Netbooks Are the Latest Tool Used To Drive Data Usage For wireless operators, the white knight in the tale of declining voice ARPUs is wireless data services, and the newest front in the drive for data adoption is subsidized netbooks for consumers who are amenable to a two-year wireless broadband contract. However, this plan carries considerably more risk than a meager $200 subsidy. As it stands now, consumer experiences with netbooks have the potential to ravage the multibillion-dollar brands of mobile carriers. Netbooks Can Offer Lousy Consumer Experiences The danger of doling out free or subsidized netbooks is that this new category of mobile device is often misunderstood by consumers, and many end up disenchanted with the user experience. One need only refer to the return rates of netbooks at retail outlets to appreciate the magnitude of the problem. According to Intel's Executive Vice President Sean Maloney, retailers are experiencing return rates for netbooks in the 30 percent range. Consumers are buying the devices expecting a laptop-like experience but are dismayed by netbooks' lackluster performance relative to their laptop or desktop. This is clearly a headache for retailers who must cope with the inventory, financial planning and cost implications of taking back nearly one-third of all netbooks sold. The netbook OEM surely suffers, too, due to negative brand perceptions. The good news for retailers, however, is the cost of the returns is confined largely to the transactional costs of managing returns, inventories and sales forecasts. Retailers for the most part are immune from brand degradation since consumers typically make a buying decision about a particular brand after hours, days or weeks of research'long before they ever walk into a store to purchase an item. There is a mental divide between the product and the channel, so the retailer bears relatively little culpability for a poor consumer experience. The same cannot be said for netbooks acquired through an operator. ...

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Little Netbooks Can Sink Big Brands
Published on October 2009
Report Summary
Netbooks Are the Latest Tool Used To Drive
Data Usage
For wireless operators, the white knight in the tale of declining
voice ARPUs is wireless data services, and the newest front in
the drive for data adoption is subsidized netbooks for consumers
who are amenable to a two-year wireless broadband contract.
However, this plan carries considerably more risk than a meager
$200 subsidy. As it stands now, consumer experiences with
netbooks have the potential to ravage the multibillion-dollar
brands of mobile carriers.
Netbooks Can Offer Lousy Consumer Experiences
The danger of doling out free or subsidized netbooks is that
this new category of mobile device is often misunderstood
by consumers, and many end up disenchanted with the user
experience. One need only refer to the return rates of netbooks
at retail outlets to appreciate the magnitude of the problem.
According to Intel's Executive Vice President Sean Maloney,
retailers are experiencing return rates for netbooks in the 30
percent range. Consumers are buying the devices expecting a
laptop-like experience but are dismayed by netbooks' lackluster
performance relative to their laptop or desktop. This is clearly a
headache for retailers who must cope with the inventory, financial
planning and cost implications of taking back nearly one-third of
all netbooks sold. The netbook OEM surely suffers, too, due to
negative brand perceptions. The good news for retailers, however,
is the cost of the returns is confined largely to the transactional
costs of managing returns, inventories and sales forecasts. Retailers
for the most part are immune from brand degradation since
consumers typically make a buying decision about a particular
brand after hours, days or weeks of research'long before they
ever walk into a store to purchase an item. There is a mental
divide between the product and the channel, so the retailer bears
relatively little culpability for a poor consumer experience. The
same cannot be said for netbooks acquired through an operator. ...
Little Netbooks Can Sink Big Brands Page 1/3

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