Nerd Fight: Will tablets with only Wi-Fi go away soon?
[We don't always agree with each other at TechHive. In fact, some times we can't believe that our colleagues are thinking and saying such ridiculous things. In our Nerd Fight series, two TechHive editors square off on opposite sides of a burning tech topic. We don't just agree to disagree, but we do so disagreeably.]
Are the days of the Wi-Fi-only tablet numbered? AT&T certainly seems to think so. Speaking to reporters at last week's CTIA wireless trade show, AT&T president of emerging devices Glenn Lurie noted the strong sales of cellular-equipped tablets and outlined a future where the ability to connect to an LTE or 4G network is a standard feature. "All devices should have all capabilities built in from the beginning," said Lurie, pointing out that the cost of including a 3G HSPA+ radio comes in at around $30 on an average these days. With that cost falling, device makers will have less incentive to build Wi-Fi-only models.
Those are fighting words to Philip Michaels, who thinks that there will always be enough demand for a Wi-Fi-only tablet to justify making them, no matter what AT&T insists. Jason Cross thinks Michaels is stuck in 2010. Let's find out who's right.
Michaels: Far be it from me to question AT&T's market savvy—or to suggest that it has ulterior motives for wanting to see cellular-equipped tablets push out their Wi-Fi-only counterparts—but I think that's a classic misread of what people actually want out of a tablet. Sure, there's a segment of users who are going to want to be able to get connected anywhere, at any time, just as there's a segment of users who will be perfectly happy to rely solely on Wi-Fi for connectivity.
Cross: Well obviously the head of AT&T sees things through a cellular-connected lens. And frankly, I don't know where he's getting his numbers. The cost of adding LTE is closer to $40 than $70.
That said, I always used to get just the Wi-Fi model, but on the new iPad I got the LTE one. "Just in case," I told myself, and so I could have a good hotspot when I travel for work. I find myself using the cell connection all the time. Which is not what I expected.
Michaels: Well, I'm happy that's worked out for you. But you're at the cutting edge of technology. There are other types of tablet users who couldn't conceive of adding cellular connectivity, even in a "just in case" scenario.
Take my mother, who essentially uses her iPad as a stand-in for her computer. She's happy to use it in the living room where she can connect to her home network. The thought of having to manage a wireless data plan—even a pay-as-you-go plan—would fill her head with bees. 3G, LTE, 4G—that's something she doesn't care about. And while I wouldn't argue she's representative of all tablet users, I think she makes up a healthy enough chunk of the market that tablet makers are not going to want to ignore.
Cross: My mom didn't want to have anything to do with smartphones either... until she got one. Now she loves it.
The thing is, it's not going to be a cost-saver to skip cellular pretty soon. Nvidia is integrating a cellular radio into a Tegra product early next year. Intel also has that on its roadmap, and so do others. So if you're a tablet maker, you can put cellular in there for the same cost as Wi-Fi, and make all the carriers want to sell your tablet. Who's not going to do that?
Michaels: Well, the "if" is the big factor there. For the time being, I would think that there still is some cost involved. And if you're a tablet maker and your headquarters don't happen to be in Cupertino, you're looking for every possible avenue to make your product more attractive than the iPad. One way to do that? Price. And cutting out a cellular radio remains, at this point, another expense you don't have to include, especially if it's not a feature that people are clamoring for.
But let's say that this world where cellular-enabled tablets aren't any more expensive to produce than Wi-Fi-only models comes to pass.
Cross: It will. It's 18 months away or so.
Michaels: Tablets with cellular connectivity as a standard feature may not have added production costs. But there are added costs for users, in the form of data plans. Even with quit-at-any-time, no-commitment plans, that's an added cost on top of what you're paying for the tablet. And I think it adds a level of complication to buying a tablet that some people just don't want to consider.
Cross: Spoken like someone who's used to seeing the world from within the Apple bubble! Most people buy most of their mobile tech from carrier stores and carrier-affiliated big box stores. And while Apple doesn't do this, the hot new thing on laptops with cellular are true "pay what you need" plans. You don't sign up and cancel at any time. You say, "I need one hour, here's $2," and that's the end of it.
The real hockey-stick in tablet adoption is going to come when tablets are front-end subsidized the way cell phones are. Even most iPhones are sold that way. Apple's the overwhelming winner in tablets today, but it's going to have to get on board with subsidized tablets eventually, when all the other tablets appear $300 cheaper because they're carrier-subsidized. Which, by the way, I think is usually a crappy deal. But customers eat it up. I'm not sure that making tablets as "complicated" as a cell phone is really going to be off-putting to customers.
Michaels: I think the mistake may be in thinking of tablets in the same vein as smartphones. Sure, they're interchangeable to some people. But to others, a tablet is more like a computer stand-in. You don't have to futz around with data plans and such with your computer (networking cards excepted, of course). So why would you want that for the device that's a stand-in for your computer?
Cross: Don't tell Apple that! Tablets and computers aren't supposed to converge.
Michaels: I'm sure Tim Cook will come to grips with that. And I wouldn't say "converge," so much as I would say "replace." And perhaps I'm not typical either, but I glory in the knowledge that when I'm using my Wi-Fi-only iPad, I'm not having to pay a dime to AT&T.
Cross: And again, that's the Apple-centric view. MacBooks don't have cellular connectivity. But plenty of PC laptops do, and the number is growing. You're kinda making my point for me. More and more, computers are almost worthless when they're not connected to the Internet. The ability to do that all the time is going to become mandatory.
I'm not hot on the idea of AT&T or Verizon screwing me over on Yet Another Device, either. But the mass market seems to think the price subsidy is totally worth it.
Michaels: The majority of the mass market, I'll grant you. But I think there's a healthy enough percentage of the market that's perfectly happy with Wi-Fi-only devices. And I don't see sensible device makers shutting out that part of the market any time soon.
Cross: When the extra cost approaches zero, and the lure of getting carriers to sell your devices looms, device makers are absolutely going to cut out the Wi-Fi only people. They'll sell consumers a cellular enabled device and leave them to just never activate it. The promise of vastly greater points of sale and low advertised sticker prices is too great not to. By holiday 2013, Wi-Fi only tablets will be rare, and Wi-Fi only dudes like you will be cranky dinosaurs, telling the kids to get off your lawn.
Michaels: I like my lawn the way it is, thank you very much.
Which side of the Nerd Fight are you on? Will tablets with only Wi-Fi continue to exist for years, or will nearly every tablet integrate Wi-Fi and cellular within the next year or two? Leave your thoughts in the comments.