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Editor's Letter
April 2000
Take a pill
Pervasive computing will change our world. But it won't change the way consumers behave with their money.
Matthew Miller, Managing Editor
Cold hard cash. Fat wads of loot. Massive mountains of moolah. Tremendous stacks of greenbacks. Look deep into the eyes of any player who's hoping to score in the post-PC era, and those are the images you'll see. And rightly so. A lot of people are going to get rich delivering convergence products.
But for some folks, those enticing visions of wealth lead to a peculiar disorder. The victims get entranced by the astounding size of their future bank balances. They begin to suffer acute lapses of common sense. They fall prey to hallucinations. Call the condition Ka-ching Fever.
Let's examine a typical case. We'll call the victim "Jane," a name that might represent an individual entrepreneur or an entire company. Jane gets a great idea for a new product, perhaps a wireless service. As she goes about making her concept a reality, the fever takes hold. Jane imagines great numbers of consumers falling deeply in lust with her way-cool technology. They open their wallets and practically beg Jane to grab their money. Jane dreams up all kinds of long-term contracts and expensive usage fees, confident that her techno-bedazzled customers will happily pay up. She feels her pocketbook bulging already. But when she unveils her service, she's flabbergasted. Real consumers prove much more cautious with their money than the customers in her fever-induced dreams.
Turning to real life, Palm Computing seems to have shaken off a mild case of the fever. The company's original pricing plan for Palm.Net—the wireless service for users of Palm VII handhelds—levied fees based on the amount of data users sent and received across the link. Consumers and critics praised the service itself and applauded Palm for pioneering it. But they also blasted the pricing scheme, citing both its potentially high cost and the fact that it would deter people from actually using the service. You're much less likely to check your stock prices compulsively if you know you're paying for every byte. Recently, Palm introduced an unlimited-usage plan with a flat $45 monthly fee, a move that should swell the number of subscribers.
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No matter how sexy the technology, consumers won't be brainwashed into overpaying for it. |
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Mobile-phone companies also seem to be controlling the fever. They're quickly learning that they can't foist onto mainstream consumers the same long contracts and exorbitant roaming charges that early business adopters accepted.
In fact, cell-phone companies are even pushing to implement "calling-party-pays" pricing, in which only the person who places the call forks over any dough. No doubt wireless carriers will miss getting those plump payments from both sides. However, they realize that there's plenty of money out there. Simple, reasonably priced plans will attract a much larger universe of customers. Schemes that try to shackle consumers to artificially high rates will only stunt market growth.
Moral qualms notwithstanding, there's nothing wrong with trying to make scads of cash. But let's retain our sanity. Yes, pervasive computing will change our world. But it won't change the way consumers behave with their money. No matter how sexy the technology, consumers won't be brainwashed into overpaying for it, at least not for long. They'll stubbornly—and correctly—continue to insist on a principle that has served them well ever since the first cave people started exchanging furs for meat: value for money.
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