Light Reading

Tablets Grow Like 'OMG' in Q1

Sarah Thomas
5/1/2014
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Now that the big four US wireless operators have reported their first quarter earnings, it's clear there is a new star of the show: tablets.

In years past, tablets might have offered a bit of a numbers boost in the connected devices category, but consumers weren't opting for LTE connectivity for the most part. Some, like Sprint Corp. (NYSE: S), only offered WiFi tablets in stores for their customers.

That is all starting to change, helped by aggressive tablet data promotions, the move to data sharing plans, and the maturity of the tablet category, in general. For Verizon Wireless , they were a bright spot in a quarter that otherwise saw it lose its crown of most postpaid customer additions. And Sprint managed to add 516,000 tablets in the quarter, beating out AT&T Inc. (NYSE: T)'s 313,000 tablet sales. Combined, the three operators reached nearly 1.5 million in tablet sales. (See Verizon Loses Its Postpaid Net Add Crown, Sprint: LTE TDD Speed Boost Coming Soon, and AT&T Gets 81% of Subs Off Unlimited Data.)

No, not this kind of tablets.

For T-Mobile US Inc. , which began offering its customers the LTE version of the iPad for the same price as the WiFi version, along with 1.2 GB of monthly data free through the end of the year, it's just getting started in tablets. It sold 67,000 in the quarter, much less than its competitors. But, speaking on the carrier's first quarter earnings call, CEO John Legere called the early response to its tablet promotions "phenomenal, one of those 'oh my god' changes in growth that told us this was a space we can really play in." (See T-Mobile Drops LTE iPad Prices to WiFi Levels and T-Mobile Sacrifices Costs for Customers.)

That said, he wanted to clarify that the uncarrier's shift to tablets won't be "what you've seen so far," meaning a way to make up for smartphone declines. "We want to grow considerably in the phone business and in tablets," he said. "Watch this space for us, but not as a way to fill in a hole or back up the truck with cheap numbers."

T-Mobile is going to have to prove it can sustain its growth in tablets, just like the rest of its business, even after the year is up. The tablet trend will be an interesting one to keep an eye on. Has the device that no one actually really needs become one that people can't live without, even on the go? Or, are pricing promotions just making connectivity an easy upsell?

The answer will be up to the wireless operators to figure out over the next few quarters.

— Sarah Reedy, Senior Editor, Light Reading

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SarahReedy
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SarahReedy,
User Rank: Blogger
5/5/2014 | 12:02:20 PM
Re: still popular when free?
Good points, jabailo. I haven't used it as a remote, but it is a great second screen for TV viewing. And, for recipes. Okay, I guess I don't use my tablet that much, but I should start. It's a better screen than my phone, but I guess laziness is the main reason why I typically reach for my phone instead.
SarahReedy
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SarahReedy,
User Rank: Blogger
5/5/2014 | 12:00:50 PM
Re: still popular when free?
This isn't a growth spurt early in the life of tablets though (and actually tablet sales are slumping a bit over at Apple, as Mitch points). This growth spurt is a result of how tablets are being priced at operators, I think. A good lesson for the wearables category.
jabailo
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jabailo,
User Rank: Light Sabre
5/4/2014 | 4:02:53 PM
Re: still popular when free?
It's a device that finds uses.

For example, if you consume any type of social media, like Twitter or Facebook, you'll find it so much easier to reach for the tablet than cranking up the PC and yet, the bigger screen is more readable.   It's nice for informational web browsing.  Being able to call up a recipe and also take it into the kitchen without printing (in general, anything that you would print and carry with you, you can now bring up on a tablet, and take the tablet).

You will be frustrated and sent running back to the keyboard if you ever want to express a thought that is more than a quip or bonmot, although I'm getting better at creating complete paragraphs with it.

And, as mentioned, Chromecast is making it indespensible as a remote control device.  Also it's introduces a different gaming style than the controller/console/screen model, one where all three are combined in one and you can twist and turn the whole device to drive a car, or do battle, or do 1st-person gaming.  

That's really something.   With a 4G connection, there's location based gaming.  I tried one of those and while it wasn't more than a quarter-baked, I could see where it might lead eventually.

And while I prefer my Kindle e.Ink for reading, I can easily add the Kindle App and have a back lit reader for low light situations, plane travel and airports.  So here it takes a proprietary device and makes it generic.

 
kq4ym
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kq4ym,
User Rank: Light Sabre
5/4/2014 | 9:06:01 AM
Re: still popular when free?
I still haven't caught on the why I need a tablet. Other than some convenience when traveling, I still haven't used them much. But any gadget is going to see growth in sales and use at least for a time. Who knows, maybe the next growth spurt will be the wearables market as we get our data fixes from glasses or watches?
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
5/2/2014 | 4:03:42 PM
Re: still popular when free?
My iPad is a workhorse for me when I travel for business. I leave the laptop in the hotel room and use the iPad with a keyboard for most computing. 

I was reluctant to get the LTE option, thinking I'd have WiFi access everywhere I needed connectivity. But when I got the LTE, I was glad I did. It's not that expensive and so much more convenient when just connecting for a few minutes in an airport or a hotel lobby. 

And these Q1 results for carriers are particularly interesting in light of iPad sales slumping for Apple. 
SarahReedy
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SarahReedy,
User Rank: Blogger
5/2/2014 | 1:00:45 PM
Re: still popular when free?
I'm the same way. I never take my own on the go with me. Would love to use it when I commute, but I worry it would get stolen. I really only use it on airplanes and for FaceTime when I travel internationally, but my fiance and parents use their's all the time. I think it's a case-by-case basis, but a lot of people will want to give themselves the freedom to use it whenever and however, so will buy the LTE version when the price is neglible, as T-Mobile has made it. If you aren't required to use the data, there's no downside.
jabailo
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jabailo,
User Rank: Light Sabre
5/2/2014 | 12:51:32 PM
Re: still popular when free?
In the past year, after declaring for a long time I needed a keyboard or nothing, I bought a cheap Ideatab and have used the heck out it ever since.

Howeer, I rarely take it outdoors.  Inside, I use it to quickly browse sites like Facebook, but with Chromecast it's now become my Universal Remote because I use it to "cast" video entertainment from Netflix and YouTube and also music streams from Rhapsody and Pandora to my LCD/Soundbar set up.

That said, the traditional tablet still seems a bit rarified perhaps because I don't own an "always connected" version (though, I could carry around a Clear hotspot).  I hardly ever take it outdoors, not only because of limited Wifi but also because they don't make screens that work in sunlight. (For this reason, I've stuck with the Kindle e.Ink which is not only a tremendous bargain, but also works even better in bright sunlight and has a battery that lasts for one or two weeks!)  Having one with built in LTE sounds like a solution, but does it raise the costs too high?  


I have long felt we're entering what I've termed the Pocket Calculator era for computers, where people expect to be able to grab and go, just like taking a legal pad from the office supply room.  I want to be able to leave my tablet on the plane, or have it stolen, and go to office depot and get another for under $100.   Do these higher priced, but always wired tablets fit the bill?

 
SarahReedy
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SarahReedy,
User Rank: Blogger
5/1/2014 | 5:49:09 PM
still popular when free?
T-Mobile's growth is impressive starting from a base of zero, but it still has a long ways to go to catch up to its peers. When the free data runs out is when things will get interesting. Is that a promotion it can renew?
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