Why Aren't There Subsidized Tablet Devices from Carriers?

When it comes to tablet devices, a common question arises: why don't U.S. cell phone carriers offer subsidized pricing for tablets like they do for smartphones? There are several reasons for this. However, it's worth noting that while not common, there are instances where tablet devices are indeed subsidized by carriers, such as the Motorola Xoom on Verizon.

do they need to?

Firstly, carriers do not need to offer subsidies for tablets because the current market dynamics are already favorable for their sale.

Ipad Sales Dominance

iPads, particularly, have been selling extremely well at their current prices. According to industry reports, iPad sales have dwarfed all potential competitors in the market. The success of iPads on their own merits makes it unnecessary for carriers to offer additional subsidies.

Data Contracts and Pricing Flexibility

Secondly, the data contracts for tablets are generally month-to-month, which provides flexibility for both carriers and consumers. Carriers have opted for a more balanced approach, making it less appealing to offer long-term subsidies that they would do for smartphones, which typically come with locked-in two-year contracts.

Why don't U.S. Cell Phone Carriers Offer Long-Term Data Contracts for iPads?

One might wonder if U.S. carriers don't offer long-term data contracts for iPads. This is a more interesting question, and the reasons behind it are complex.

A Balanced Market Strategy

Carriers such as ATT, T-Mobile, and Verizon may see no immediate benefit in providing long-term contracts for iPads because the market has already adapted to shorter term commitments. This does not mean, however, that they never offer subsidized options for tablets. The Motorola Xoom on Verizon is a prime example, where the device was sold at a discounted price with a 2-year contract.

Market Adaptation

Carriers have adapted their pricing models to align with consumer behavior. Consumers prefer devices that allow more flexibility and lower monthly spending, and tablets, while popular, have yet to reach a critical mass that warrants the same level of subsidy as smartphones do. As long-term subsidies for iPads are less common, this does not mean they are never offered; just that they are not the norm.

Case Study: Motorola Xoom on Verizon

To illustrate this point, let's take a closer look at the Motorola Xoom on Verizon. On a full retail price, the Xoom was listed at $799.99. However, with a 2-year contract, the price dropped to $599.99. Other tablets on Verizon and ATT follow a similar pricing model. It seems that T-Mobile also follows this model, but data from ATT is less available.

Conclusion

In summary, while there are rational market reasons for why carriers do not frequently offer long-term subsidies for iPads, there are instances where it has happened. The question boils down to balancing the market dynamics, consumer preferences, and the overall profitability of such a strategy. As technology and consumer habits continue to evolve, we may see changes in how carriers approach pricing and subsidies for tablets.

Do you have any questions about this topic? Feel free to comment below or reach out for more information.

Keywords: subsidized tablets, tablet pricing, carrier pricing models