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.)
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