The Telcos Are Coming, The Telcos are Coming

Elliot: If I were Dell, HP, Sony, Toshiba, and Fujitsu… Acer, Asus and Lenovo… I would be afraid, VERY afraid.
Cathie: Are you crying wolf again, Elliot?
Elliot: No, THIS time it is serious!
Cathie: OK, I’ll bite.  Why should all those huge and profitable companies be afraid?
Elliot: Because the telcos are essentially giving their hottest product away free!! A report just came out that said telco’s are making a “profound impact” on the PC industry. The telcos are distributing netbooks like they are distributing cell phones.
Cathie: Calm down now; Breathe in; Breathe out.
Elliot: Got it. But this is so cool!  This is a sea change. THIS is REALLY a disruption!
Cathie: So, telco’s offer a netbook for a modest fee, just like they are now offering smartphones for a modest fee – with a two year contract that includes a data plan.
Elliot: A VERY modest fee! And the telco’s are moving truckloads of netbooks apparently.
Cathie: Then the bottom line is this: the cost of a computing device – be it a smartphone or a netbook – is essentially zero  - you only pay for the networking cost. Right now that networking cost is not cheap, but still…
Elliot: Yes, in the past, the cost of the computing device was the serious purchase. With the telco’s distributing the netbook as a “come on” the tables have been turned 180 degrees. Computing devices are essentially free.
Cathie: Telcos offering netbooks, like cell phones, is going to have a “profound impact” on K-12. Telco’s – not the hardware guys – are going to be driving the deals. That’s weird. For as long as computers have been around, schools have dealt directly with the hardware guys. Now…
Elliot: Right! But it’s going to take a bit before we truly comprehend the change that is taking place.
Cathie: Let me see if I have this right: Instead of spending $350 to buy a netbook and then spending a whole bunch of money to put up a wireless network to support the netbook, from a telco for the same $350, schools will get the netbook AND they will get the network connection.
Elliot: Yes! Yes! Yes! You are such a math person. But that’s a great way of putting it! Actually, the deal seems too good to be true. There must be a catch!!
Cathie: Well, it doesn’t take a math person to see that the data plan cost needs to come way, way down. But it will; that’s just the progress of technology at work.
Elliot: So, sharp-eyed readers in Blogville, help us. Where is the fly in the ointment, the flaw in our reasoning?
Cathie: Elliot, I apologize for doubting you; you were right this …
Elliot: Please stop there…. “I was right.”
Cathie: … this once.