Are Subsidized Netbooks the Answer to Lower IT Costs?

November 12, 2009
Eric Zeman

If you've been intrigued by those ads for $300 netbooks touted by AT&T and Verizon Wireless, here's the information you need to know before buying.

If you've been intrigued by those ads for $300 netbooks touted by AT&T and Verizon Wireless, here's the information you need to know before buying.

Laptops and netbooks are essential business tools for many, but they can be useless without an Internet connection. That's why Verizon and AT&T are offering cheap netbooks with embedded wireless radios built in. That means they come with an internal modem that can connect to their respective wireless broadband networks so the user always has access to the Internet.

Verizon Wireless and AT&T are using the same pricing scheme they employ with their handsets to convince you to sign up for a netbook, too.

Here's an example. AT&T and Nokia recently introduced a netbook that is for sale from Best Buy. The netbook costs $600 if you purchase it at full retail price with no contract and no subsidization. If you agree to a two-year data plan, however, the price drops to $300. On the surface, it sounds like a deal, right? But that data plan costs $60 per month (before taxes). Over the course of the two years, the total adds up to $1440 in wireless data fees, plus the $300 sale price of the netbook. Now you're looking at a total out-of-pocket expenditure of $1740. That's a different story.

Consider the alternative. Go out and by a netbook on your own from any hardware vendor. You're probably going to pay between $300 and $600 anyway. If you want the same capability that these subsidized netbooks do, you'd then have to purchase a separate wireless modem ($50 - $100) and then sign up or the data plan, which still costs $60 per month. The benefit of going this route is that you own the netbook free and clear. You can also choose a per-use, or more limited data plan to save a little cash each month.

The bottom line is, each business needs to determine how such a device is going to be used. If constant access to the Internet is essential, then perhaps the embedded route is the way to go. If your users need only infrequent access to the Internet, then maybe sticking to the separate modem and lesser data plan is the right choice.