“When you haven’t got the dough, try pay-as-you-go. That could be a potential axiom for the nifty business model launched in Brazil today by Microsoft. After several market trials, the company is announcing the release of computers powered by FlexGo, a technology which lets users pay by the hour using cards bought from local vendors,” Parmy Olson reports for Forbes. “If you’re familiar with the pay-as-you-go method for cell phones, FlexGo uses a similar system. A customer who buys a FlexGo-powered PC would pay half the normal retail price at a shop, and would from then on purchase multicolored pre-paid cards to get hourly access to the computer.”
“The users would type in the card number via a program in Windows, and if they card runs out, the computer stops working. A PC that normally sold for $600 would go for around $300 with 10 hours of usage time included, and the pre-paid hours would go towards paying off the computer,” Olson reports. “In a statement Microsoft, led by co-founder and Chairman Bill Gates, said the new method brought ‘the flexibility of an Internet cafe into the home,’ and allowed users to avoid high fixed-monthly loan payments required to finance a PC.”
Full article here.
MacDailyNews Take: An interesting idea. Rent-to-own personal computers. Eventually, users pay off the PC and own it outright. It could be used as a way to get a more expensive PC than one could afford to buy – sort of like vehicle leasing.
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Poor suckers, buy a 5 hour card, and spend 1 hour on the net and 4 hours repairing again.
Sounds retarded to me.
Of course a Microsoft IT Weenie will come out remove the viruses on the computer and debug the Microsoft software they are renting you.
Subscription taken down to the ‘Nth’ degree. You stop paying and you no longer have a computer.
You bring up an interesting point WJ. When one is faced with computer problems that arise from a flaw in the design of the operating system, will that person have his/her card billed against that problem. I’ve seen some nasty pop-up/messenger malware that completely takes over a system. So, to the billing system it would appear that the person is using the computer when, in fact, it has been hijacked.
I think they will hit it big if it is as easy as it sounds. I didn’t read the article though.
“financing” or putting up as little capital up front as possible has caught like wild fire for a reason.
This country does not know how to save money and be patient any more. When anyone will give you credit without hesitation, why should they.
Suckers
MDN: History, what does history tell us?
That sounds secure. Whatever happened to Passport?
What’s to stop someone just cracking the software (stuff like this always gets cracked eventually) and end up owning a cut-price, high-end PC?
An interesting idea. Rent-to-own personal computers. Eventually, users pay off the PC and own it outright.
Somehow it doesn’t actually say that! There is no statement in the story as to when the PC is owned by the person. Gee it comes with a free first 10 hours. How much time did you spend on your new Mac when you fired it up. That 10 hurs will beburned up in the first day.
Where is the extra info on rent to buy? How much will it actually cost these guys to own that wonderful windows box??????
Leo
You really think the pay-as-you-go scheme will end once the computer is paid off? The article doesn’t mention what the payoff rate will be — they could well be paying on this thing for years.
Think cellphones. You might rent the phone, or you may own it, but you’re still going to pay handsomely for the connectivity that makes it work.
I think this is a test case for a new market model — pay-as-you-go hardware loaded with pay-as-you-go software.
Look at what MS is trying to accomplish with URGE. They want to rent your music to you. Subscription-based model.
Take a look at Microsoft Office Live:
http://officelive.microsoft.com/?xid=A0603003EK0000246803
$29.95/mo will buy you the *online use* of their live collaboration software. This is definitely where Microsoft is going — rental software coupled with rental hardware.
Sad thing is, they’ll probably make a killing on it.
MW: because — “because” people are sheep.
Sleeve.
Can you be specific about what is retarted about the plan?. Have you ever been to Latin America?
In that part of the world the average person doesn’t have $800 to blow on a computer. Not to mention that utilities, phone service, and other things are expensive which we take for granted in more developed nations.
MS ideas is great. Give consumers something for less (even if it isn’t a great system) and allow them to pay as they go for the most important computer tasks. In the process MS locks up they lock up more customers. What is Apple doing in Brazil?……nothing
MS has been wanting to penetrate Brazil for a long time because it is a market 5 times the size of Canada (no offense to my canadian friends) and the Brazilian goverment is a big supporter of open source technologies which MS is trying to fight off. I find this to be a great idea
I’d love to see Apple do something like that but I don’t think they will since it likes to charge a premium for its products and Latin America has been pretty much ignored by its management.
Sounds like an offer you simply can’t refuse, if Microsoft has its way.
More correctly put, “Gouge-as-you-go”.
First you pay for the computer, then you pay for the right to use your computer. It’s not surprising that an idea like that is coming from Microsoft.
Managers that are blinded by dollar sign’s floating in front of their face and ignore what consumers want and are willing to pay for are domed to fail.
Microsoftst new pay as you go program for a computer: $300
New 10 hour card: $50
Hammer at the local Brazillian Ace Hardware store to fix computer: $25
Time wasted Ctrl+Alt+Delting and Bluescreen-Surfing: Costly – But Priceless
MasterCard + Microsoft, Where Aren’t you going today?
