iPad sales renew questions about AT&T's 3G readiness

Lynnette LunaSurf the wireless news sites, and you'll see a host of folks going ga-ga over the new iPad, which went on sale on Saturday (Apple said it sold 300,000 iPads on Saturday). That is a far cry from late January when analysts and commentators dismissed the device as a bigger version of the iPod touch. It was nothing revolutionary, they said. And the list of drawbacks was extensive: no Microsoft Word support, no USB, no multitasking, no webcam and no Flash support.

Now the Wall Street Journal's Walt Mossberg gives it a thumbs up, concluding that the iPad "can indeed replace a laptop for most data communication, content consumption and even limited content creation, a lot of the time," unless of course you are developing huge spread sheets or long documents.

Research firm iSuppli predicts global iPad sales are expected to reach 7.1 million units in 2010, with sales doubling to 14.4 million in 2011 and nearly triple to 20.1 million in 2012. This is despite the drawbacks.

I wonder if all of this "good" news about the iPad is a bit unsettling for AT&T Mobility, which has indicated it doesn't expect iPad users to overwhelm its network. AT&T executives said they believe iPad users will rely predominately on WiFi, and therefore it won't impact the performance of AT&T's 3G network. "We will monitor the usage as the device gets out there," Rick Lindner, senior executive vice president and CFO at AT&T, said recently. "If it turns out substantially different, we will adapt."

The iPad is bandwidth intensive. Netflix offers a free application for the device, enabling subscribers to instantly view full-length movies and TV shows. Place shifting technology developer Sling Media confirmed it is working on a new HD version of its SlingPlayer Mobile video application for the iPad, while Hulu.com is expected to introduce its own app.

Will the iPad overstrain AT&T's networkOf course, the 3G/WiFi version of the iPad will sell for $130 more than a WiFi-only device, and users have to pay extra for 3G connectivity--either $15 per month for 250 MB or $30 per month for unlimited usage. But it all depends on which market segments the device appeals to most: casual users or power users. And we don't know that answer yet. As Sanford C. Bernstein & Co. analyst Craig Moffett said, AT&T's assumption that users will be connected to WiFi most of the time is "a pretty big stretch given it's a new device nobody's used before."

While it appears the iPad is geared toward consumers, there is talk about what the iPad can do for the mobile worker--who is willing to pay more to stay connected. A recent survey from Sybase and Zogby that surveyed more than 2,000 adults with mobile phones found the top reason U.S. consumers would use a tablet device such as the iPad is for work on the go. Sybase said the findings show consumers are increasingly demanding mobile devices that blend consumer and enterprise functionality, exposing an unexpected emphasis on the iPad's suitability for work-related activities. We have seen this trend for quite a while with the iPhone, and this type of usage won't be relegated to WiFi hotspots.

Of course AT&T is now used to adjusting for data traffic on the fly, given that it was caught off guard by the data deluge generated by the iPhone. But I also have to think that predicting traffic might be more problematic given the fact that 3G data pricing for this device is month-to-month, meaning some users might choose to use WiFi one month and then 3G the next, based on their travel schedules. And again, as Moffett points out, no one has ever used a device like this before. --Lynnette

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