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AT&T, Verizon Wireless pushing mobile netbooks

AT&T and Verizon Wireless stores are no longer places just to buy mobile phones. The two companies are now branching out into small laptop computers and probably won't stop there.

New York-based Verizon, for example, recently began selling a netbook from Hewlett-Packard while Dallas-based AT&T plans to offer a handful of light weight computers in its stores later this summer. AT&T already sells netbooks for as low as $50 through national retail partners such as Radio Shack, Costco and Amazon.com.

Netbooks represent a rare growth market in a computer industry, which has been pummeled by the global downturn. The technology research firm iSuppli projects global shipments of netbooks to jump 68% to 22.2 million in 2009 from 13.2 million in 2008 and virtually nothing in 2007.

To entice consumers, AT&T and Verizon are offering netbooks at sharp discounts of 50% or more, just like they do with wireless phones. Prices and models vary from market to market.

AT&T, for its part, offers an Acer netbook for as little as $50, a Dell for $100 and an LG for $199. Verizon sells just one netbook right now, the H-P Mini, for $199.

The catch is that consumers have to buy a monthly mobile-Internet plan, which start at $40, and subscribe for two years. While customers might save several hundred dollars upfront, the cost of a basic two-year subscription would run around $1,100.

"It's a tradeoff," said Gerry Purdy, chief wireless analyst of Frost & Sullivan."The initial price is low and makes consumers think of an impulse buy, but there is a long-term cost that has to be considered."

Ultra mobility on the cheap
The big attractions of wireless-enabled netbooks are size, price and ever-present Internet access.

Most netbooks weigh under 2.5 pounds - half the weight of a laptop - but they still include a full-size keyboard and 9- or 10-inch screens perfectly suitable for sending email, surfing the Web or writing documents. What netbooks don't handle nearly as well are complex video, audio and other large files since they lack the same processing power.

They also cost much less than laptops, some of which run as high as $2,000 in retail outlets like Best Buy. Business-class laptops weighing less than 3 pounds tend to be particularly expensive.

That's a big selling point for netbooks amid the steepest U.S. recession in decades."People don't have a lot of disposable income now," said analyst Matthew Wilkins of iSuppli."They are the right product at the right time."

Netbooks have proven especially popular with first-time computer buyers, college students, women and small-business people, but they attract all sorts of customers who want a cheap and lightweight Internet-enabled device to tote around.

Steady improvements in network quality, meanwhile, have made netbooks a realistic option as a customer's primary gateway to the Internet. AT&T and Verizon now offer speeds that can easily surpass early wireless and DSL technology. Customers who buy Internet-enabled netbooks through them can get online almost anywhere.

"People using netbooks want to be connected wherever they are," said Verizon spokeswoman Brenda Raney."When they travel they want access to the Internet on a larger screen" than a cell phone.

For some customers, it might even make sense to dump their home Internet connection to offset the cost of a mobile-wireless plan.

Looking toward the future
The foray into netbooks, meanwhile, gives AT&T and Verizon a chance to create new markets in which they can sell more wireless services. The share of the U.S. population without a mobile phone has rapidly dwindled and carriers need to find fresh sources of growth.

Indeed, phone companies envision a future in which an exploding array of devices - some already existing and others not yet invented - connect to their networks. Netbooks are just the beginning.

"You are going to see unbelievable innovation," said Glenn Lurie, AT&T's president of Emerging Devices.

Yet the prospect of purchasing additional wireless plans for netbooks or other devices is sure to turn off prospective buyers, most of whom already pay monthly bills for cell phones, home Internet access and even a traditional local-landline connection.

To boost sales, phone companies may have to offer special deals to customers who already subscribe to one or more of their services."That's exactly where we have to go," Lurie said."We are going to be more flexible with our pricing."

As wireless networks continue to improve, Purdy predicts phone companies will eventually adopt flat-rate pricing in which customers sets up one account, connect all their mobile devices and pay just one bill.

"In the long-term, you'll see cable-like, all-you-can-eat pricing for the wireless networks," he said.

Источник: Total Telecom

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