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Why people hate on-contract tablets

Posted: , by Michael H.

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Why people hate on-contract tablets
NPD just released a survey that may not exactly "prove" that on-contract tablets are universally hated, but it certainly shows that very few people bother with them, and there isn't much place for them in the market right now. The new survey is from Connected Intelligence, part of NPD, and it is a follow-up on a survey done in April 2011.

The surveys aim to get info on how tablet users access the Internet. As we let you know, in April, it found that 60% of users connected only through WiFi, but 5% planned to get a mobile data plan within 6 months. The new survey (amazingly 6 months after the first) found that WiFi-only users had grown to 65% while mobile broadband users decreased.

There are a number of reasons why this happens. Eddie Hold, VP of Connected Intelligence, says that one reason is that WiFi represents "good enough" connectivity for most tablet usage, and mobile phones fill in the "'must have' connectivity needs". There is also a theory that early adopters bought 3G tablets as a sort of "future-proofing" without having any plan to ever use the capability.

Price and availability

We think it's just two basic issues: cost and mobility. No one really wants a subsidized tablet. That much is very simple, and we've seen the proof in the Motorola XOOM, HTC Jetstream, and other tablets. The most successful tablets have been the iPad (and most sales of the iPad are WiFi-only models), the Asus Transformer, the Kindle Fire, Barnes & Noble Nook Color, and Samsung Galaxy Tab. No one wants a tablet that's more than around $500, and certainly very few people want to have recurring charges for mobile data. More importantly, if a tablet is subsidized or marketed primarily as a carrier device, consumers will only find those devices when they go into a carrier store.

We haven't seen the stats behind it, but we'd be willing to bet that there are more iPads sold in Best Buy than in AT&T and Verizon stores. But that is the other unifying aspect of the biggest tablet flops so far: availability. The XOOM and Jetstream may have been overpriced, but they were also only available in carrier stores. It would seem likely that most consumers haven't gotten into the habit of thinking of their carrier store as an electronics store. Most people who go shopping for a tablet are likely to visit Best Buy before a Verizon store.

Mobility

The other issue is mobility. Maybe we take a more hardline stance on the semantics of it, but it seems to us that "mobile" is something that can fit in your pocket, like a phone; whereas, "portable" is something that you can carry if you want, but most people won't carry it all the time, like tablets and laptops. The difference is that a mobile device is something most people are willing to have with them at all times, and will pull out for use just about anywhere, but portable devices are carried to a destination before coming out for use.

Smartphones are decidedly mobile. Smartphones have myriad uses and are at their best when connected at all times to mobile data, because they are small, quick and easy, and are mostly used for quick and easy tasks. Tablets, as we've said before, are essentially consumption devices. Their most common use is to watch video, read books/magazines, surf the web or play games. Those are not activities that you are likely to do while walking down the street, but rather when sitting or relaxing at home, a cafe, etc (aka places that usually have WiFi.) The one big outlier to this theory is the public transportation commuter. As yet, a lot of buses and trains don't have WiFi access, so tablet owners who commute to work via public transport may find mobile data more necessary than most other tablet users. Still, this is a pretty small section of the whole of tablet users.

Conclusion

As of right now, consumers have to choose between convenience and cost, but if we're lucky, that won't be the choice for too much longer. If carriers do it properly (which is quite a big if), shared data plans could go a lot way to changing the way we use tablets by virtue of offering easier access to mobile data. The other possibility is that manufacturers stop charging such absurd premiums for a 3G model tablet, but that isn't very likely. If Apple can get away with a $130 premium for 3G, or Android manufacturers can tack on an extra $100 or so, they will certainly do it. Luckily, NPD has shown that consumers don't fall for it.

source: Connected Intelligence

16 Comments
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posted on 12 Dec 2011, 22:02

1. FAW-Q (Posts: 63; Member since: 29 Jul 2011)


My reason not to get an on-contract tablet would be the fact that they are stuck on a limited data plan similar to wireless data cards and routers when the usage of a tablet is more similar to a cell phone than a laptop.

posted on 12 Dec 2011, 22:37 1

2. Vzw_employee (Posts: 42; Member since: 01 Sep 2011)


the plans for tables aren't worth it , $30 for 2bg, $50 for 5gb and $80 for 10gb , the whole point of the bigger display to stream videos and movies, even on the higher plan, you watch 3 blue ray movies and is over.

posted on 13 Dec 2011, 14:58

9. networkdood (Posts: 6267; Member since: 31 Mar 2010)


Wouldn't the 4G LTE tablets get double the data?

posted on 13 Dec 2011, 16:13 1

11. iHateCrapple (Posts: 734; Member since: 12 Feb 2010)


Negative, only smartphones qualify for that promo.

posted on 13 Dec 2011, 01:00

3. speckledapple (Posts: 879; Member since: 29 Sep 2011)


i agree with the article. the problem with tablets in general and pretty much with tablets that were mainly android is because of the contract. Carriers were betting that more people will buy a tablet if it had all these oh so wonderful extras that we already get non our phones and have no need for non a tablet. The beauty of tablets should lie more in the ability to go anywhere with ANYONE not tied to one carrier. Its bad enough that everyone is getting LTE and none of them are even compatible with each other but then tablet high prices would only be culled by an attachment to a carrier? i dont think so. flexibility matters and it seems that so many companies still have not gotten that message. so again its not surprise that no one wants a tablet on another 2 year crappy agreement except whales.

posted on 13 Dec 2011, 08:23

4. remixfa (Posts: 13903; Member since: 19 Dec 2008)


id be dollars to doughnuts that the ipad sells more "3G" versions than any and all of the android tablets... probably combined. Not for some fanboy "there is only an ipad tablet" junk, but because most android phones come with the ability to wifi tether out of the box now (or with some quick modifications), negating any need for a carrier internet provided tablet.
If i can get a tablet for 450-500 (or less) subsidized without carrier interference and using my phone internet + wifi, why would I want a carrier subsidized tablet for 300-400 + monthly charges for internet?

