Microsoft FlexGo pay-as-you-go PCs

Microsoft plans to expand an earlier trial of its FlexGo service -- which allows customers in the developing world to pay for PCs by the hour -- to customers in Brazil, Mexico, China, India and Russia. Under the program, which is being rolled out with PCs from Lenovo and other partners, customers pay about half the price of a $600 PC upfront, and pay the rest with prepaid cards similar to those used for long-distance phone calls. The PC dials the mothership periodically to track usage; customers are charged by the hour for PC usage, and also pay the remainder due on the PC's purchase over time. According to Microsoft, pricing and interest rates vary by market, but we somehow suspect that consumers who can afford it are probably still better off paying for that PC upfront.

[Dave Barbee @ May 22nd 2006 9:49AM]

This has been a proven successful strategy in cellphones. I don't see why it wouldn't succeed with PC's as well. A terricic way to get Vista out to the masses.

[Ihar `Philips` Filipau @ May 22nd 2006 9:50AM]

Hm. Over here in "rural" Germany internet cafes serve the same purpuse perfectly fine.

From the description it sounds way too complicated. Especially, compared to the bunch of recycled PCs in kiosk mode loaded with free Linux distro.

Anyway, most people use PCs mostly for browing - i.e. they search for information - there is no need for anything that complecated.

As for games, most developing markets I have observed, have quite well established industry of game console renting. IOW, kids use their allowances (or gift from parents) to rent some PS2 with load of games for several days. Again, it's simpler than some subscription.

[magic @ May 22nd 2006 10:12AM]

why there gotta be black folk on the card, where the poor crackers at!

[Peterson @ May 22nd 2006 10:56AM]

This card is from Brazil... it�s about 1 dollar per hour. still too expensive.

[marklar @ May 22nd 2006 10:58AM]

obviously the first comment on this thread was written by somebody from microsoft's pr department posing as a 'normal' human being.

[liquid @ May 22nd 2006 11:36AM]

"to customers in Brazil, Mexico, China, India and Russia."

lots of poor black kids in those countries.

[Poopmaster @ May 22nd 2006 12:32PM]

Is it charity? Is it profit? I think the business model here is a bit wacked. For the truly poor, $300 is probably a year's work. The cyber cafes serve up internet access; the universities allow for learning skills. So what is this, but a way to make money and hang a continuing debt around the folks that probably understand financing the least? This comes off as a cynical way to exploit the poor, if you ask me.

[al @ May 22nd 2006 12:52PM]

"For the truly poor, $300 is probably a year's work.
This comes off as a cynical way to exploit the poor, if you ask me."

[skirov @ May 22nd 2006 1:30PM]

'"to customers in Brazil, Mexico, China, India and Russia."

lots of poor black kids in those countries.'

Well, since this card is for the Brasilian market:

http://en.wikipedia.org/wiki/Brasil

"Brazil has a large black population, descended from African slaves brought to the country from the 16th century until the 19th century. More than 3 million Africans were brought to Brazil until the end of slave trafficking in 1850. They were mainly from Angola, Nigeria, Benin, Togo, Ghana, the Ivory Coast and S�o Tom� e Pr�ncipe. The African population in Brazil has mixed substantially with the Portuguese, resulting in a large mixed-race population."

[Phil @ May 22nd 2006 1:37PM]

Is there a way to tell when the machine isn't functioning because you've run out of money and when it isn't functioning because it's Windows?

[Wooky @ May 22nd 2006 1:46PM]

Being brazilian myself, I can confirm that wikipedia's info is mostly accurate. But the card surprised. Most brazilian propaganda do not show this reality; judging from ads/magazines/TV alone you would think Brasil had about as much black people as say, Sweden. In fact, I was really amused to see more black people in German's TV than in Brasil's.

[doc @ May 22nd 2006 2:11PM]

i cant believe this. they are basically charging fricken 25 reais (brazilian currency) to 10 FRICKEN HOURS!!!!! TEN!!!!!! CONSIDERING THE MINIMUM WAGE IN BRAZIL IS LITTLE MORE THAN 300 'REAIS' D A MONTH, AND THAT A HUGE FRACTION OF THE COUNTRY GETS WAY LESS THAN THAT,THERE
IS NO WAY IN HELL they are gonna reach the poor. sorry, i had to vent. this makes me so madS microsoft is SCAMMING these poor people.

