AT&T Test Drives Subsidized Netbooks

In a move that could have sweeping ramifications for the PC market, AT&T yesterday announced that it's test-marketing the sale of netbooks to consumers, using the same subsidized pricing model that wireless carriers use for cell phones and smart phones. That is, instead of requiring consumers to pay $300 to $600 up front, AT&T will sell the devices for as little as $50 but require a $40-to-$60-per-month data plan for two years.

"Broadband is not just about speed anymore, it's about mobility," says AT&T Chief Marketing Officer David Christopher. "We want our customers to have Internet at home and on the go. Pairing mini laptops with AT&T's home, Wi-Fi, and mobile broadband offerings enables consumers to get the most from their new devices, virtually anywhere, anytime."

AT&T's "Mini Laptop" promotion is currently offered only in Atlanta and Philadelphia, and the company says it expects to expand into other major cities soon, assuming sales are strong. Analysts expect that to be the case, and it's possible that subsidizing netbooks—combined with strong overall sales of the devices—could forever change the dynamics and economics of the PC market. PC prices had been falling steadily anyway, but the sudden netbook boom over the past two years has dramatically accelerated the pace.

So, what does $50 buy you at AT&T? For that price, the company will provide you with an Acer Aspire One netbook with an 8.9" display. Beyond that, it features the standard netbook hardware repertoire: a 1.6GHz Atom processor, 1GB of memory, and a 160GB hard drive. But there's a catch: To get the lower upfront price, you have to sign up for AT&T's $60-per-month service, which includes DSL for the home. If you'd prefer to access a less expensive plan, with a cap on mobile data transfer, the cost of the netbook rises to $100.

AT&T is offering other netbooks as well, including the Dell Mini 9 (8.9" screen), Dell Mini 12 (12"), LG x110 (10") and the Lenovo x200 (12.1"). Pricing is different for each, with the Lenovo topping the charts at $750. (Although, to be fair, the X200 isn't really a netbook and is much more powerful and capable than the other devices.) The other netbooks fall in the $100-to-$250 range.

AT&T isn't the first company to offer subsidized netbooks to the public, but it's the first major wireless carrier in the United States to do so. Previously, electronics chain Radio Shack offered a $100 Aspire One with a two-year wireless plan as well.

For more information about the Mini Laptop promotion, visit the AT&T website

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