3G tablet sales 'very slow,' analyst says

Customers can't afford another data plan, prefer Wi-Fi tablets instead

Sales of 3G cellular-equipped tablets have largely been a bust because consumers don't want to pay wireless carriers for another data plan on top of their data plans for smartphones, an IDG analyst said on Friday.

"The 3G thing on tablets is bogus," Bob O'Donnell, an IDG analyst, told Computerworld. "Nobody wants to pay for that data."

He said "hundreds of thousands" of 3G-ready tablets are sitting unsold in inventory at carrier stores and other retailers in the U.S. because tablet customers far prefer buying a tablet to work over Wi-Fi instead of 3G cellular.

"Sales of 3G tablets have been very slow," O'Donnell said, basing his insight on interviews with several large tablet makers, including Motorola and Samsung.

"Tablets are a different animal than smartphones and are much more like a typical computer where you tend to sit in one place using Wi-Fi to work," O'Donnell said.

Because 3G tablets haven't sold well, U.S. carriers will need to change their pricing plans for data, combining data plans to cover a family of devices instead of just a single device for a data plan, O'Donnell said. He predicted carriers will do just that, sometime in the fall.

In May, a Verizon Wireless executive said the carrier was considering offering a shared data plan for families where data from more than one smartphone or tablet would be combined.

Verizon hasn't announced anything further on data sharing across families or work groups, although it did stop offering unlimited data plans for new smartphone users on Thursday. It set up three new data pricing tiers, starting at $30 for 2GB per month.

O'Donnell said the carriers would never suggest that a home- or office-based broadband user have a separate DSL line for every desktop computers, which would be far too expensive. At $30 for 2GB per smartphone, a family of four could easily exceed $100 a month for data charges and adding a tablet on cellular would be something they would try to avoid.

"People want the equivalent of a mobile router, with one data plan to use across several devices," O'Donnell said. "It has to be a reasonable price point. Why should the carriers care where I use my bits?"

IDC reported on Friday that vendors such as Samsung and Motorola, who sell mobile phones as well as tablets, have tended to focus their tablet distribution through the carriers but only found "moderate" success with tablets.

Those tablet sales were "largely stymied by many consumers' unwillingness to sign up for the 3G/4G data plans that the carriers typical require along with those devices," IDC said in a statement.

For the remainder of 2011, IDC added: "We believe [tablet] vendors who continue to focus on the telco channel for distribution will face serious challenges."

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at  @matthamblen or subscribe to Matt's RSS feed. His e-mail address is mhamblen@computerworld.com.

Copyright © 2011 IDG Communications, Inc.

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