Verizon, Google teaming up for Android tablet
Verizon Wireless (NYSE:VZ) plans to launch a tablet based on Google's Android platform, and a host of other connected devices, in a bid to catch up with rival AT&T Mobility (NYSE:T) on the tablet front. The move also deepens the relationship Verizon forged with Google last fall, when the two announced a multi-year collaboration on devices.
"What do we think the next big wave of opportunities are?" Verizon Wireless CEO Lowell McAdam said in an interview with the Wall Street Journal. "We're working on tablets together, for example. We're looking at all the things Google has in its archives that we could put on a tablet to make it a great experience."
Verizon has declined to discuss when it will release the tablet, how much it might cost and which company might make the device. A Verizon spokesman, Marquett Smith, told Bloomberg that the device will run on Android and that Verizon will unveil more details later this week.
Google, for its part, is staying mum on the potential tablet. "Anyone can take the Android platform and add code or download it to create a mobile device without restrictions," the company said in a statement, according to Bloomberg. "We look forward to seeing what contributions are made and how an open platform spurs innovation."
Despite the headline-grabbing WSJ interview, an Android tablet on Verizon's network is not entirely without precedent. At the Consumer Electronics Show in January, Motorola (NASDAQ:MOT) demonstrated a prototype Android tablet running on Verizon's forthcoming LTE network, and noted that, if commercialized, the device could be released for sale by the fourth quarter of this year.
Though the tablet likely will be a rival to Apple's (NASDAQ:AAPL) iPad, some have already begun to speculate that the announcement by Verizon is an attempt to gain leverage in negotiations for Apple's iPhone. Neither company has given any indication that the iPhone is coming to Verizon, but rumors on the potential teaming continue unabated.
With 90 percent cell phone penetration in the United States, carriers have turned increasingly to devices such as netbooks, ereaders and other connected devices to provide new revenue streams. AT&T has several high-profile devices in its stable, including the international version of Amazon's Kindle and the Nook ereader from Barnes & Noble.
McAdam acknowledged that Verizon is playing catch up in the race for connected devices due to AT&T's GSM advantage (GSM commands a far greater share of the worldwide wireless industry than Verizon's CDMA technology). AT&T was able to get out of the box faster, McAdam said, but noted Verizon will have several devices to show off early next year once its LTE network is operational.
Verizon plans to launch 25-30 commercial LTE markets in the fourth quarter, covering 100 million POPs. Without going into exact pricing specifics, McAdam gave another indication that the LTE network will feature usage-based pricing. "The old model of one price plan per device is going to fall away," he said, noting that carriers will tailor plans for a "bucket of megabytes." He also said customers will likely have to pay more for connecting multiple devices to next-generation networks.
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