Honestly, I think the carriers need to rethink their pricing structures to justify the 3G better. If i was to grab.. say.. an ipad for 500 with just Wifi, or 200 (screw rebates!!) with a 3g contract, that would be worth it. But instead i just went on to VZW's website, and instead of offering a fat discount for that $30 a month minimum 2 year contract, the 3g 16 gig ipad is still 629 while the wifi only version is 500 atwww.bestbuy.com

Granted many tablets are discounted for the contract, but not enough. They discount smartphones like crazy and those are the "primary use" devices. Tablets are toys.

posted on 13 Dec 2011, 10:11

5. axllebeer (Posts: 265; Member since: 05 Apr 2011)


Well all those problems were solved for me when I got my Blackberry Playbook. As the add says, powerful, portable, Playbook. I keep it bridged to my Blackberry phone and its in my pocket sharing my unlimited data plan while incurring no extra costs to me. Fits nicely in my jacket pocket and I can whip it out wherever and am always connected. It kills me that this device hasn't caught on better as I save $ every month by not paying for another data plan.

posted on 13 Dec 2011, 11:47 1

6. saiki4116 (Posts: 350; Member since: 31 Mar 2011)


"No one wants a tablet that's more than around $500,"

this is damn true...since they are essentially consumption devices and cannot have the functionality provided by a 800 to 1200 $ notebook..

posted on 13 Dec 2011, 12:28

7. downphoenix (Posts: 2302; Member since: 19 Jun 2010)


1) The tablets dont get enough of a discount. Usually there isnt any discount or its only a measly $200.

2) Why get a tablet data plan when you can enable a hotspot plan on your phone for about the same price usually, and use that data not just on your tablet but other devices too.

3) Tablets are still toys more or less. I dont think built in connectivity will be important until Tablets serve additional functionality that cant be gotten on a smartphone and that the functionality level is much more close to a laptop.

posted on 13 Dec 2011, 14:52

8. casbah70 (Posts: 16; Member since: 21 Jun 2011)


a tablet sold with a carrier contract should be CHEAPER that those without! Even an off-contract carrier enabled tablet should be CHEAPER. The carrier will make money every time I activate my account. I'm more likely to carry the account, if I get a better deal on the tablet. Otherwise, I'll buy off-carrier and will just tether my smartphone for $20.

posted on 13 Dec 2011, 15:28

10. iankellogg (Posts: 155; Member since: 15 Jun 2011)


Here is the problem with on contract tablets. They are the same price as the wifi version except you have a 2 year contract at $30+ a month.

posted on 13 Dec 2011, 21:33

12. farhan165 (Posts: 4; Member since: 22 Nov 2011)


In indonesia there a "operator" has Rp 99.000,- (indonesian doallar) get 5Giga quota per month, may be tablet contract in indonesia will explode and get much users.

posted on 15 Dec 2011, 13:26

13. bossmt_2 (Posts: 430; Member since: 13 Oct 2009)


I think that if your intention is to get a tablet with 3G/4G because you travel that contract is 100% the way to go. If your intention is to have a Tablet for at least 2 years and you're gonna use it on a road (say you're a traveling salesperson and you want to stay up on news while traveling, easier to carry than a laptop) then it makes sense, if you're intention is to have the dataplan and not to cancel your contract then it makes sense if you're gonna save 170 bucks. I do think though that tablets aren't cheap enough on contract though.At the very least it should be the same cost to buy a tablet on contract as it is to buy a similar tablet WiFi. So the 16 Gig Xyboard (worst device name) should be at least 500 on contract.

I do agree though that you have to have a WiFi tablet to be competitive. I wonder if instead of 3G/4G tablets verizon should make a USB attachment attachment they'll sell for free on contract that will make your WiFi Tablet 4G.

posted on 17 Dec 2011, 05:20

14. ocostich (Posts: 5; Member since: 23 Feb 2011)


If you have a smartphone with mobile hotspot capability, then you have the ability to use 3/4G with your tablet. My ASUS Transformer works great thsi way. Yes, it sucks the battery life out of the phone, but extra battery power is cheap compared to a data plan.

posted on 18 Dec 2011, 18:46

15. CRICKETownz (Posts: 980; Member since: 24 Oct 2009)


tablets don't sell well b/c the biggest idea around tablets are its a toy. i sell a good amount of android tablets b/c of the built in hotspot feature at no additional cost for those who choose a data plan. particularly the Galaxy 10.1 is the biggest seller...Motorola Xoom unfortunately we know how those didn't move until the Black Friday special. XY Board doesn't seem to be priced too high at $429 but again...the toy aspect is the biggest hurdle. the potential is there, but the average notebook user is usually not going to go for a tablet. i sell the most to Kindle & Nook users. we'll see what the future holds tho.

posted on 19 Dec 2011, 11:01

16. ocostich (Posts: 5; Member since: 23 Feb 2011)


"i sell a good amount of android tablets b/c of the built in hotspot feature at no additional cost for those who choose a data plan."

The data plan IS the additional cost. With Verizon, for example, it's $30 a month for 2 years or $720, more than the cost of the tablet.

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