Zonbu launches barebones subscription laptops

Unfazed by the failure of earlier subscription-based PCs from vendors like
PeoplePC, Zonbu Wednesday launched an inexpensive subscription notebook that
the company claims will free users from the hassle of computer maintenance.

In addition to US$279 for the Zonbu Notebook, users will pay a $14.95 monthly
subscription fee that includes software upgrades, online storage, data backup,
online tech support and hardware replacement in case of damage. Users can also
buy the PC without paying subscription fees.

The notebook runs on a Via Technologies C7-M processor operating at 1.5GHz
and weighs 5.3 pounds (2.4 kilograms). It has a 15.4-inch screen, 512M bytes
of RAM, a 60G-byte hard drive, a DVD-RW/CD-RW drive, an integrated graphics
controller and wired and wireless 802.11 b/g networking.

The notebook, which runs a customized version of the open-source Linux OS,
comes preloaded with 20 software applications, including free applications already
available on the Internet, like the Firefox Web browser and OpenOffice.org office
suite.

It's targeted as a second computer for those tired of updating PCs, Zonbu said.
The notebook is currently in "beta," according to Zonbu. The final
version of the notebook with updated software will ship globally early next
year.

Users can buy a month-to-month, one or two-year subscription plan with the
notebook, all for $14.95 per month. Maintenance fees will also take care of
PC configuration, set up, data loss and security issues, Zonbu said. In case
a notebook goes bad, a replacement notebook is shipped overnight, Zonbu said.

Although the laptop price is compelling, will the subscription model attract
buyers?

Zonbu is reaching out to a market segment not addressed yet, a client bundled
with applications and services installed and maintained by a vendor, said David
Milman, CEO of computer maintenance firm Rescuecom. This subscription model
differs from earlier models where users bought a cheap PC and were locked up
in monthly Internet charges.

"You're going after a market that's wide open and hasn't been addressed
yet," Milman said. Components prices are cheap, so it is possible for a
vendor to build such a PC, he said.

However, the company could face challenges in maintaining a decent bottom line,
Milman said. "Customers are buying the computer because of its price. If
customers don't get the service for their price, they'll stop paying,"
Milman said.

Users could just take the PC and disappear without paying. "You're effectively
buying a zero maintenance computer. There is no such thing as zero maintenance,"
Milman said.

Online support could pose problems for hardware as users prefer on-site support
technicians, Milman said. With such a shoestring budget, shipment of a replacement
PC itself could eat into Zonbu's profits, Milman said.