Tablets are expected to make up a large majority of all mobile broadband connections in the U.S. over the next two years, according to a new report from the NPD Group.
By the end of 2015, NPD analysts expect the number of active mobile broadband devices to reach 34 million, a nearly 50 percent increase from 2013, according to a new report from NPD's Connected Intelligence group. The NPD report predicted that two-thirds (66 percent) of those devices will be tablets.
Tablets currently account for 40 percent of mobile broadband connections, and, as USB modems and mobile hotspots decline, NPD predicts that carriers will need to boost adoption of the connected tablet. NPD thinks that, as this shift occurs, the price of tablets with embedded cellular connectivity should rapidly decline.
Indeed, carriers are already starting to embrace cellular tablet connections as growth drivers. Earlier this month T-Mobile US (NYSE:TMUS) announced it will sell LTE-enabled tablets for the same price as Wi-Fi models; T-Mobile is also giving away 1 GB of free tablet data per month to voice customers who sign up for a tablet.
T-Mobile isn't the only carrier looking to juice its tablet sales. Verizon Wireless (NYSE:VZ) has been offering 1 GB of extra data per month to customers who activate a tablet on the carrier's new "More Everything" shared data plans. Verizon said its offer of the extra 1 GB of data will remain available to customers as long as the tablet is active on More Everything plans at or above 1 GB. It costs $10 per month to keep a tablet on the carrier's More Everything plan. The offer was introduced in late March and Verizon has not set an end date for it.
USB modems were the primary mobile broadband devices until the end of 2012, driven largely by demand from enterprise users, NPD notes. Additionally, standalone mobile hotspots gained popularity in 2011 and 2012, but both devices saw substantial declines over the year as more consumers began using the hotspot features on their tablets and smartphones.
"Tablets are the next subscriber battleground for the carriers," NPD analyst Brad Akyuz said in a statement. "The decline in ASPs, coupled with the intensified pricing competition, will further boost connected tablet adoption in the coming years. AT&T currently leads in active tablets connections, but we anticipate Verizon Wireless will surpass AT&T by the end of 2015. While all of this is great news for consumers who want an always-on tablet, it could drive the carrier market back into a subsidized device model just as this is beginning to fade for smartphones."
The NPD "Mobile Broadband Market Share and Forecast Report" is published quarterly and uses a mix of various proprietary sources including NPD's consumer panel and point-of-sale data, as well as public sources such as U.S. wireless carrier financial data to analyze the U.S. mobile broadband market by device type, carrier and revenue.
- see this NPD release
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