AT&T Says $1,000 Tablets Might Make Laptops Obsolete

AT&T Inc.’s emerging devices president, who oversees the carrier’s relationship with Apple Inc., said tablet computers costing as much as $1,000 might soon make many laptops obsolete.

“You’re going to see those 10-inch pieces of glass become full-on computers,” Glenn Lurie said in an interview this month in Atlanta. He said he expected there to be a variety of tablet computers costing $300 to $1,000 in the next five years. The Apple iPad ranges in price from $499 to $829.

AT&T may draw more revenue by compelling new and existing customers to buy tablet computers that will complement their smartphones. The carrier is the exclusive data-service provider for the iPad, which has sold more than 3 million units since its April 3 introduction.

Sales of tablet devices probably will grow to 23 percent of the U.S. computer market by 2015, from about 6 percent this year and less than 1 percent in 2009, said Sarah Rotman Epps, an analyst at Forrester Research Inc. in Cambridge, Massachusetts.

“Starting in 2012, tablets will outsell netbooks, and by 2014, more consumers will use tablets than will use netbooks,” Epps, referring to the smaller, less-powerful laptop-style computers, said in a report this month.

Forms and Functions

The range of tablets is already growing this year. Research In Motion Ltd. is planning to introduce in November a tablet computer with a 9.7-inch screen and Wi-Fi capability, according to two people familiar with the company’s plans. Verizon Wireless and Google Inc. have discussed a tablet that would run on Android software, and Dell Inc. released its $299.99 Streak 5-inch tablet this month.

“There’s going to be a huge number of tablets, different sizes, different functions,” Ralph de la Vega, chief executive officer of AT&T mobility, said in an interview in Atlanta. He declined to say whether AT&T would offer the planned Research In Motion device on its network.

De la Vega said he expects sales to surge among business customers in part because tablets will be designed to connect to multiple devices, such as keyboards and cameras, that support their needs.

Lurie said the ultimate loss of AT&T’s exclusive contract to offer the iPhone in the U.S. wouldn’t significantly affect sales. “We’re still going to be plugging along with the kind of rates we’re doing now and the kind of success we’re having today,” he said, declining to specify when the contract with Apple ends.

Exclusive Contracts

Verizon Wireless, co-owned by Verizon Communications Inc. and Vodafone Group Plc, may offer the iPhone on its network as soon as January, two people familiar with the plans said in June.

AT&T will continue entering into exclusive contracts to lure customers with certain devices, such as RIM’s BlackBerry Torch, de la Vega said. The smartphone went on sale Aug. 12.

AT&T, based in Dallas, gained 8 cents to $26.80 at 2:32 p.m. in New York Stock Exchange composite trading. The shares had lost 4.7 percent this year before today.

To contact the reporter on this story: Greg Bensinger in New York at gbensinger1@bloomberg.net

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