Nokia (NYSE:NOK) has a new netbook, but it'll cost you 575 euro -- roughly $820. Who's smoking the smoked fish in Espoo?
The trouble with this plan isn't so much the price, but who Nokia expects to pay the bill. Cell-phone network carriers will distribute the Booklet 3G, which usually means purchase prices are lowered thanks to carrier subsidies.
We don't know which carriers, of course, but Europe and America's top names are the likeliest choices. Vodafone (NYSE:VOD), France Telecom (NYSE:FTE), Verizon (NYSE:VZ), and Sprint Nextel (NYSE:S) all come to mind.
So does AT&T (NYSE:T), yet I wonder if Ma Bell's network is too tapped to handle another smart device. The data deluge caused by Apple's (NASDAQ:AAPL) iPhone is causing enough trouble as is.
More than anything, the iPhone illustrates the problem with Nokia's plan. AT&T pays a fortune to subsidize iPhone sales, only to be forced to reinvest billions in profits to bolster its network infrastructure. If you're wondering whether AT&T will ever catch up to the data demand the iPhone creates, you aren't alone.
Growing a new crop of advanced devices won't help. Certainly not the Booklet 3G, which the AP says will include a small, insertable card designed to access high-speed carrier networks when the device is out of range of a Wi-Fi network.
What's more, this so-called netbook -- can anything costing more than $800 really be called a netbook? -- will include a built-in navigation chip that will apparently connect to Nokia's map software.
In short: This device is going to be one heck of a data consumer. Carriers are supposed to subsidize this, an aluminum-plated guarantee that they'll soon be forced to upgrade their networks? I'm not so sure they will. Not without some concessions, anyway.
Smart devices such as the iPhone and Booklet 3G are here to stay, and mobile data will flow more freely as a result. Carriers can't escape this truth. But no one should be surprised if they're reluctant to pay more to connect to the revolution when the price of doing so is already high.
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