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HP considers bundling Netbooks, wireless service

It's a business model that's working well in Europe right now, but historically has failed in the U.S. market.

A day after rolling out a new line of Netbooks, Hewlett-Packard says it's looking at selling them in conjunction with wireless service providers.

HP Mini 1000 MIE Linux MediaStyle

In an interview with The Wall Street Journal, Kevin Frost, who heads up HP's consumer notebook division, said the company is considering selling Netbooks at a deep discount to customers who sign a wireless service contract.

On Wednesday, HP introduced a new line of Netbooks called the HP Mini 1000.

Frost said, "The big picture for these Netbooks is that kind of model," but described it as a "longer-term" plan. He mentioned AT&T and Verizon as potential partners, but all involved declined further comment.

Asus and Acer have each deployed this model recently in Europe, and both have enjoyed sizable shipment increases this year. Dell is also trying its hand at it, selling its Inspiron Mini 9 in conjunction with Vodafone in Europe.

But that success doesn't necessarily translate well to the U.S., said Richard Shim, PC analyst for IDC.

"The U.S. has tried this before, about seven years ago, and it was a complete failure," he said. "Part of the reason was that cost of the hardware was too much, cost of service too high, and there was just not enough users."

But that was seven years ago, he acknowledged, and "things have drastically changed."