Mobile service providers are reworking charges for wireless connections on tablet computers to lure in customers put off by costly fees. Carriers see tablets like Apple Inc's iPad as key to revenue growth. But high prices for the devices and more fees on top of phone plans are seen pushing consumers to bypass the cellular network and rely on free Wi-Fi services.
This is expected to result in a drop in the percentage of tablets supporting cellular, potentially making operators less relevant as tablet distributors than electronics stores.
'The tablet's more natural point of sale is retail,' Nvidia Chief Executive Jen-Hsun Huang told the Reuters Global Technology Summit this week. 'The question is whether carriers will find a reason to bundle tablets with other services and create a subsidy model that is really appealing.'
Today, carriers limit cellular Web use on tablets by charging for each gigabyte (GB) of data downloaded. For example, Verizon Wireless charges $20 per gigabyte and AT&T Inc charges $25 for two. Sprint Nextel subsidizes tablets but charges more per gigabyte and requires long-term contracts.
Such arrangements will gradually result in more consumers opting for Wi-Fi-only tablets, according to iSuppli, which sees sales of tablets with cellular connections falling as low as 30 per cent of the total in 2015 from about 60 per cent in 2010.
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