No Free Wi-Fi? Would You Accept a Free Computer Instead?
August 3rd, 2009I noted late last week my frustration with the lack of free Wi-Fi access in the northeast. I even went so far as to commend big-box bookseller Barnes & Noble for dropping its prior practice of pay for service.
No sooner had I postured our position when I bumped into a rather different option noted by Alex Salkever of DailyFinance.com.
Instead of free access, he suggests we are on our way to another path, one where The Price of Our Next PC is actually zero.
As in nada.
And it scared the BeJesus out of me.
All About Making Money
Salkever writes:
Here’s another soon-to-be new twist on the Freemium model, where companies make money by giving things away. This time it’s set to hit the high tech hardware world.
….wireless carriers like Verizon (VZ) and AT&T (T) are rolling out more and more plans that offer subsidized netbooks to customers willing to sign up for two and three-year data plans on top of their existing cell phone coverage.
According to a DisplaySearch analysis, the lifetime value of a two-year AT&T or Verizon subsidized netbook (w/ HP Mini or Acer Aspire One netbook) and service plan (assuming you don’t blow through monthly data limits) is $1,159 before sales tax and all of the monthly telecom taxes are added.
As the acceptance of applications delivered over the Internet continues to grow (Microsoft OfficeLive, Google Apps) the true value in a customers engagement will move towards this software and away from hardware. That will force PC companies like Dell (DELL) and HP (HPQ) to consider new ways to boost revenue because, let’s face it, they don’t want to be in the business of selling sub $500 computers, which is where the market is heading.
The upshot? The new price for some PCs might well be $0.00.
Hate the Thought, Part One
Now I hope your not thinking, wow that must be right up my alley. As in free is the word for this writer.
Actually, I don’t like the sound of this at all. First, it reeks of those early days when unsuspecting customers purchased those amazing color printers. You know, those three-way babies that could copy, scan, and print for some ridiculously low figure like $19.99. In some cases, the deal was to throw the printer in free.
Perhaps you bought/accepted one?
At first, things seemed OK. They even delivered a decent product.
But at some point, quite soon in most cases, they ran out of ink. And you headed to the store to pick up a couple of cartridges only to learn you had to shell out $50.00 for a new pair. You cussed but you accepted it, it gave a decent product.
Perhaps the second time, or maybe the third, as they ran out of ink (again quite soon), you caught on. It wasn’t about selling you a printer. It was about getting you take that printer so they could get you to shell out serious cash again and again as you supplied the damn thing with ink.
Hate the Thought, Part Two
This also sounds a great deal why I no longer have full cable television access. You know, the bulk pricing that features oodles of channels.
You soon learn that most of them are not worth even a buck a month. But, you are stuck.
You can buy channels 1 – 23 or 1 – 80 or some other ridiculous combination. But you can’t negotiate a price for the five or six or if you are lucky, ten channels, you might actually watch.
Yes, this sounds too much like the cable outfits, bulking up so as to give the appearance you are getting more just so they can charge more.
Has the Best Come and Gone?
Me, I am fearful. I am afraid that the best has come and gone.
I love this Internet thing and access to the world-wide web as it now exists. The limitless opportunities, the hours of surfing without a meter running.
Yes, I am worried. I am worried that somehow the free, open nature of what we have today will close down.
And the costs rise.
As the services dwindle.
No, I didn’t like what Salkever had to say one bit.
