Netbooks' banner year offers wireless opportunities

Glenn Lurie, president of AT&T’s emerging devices division, expects the mini-netbook segment to be a very big new segment for the computing and wireless industry as well. AT&T recently partnered with Radio Shack and Acer on a $100 Acer Aspire One netbook with a two-year $60 per month contract. This is the first of many device partnerships to come, Lurie said. At this month’s Consumer Electronics Show, AT&T and Dell also introduced the Inspiron Mini 9 for $99 after a $350 mail-in rebate and a two-year Laptop Connect service contract for $60 per month. T-Mobile is also playing in the connected devices market, offering a free Asus Eee PC with a service contract.

With low prices and low battery life, the product is designed for consumers – not the enterprise, and especially young, tech-savvy users. The Dell laptop is being marketed at both youth who desire a constant connection and the ‘mom demographic’ who are looking for a smaller, more portable version of the home PC, Lurie said.

“We do plan and expect the majority of our devices will have 3G, HSPA and WiFi,” Lurie said in a CES interview. “You put those three together for a great value proposition for seamless connectivity wherever you are.”

Despite the progress, wireless operators and manufacturers have more work to do to sustain the momentum, according to new research from market and media intelligence firm Biz360. Through analyzing 20,000 online opinions from popular review sites, the company found that net advocacy for netbooks was 40% lower than for all laptops. Acer, the top selling netbook in the fourth quarter of 2008, ranked lowest in net advocacy among the six laptop brands, and its Acer Aspire One had 34% lower net advocacy than the average for all laptop brands. Acer’s Aspire One series, like almost all netbooks, is regarded by the majority of their new owners as not technically performing up to their expectations, the report found.

Service providers, as the distribution channel of MIDs, are faced with the challenge of finding a compelling business model to sell these mini-notebooks. While consumers are interested in multiple device ownership, they are likely less tolerant of multiple service plans and bills to pay. Wireless operators have the ability to bundle services and experiment with new business models. They also have a vested interest in new ARPU-driving devices as their voice revenues become increasingly saturated.

“We need to get better as an industry at making things more simplistic,” Lurie said, adding that this includes simplicity in the technology, activation process and the billing, which could be pay-per-use, prepay or a subscription plan. “Our big push needs to be to make it simplistic and understand what drives overall customer satisfaction.”