I wonder what sort of security is included with it. What prevents people from buying a computer for half price, reformating it, pulling out cards, whatever and using it without MS’s little scheme. Or just taking it for parts. Either brazilians are very honest people or some of them were just given a very profitable businesss.
MDN: two points for not tearing the idea apart just because it’s microsofts but your take just resates the article and the obvious. It makes me feel like I’m being talked down to.
and who gets to reimburse the user for downtime, virus and other usual windows crap ????
Although you must pay as you go, and you will eventually own the computer when you’ve paid enough, I believe that you actually own the virus the first time you use it, and it’s yours to keep forever. Or, would the virus own you?…
The real reason behind this is something that Bill Gates has been trying to get going for many years. He wants to “rent” you the apps. You would no longer own Word, Excel, Powerpoint, Access, etc. Instead, you pay a lower amount per year and you get to use the latest version of the app. You stop paying and it stops working. That way, he doesn’t have to worry about people that feel that Word 2003 is good enough for the next 10 years, so they don’t upgrade.
E-V-I-L…
surprisingly, this a good idea.
You would have to be really stupid to sign up for this. It’s just like those ads for cheap PC loans. Do the math and you’ll realize that it will cost easily 1500 bucks over the loan lifetime for a cheap and nasty PC. Way better to scrape together 200-300 bucks and get a crap Dell box.
The same deal here – add up the cost and you’ll easily save money very quickly buying a machine outright.
Even with the P17 inch PB I bought 2.5 years ago, the 3 grand I paid equates to at least 2000 hours of use. At 5 bucks a hour that would equal 10 grand! Granted we use the mac a lot, but considering it is a high end machine to come out on top compared to the rental model says a lot.
You don’t know the history of being talked down to. I do.
“The users would type in the card number via a program in Windows, and if they card runs out, the computer stops working.”
Oh good, yet ANOTHER way to get a PC to stop working!
JEG, don’t think for a second that MS is doing this to help the poor Brazilians who can’t afford a computer. This deal is no more honorable than the millions of payday loan stores that have popped up on every block over the last few years. Gates has one thing in mind – getting people’s money in his pocket. It’s really no different than the crack dealer who gives the first dose away for free. Once MS has you, it’s hard to get away.
If I had to pay by the hour to use my G5 then it would have cost me over $100,000…
give it a month the protection scheme will be hacked, the pre-payed cards cloned, and the HD removed and replaced with a “working” os.
A poor family in Latin America buys one of these computers under the rental/hourly program. Mom and Pop tell the kids “Only use the computer if you have to” because it is costing them by the hour for its use. This is no way to encourage computer use among the third world. Better would be give them the computers and give them minimum software and let them go at it. Through the internet people learn about the world. They get experienced using your software and will continue using it (assuming it is usable to start). Their next computer they can buy from you as an upgrade/trade in. Microsoft has the money to do this.
ndelc.
On my note I clearly stated that MS wants those customers locked to their technologies. Doesn’t Apple want customers locked to its technologies?. MS reason for doing this is strictly business and I never said that it is to help people. It is a fact that the disposable income in Brazil is much less than in the North America/Europe and MS does this to sell to a segment that otherwise it couldn’t.
Brazil is the Americas 2nd largest market/economy and MS knows this. It has around 150M people and MS doesn’t want open source technologies to take off there. Brazil’s goverment support for open source is the reason why MS is doing this (it is hard to compete against free software). I don’t believe MS is doing it because they want to rent software although I admit that it may want to in the future.
For Microsoft, this is a stupid idea. We all know of Windows users — most of them — who spend an inordinate amount of time fighting security issues. This will drive the customers into a fury when they spend their money on Microsoft’s ticking meter to deal with spam, spyware, viruses, crashes and such. If Microsoft is looking for yet another publicity disaster, they have found it.
And this is “innovation”?
Gimme a break!
As Jimbo said it is all able Microsoft creating revenue streams to complement the Windows cash cow.
You can always count on Microsucks to take the lowest common denominator. They’re winning the race to the bottom. Congrats!
JEG,
Your original post was a complaint that Apple wasn’t doing something like this. Frankly, I’d rather have Apple maintain it’s lower marketshare than make a soulless business move designed to take advantage of people by taking their money in exchange for lousy products. These people will surely end up paying much more for these inferior computers than they would if they simply saved their money for awhile and then purchased them at regular price. This might be a great move for Microsoft, but usually what’s great for Microsoft is terrible for consumers.
JEG.
No, i haven’t been to Latin America. But I can’t help to think that they might also find the idea of being locked out of their stuff because they ran out of minutes, well, retarded. $300, $600, $1200, whatever, its still junk. And now you have to pay by the hour for that junk to not work properly? Retarded.
And what does Apple have us “locked into”? A solution that just works? Oh no!!!
