Do Tablet Data Plans Hinder Adoption?

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News Posted: Mon, May 23 2011 10:54 AM

Are tablets that are tied to cellular networks and service plans less appealing than Wi-Fi only versions? Some people seem to think so. Although carriers such as AT&T and Verizon Wireless would like to use tablets such as Apple's iPad and the Motorola Xoom as key revenue makers, the high price of these tablets combined with additional fees and service plans seem to be pushing many customers to opt for Wi-Fi only versions of the tablets.

Nvidia Chief Executive Jen-Hsun Huang seems to think price could be a key factor as well. Huang told the Reuters Global Technology Summit, "The tablet's more natural point of sale is retail….The question is whether carriers will find a reason to bundle tablets with other services and create a subsidy model that is really appealing."

Huang might be on to something—could changes be coming to tablet service plans? It's possible. In fact, Verizon Wireless has said it would eventually make changes to tablet service plans, though the carrier would not provide a timeline. Overseas, Orange is said to be considering a shared data plan between smartphones and tablets. Anne Bouverot, head of mobile services for Orange, explained at the summit in Paris, "Shared bundles may be an answer for these customers who don't know how much they will use on the go."

Verizon Wireless is said to be considering shared family data plans which could be more appealing, particularly for users who have tablets and smartphones. "I think it's safe to assume that at some point you are going to have mega-plans (for data) and people are going to share that mega-plan based on the number of devices within their family," Fran Shammo, Verizon's chief financial officer, said at the summit in New York. Although Shammo seemed open to the idea, no timeframe for this progression was given.

Another option would be to offer "sessions" of data, whereby a user purchases a day, week, or month pass. Still, some carriers seem to think that because tablets are not tied to a long-term service contract that the current model works well.

We'd love to hear your thoughts. What type of service plan do you prefer for a tablet?

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I think they need a new model for charging people for their devices. A tablet should not require an additional dataplan you should be able to tether it to your smartphone if you already have one and use it's dataplan. In many cases you can already do this with android phones turning them into wi-fi access points. So why would you bother paying for an additional dataplan when you can buy the wi-fi only versions and still use your cell connection.

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digitaldd replied on Mon, May 23 2011 1:44 PM

I think the problem is that the tablet manufacturers do not think anyone will want to pay full price for a tablet, just like very few people pay the full un-subsidized price for their phones. How many folks balked at the initial price of the Motorola Xoom which was around $1000? How about the $650 the Samsung Galaxy tab cost initially without a contract? I mean those prices are ludicrous. $200-400 for a tablet [no subsidy,no contract, if 3G data is included it should be pay as you go] is where its at.

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Tbagger01 replied on Mon, May 23 2011 3:32 PM

AT&T's data plan for the Ipad is pay as you go. No contract. I pay either $15 a month for 250 megs, or they charge $25 a month for 2 gigs. Most of the time, I am around Wifi, so the $15 is way more than enough. I like having the option for using the 3g when I happen to need it though.

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jonation replied on Mon, May 23 2011 11:53 PM

we need to convert cell-towers into wifi-towers

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HHGrrl replied on Tue, May 24 2011 3:13 PM

Pay as you go options or using your smartphone as a Wi-Fi hotspot seem like the best options in my mind. The only kicker with the latter is that carriers often charger for the Wi-Fi hotspot option. Still, at least you can use the phone as a modem for more than one device.

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HHGrrl replied on Tue, May 24 2011 3:14 PM

There are many Wi-Fi only tablets for $400-$600 and people are actually buying them. In fact, the models tied to a cellular contract aren't significantly cheaper, especially when you consider the cost of the data plan. That said, I would really love to see more $200-$400 tablets that don't require a contract and think that price point would increase market adoption tremendously.

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