Doug on IP Comm – An independent voice on VoIP, telecom, and IP Communication

Sprint offers 99 cent netbook at Best Buy

Posted on: July 6, 2009

Best Buy is offering Sprint bundle deal offering a netbook for 99 cents (yes, under a dollar) with a two year contract commitment. Dan Hesse, are you crazy, or crazy like a fox?

I was a little shocked when I first saw the Best Buy Sunday ad flier — I thought that there had been a mistake on the price, especially since AT&T and Verizon wanted a couple hundred dollars AND a two year commitment for the same machine — a Compaq Mini 110c-1040DX netbook with embedded 3G connectivity and listing for $389 without a contract.

The actual netbook ain’t all that great actually; given  it has a 10.1 inch screen and only a 3 cell battery, it is a little pricey for what you get with the exception of the built-in connectivity.

So how does Sprint manage to eat $200 relative to AT&T and Verizon? Subsidy deals are no big deal in the cellular industry, and the 99 cent notebook seems to be Sprint’s latest gambit to grab market share.

Compare $390 list for the netbook to the list price of the spankin’ new Palm Pre – $850.  The price drops to $200 after you buy at Best Buy and sign a two year contract with Sprint so the delta is $650 or so if everyone is paying list price. The Samsung Instinct, listed at $600, goes down to $100 after a two year contract, so there’s $500 of magic math difference.

Some phones are already effectively “free,” so seeing a netbook at “free” in exchange for a two year commitment isn’t surprising.

Be interesting to see if AT&T or Verizon have to respond.  Will they go 99 cents, $99 dollars, or $149.99?

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