How Low Can PC Prices Go?

BusinessWeek somewhat rhetorically asks "How Low Can PC Prices Go?" The answer is zero or $0, provided there's a two-year contract. That offer has already been floated in the US and in Europe on a trial basis.

Wireless carriers in Europe and the U.S. are starting to offer netbooks to their customers for little money up front or even for free with a monthly wireless data contract. Retailer RadioShack already sells an Acer Aspire One netbook with a two-year AT&T contract for $150. That's $50 less than the cheapest Apple iPhone from AT&T. 

It's a very interesting time in the hardware world, with Apple apparently set to release a pseudo netbook (or tablet), Android set to move into non-phone segments and a range of efforts to broaden connectivity (e.g., the US White Spaces initiative). There's also an impending wireless operator price war.

What devices will consumers opt for; will it be smartphones or netbooks with connectivity (or both) and what will cannibalize what? Stay tuned. As I've argued in the past, if the connection problem is solved (along the lines of the netbook + wireless contract or Kindle with built-in access) we'll see an explosion of devices that offer Internet access. 

A few years from now the $1500+ prices that still exist for many laptops may seem absurdly high. Regardless, the back of the PC pricing model is now all but broken for consumers.