Alex Zaharov-Reutt
Saturday, 24 May 2008 14:40
Opinion and Analysis
Page 2 of 3
Naturally, the reason why people enter into $0 upfront deals, interest-free deals and other similar transactions is because they don’t have the money upfront to begin with, or would rather spend that money on other things.
Business people should also know full well, even more than general consumers, that any kind of finance always dramatically increases the final cost of the goods being purchased – yet business people and consumers are still lured by the low or no upfront cost option.
Cathy Aston, an Executive Director of Telstra Business, was quick to explain that the $0 upfront laptop deal was more about mobile broadband than the free laptop, saying: “Building on the success of the $0 upfront mobile phone offers that really took off in the 90s, we've decided the time is right to extend the same deal to mobile broadband.”
Aston explains that the $99 per month “provides cost certainty and eliminates the stress of having to come up with a large upfront payment. Telstra is best able to meet these needs of small business through the extensive breadth and depth of coverage and speed that the Next G network provides”.
So, while Telstra is keenly promoting the deal, it was very interesting to discover that, while Harvey Norman are indeed one of the distributors of the deal, they seemed to have been dragged into the deal by Telstra and aren’t terribly enthused about it as it won’t generate them any profits.
According to
Current.com.au, Harvey Norman’s general manager of computers and communications, Luke Naish, isn’t super impressed and notes that Harvey Norman already offers “interest free deals”, telling Current.com.au that the deal is about “filling needs, there are less restrictions in purchasing separately”.
He also told Current that he only expected the deal would result in “small volumes”. When asked what margins it might generate for Harvey Norman, Naish said “What margins? It’s been an absolute dogfight. The [computer] market is packed at the moment, everyone is underselling.”
So, Harvey Norman will clearly sell consumers as $0 laptop if they really want it, but I’m sure that shop-floor retail staff will try to steer interested business customers into not only a better laptop, but a Flexirent plan that will generate Harvey Norman more profit margin.
A Telstra spokesperson did advise iTWire that a more expensive laptop could be procured despite the $700 laptop cost threshold, the difference would simply have to be paid in cash or with a credit card to the retailer in question.
So, will a three year old laptop be worth using in 18 months, especially given the speed with which everything is so rapidly moving? And what about ever lowering mobile broadband costs – do you feel like paying $99 per month for 1GB when costs will have lowered dramatically for everyone else?
And what appears to be Australia's only 'no contract' mobile broadband 3.5G HSDPA deal?
Please read on to page 3.
