US$99 computer + US$12.95 monthly service fee = interesting new way to buy a computer

If Michael Dell truly wants to bring fresh ideas into the eponymous computer maker, he should eventually acquire Zonbu.

The Silicon Valley startup may have found a new way to appeal to budget-conscious consumers that want a scaled down computer for Web surfing and other basic functions.

Zombu, like Dell, sells its computers direct to consumers. The similarities between Dell and Zonbu stop there.

In an unusual twist on what has become a dull industry, Zonbu wants to charge users for storage space and a bare bones US$99 for its computer.

Zonbu, has taken a page from the book of the cell phone service providers - users will have to pay a monthly service fee. Zonbu charges $12.95 a month for 25 GB of storage space. 100 GB of storage and other benefits will run you US$19.95 a month. Over a four-year computer life cycle of the computer, for example, the Zonbu service will cost no less than US$621.60.

That’s because Zonbu will sell its computers WITHOUT a hard drive - the computer contains only 4GB of flash memory, making a subscription almost necessary if the user wants to download music or video files for example.

Open source applications, such as Firefox and OpenOffice, are pre-installed on Zonbu’s computer which presumably allows the company to keep its costs down. It’s about the size of a Mac mini.

Shoppers that don’t want an online storage subscription can still buy the box for $249. The first Zonbu systems will ship in September, and the company plans to release a new system every six months.

The savvy consumer can probably pick up an after-market computer from Staples or some other large retailer for $400 to $500 even in Canada.

But the Zonbu computer is still a relatively attractive proposition for someone who wants a new computer immediately and doesn’t need to buy a computer from a better known manufacturer.

There is value in storage space - Apple has proven the point. Consumers are willing to spend hundreds of dollars on iPods as large as 80GB though they are more fashionable items to be fair.

July 19, 2007 | Filed Under News Items and Commentary