Microsoft Bringing Rent-to-Own to the Developing World (MSFT)

May.22.06 | About: Microsoft Corporation (MSFT)

By Carl Howe

The silly season has begun. Today's Wall Street Journal cites a program Microsoft (NASDAQ:MSFT) is testing to rent PC time as a way to reach developing country users who wouldn't be able to otherwise afford a PC.

As the article notes:

The program allows suppliers to cut the initial price of PCs and lets consumers pay for them over time with the prepaid cards.

"You can take this barrier of the relatively high entry price of a PC and maybe drop it by half," said Microsoft Senior Vice President Will Poole. In Brazil, a trial of the program was able to offer $600 PCs for about $300, he said.

This, of course, is the rent-to-own model taken to the developing world. But the quotation feels wrong too. $600 PCs for the developing world when they sell for $249 here in the US? What about the Chinese Linux computer for $149 or the $100 laptop project?

This marketing program seems more intended to get developing countries hooked on Microsoft subscriptions than to actually help users. And when marketing programs benefit primarily vendors instead of customers, they rarely do either.

Here's a thought: if Microsoft wants to do something for the developing world, why don't they buy them some computers with the $34 billion they have in the bank?