Are you that dense ? ANY pay-to-play, rental service usually ass-rapes the poor people that can’t afford it in the first place. The opposite, being rich and getting perks for spending the riches you have. The only true way to help the poor is to build them a barebones unit that’s affordable, and they can KEEP. I’m sure a 700 mhz PC can be had for $120, and while it won’t play Quake 4, it can play lots of older titles, and more importantly, people can actually use it to LEARN with. I use to have a 700 mhz PowerSpec with Win 98, then XP. I upgraded the graphics to a Geforce 3, and it sufficed just fine. I ended up selling it to someone for $100 and they’ve been happy ever since. Higher end PC’s carry higher PROFIT margins, that’s why they’re not trying to sell these Brazilians the $400 PC’s you and I see at discount places. If these people were really benevolent, they would simply donate older PC’s to poor people worldwide because few people are really equipped to deal with technology and business-wise, this make a less employable workforce. Equipping South America especially makes sense, because it’s a lot closer than India for outsourcing, and we are seeing a fantastic increase in spanish speaking people here. Building PC manufacturing plant and support centers in South America would enable there economy, and so many wouldn’t need to flood this country illegally. Plus, more americans would have jobs flying down there to supervise and set up the industry.
I thought that the first hit was free.
sorry, i meant TO Jeg
that last post was me
Retarded idea but then again it’s Microshaft!
um…yep. definitely dense. and locked in : )
The last coment from Jeg did not come from me.
Sleeve, maclover
It doesn’t matter what the long term cost of owning a cheap is. For a lot of these folks that is the only way they can afford a computer. You can debate all day long about how good/bad these machines are. To them price is king. Take it from someone who used to sell technology to these countries. These people don’t really have a choice. Apple support in Latin America is very limited and software titles there are scarce. Yes you can buy on-line from US retailers but shipping is expensive.
You don’t seem to understand my post. What I meant by “locked” is that they catch customers early on get used to MS products and go on to buy them and recommend them to friends. Are you telling me that Apple wouldn’t want to be in that position? It has nothing to do with actual technology
Maclover: Sorry but I’m not sure how you when from an MS rent plan to an outsourcing discussion.
This is going to be great for Mac sales!
I want Microsoft to offer low rent housing. The tenants might need government assistance with virus protection though.
This is a veiled test for OS subscriptions – buy a computer and pay a monthly fee just to turn on your computer. Microsoft has been trying to sell this model to the IT world for years.
EVERYONE should be worried about this. If it works for Microsoft, I guarantee that every software company – including Apple – will also go with that model. This is a hugh cash cow for all of them. They all want a steady revenue stream.
If you don’t think so, just look at the software activation scheme currently used by the majority of major software companies.
The only reason Apple doesn’t have activation for OS X is – up until the change to Intel chips OS X wouldn’t run on anything other than Apple hardware. Well, that has all changed. I also guarantee that eventually, it will be included in OS X.
Triplehead, how can you possibly “guarantee” that Apple will follow M$ in any respect? As long as Steve Jobs is at Apple, he will do what he wants – and I guarantee that Steve does not follow Bill.
I also have a theory as to why there is no activation code for OS X: Apple wants us to install it on as many macs as we can. Because selling hardware means money in the bank, Apple doesn’t care about piracy. Their attitude is that we have to buy the Macs from them and since the latest OS release runs best on the newest hardware, we are just giving ourselves the incentive to buy newer Macs. It’s clever, shrewd and very effective – an idea worthy of Steve Jobs himself.
Now then, tell me again why you think Jobs is going to copy Gates?
Why do title loans, pawn shops and loan sharks come to mind when reading this article? Oh yes, because MafiaSoft is gonna bilk those poor bastards into paying 400+% of the value of that piece-of-crap computer they’ll get.
They’ll be better off with the MIT $100 computer project (if it ever sees the light of day).
Cell phone usually don’t stop working. An hour of talk time is an hour of talk time. PC’s can easily stop working, or they can start to work unreliably, after even a few weeks, especially if the user is a novice. The “Internet Cafe” is a good thing, because the establishment will maintain the PC is working order. What happens when the “rent-to-own” PC needs IT support? You’ll be using up the “10 hours” just getting it to work again.
HELLyeah! I want to pay mafia$oft all the time what ever they ask.
Hallelujah!
Hmm I read it as
Microsoft introduces PRAY-as-you-go PCs
Jeg, you do have a pretty good understanding of the situation, but my point was how to solve multiple issues across multiple levels which the microsoft solution isn’t doing. Actually that’s what makes Apple so great, they solve multiple issues in depth quite frequently which puts them so far ahead of other technology companies, Apple really is amazing. Other companies seem to lack hindsight, insight, and foresight, which few people let alone executives have – which in essence – is exactly what vision requires. My solution nevertheless has vision, it solves economic problems in North and South America simultaneously, while unfortunately increasing business for microsoft, but alot of the whole IT industry is built on windows ineffectiveness. Apple, unfortunately, couldn’t spur the economy because it would take less people to implement, meaning less people with disposable income. So basically, as the microsoft program is, no one really wins, not even microsloth.
I don’t get it, most PC systems with Windows are pay as you go. The only difference I see here is that you pay half price before you pay as you go.
Windows, the software that you keep on paying for.