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Monday, October 06, 2008

So much for "free laptop" subsidies....

OK, I know this is just a lone example, but to me it's an interesting illustration of what's going on in the notebook / 3G marketplace at the moment.

I've had a look at the UK prices of Dell's new Inspiron Mini-9 netbook, together with mobile broadband. It's available through two different routes at the moment:
  • PC bought from Dell.com, used with an added 3G dongle and standalone mobile broadband subscription. Dell also offers a consumer finance package of its own, with 3 or 4 year terms.
  • PC and embedded module from Vodafone UK, available "free" but with a two-year contract.
I've tried to compare apples for apples as far as possible - ie both devices with Windows XP, both with 7.2M/2M HSDPA & HSUPA. ((The Dell.com one comes with a 16GB SSD hard drive rather than the Vodafone's rather tiny 8GB). This is what comes out:

PC purchased from Dell.com £299, or via a loan from Dell Finance @ £9.59 x 36 months

Standalone Vodafone "Modem Stick Pro" with 7.2Mbit/s HSDPA & 2Mbit/s HSUPA = "Free2 dongle + 24 months x £15 for 3GB / month. (H3G offers 5GB for £15 a month, but only with 2.8M HSDPA)

Vodafone-spec Mini 9 = "free" + £30 / month for 24 months with 3GB / month.

Over a two-year cycle, the options are fairly closely matched, if you consider the implicit charge for finance:

- PC from Dell, plus Vodafone dongle = £299 + £15 x 24 = total of £659

- PC from Vodafone with embedded module = £30 x 24 = total of £720

But taken over a typical laptop's 3 year life, assuming contracts are continued after 24 months at their current prices, the options are:

- PC from Dell, plus Vodafone dongle = £299 + £15 x 36 = total of £839

- PC from Dell on finance, plus Vodafone dongle = £915

- PC from Vodafone with embedded module = £1080

The other option that may appear in future is the ability to spec the Dell.com PC with a "vanilla" 3G module, then insert the SIM card of your choice. At present, that's not possible however.

Put simply, it looks like Vodafone's profit margin will be hugely boosted if customers keep paying full price for the PC and broadband after the two year period is up. I wonder if Dell (or some brave banks or retailers) will start to focus on offering 2-year standalone finance deals on PCs.

Now this is a very UK-specific offer, and I know that the "free laptop" hysteria hasn't spread that far yet. But one thing seems clear at the moment - from a consumer point of view, it doesn't look like a particular bargain. But then, that's never seemed to matter in the "free" mobile phone market....

1 comment:

Unknown said...

I'm not actually that surprised that it works out more expensive, you're paying a early adopter premium for the novelty of having your WWAN built-in rather than having to cart around an external dongle.