At the recent Citigroup Technology Conference, Dell’s CEO, Michael Dell indicated that the strategy for selling the company’s ‘netbooks’ would be via the wireless network operators – the former would be subsidized to consumers along with 3G service. Actually, this model is not new – Carphone Warehouse in UK has been giving away free laptops in exchange for a 3G subscription for many months now.
Sticking with the UK, Orange has started selling its first bundle of a mobile broadband dongle with an Asus laptop. 3 UK has also started selling packages in partnership with HP, and T-Mobile is offering an Acer laptop with a broadband package costing £30 (US$55.15) a month. Clearly, operators expect to recoup some of the costs behind the laptop subsidies by tying customers into long-term 24-month packages. Mobile operators are also familiar with this model from their handset subsidy experience. None of these laptops come with embedded 3G – though the USB dongles are provided free of charge as well.
The big question is – are operators ready to be PC retailers? In addition to selling mobile phones and accessories, Carphone Warehouse also sells home broadband, mobile broadband, laptops, iPods etc. So, it is not exactly a leap of faith for them to start offering laptop bundles with 3G mobile broadband. But are mobile operators ready to take on this challenge? Selling laptops means having to provide after-sales support that requires new skills for staff unaccustomed to such devices. Admittedly, laptop prices are coming down, but the real hidden cost is customer service and support.
Maybe there is an opportunity for operators in Central and Eastern Europe where broadband as well as retail markets are traditionally less developed. In fact, in Slovakia, Orange began selling laptops some 18 months ago and has already become the country’s third-largest channel for laptop sales. But it remains to be seen how operators in developed markets fare given that ultra-low mobile broadband prices are already squeezing their margins – they would rather not incur additional costs for laptop after-sales service and support.