Sun Says Hardware Will Be Free

ron_ivi writes "Reuters reports that Sun's President and COO thinks hardware will be free and that people will pay for software subscriptions instead. Reuters quotes Schwartz: 'In our world, you will subscribe to the software and the hardware is free.' 'Directionally, our expectation is that in fiscal 2005 you're going to see a rapid departure from selling hardware, software and services apart.' 'Bill Gates and I agree that within four to five years hardware will be free.' We've recently read here on /. how Gates thinks hardware will be free."

Re:Free Market

[Anne Thwacks]

I don't know which country that is, but here in the UK, leasing is popular, because the tax structure is massively rigged in its favour. If you have a car on a company lease, you effectively avoid taxes of 30%, and possibly considerably more.

Re:Free Market

[Anonymous Coward]

They do it because almost nobody can afford to buy a new car outright
What a complete load of crap.
If you can afford to lease a car, you can afford to buy a car. You may not be able to afford the $40-60K SUV of your dreams, but you can certainly afford to buy decent transportation.

Re:A return to the old phone company

[Grishnakh]

I was very young at that time, but I think consumers got fed up with the situation where they could only have one phone in the entire house, or had to pay hefty monthly fees for additional phones. I believe this spurred the government to change the law so that property owners owned the lines inside their houses (previously, Ma Bell owned the actual wiring, even though it was inside your walls!), and could purchase their own phones if they wanted.

Re:A return to the old phone company

[Anonymous Coward]

The government mandated it with the breakup of the "Ma Bell" single phone company. Part of their monopoly was with service, so they split into the "Baby Bells" regionally, then had to allow competition later within those markets. The other part of the monopoly was in physical equipment. You weren't allowed to connect a non-Bell phone to your line. They had a proprietary connector, which they had to replace with the RJ45 jacks everyone has now. That standard jack allowed citizens (aka consumers - I hate that term!) to connect phones made by anyone.

Re:A return to the old phone company

[Anonymous Coward]

The phone companies were charging a small fee every
month to 'rent' a phone, which over a period of many
years (the phones lasted forever) added up to thousands of dollars. You weren't allowed to actually buy a phone (which would have cost about
$100). The gov't. eventually stepped in, probably
at the urging of businesses who wanted to sell
new phones with more features.

Re:Free Market

[ComputerSlicer23]

Actually, go look at it. I'm eligble for "A plan" from Ford (essentially, I get the best deal Ford offers to rank and file employees). My brother-in-law works in Ford Motor Credit, and can extend that plan to "Friends and Family".

I bought a truck essentially for the reasons you describe, and now I'm not sure it was the best idea. However, leasing was a very, very good deal for the first 4 years I did. Ford encouraged you to lease heavily. I think the buy vs. lease payments for my first truck was something like: $315 vs $500. Ford priced leasing so attractively, that it was very hard to turn down. They had rigged the system, so that leasing was always a winning proposition (I never paid for full depreciation value of the truck while I had it). Ford was always losing money on it, and hoped to make it up on the used market. The problem, was nobody wanted to pay the inflated used price (to make up for the value I didn't pay for), because it was a cheaper payment to lease then it was to buy.

The buyout price on my first truck was $450/month for 4 years. So I always got more value then I paid for, but theoretically, I wasn't getting the best deal I could have. However, I had a fixed price, full warrantee, other then gas and oil changes, I had no other costs. About the only thing that sucked about it, was you get screwed on miles. You either pay too much or pay too little. On my first lease, I didn't get enough, and ended up owing an extra payment for it. On my second lease, I ended up with an extra 12K miles I paid for, but never used. However, if you are a buy a new vehicle every 6-8 years kind of person, and don't put that many miles on it, buying was just stupid. Over the 6-8 year time frame buying was more expensive then leasing, even over the long term. You have to plan on owning a vehicle for 8-10 years for it to be a money saving proposition.

Leasing was a great deal 4-6 years ago. It was priced too cheaply to not do. At the time, not being able to drive to work was a serious problem. The extra reliability was worth it to me.

Now I'm trying to save money over the long haul, and I live within walking distance of work. So I bought.

Kirby

Re:A return to the old phone company

[EisPick]

The monopoly mentality in hardware lived long past Western Electric's demise. I remember working at a convention in NYC in 1992. The convention contracted with NYNEX to supply telephones. The NYNEX/CWA phone techs broke the ends off the release tabs on the RJ-45 wiring after plugging them in, under the misconception that this would keep "civicians" from moving "their" telephones. Oh, and there really weren't proprietary connetors. While there was a big, clunky 4-prong plug for some phones, most were hard wired into the wall in those days. And those rental phones were built to last. Made of heavy Bakelite plastic (or something similar), they probably could survive a 30-foot drop. And if anything ever went bad, you just called for a free replacement.

Re:Free Market

[StormReaver]

I don't think the free market, specially normal consumers, will like subscription based goods.

The market has already proven that customers will get sucked into perpetual payments (subscriptions) if the snow job is good enough.

