Another $100 PC... or is it?

It was inevitable that someone would try to capitalize on the interest in the $100 XO laptop from the One Laptop per Child project. I'm sure we all remember the brief craze for free PCs in 1999, where a cheap PC was given away with a relatively expensive or ad-sponsored Internet service agreement. When I started hearing about the $100 laptop, I expected it would spur a resurgence in such deals.

So when I checked out Zonbu, a Silicon Valley company offering a $99 Linux-based PC, I wasn't surprised to discover there's a service agreement involved there too. The Zonbu desktop isn't really a $99 PC; it's a $249 PC. Buyers can get a $50 discount by signing up for a year of Zonbu's remote file hosting or $150 off for a two-year commitment.

The service costs from $12.95/month for 25GB of remote storage to $19.95 for 100GB. Customers must pay for the service up front, so the cheapest way to get one of these machines from the company's ordering page (here) is to sign up for the month-to-month plan and pay $261.95.

So it isn't a $100 PC. Then again, the OLPC XO isn't a $100 laptop either. It's more like $175 laptop when purchased in million-unit quantities. In the US retail market, it might cost two or three times as much.

Over time, however, the OLPC XO could become a $100 laptop. And the Zonbu desktop could become a $100 PC, too. Zonbu uses a low-cost VIA processor, 512MB of RAM, a 4G flash disk, and doesn't include a monitor at all. It's a smallish machine, about 5" x 6.5" x 2" in size, similar to an external hard disk. It should be easier for Zonbu to reach a $100 price point than for the OLPC to work the same magic with the XO, since the Zonbu machine is simpler and doesn't need to be squeezed into a laptop shape.

So in spite of the meaningless "$99" price point, the Zonbu desktop is an interesting product. It's certainly faster and more capable than any machine you could buy 15 years ago, and people got a lot of work done on those machines.

For me, the problem with Zonbu is that some of the companies behind the free-PC craze are still around, and $300 PCs are widely available with real hard disks and optical drives. The difference, of course, is that Zonbu will be lucky to sell a hundred thousand of its systems, whereas low-end PCs sell by the tens of millions.

It's good that Zonbu offers a simpler machine that costs less to build, but it needs to have a business model that lets it pass the full value of these cost savings along to customers. With time, and acceptance by the Linux crowd, it could happen...