it becuase it is too bloody hopeless and far too pricey.
Upgrading to EDGE was, from O2 point of view a an act of desperation to get some traffic moving, rather than a some altruistic act of benevolence.
Don't be fooled by the o2 / Apple marketing machine..........
Still can't see why this is so bad for us punters
So I buy a new subsidised netbook with a two-year contract. This is bad how? Especially if I can't afford the initial cost of buying an unsubsidised machine but can afford monthly payments.
The only "down" side is I can't change it for two years without a penalty: just how often do you think I'm likely to buy a new netbook? And if I'd bought an unsubsidised one, I'd probably keep it longer, so the "stifling innovation" thing would be worse, if anything.
As for restricting choice, it becomes an issue with Macs (though less so if you still have the option of buying one unsubsidised), but with generic Win/Lin PCs, you'd probably find almost identical machines available from all the operators.
I'm not sure I'd want to use this purchase model (not least because I'd want a Mac, and having said that it's exactly what I did when i bought my iPhone), but there are LOTS of people around who would probably jump at it. Probably the kind of people Asus was initially aiming the Eee at, ie people with less technical knowledge or ability who just want to do run of the mill office and communications tasks with minimum fuss. A subsidised and supported "commodity" appliance that does what it says on the tin, with the connectivity pre-installed and sorted out so you just turn it on and go is just what an awful lot of people want. What's so dreadful about giving it to them? It might even open up a whole new market and get people connected who aren't currently.
"Imagine if O2, Voda, and T-Mobile had ALL built their own EDGE networks"
Except that T-Mobile and Vodafone had already deployed EDGE on their networks, and with greater coverage than O2's rush job, which was done so badly, that the only place in my local area I can get EDGE is halfway between J7 & J8 on the M11, while in any actual populated area nearby, I'm stuck with GPRS or slower
@Robert Hill, the Reg is a PC industry rag?
Out of the 50-odd stories currently visible to me on the front page of el reg, 3 refer to consumer computers... of which 2 are about subsidised netbooks, and one is about macs.
I think maybe you're getting this place confused with some other site?
Ignoring the first part of your reply, as several other posters have answered, but in answer to your direct question "So the consumer can get a subsidized phone, on a competitive tariff, on a network that took a risk to bring that phone to the UK, and port their existing number from any other mobile operator to keep it. So Mr. Bear, please, detail how this is a loss for the consumer..."
I am a consumer.
I wish to have an iPhone.
I have poor O2 coverage in my locale.
This is a loss for me as I cannot get the iPhone on a network with decent coverage in my locale.
Further comment on your last paragraph as well - the initial idea of mini notebooks being web-based terminals, ie. the modern cloud idea, incidentally identical to the ancient mainframe idea, seems to have died off a bit, with all the manufacturers all plunking huge HDD for local storage, rather than small SSD with the bulk of storage online as it were. My personal feeling is that the idea is sound, but will, like wired network access, saturate available bandwidth and this will lead to the mobile ISPs all doing the same unlimited tariffs with all sorts of limitations on them, and the regulatory bodies will do diddly-squat for the users as long as they keep getting their kickbacks and other forms of corruption.
Not sure what I said to deserve such vitriol in your reply - can you please elaborate?
Ok, we get it already. You work for ATT. Sheesh.
"This is perfectly natural. AT&T doesn't even need to lock the hardware, because they already lock you in with the long term contract."
You can say the same for phones... so why do they lock them (other then pay as you go) and why would they not lock a computer if they could?
Not a bad idea.
Agree with with bygjohn above: while I might not want to pursue the "buy our two- year wireless package contract and get a netbook for 25% off MSRP (or whatever)" deal, customers who just want to check email, myFace, &c, could be quite interested in getting a deeply discounted "dumb terminal" that connects to online services/ storage. Cellphone providers (in the U.S., anyway) generally offer basic, no- frills phones free with a contract (better, feature- rich phones get discounts), why not do similar with netbooks?