Why the Kindle Fire and Nook Tablet are Wi-Fi-only

3G/4G wireless service are left out to keep costs down, avoid costly data plans

The low-cost computer tablets coming next week from Amazon and Barnes & Noble connect only over Wi-Fi networks, which reduces costs and also cuts the nation's 3G/4G cellular carriers out of the equation.

Other tablets, such as the iPad 2 and several Galaxy Tab versions, however, connect to 3G/4G cellular as well as Wi-Fi, but also have Wi-Fi-only models.

So what's behind the decision to support Wi-Fi-only in Amazon's $199 Kindle Fire and Barnes & Noble's $249 Nook Tablet ?

Part of the answer stems from the way Amazon and Barnes & Noble see their tablets being used. Both see their devices primarily for consuming massive amounts of video, games, e-books and other media, which is best served over a low-cost Wi-Fi connection.

"Amazon and Barnes & Noble want people to spend money on their content, not on [carrier] data plans to keep the tablets connected," said Tom Mainelli, an analyst at IDC. "So I don't think they have much interest in offering 3G/4G-enabled media tablets."

Neither company has said whether it will eventually offer a cellular connection for their tablets, but there is little financial motivation to do so. Carriers might decide to offer cellular connections and service plans if the Kindle Fire and Nook Tablet become popular, but they might find customers balk over data pricing, data caps and overage charges.

Mainelli and Jack Gold, an analyst at J. Gold Associates, said cellular-ready tablets sold by carriers haven't sold as well as Wi-Fi-only tablets, although they didn't have specific sales numbers.

"Carriers have not been very successful at selling many tablets," Gold said. "The majority of tablets seem to be sold through retail, such as Best Buy or Staples. Tablets are similar to the laptop market, where carriers attempted to sell 3G-enabled laptops and sold relatively few."

Added Mainelli: "IDC research shows that the vast majority of tablet owners use their tablets in places where Wi-Fi is readily available. That's mostly at home, but also in coffee shops, hotels and the office."

IDC also found that among those who buy a 3G/4G-ready tablet "a relatively small percentage turn on the cellular radio and use it on an ongoing basis."

The main reason that so few want a cellular plan for a tablet is to avoid "yet another data plan," Mainelli added. A data plan can range from $20 to $70 a month depending on the carrier, which for many would be on top of a cell-phone data plan or a home broadband connection used to support home Wi-Fi.

T-Mobile USA, for example, on Tuesday announced that a 4G-ready version of the Samsung Galaxy Tab 7.0 Plus will go on sale Nov. 16, subject to a two-year 4G service agreement and data plans that start at $20 a month.

"When and if carriers start letting consumers use their data plans across devices, instead of paying for a plan for each device, then we'll start to see more consumers using tablets with 3G/4G," Mainelli added.

Gold said most consumers don't need a cellular data plan for a tablet, unless they use the device on the road. Business users, on the other hand, generally "want connectivity anywhere." If a business is widely adopting use of iPads for running applications formerly used on employee laptops, it would make sense for a salesperson or a CEO to have the tablet's cellular connectivity while traveling to meet clients.

Mainelli said Amazon discovered with its first Kindle e-reader that it could offer 3G cellular connectivity for free to users who were willing to pay more for the device upfront. But he noted that e-books take up a small data footprint compared with color magazines, games and videos, making e-books inexpensive to transmit over cellular networks.

Devices like the Nook Tablet and Kindle Fire, on the other hand, "consume large amounts of bandwidth as people use them to stream movies, music, etc.," Mainelli added. "So a 'free' 3G/4G connection on a media tablet just isn't as feasible from an economic standpoint."

The question left open to tablet buyers over the holiday season is whether they can accept not having a constant cellular connection and are confident of having plenty of Wi-Fi access.

Barnes & Noble CEO William Lynch, in announcing the Nook Tablet on Monday, noted it will be "easy to connect" the device to Wi-Fi because of its wide accessibilty, including 26,000 nationwide AT&T Wi-Fi hotspots.

Lynch also faulted the Kindle Fire for offering only half the internal storage provided by the Nook, which has 16GB. That extra capacity will be needed in Wi-Fi-only devices that won't always have an Internet connection for accessing data.

Read more about mobile and wireless in Computerworld's Mobile and Wireless Topic Center.

Copyright © 2011 IDG Communications, Inc.

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