Cellular set to become a standard tablet feature?

by David Needle

March 6 2013

Does your tablet have cellular connectivity? Many buyers don’t spring for the cellular version which typically costs at least an extra $100, plus monthly connection charges. For example, the latest iPad with Retina display is $629 with the cellular radio built-in, $130 more than the WiFi-only model that sells for $499.

Carriers are hoping to spur more sales of tablets with built-in cellular. AT&T offers a $100 discount for customers that sign on to a two-year data plan. Sprint Nextel offers a similar $100 discount on tablets to connect to its 4G LTE network.

AT&T’s CFO Pete Richter admits the price of the separate cellular model is too high and may go away.

"The price difference doesn't make sense based on the components that go into it," Ritcher said at a Deutsche Bank investor conference Wednesday reported by the Dow Jones Newswire.

AT&T has had the $100 discount in place for four months, though Richter says he doesn’t believe it will be permanent and says the telecom giant will continue to re-evaluate it.

In fact, at some point, there may not be a need for any subsidy. Richter said he expects tablet prices will eventually converge and will come in one model with cellular connectivity included. 

Of course there will still be a monthly connection charge should users choose to use it.

Add a tablet to your data plan

AT&T has a data plan that allow subscribers to share their cellular data plan among devices, and, for example, add a tablet for an extra $10 a month.

Bernardo de Albergaria, VP and General Manager of Citrix SaaS products group, says he isn’t so sure tablet makers are anxious to put cellular hardware in every model. 

“Most companies go with a good, better, best plan that lets them sell to different tiers of the market starting with the more price-sensitive customers,” de Albergaria told TabTimes. “The actual cost of adding wireless is pretty minimal, but it’s a way for them to differentiate the models.” 

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