[Marc Mayor @ May 22nd 2006 2:54PM]

At last someone from Germany admitting that it is a developing country !

[vick @ May 22nd 2006 6:15PM]

And Bill Gates got person of he year? WTF.... i read that article and it was bragggin about how how much Bill Gates and his wife would give to third world countries particularly india. -- ha i guess we know how their financiing it.... I think its pretty dirty making money (interest) off impoverished people... I know its a business and profit is the goal but it seems that this announcement is like a PR stunt to make microsoft look good.. but in reality their is no humanitarian inspiration here just the quest for profit.

[Sigurd @ May 23rd 2006 3:32AM]

Is this just another slugfest against Microsoft® or what?

So they've taken on a business initiative with bleak prospects. As you all say; the customer base is minimal if not nonexistant. So why are whining about Microsoft® taking on an endeavour, which surely will not be feasible to the corporation.

Unless of course, that this is not targeted towards the dirt poor – which for the main part are illiterate, and not just computer illiterate – but towards the lower middle class or struggling humanitarian organisations.

Try and remember, that if you're not able to buy clothes, decent food and housing. You will find that a brand new custom Dell XPS system is not #1 on your wish list.

[Sigurd @ May 23rd 2006 3:39AM]

Oh and by the way if you really feel so much for the poor computer starved people of the world, that you want to hassle somebody else for their initiatives not being good enough:

1. Turn off your computer
2. Go find a big box
3. Insert computer in big box
4. Ship computer off to
5. Relish the feeling, that you are no free of the clutches of Bill Gates

[Stephen @ May 23rd 2006 4:44AM]

I disagree with some posters that this is a cynical scheme, but I do agree that it will be an unsuccessful one.

Microsoft views itself in this instance as providing low-cost pc's to people who wouldn't otherwise be able to afford it. They think that they are creating a super-low-end option for poorer users. The motivation behind it is great.

That said, the pricing on this one shows just how out of touch Microsoft is, not only with the developing world but also with computer sales in general. $600 is not only a lot for a low-end PC in a developing country, it is also waaay more than many low-end PC's in the developed world! Check out the current low-end Dells:

$272 for a low-end Dell desktop: http://www.dell.com/content/products/features.aspx/featured_basdt?c=us&cs=19&l=en&s=dhs

$499 for a low-end Dell notebook:
http://www.dell.com/content/products/features.aspx/featured_basnb?c=us&cs=19&l=en&s=dhs

This versus Microsoft's proposed $600 cost for the system, plus rental fees while you are paying off the portion of the cost that you financed?? Even if this is for a laptop (which this doesn't say), that is more than they would pay for a budget laptop from Dell. I suppose it might be the case that they can pay $300 up front but can't afford $500 up front - but since this is basically just a financing scheme, anybody who can participate in this could probably take out a loan for a $500 laptop.

And if they're charging $600 for a desktop, well, that is just insane considering what budget desktop prices are.

All in all, I think that the Negroponte model will be more successful. It will cost $100 and while it will be extremely stripped down (no hd, just 500MB of flash memory; 500mhz processor; linux, which we all know as techies is cool but will limit their ability to run "mainstream" programs), it will be good enough for basic web browsing (if they can find a connection), photo viewing and text editing. That makes it a perfect entryway PC in the literal sense of the world - it will introduce people to the Internet who are probably not aware of its value. Also, the hand crank for power was an extremely good idea.

http://news.com.com/PCs+for+the+poor+Which+design+will+win/2100-1003_3-6040019.html?tag=st.ref.goo

[Stephen @ May 23rd 2006 4:47AM]

"Try and remember, that if you're not able to buy clothes, decent food and housing. You will find that a brand new custom Dell XPS system is not #1 on your wish list."

Yeah, but neither is a $600 rent-a-computer. Especially not when there are better options, not just Negroponte's $100 computer but internet cafes, which all in all make a lot more sense (even more sense than Negroponte's idea, actually).

I have no desire to hate on Microsoft, but I do have a fair amount of schadenfreude at seeing them pursue such a bad idea. Reminds me of the iRiver.

[Claudiu Spulber @ May 23rd 2006 5:06AM]

This is simply outrageous, I mean "customers are charged by the hour for PC usage, and also pay the remainder due on the PC's purchase over time". Come on, you'll end up paying less if you pay monthly rates. If they want to do something good they should sustain the $100 computer idea.

[Manish @ May 23rd 2006 8:24AM]

An assembled desktop PC in India costs