By Michael Fisher | March 1, 2012 3:50 AM
If you’re like me -and our traffic analysis tells me most of you are- you probably like visiting wireless carriers’ retail stores
every other day from time to time, to see what’s new. For me, carrier stores rank up there with giants like Best Buy as a critical refuge for geeks dragged along on shopping trips with a significant other or family member. Recently, I was killing time at a Verizon Wireless store and came across a familiar sight: the desolate wasteland that is the tablet section.
Most carrier stores now feature such a barren dead-zone, a wall section hastily carved out to accommodate last year’s massive influx of 3G-enabled slates the wireless carriers couldn’t wait to slap 2-year contracts on. A typical scene features Galaxy Tabs and Xyboards being idly toyed with, distracted customers swiping between homescreens haphazardly littered with redundant widgets. Maybe a keyboard dock is fumbled with for a minute or two. One of the iPads is being used by a 14-year-old to check Facebook. The air is thick with the quiet complacency of unimpressed consumers.
All right, it’s not always so depressing. I’m sure some locations can’t keep tablets on the shelves; I’ve just never seen them. Barring a few flurries of excitement in AT&T locations following the launch of the iPad2, the typical scene I encounter in carrier stores’ tablet sections is the one I described. And every time I visit them, I have the same thought: Why would anyone in his right mind buy a 3G-enabled tablet?
I have Mobile Hotspot capability on my phone. Most of you do as well, and most of the smartphone-carrying public does (whether they know it or not). I can fire up an app and sprout a spherical cloud of internet-enabled goodness almost anywhere I go, and I can use any of my WiFi-enabled devices within it. Why would I pay more money for a tablet with a separate data plan, accompanied by a separate monthly bill, and -depending on the device- a separate contract?
So I did some research into the racket of the data-enabled tablet. Spoiler Alert: I didn’t get the answers I expected. Check out how the numbers flipped the script on me, below.
(Note: this informal “study” was done with the average consumer in mind. I’ve never questioned the utility of data-enabled tablets in specialized fields, or in situations where the tablet is the primary computer in a household without internet access.)
Running the Numbers
In my quest to discredit tablet data plans, I called upon my vast experience in mathematics. When said vast experience didn’t take my call, having never existed in the first place, I broke out a calculator and started doing some comparisons.
For my hypothetical situation, let’s assume we’re in the market for a 16GB iPad2 we want to use on the go in the United States, and we have a choice between Verizon Wireless and AT&T. These options were chosen for simplicity’s sake; your mileage may vary on other carriers or with other devices. That said, the simple comparison we use below can be adapted to your situation if you happen to reside elsewhere, or if you’re a US resident who uses T-Mobile or Sprint.
Let’s further assume that we own a high-end smartphone with mobile hotspot capability. We’re faced with a choice, then: buy a 3G-enabled iPad and an accompanying data plan, or add tethering to our phone plan and save some money on the cheaper WiFi-only iPad.
My expectation when I kicked off this article was that the hotspot route was the clear winner in terms of cost. I thought I’d been sneaking under the radar all this time, deftly evading the money-grubbing carriers as I sat smugly sipping Starbucks, snidely snickering at the poor chump who’d overpaid for his black-striped 3G iPad. “No, I have the WiFi-only model,” I’d say. Before his face could fall into a sympathetic mask of pity, though, I’d follow up with: “I make my own internet,” gesturing to my Galaxy Nexus with not a little condescension. Then I’d say something like “boom.”
Yeah so, two things: 1) I’m petty sometimes, and 2) I’m the chump. Yeah; I’m actually spending more than Starbucks Stanley. Peep this:
For a data-only iPad plan, the cheapest useful (2+ GB) rate you’ll find on either Verizon or AT&T is $30 per month. Even though these plans carry no commitment, it’s instructive to visualize that cost over two years, which is $720.
Saving some coin upfront and opting for the WiFi-only iPad instead means you’ll have to attach tethering to your phone plan in order to attain the portability you’re looking for. The cheapest such option for either Verizon or AT&T is $50 per month. Minus the $130 you saved on the WiFi-only iPad, you’re looking at a $350 price difference over two years.
In short: with the mobile-hotspot approach, you’re paying 48% more for the privilege of carrying a less-capable (non-cellular) tablet.
This, of course, begs the question “why?” Why are carriers charging customers more to use a mobile hotspot feature than consuming the same amount of data via tablet? The cynic in me speculates that it’s motivated by the desire to bump customer counts: adding a tablet plan qualifies as a subscriber addition, while a tethering add-on doesn’t. Carriers are still very interested in competing on subscriber numbers, so it stands to reason that they’d take a hit on revenue in order to entice more users to “add a line” for a tablet.
The more-reasonable side of me says what the carriers say: a mobile hotspot feature can provide connectivity for more than just tablets, and can do so for many devices at once. Thus, it makes sense to charge a higher monthly rate for a more-versatile service.
Of course, it’s all the same data pipe anyway, and I should be able to use it how I’d like … but I digress.
Six of one
We used a lot of conventions above to simplify the comparison shopping. In reality, neither of the options in our scenario, iPad data plans nor mobile-hotspot add-ons, currently require a two-year term. We’re just used to looking at costs that way because of the mobile industry’s affinity for contracts of that length. But viewed through that lens, if we boil down the math to a monthly perspective, the difference between the 3G iPad and the mobile-hotspot approach is $14 per month.
(Warning: sales-rep Jedi mind tricks ahead.)
That’s a difference in price of $3.50 a week. 46 cents per day. Taking into account the leap year, that means you’d have spent 48 fewer or 48 more cents today, depending on the connectivity option you chose.
In short: it doesn’t matter. Pick which option is best for your needs. Some people aren’t willing to endure the hit to battery life that use of a mobile hotspot entails; others might not be able to afford a more costly 3G iPad now, but can bear the cost of a tethering plan when parceled out over a long period. Still others would opt for the additional features that most cellular tablets provide, like integrated GPS. Different strokes for different folks. If a $14-per-month price difference is enough to give you pause, you probably shouldn’t be in the market for a tablet anyway. And that’s okay.
That’s what phablets are for, right?