The price of your next PC: Free!


Here's another soon-to-be new twist on the Freemium model, where companies make money by giving things away. This time it's set to hit the high tech hardware world. Talk of the Apple (AAPL) Tablet continues to build with rumors that the iBook (or whatever) will be subsidized. At the same time, wireless carriers like Verizon (VZ) and AT&T (T) are rolling out more and more plans that offer subsidized netbooks to customers willing to sign up for two and three-year data plans on top of their existing cell phone coverage. The carriers are willing to part with these netbooks for $199 and up, a subsidy in many cases of $200 or so.

That still sounds expensive to me because the true value of a customer is in the data subscription, not the hardware charge. According to a DisplaySearch analysis, the lifetime value of a two-year AT&T or Verizon subsidized netbook (w/ HP Mini or Acer Aspire One netbook) ) and service plan (assuming you don't blow through monthly data limits) is $1,159 before sales tax and all of the monthly telecom taxes are added. That's about $900 more than the upfront price paid by the customer. So how about a free netbook for anyone willing to sign up? Yep, that's where we're rapidly heading. The entire PC sector will probably soon follow.