Microsoft to Offer Pay-As-You-Go PCs

Hoping to bring the success of the prepaid mobile phone business model to personal computing, Microsoft on Monday launched a pay-as-you-go initiative in emerging markets. The program, called FlexGo, will provide low-cost Windows PCs that are subsidized by prepaid cards and subscription fees.

The driving idea behind the program is to offer full-featured PCs in regions where lack of credit, low income and high costs restrict individuals from purchasing a computer. Consumers will essentially pay for the PC as they use it by purchasing computer time on prepaid cards.

FlexGo is one a number of recent programs that attempt to bridge the growing digital divide. MIT has joined with AMD to build a $100 laptop, while Intel has pushed for a more pricey, but full featured, $300 device. Microsoft is also continuing to expand availability its low-cost Windows Starter Edition offering.

The Redmond company has joined up with a number of hardware manufacturers and telecoms to make FlexGo a reality. AMD, Intel, Infineon, Phoenix and Lenovo are among those partnering with Microsoft, which says it has completed a successful year-long trial of FlexGo in Brazil.

Microsoft will soon bring the program to China, Hungary, India, Mexico, Russia, Slovenia and Vietnam.

"Today there are already more than 1 billion prepaid mobile phones used around the world, so we know FlexGo enables a familiar and comfortable pay-as-you-go model that works for people with variable or unpredictable income," commented Will Poole, senior vice president of Microsoft's Market Expansion Group.

The FlexGo technology runs atop Windows and informs users of the time used and how to purchase additional computer minutes. If the access expires, the PC switches into a limited-access mode until more time is purchased. The system will become owned by the user after a certain amount of minutes have been purchased.

Microsoft says it expects to reduce the initial costs of entry by 50 percent or more. The company is also working with broadband providers to make FlexGo work with a subscription model that includes Internet access.

“Offering unprecedented flexibility of PC ownership will bring high-quality personal computers within the reach of hundreds of millions of families and small businesses in emerging markets so they too can enjoy the many benefits PCs bring in education, entertainment, communication and productivity,” said Poole.