Embedded Devices Haven't Sold That Well, AT&T Says

In business and politics, there often are several ways to interpret virtually any public statement, and some comments by David Haight, AT&T vice president of product development for emerging devices, is probably one of those.

On one hand, AT&T itself has had modest success selling "embedded devices," typically netbooks sold at a discount with a two-year mobile data plan costing up to $60 a month.

3G-enabled laptops haven't sold all that well for several reasons. The cost difference between a device that uses Wi-Fi-only for connectivity, and a version using mobile broadband is too great, they're hard to find in stores, and service plans are just too expensive, he argues.

Users are able to figure out on their own that getting at $100 or $200 discount on a $300 device, but then having to pay $60 a month for two years, is not such a great deal. Sure, the user gets $100 or $200 of value upfront, but then pays $1440 over two years in service fees. With the growing availability of "free" Wi-Fi hotspots and at-home and in-office Wi-Fi, that might not seem such a great deal.

AT&T obviously has found, in introducing "no contract" and lower-priced access plans for Apple iPads, that consumers prefer both the absence of contract commitments and lower recurring prices.

AT&T might also be signaling its belief that Verizon Wireless will have little luck bundling iPads with MiFi service, since that is basically what AT&T had been trying to do with its embedded devices. Verizon hopes to prove AT&T wrong, offering plans ranging from $20 to $50 a month.

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