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Verizon to introduce subsidized laptops

Representatives from Verizon have confirmed that the telecommunications company will soon begin branching out into the laptop computer business. Industry experts believe that Verizon plans to begin offering low-priced notebook computers, which will be available at a cheaper subsidized price in exchange for signing a two-year subscription service contract with the company.

The subscription contract is expected to be very similar to one already being offered by AT&T. The AT&T mobile subscription costs about $60 monthly, and offer 5 GB of wireless data transfer. Industry experts believe that Verizon will follow suit, and they are not expected to seriously undercut the AT&T offer.

Verizon has not revealed which types of notebook computers it will be offering, though the company has admitted to evaluating laptops and netbooks by Dell and Hewlett-Packard. One leaked memo suggests that the HM Mini 1000 will be the first machine offered at the subsidized price, though Verizon officials have so far been reluctant to confirm or deny this report.

The trend of telecommunications companies subsidizing PDAs and notebook computers is expected to grow over the next few years. The business model, of course, is not new at all. In fact, it is almost identical to the model mobile phone companies have used in selling smart phones at subsidized prices in exchange for one or two year service contracts.

With the mobile Internet business expected to grow significantly this year, Verizon (as well as other telecommunication companies) are trying to jump on the bandwagon by offering low-priced notebooks and netbooks in exchange for customer loyalty. Whether or not this is a good deal for the consumer in the long run is a contentious question — many consumers resent being “locked into” a subscription with a service provider, and would rather have the option of evaluating the service before making a lengthy commitment.

On the other hand, by offering laptops and PDAs as part of a service agreement, companies like AT&T and Verizon are able to effectively “eat” a great deal of the cost, and supposedly, pass a substantial savings on to the consumer. With the economic downturn causing people to rethink new computer purchases, the low-cost subsidized netbooks and other laptops could be a big hit with the public, that is if they’re willing to trade flexibility for a lower price up front.

Verizon officials have announced that they will begin selling the portable PCs within the next three months, but exact price points and fees for data transfer have so far not been confirmed.

Contributed by: Our Special Correspondent 
City: San Francisco
Country: USA
Date: March 15, 2010