Home Mobile Few Paying for 3G on iPad, Bad Sign for Galaxy Tab

Few Paying for 3G on iPad, Bad Sign for Galaxy Tab

AT&T’s CEO said that about half a million iPad owners actually pay for AT&T 3G service. That might sound like a lot, but it’s only a fraction of the total number of iPads out there considering more than three million were sold in the second quarter of the year alone. Even worse, from AT&T’s point of view, is the fact that iPad users aren’t on long term 3G contracts.

Apple doesn’t break out how many iPad WiFi + 3G copies it sells compare to the WiFi only versions, but it’s safe to say that most consumer slate users aren’t interested in paying for expensive 3G data plans, even without long-term contracts. While many apps rely on Internet connectivity, iPad users seem to be finding enough open WiFi connections or simply not seeing the need to pay for more expensive hardware and yet another monthly service.

In an interview with Reuters, analysts are saying that this could mean bad things for the upcoming launch of the Galaxy Tab:

Pacific Crest analyst Steve Clement said this could indicate that many iPad purchasers aren’t bothering to connect the device to the Internet using the AT&T network.

Since operators such as AT&T are expecting strong growth from gadgets such as tablet computers, this trend could mean the device category will represent less business than expected.

“Half a million at this point would seem low,” Clement said. Apple rival Samsung Electronics is banking on several carriers, including AT&T, to help sell its new table device, the Galaxy Tab.

A $499 gadget like the iPad is affordable enough to be an impulse buy for many early adopters, but top a slate’s price tag with a credit check and a monthly service fee and people really start thinking about purchases. We’ve seen this movie before and we’ve seen it go nowhere. No matter how cheap a device is, consumers don’t like paying $60 per month for mobile Internet. Subsidized netbooks with built-in 3G have been a flop here in the U.S.

If Apple can’t get more than 10% of its iPad customers to hop on the 3G bandwagon for just $25, I doubt anyone else will be able to do much better. The problem of course is that many of the consumer slates are going to be sold by the big wireless carriers who have no interest in pushing WiFi only models. Google has restrictions that prevent Android powered devices from accessing the Android Market unless they have 3G connectivity, which means any such device would be crippled beyond usability.

I’m one AT&T customer that isn’t paying for a 3G connection for my iPad. I saved $130 on hardware and I already had a Sprint MiFi connection.

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9 Comments

  1. Sumocat

    09/22/2010 at 7:32 am

    Agreed. The only reason I would have gotten the iPad 3G was to get the option of mobile broadband without the contract. For most, a two-year data contract will be in addition to their smartphone data plan, which is very unappealing. I can see a few people adding a tablet with data to their voice-only phone, but not many.

    Reply

  2. Steve

    09/22/2010 at 7:43 am

    $60 for 3G? The author should check his facts. Monthly iPad service is $15 with AT&T – a significantly different price point that undermines the story’s credibility I’m afraid.

    Reply

    • Xavier Lanier

      09/22/2010 at 9:20 am

      “If Apple can’t get more than 10% of its iPad customers to hop on the 3G bandwagon for just $25…”
      AT&T charges $15 for 250MB per month for the 3G iPad. Carriers charge about $60 per month for other 3G devices, such as netbooks, MiFi, etc.

      Reply

  3. Syn

    09/22/2010 at 10:03 am

    As a iPad owner with a 3G iPad, I can tell you at first I did use it. AT&T then did the bait and switch on the data plans and basically said if I wanted to keep unlimited, I’d have to keep it active without ever dropping it. AT&T managed to turn the selling point of the data plan into a contract with out having a contract. I was pretty much done with them after that. No way was I paying 30 a month for Edge service. I’ve since moved my cell service to Verizon and at least finally get (3G) what I’m paying for.

    Reply

  4. Big Wes

    09/22/2010 at 10:04 am

    If the carriers want people to pay to use these types of devices on their networks, they need to smarten up about the cost of sharing data via tethering. AT&T could make a ton of money if they would allow iPhones to serve as a Wi-Fi hotspot for their iPad. Share the same pool of data among the devices and charge $5-$10 for the feature. What they would lose in margin, they will make up in volume. It’s not rocket science. American carriers charge a ton for data and most people aren’t going to pay those hefty fees twice.

    Reply

  5. Virtuous

    09/23/2010 at 4:00 am

    Few want to essentially pay twice for mobile data. Many people are dropping monthly fees, not adding new ones. I deep sixed my home phone, DirecTV and Verizon MiFi. I loved my MiFi, but I could get a 2nd smartphone voice+data plan for only $10 more per month.

    Reply

  6. IronEddie

    11/11/2010 at 8:16 am

    The Galaxy Tab is much more portable than the ipad. I would not think to leave the house on a normal day toting my ipad along for the ride. It is too big for that. The Galaxy Tab however fits in the back pocket of my jeans. I could walk around all day with the Galaxy so yeah, the data plan makes sense.

    Reply

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