Cheap computer notebook refurbished

Retailers, distributors, ISPs target students with promotions and point of sale displays

Steep discounts and giveaways dominate this year's back-to-school season, as fierce competition and commodification mean a boon to September bargain hunters.

The highest-profile price war is between Canada's high-speed Internet adversaries, Rogers Cable Inc. and Bell Canada's. Sympatico service. Both slashed prices for new residential Users offering the first six months of service for $19.95 a month with sign-up before September 30. The price then jumps to the standard $3995 per month.

Rogers is also touting a package of high-speed access and a computer, valued at $1,000, for $79.95 per month. RadioShack is offering potential high-speed subscribers a $100 in-store credit and a free month of access with a Sympatico sign-up through their stores.

For high school and university students, fast Internet access means speedy research as well as music downloads in minutes. Jim Okamura, a J.C Williams Group retail analyst based in Chicago and Toronto, sees a growing interest in downloading by youth in Canada.

"The shutting down of Napster fragmented the market. There's all these different sites out there now," he says. "If you're high school or university age, that spreads around through word-of-mouth."

Okamura also says the appetite for CD burners is growing in Canada.

Prices of CD writers have dropped dramatically over the past 12 months. Future Shop, Canada's largest electronics retailer, is selling LG Electronics 8X4X32 writers for $89 with a mail-in rebate.

"The same time this year that was selling at $249," says Royson Ng, executive vice-president of value-added distributor Samtack. "We have never seen back-to-school as low as this. It poses a real challenge to retailers because prices have eroded by two-thirds."

Other products with reduced price tags include DVD-ROMs, which can now be had for under $100, and both desktop and laptop PCs. A refurbished Hewlett-Packard 531 or notebook can be found at futureshop.ca for under $1,500 while desktops at the site start as low as $699.

"There's so much excess inventory out there that we're potentially sitting on some price wars in computer equipment," says Okamura, who watches the retail market in both Canada 'and the United States.

However, Okamura does not think the retail market will suffer too much because of the current economic downturn.

"The back-to-school season has produced a lot of busy stores," he says of retail in general. "We've been quite bullish on the back-to-school season in Canada -- much more so than in the U.S."

Ralph McNeil, vice-president of consumer marketing for HP Canada, adds that the need for technology products at this time of year has not changed because of the economy.

"If you look at things like year-over-year growth, this has not been a normal year within the past five years," he says. "The general situation is making for a competitive marketplace . . . (But) by the level of interest we've seen on our Web site, the amount of clicks we're getting, the indicator is there will be a robust back-to-school season for us to participate in."

McNeil says HP is looking at three product areas for its retail results this back-to-school season, including multi-function devices and digital imaging products like cameras, as well as related supplies like ink and toner. "As price points come down, people understand what digital photography can do for them," he says.

According to market research firm NPD Intellect, the average price of a digital camera dropped from $945 in January 2000 to in June 2001.

HP's third targeted area will be related to Windows XP, which is set for an October 25 release date.

"We believe there will be a lot of opportunity for HP to flesh out the capability XP is going to bring to market," McNeil said.

Though XP's release date comes after the back-to-school season, Samtack's Ng agrees it will be a driver for back-to-school offerings from a number of vendors. "Starting in September, you'll see a sticker called XP-ready," he says, adding another hot area this season will be handheld devices, especially MP3 players (Future Shop ran a promotion in late August packaging a free Pine MP3 player with the purchase of a Pentium IV PC). Okamura expects low-end Palm Pilots to soon become commonplace among university students, though he thinks the teen market is more inclined towards handheld entertainment devices.

Rogers AT&T Wireless is one cellular company actively targeting the teen market with its iD Wireless program, expanded for the back-to-school season. Targeted at 12- to 24-Year-olds, it includes a membership card for special promotions and discounts. Online registration comes with an additional $55 in HMV, Playdium and Rogers Video. The package also includes a silver phone case for the Nokia 3360, just added to the iD Wireless program at a price of $49.95 (with rebate on two-year sign-up).

"We don't rely on a zero dollar phone, we don't rely on cheap buckets of minutes," says Sarah Moore, youth-segment leader for Rogers AT&T Wireless.

Said Okamura, "Tailoring cell phones for the younger market makes absolute sense. I don't think we've reached the penetration rates of other countries. If you look at European countries, every teen has a cell phone and they're using things like text-based messaging."