Comment They *CANT* be selling the hardware at a loss (Score 1) 402
I just wanted to point out one thing:
IMHO, Netpliance simply *cannot* be selling this hardware at a loss. They might be breaking even, or not making much, but they can't be losing much either. I'm basing this on the following:
1) They charge a maximum of $21/mo for the internet service. From SEC filings, we know that it costs Netpliance ~$12/mo for each account that they sell. That gives them a monthly profit from service at no more than $9.
2) The average life expecancy of this device (with its intended audience) can't be more than 2 years, and I believe that this is being extremely generous.
$9 x 24mos = $216 gross profit per buyer over the lifetime of service, assuming no time is spend with the customer on support calls, etc.
AFAIK, they don't force banner ads on folks, so theres no significant revenue there..
Add all this up, and I don't see how they can be selling the hardware as a loss leader. The LCD that they are using (the only significant piece of hardware on the whole unit) is fairly cheap in quantity, too.
Am I wrong?
IMHO, Netpliance simply *cannot* be selling this hardware at a loss. They might be breaking even, or not making much, but they can't be losing much either. I'm basing this on the following:
1) They charge a maximum of $21/mo for the internet service. From SEC filings, we know that it costs Netpliance ~$12/mo for each account that they sell. That gives them a monthly profit from service at no more than $9.
2) The average life expecancy of this device (with its intended audience) can't be more than 2 years, and I believe that this is being extremely generous.
$9 x 24mos = $216 gross profit per buyer over the lifetime of service, assuming no time is spend with the customer on support calls, etc.
AFAIK, they don't force banner ads on folks, so theres no significant revenue there..
Add all this up, and I don't see how they can be selling the hardware as a loss leader. The LCD that they are using (the only significant piece of hardware on the whole unit) is fairly cheap in quantity, too.
Am I wrong?
