3G netbook arrives at RadioShack for $100: But who is paying the subsidy?

RadioShack Corp. announced a new $100 netbook sporting 3G connectivity. The catch? Customers have to sign up for two years’ worth of AT&T Mobility’s DataConnect mobile broadband service at $60 per month before Dec. 24.
The device is Acer’s Aspire One netbook that includes an 8.9-inch screen, 1 gigabyte of random access memory and a 160 gigabyte hard drive in a package that weighs less than two and a half pounds. The computer also features Wi-Fi connectivity to go along with its built-in, wide-area network capabilities tuned to AT&T Mobility’s 3G network.
AT&T Mobility would not comment on who was paying the subsidy on the device or how much of a subsidy was being offered, but RadioShack offers a similar Acer netbook without a subsidy for $350. Through its Web site, AT&T Mobility offers six free PC cards and USB dongles for its data customers and one PC card for $50. Before the subsidies, those devices rested in the $200 to $250 price range.
Recently, AT&T Mobility knocked $150 off 3G-capable Lenovo ThinkPad laptops to entice customers. And in Europe, carriers such as T-Mobile Germany and Vodafone UK have been giving laptops away for free to get customers onto data plans.
“Many people internationally are already enjoying the portability, on-the-go connectivity and affordability of this emerging new technology,” said Peter Whitsett, RadioShack’s executive VP of merchandising. “We are proud to introduce this concept in the U.S. by offering a netbook with integrated 3G functionality in addition to full Wi-Fi capability.”
The netbook market has become hotly contested, with analyst firms noting an 160% increase in sales during the third quarter. Further, more netbooks were sold during the quarter than Apple Inc. iPhones. According to DisplaySearch, Acer currently has the largest market share in the netbook space at 38.3%.