Sprint, Best Buy Offering 99-Cent HP Netbook

Sprint and Best Buy are teaming up to offer a 99-cent mininotebook -- known popularly as "netbooks" -- as long as customers agree to a two-year data contract that costs $60 a month. The aggressive deal is designed to undercut similar offers from wireless rivals such as AT&T Mobility and Verizon Wireless. Despite weakness in the PC market that has driven overall sales down, netbooks' cheap prices and portability continue to make them robust sellers.

For the price of a fast-food burger, Sprint and Best Buy are offering a netbook-provided customers sign a two-year data contract along with the virtually free device.

The netbook in question, a Hewlett-Packard Compaq Mini 110-c1040DX with a 1.6GHz Intel Atom processor and a 160GB hard drive, will be available only through Best Buy stores; the modem will utilize Sprint's EV-DO 3G network. A two-year data plan with Sprint costs around $60 per month.

Excluding taxes or other fees, that means anyone who takes the deal and uses the netbook for two years will ultimately pay $1,441. Sprint is evidently hoping that number will hold more appeal for consumers than other subsidized-notebook offers from competitors such as AT&T Mobility and Verizon Wireless, which offer the same Compaq netbook through Best Buy for $199 with a two-year contract.

Although their ultimate utility to the enterprise is still being debated, netbooks have certainly seized the imagination of the general consumer segment over the past year, with analysts at IDC predicting that some 21 million of the mininotebooks will be sold this year. At the same time, pressures of the global economic recession have weighed down the sales of higher-end laptops and notebooks, a trend that analysts see as continuing in the short to medium term.

Although the devices are generally not highly powered enough to run many resource-intensive applications, many consumers have been attracted to netbooks thanks to the combination of low price, connectivity and portability.

In a sign of netbooks' growing importance to a whole range of IT companies, both Microsoft and Google have been angling to port their respective operating systems onto the devices.

Acer announced in June that it is planning to release a netbook in the third quarter of 2009 with Google Android preinstalled. "The Android operating system offers incredibly fast wireless connection to the Internet," Jim Wong, Acer's president of IT products, said in a statement at the time. "For this reason, Acer has decided to develop Android netbooks for added convenience to our customers."

Although Google has suggested that the movement of Android onto netbooks is largely taking place outside of its control, CEO Eric Schmidt nonetheless said during an April 16 earnings call that he was "exciting that that investment is occurring," adding, "We think that's another one of the great benefits of the open-source model that we've used."

Google has been tailoring Gmail and other applications to run more smoothly on the Android Web browser.

Despite the Android push, over 96 percent of all netbooks currently on the market run Windows, according to one study.

Microsoft's mission to disseminate its upcoming Windows 7 operating system onto as many machines around the world as possible means that it will release a version, Windows 7 Starter, tailored to run on netbooks. The Windows 7 Starter will have the ability to run more than three concurrent applications on a PC, potentially boosting the functionality of any netbook running the operating system.

On the other hand, the Windows 7 Starter will not include Aero Glass, certain personalization features or XP mode, all of which will be present in alternative editions of the OS. Rumors have abounded that, to port the system onto small notebooks or netbooks that lack DVD drives, Microsoft will offer Windows 7 Starter or a similar stripped-down version on a USB memory stick.