Lenovo, ATandT Look to Expand 3G Service with ThinkPad Notebook Discounts

Lenovo and AT&T are looking to increase the use of the carrier's 3G cellular broadband network by offering a $150 discount on several of Lenovo's ThinkPad notebooks.

AT&T and Lenovo, along with Ericsson, announced the deal Oct. 30. The agreement between the three companies means that AT&T's 3G service is available on several Lenovo ThinkPad notebooks that are equipped with Ericsson's 3G embedded modems.

Lenovo will offer the $150 discount on its ThinkPad SL series for small and midsize businesses. In addition, Lenovo will offer the same discount on its enterprise ThinkPad T and X series of laptops.

The ThinkPad notebook discount requires a two-year contract with AT&T's DataConnect 3G broadband service, which costs about $60 a month. The contract also allows for a free 30-day trial of the DataConnect service. With the service, AT&T is promising top download speeds of 1.7M bps and top upload speeds of 1.2M bps.

This type of deal resembles what carriers such as AT&T and Verizon have done in the cellular market, which is essentially subsidize the price of the hardware in exchange for a long-term service contract.

Richard Shim, an analyst with IDC, said carriers such as AT&T have been experimenting with price to see how much customers are willing to pay for broadband service and also to see if the networks can handle the increased traffic as more and more users switch from more standard Wi-Fi. The Lenovo deal will help accelerate that change and make switching to 3G more appealing, especially to businesses users and SMBs.

"This is unique in that [Lenovo and AT&T] are giving away the radio and offering the free 30-day trial," Shim said. "This is also their way of priming the pump and getting folks interested in this stuff. In the past, one of the hurdles was the cost of the hardware. Here, they are saying that you can get these notebooks at the same price with radio."

The deal also means that Ericsson has a way to compete against Qualcomm and its Gobi technology when it comes to offering 3G broadband service in devices, such as laptops. Other notebook vendors, such as Hewlett-Packard and Dell, are also looking to offer 3G service and boost the viability of 3G networks.