Data price plans are hindering 3G tablet sales

Tablets equipped with 3G cellular connectivity are not selling because consumers don't want to pay for another cellular data plan on top of what they are already paying for their smartphones, an IDG analyst told ComputerWorld.

According to IDG analyst Bob O'Donnell consumers are buying the Wi-Fi equipped tablets at a much faster rate that 3G-equipped tablets, which are sitting unsold in inventory at carrier stores and other retailers. O'Donnell said he is basing his information on various interviews conducted with tablet makers, including executives at Samsung and Motorola  (NYSE:MMI).

O'Donnell's comments jive with findings last month from ABI Research, which found that only a quarter of Apple (NASDAQ:AAPL) iPad tablets shipped in the first quarter featured support for 3G networks. That number is significantly lower from previous quarters and just below the industry average of around 35 percent.  ABI analyst Jeff Orr wrote in a research note that even though the attach rate of 3G-capable tablets was higher than that of 3G-capable PCs or netbooks, activations of those tablets on the cellular network was surprisingly low.  Orr concluded that Wi-Fi connectivity for tablets tends to be "good enough" for most consumers.  

O'Donnell asserted that U.S. carriers need to change their pricing plans for data--such as offering a data plan for a family of devices, rather than a single device--if they want this trend to change. He predicts that operators will start doing that in the fall.

In May, Verizon Communications (NYSE:VZ) CFO Fran Shammo said that the company will offer family plans for data services, however he stopped short of providing a launch date for the new plans.

Shammo, who disclosed the news to Reuters as part of the Reuters Global Technology Summit event, said the carrier will introduce the family data plans sometime after it replaces its unlimited smartphone data service with tiered data pricing. He did not provide any further details on the plans.

For more:
- See this ComputerWorld article

Special Report: Testing tablets: What are the pros and cons of today's tablets?

Related articles:
ABI: 25% of iPads sport 3G connections, slightly below industry average
Verizon Wireless to offer family data plans
Rumor Mill: RIM scraps plans for 10-inch PlayBook tablet
How should wireless carriers approach the tablet market?
Will tablets cut into notebook sales?

Suggested Articles

Qualcomm has warned U.S. restrictions only stand to hand billions of dollars to its foreign competitors, according to the Wall Street Journal.

Dish Network is making progress on its one-of-a-kind open RAN in the U.S. and isn't wasting time trying to convert skeptics.

Verizon and Amazon Web Services (AWS) are bringing 5G mobile edge compute (MEC) to Boston and the Bay Area.