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Can the 605 WiFi be subsidized by the big US retailer/content partners?

Posted by Charbax on September 8th, 2007

Following is speculation on my part:

Normally both Best Buy and Circuit City will carry the 605 WiFi this Christmas season in the USA:

http://acp.archos.com/portal/hpc/circuitcity/hpc.html

http://acp.archos.com/portal/hpc/bestbuy/hpc.html

Those Archos Content Portal pages don’t mean the deals are signed yet, but they most probably imply that Archos USA must be trying to get the shelve space necessary before Christmas in all those big stores in the USA, also counting on being able to ship satisfactory stock cause big stores like best Buy and Circuit City probably hate it if there isn’t enough stock delivered on time to meet demand if the demand will grow quickly. Hopefully also that Wal-Mart will provide shelve space as well as the content on the Archos Content Portal.

It’s all up to the big retailer to be convinced by Archos USA to sign interesting deals. Getting low margins and maybe even selling the hardware at a loss, while earning margins on accessories, plugins and especially on signing customers up for 12-month or 24-month subscriptions on their online content portals. For example, any of Best Buy, Circuit City, Wal-Mart could basically give out the 605 WiFi 4GB for less then 99 dollars when the customer signs a 24-month contract at 9 dollars per month subscription for unlimited films and music access through the Archos Content Portal. But since this would be a kind of a large commitment, it might take a bit of convincing of the representatives of those big retailers and content providers. Since some might or might not be stocking the new iPods, they may want to push an alternative to the iPod/iTunes this Christmas, and if Archos can satisfy the demand with sufficient deliveries, then some of those big retailers might want to try that strategy out this Christmas.

It’s all up to the content providers to have attractive subscription deals for music and movies in the USA. If any content provider in the USA wants to market this kind of unlimited access to movies and music for a fixed monthly fee, then the Archos Content Portal will support it today. So combine a monthly subscription with a 12-month or 24-month contract, and you’ve got margins that lets the partner sell the 605 WiFi hardware subsidized to make it even more attractive then the 199 dollar 4GB price.

This is how I see (remember, I have absolutely no official information about this pricing model actually being in consideration by any of Archos or it’s retailer/content partners) the 605 WiFi becoming the americans favourite christmas present:

605 WiFi 4GB + 12-month $10 unlimited music/movies subscription contract = $100
605 WiFi 4GB + 24-month $10 unlimited music/movies subscription contract = $1

605 WiFi 30GB + 12-month $10 unlimited music/movies subscription contract = $150
605 WiFi 30GB + 24-month $10 unlimited music/movies subscription contract = $50

605 WiFi 160GB + 12-month $10 unlimited music/movies subscription contract = $250
605 WiFi 160GB + 24-month $10 unlimited music/movies subscription contract = $150

and so on.. I think though that the unlimited could have a little exception saying that if the movie or music in question has been released less than 3 months prior, then it might cost an additionnal for example $2 per movie or $2 per album to get access to. So the unlimited access could be limited to all content that is older then 3 months. In the contract, there could be a $100 or $200 cancellation fee depending if the user still has less then 12-month or less then 24-month left in the contract.

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