AT&T, Inc. (NYSE: T) said this week that it would begin selling netbook PCs for the low price of $50 if customers would commit to two years of internet access through its nationwide high speed internet DSL service along with its Wi-Fi wireless and 3G internet service as well. In effect, AT&T is seeing if the wireless phone subsidization model that's been used for over a decade now could spill over into the portable netbook PC market and bring more customers onto its internet services.It isn't rocket science to see that a $300 netbook being offered at $50 is a basic subsidy by the telecom behemoth of $250, which could mean a breakeven point for these new customers at a year (or less) depending on the wireless/wireline internet access bundle AT&T will offer here. The biggie is wireless, non-Wi-Fi access: AT&T's Wi-Fi network isn't ubiquitous like its nationwide 2G/3G network running on the established cellular infrastructure AT&T has. People will want more than Wi-Fi access at airports and Starbuck's locations -- and this is part of AT&T's plan here.
AT&T could have a winner here if it offers DSL service, nationwide Wi-Fi service and 3G wireless service into a complete internet access bundle with these $50 subsidized netbooks. No other carrier besides Verizon can offer a trifecta like this, so it will be interesting to see if the second-largest telecom provider in the U.S. will follow suit. Verizon still can't match AT&T's blanket coverage with Wi-Fi and 3G, and those two alone are what will make AT&T successful here. DSL? That's yesterday's kind of internet access.
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