Why netbooks will soon cost $99

Subnotebooks like the Asus Eee PC, the Dell Mini 9 and the HP 2133 Mini-note will soon cost as little as US$99. The catch? You'll need to commit to a two-year mobile broadband contract. The low cost will come courtesy of a subsidy identical to the one you already get with your cell phone.

The Wall Street Journal reported Thursday that HP is already talking to carriers about such an arrangement but didn't say which carriers. And you can bet that if HP is talking to carriers, so are the likes of Dell and Asus.

It's likely that HP is talking to AT&T, which has already inked a deal with Lenovo and Ericsson to sell full-size ThinkPads at a $150 discount if customers sign up for a two-year contract. That discount brings the price of a ThinkPad with Ericsson built-in mobile broadband modules down to essentially the same price as one without that capability.

The ThinkPads in question are not netbooks. But the deal shows in concrete terms what a mobile broadband contract is worth to the industry: $150. If you were to apply that figure against the total price of the cheapest netbooks today -- which are about $300 -- you can assume that under existing circumstances, a subsidized netbook would cost you out of pocket about $150.

AT&T also announced a major strategic shift a couple weeks ago that should result in AT&T stores selling non-phone gadgets that can take advantage of mobile broadband, including netbooks. In other words, the cell-phone sales model, where hardware is steeply discounted in order to encourage wireless contract commitments, is going to be applied by AT&T to devices that are not cell phones.

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