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High Priced Data Plans Hurting LTE Tablet Market

Phillip Dampier July 24, 2012 Consumer News, Data Caps, Wireless Broadband No Comments

A new forecast from an industry research firm predicts sales of tablets with built-in LTE-4G connectivity will continue to drop because of high prices for wireless data from the nation’s cellular phone companies.

CCS Insight notes (via FierceWireless) that only 48 percent of tablets shipped in 2011 were enabled with built-in cellular capability. The researcher predicts that number will drop to 37 percent by 2016.

“Most users do not regard cellular connectivity in tablets as a must-have, especially given the current price of tablets and mobile data subscriptions,” CCS reports.

Customers simply do not find the $100+ price premium for a cellular-enabled tablet worth the expense, especially when they also face costly data charges to use the service. Most tablet owners prefer to rely on Wi-Fi, often provided free of charge. Among those who acquire a cellular-enabled tablet, nearly half never bother to activate the wireless service from the supported carrier.

“In the future, the share of cellular-enabled tablets will be determined by three factors: the availability and attractiveness of multi-device tariffs from mobile operators; the availability of public Wi-Fi networks; and the difference between the retail prices of cellular and Wi-Fi-only tablets,” CCS found.

Carriers like Verizon and AT&T hope their new “family share” data plans will ease the pain for customers who want to use their tablets on cellular networks, but companies still have to overcome the substantially higher price cell modem-equipped tablets carry and the expensive price tag for data usage, shared or otherwise. Verizon Wireless is not making it any easier. It discontinued selling subsidized tablets to customers this month.

 

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