Under the Money section of USA Today there was a short article titled Microsoft offers ability to bill usage hourly. Microsoft has released a solution for the consumers of lower income countries which will allow them to have access to a computer. This new solution is known as FlexGo, and has been launched in Brazil and will be launched in Mexico, China, Russia, and India over the course of the next 90 days. What this solution does, is that it allows for a consumer to have access to a personal computer in a much more affordable manner.
FlexGo makes consumers pay for roughly half the price of a computer up front. The consumer then must purchase prepaid cards in order to use the computer at home. The prepaid cards will be based on an hourly rate, and will connect to a service to verify the access codes on the prepaid card. Whenever the time on a prepaid card runs out, the consumer no longer has access to the computer until the consumer purchases another prepaid card. This works in the similar manner that prepaid mobile phone lines work.
Microsoft seems to have figured out a way to market computers to people that usually wouldn’t be able to own their own computer. Not a lot of details are available at the moment, but what is known is that a computer running Windows XP that comes along with a 17-inch monitor that would usually sell for around $600 will be selling for between $250 and $350. With the price comes 10 hours of usage time. After that, every additional hour will cost approximately 75 cents. Microsoft has teamed up with the Chinese Lenovo Group to manufacture and distribute the FlexGo machines in China and India. This move by Microsoft most probably directed to compete with the $100 laptop that is being developed by AMD, Google, and Red Hat.
No information is available on the Microsoft website about the FlexGo solution. Press releases have been the only source of information as of right now.
I honestly don’t know what Microsoft hopes to achieve with this stunt. In my eyes this only proves that Microsoft isn’t as innovative as the $100 laptop team. I doubt this service will get enough attention and sales to justify the cost they are going to pump into this thing. Microsoft should know by now that they aren’t good at hardware. They tried before and failed with products like MSN TV.
I also doubt whether or not this service will actually help people. The service will only last a year or two before the amount spent on the service exceeds the cost of buying a computer outright. A $600 computer bought outright will last much longer than this. While the initial cost is lower, I still think it is rather high. Also, it sounds like the customer will have to be using the internet to even turn on their computer, which means the money spent on internet (still dial-up in some places) will increase as people do things offline with these computers.
All in all I think Microsoft is becoming a dumb company. Instead of using their cash and competencies in software development to create new cutting edge software and operating systems (yeah vista is coming but it doesn’t look all that cutting edge), Microsoft spreads a little cash on projects they have no idea how to run.