People have been suckered into multi-year subscriptions to cell phones and cars which they will never own (or will own after paying exhorbitants amounts of cash).

Most people will fail to do the basic math that would clearly show how bad these subscriptions are, and will easily get taken in by slick ads and slicker (aka greasier) salespeople.

Never underestimate the overwhelming desire of people to not have to use their brain.

Re:A return to the old phone company

[pdbaby]

That model still exists here in the UK -- although it's probably not very popular. My mother's a doctor and she has one corded phone that's provided by the phone company; the benefit for her is that if her phone &/ line breaks the company come around and fix it much faster (or so it appears)

Re:A return to the old phone company

[Eraser_]

Minor point, but I thought it was 2-pair RJ-11 that we have now? With RJ-45 being the 4-pair ethernet style adapter?

Re:A return to the old phone company

[Smallpond]

Carterphone [airewav.com] sued to be able to connect customer-owned equipment to the telephone network. Once that sailed through the courts (heh) the market was opened up for cheap phone equipment.

Re:"Dumping" of hardware to keep a monopoly?

[Anonymous Coward]

Yes, it was a monopoly situation. Building the telephone system was an insanely expensive, difficult, and for most of the (rural) US, unprofitable proposition. The government gave the Bell System a limited monopoly on things like providing telephones, in exchange for its willingness to serve the entire country on an equitable basis. (You can still see a similar government-granted monopoly in the US Postal Service now; to this day, it's actually illegal for anyone other than the USPS to provide non-priority mail service.)

By the 1980s, the Bell system was long since totally paid for, and its monopoly had outlived its usefulness to the country. Because the Bell System was essentially just living at public expense, it made sense to open up the AT&T infrastructure to competition at that point, which is what the breakup order accomplished.

Not so long ago...

[WebCowboy]

(this opst ain't ALL off-topic, I'll make a point at the end)

You just picked up the phone, if someone was yakking on it (no one had a dedicated phone, they were all party lines with like 6 houses on each circuit) you asked when they would be done. ...

I'm quite young (almost 30 years old) and the above was the case in *my* lifetime! Of course I was also born and raised in a rural area of Canada (and yes, many rural parts of the US were just as "backwards" or more so in the 70's and early 80's). We had a colour TV thoughan horrid inflation in the 70s and early 80's made everything a bit more expensive.

When I was a wee lad my early experiences with the phone were quite similar. We had a clunky rotary-dial phone (didn't need operator assistance of course). All the lines on our local exchange outside the town limits were shared by two to six people. Touch-tone phones could not be used to dial out (although you could use one as an extension once the call was conencted or to spy on the neighbours when they were talking). Not only did you not have to dial the area code for any local calls as you have to do in some cases today, you didn't even have to dial the exchange code if you were on a common exchange! You just dialled the last four digits to connect if you were both on the same exchange(if your number was 555-1234 and you wanted to call 555-4321 all you did was dial 4321--If you wanted to call 321-5555 you'd need to dial the whole thing).

RJ11 or those wonky 4-prong connectors existed, but it was still common for the phone to be HARD-WIRED to the wall! You still couldn't buy your own phone or even add an extension in your own house without the government telephone company's involvement and extra charges. That was the case for everyone, not just in the country either. You couldn't even get your own line, much less a second one or even a second number no matter that you were willing to pay.

That all started to change in about 1985. Rural residents finally got touch-tone dialling and a dedicated (non-party) line (although each residence had to pay a few hundred dollars to get the line). We also were given ownership of the lines within our homes (at no cost) so we could do our own wiring and add extensions at no cost. We were no longer forced to rent phones and were allowed to purchase our own. And we were officially allowed to use answering machines and computer modems (finally--they were not allowed on party lines although they would technically function to some degree)!

As time went on, the government telephone company was privatised and we could buy long distance from competitors. There have been downsides (local company customer service stinks even worse than it used to) but overall the upsides are much greater (waaaay cheaper long distance, no party line, more flexible options, more features like call waiting and so on). In less than 20 years the difference is extremely dramatic!

This all looks like the reverse of the Sun/Microsoft vision actually. Some compare it to cellphones but I think of it more as the way government owned telephone system worked pre-1985 where I live--which is even worse. The parallels are there:

* Computers will be "free" (but neither in the "gratis" OR "libre" sense--it'll be no money up front but the "rental fee" will be mandatory or built into your monthly bill for service). Just like when you couldn't actually OWN your phone. At least you have SOME choices with cellphones.

* Technicians will come to your home and set everything up for you. Really convenient, but when you try to set up a second computer on your own (if you could even obtain one on your own) or alter your existing PC you'd be breaking your service contract, not only causing you to be fined but maybe you'd lose internet access or even the entire PC! (kinda like if you tried to add an extension or use an answering machine and got into trouble). Can you imagine... "we have evidence that you've connected an unaut

Re:Free Market

[bizitch]

Obviously you aren't privy to the magic of the Schedule C "actual expenses" write-off.

This is the main reason why people lease a car.

Unless you can take advantage of this write-off (i.e. primarily 1099 income) - you right.