Sprint Offers a Netbook for Under a Buck. Will AT&T & Verizon follow?
If you thought a $99 netbook might spur demand, what do you think a 99-cent netbook will do? We'll soon find out, because Sprint is subsidizing Compaq's 1040DX netbook. Customers can get the offer in a local Best Buy …
Context & Ripple Effects
The carrier-subsidy playbook has been creeping from phones into laptops for the better part of a year: RadioShack-tied reports of a contract-laden $99 Acer Aspire One surfaced in December 2008, Dell entered the category that September and then proved in February that an unsubsidized $249 Mini 9 could sell on its own, and Verizon formally confirmed it would retail netbooks in March 2009.
Sprint's move takes the model to its logical extreme — a Compaq 1040DX priced at 99 cents with a data commitment, merchandised through local Best Buy stores. That puts it ahead of AT&T and Verizon on price while both rivals are only beginning to stock the category, and it lands weeks after Sprint's own attention was fixed on the Palm Pre launch rather than on computing hardware.
First-order effects
- Sprint converts its netbook pitch from 'cheap' to 'effectively free,' giving Best Buy a traffic-driving offer and HP/Compaq a high-volume outlet for 1040DX inventory in exchange for Sprint's multi-month data revenue.
Second-order effects
- AT&T and Verizon face direct pricing pressure just as they enter the segment — Verizon had already confirmed netbook retail plans in March, and matching a sub-dollar headline price forces both to decide whether subsidy wars spread from handsets to laptops.
Third-order effects
- If the pattern holds, the netbook becomes a handset-like loss leader where the device carries no margin and carriers compete on data-plan economics — shifting bargaining power toward distributors like Best Buy and away from PC makers' brand premiums.
The trend: Carriers are importing handset-style demand underwriting into mobile computing, with each new subsidy floor pushing the netbook's sticker price toward zero and the real sale onto the monthly data plan.