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AT&T says subsidy model good for business
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AT&T confirmed that it is subsidizing the cost of netbooks to entice more customers to sign up for two-year service contracts with the carrier. With the subsidies, consumers can buy netbooks from Acer and Dell for about $99 but they are then charged about $60 per month for AT&T's data services.
In fact, Glenn Lurie, AT&T's president of emerging devices, says that not only is the company willing to subsidize netbooks, it will also take this strategy to other types of hardware such as portable video game devices and digital cameras. "The economics for us is terrific. We're willing to invest to get a customer," Lurie said in an interview with Investor Business Daily. Lurie will be talking about AT&T's embedded device strategy during FierceMarkets' Path to 4G event April 1 at CTIA Wireless 2009 in Las Vegas. Click here to see the agenda.
The subsidy model is a long-time tradition in the wireless industry. For years operators have subsidized wireless handsets in return for a two-year service contract from consumers. However, some consumers have balked at this practice, particularly when they want to walk away from their service contract before the two-year deal has ended. The subsidy model has been particularly successful for AT&T, which subsidized the popular iPhone 3G, bringing the cost of the iPhone down to $199 for customers who signed a two-year contract.
For more:
- see this article
Related articles:
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Will embedded wireless transform the industry?
Wireless carriers open the network to embedded devices
Comments
Posted by Anonymous | March 3, 2009 - 3:11pm
www.fiercewireless.com/story/unlimited/2009-03-02
It is interesting to see these two pages on the same site. WOW, the way things seem to fall in place. In the above link, it talks about overages in excess of $5K and in this article, it speaks to AT&T's acceptance of netbooks. It really doesn't seem as if data is a heavy cost to carriers from this article, but in the other, its the reasoning for the gouging consumers have to take. This so much reminds me of the only Lucent moniker of a bleeding red circle, but in this case, AT&T is Lucent and the consumer backside is the moniker.
I think these lawsuits should be increased and the leadership at AT&T will pay attention and maybe they will think twice about letting the general public know so much.
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