Laptop subsidisation puts PC makers in a bind
U.S. telecommunications carriers are expected to push prices of tiny netbook laptops close to zero to promote wireless service, a development that could eventually hurt computer makers by depressing prices and compressing margins.
In a practice pioneered in Japan, . subsidizes the price of netbook computers - stripped-down machines that many consumers use mainly for surfing the Internet - it sells with service contracts. Though the netbooks are heavily discounted, the contracts lock customers into two-year service contracts that provide more than enough revenue to recoup the cost of the machines. It now offers some netbooks at discounts of almost 85% of their standalone retail price.
Verizon Wireless, a joint venture of Verizon Communications Inc.
The rising popularity and falling prices of netbooks creates a subtle - and potentially damaging - dynamic for computer makers, like Hewlett-Packard Co., Dell Inc. and Taiwan's Acer Inc. As prices fall, consumers get used to paying less and less for their machines and few are willing to pay for high-end machines. That, in turn, can weigh on margins at the computer makers.
"(Netbooks) put pressure on the revenues of nearly every player," A. M. Sacconaghi, a Sanford C. Bernstein & Company analyst, wrote in a recent research note.
Already, the change in attitude, coupled with a recession that's reined in discretionary spending, has helped push down average selling prices. Last quarter, H-P's gross margin fell 23.4% from 24.7% a year earlier, while Dell's gross margin dipped to 17.2% from 18.8% in its last reported quarter.
Slipping margins haven't been overlooked by investors. Over the last year, H-P shares have dropped about 27% and Dell's have fallen 46%. On Tuesday, H-P rose 2.1% to $35.43, while Dell added 2.3% to $10.55.
H-P and Dell representatives declined comment on the impact of subsidized netbooks, but both companies are discussing deals with carriers around the world.
"We're very pleased with the trial results," AT&T spokesman Mark Siegel said.
Despite the potential impact on computer company bottom lines, prices of netbooks continue to slide. AT&T sell an Acer Aspire One netbook for just $49.99 in limited areas. That's putting pressure on other carriers to cut prices to stay competitive.
Verizon Wireless reportedly plans to an H-P Mini 1000 netbook for $99 along with a contract.
Источник: Total Telecom
Заметили неточность или опечатку в тексте? Выделите её мышкой и нажмите: Ctrl + Enter. Спасибо!