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AT&T, Sprint, Verizon Said to Plan Samsung Tablet to Rival IPad

AT&T, Sprint, Verizon Said to Plan Samsung Tablet
The Samsung Galaxy Tab has a 7-inch screen and is able to play high-definition videos. Photographer: Michele Tantussi/Bloomberg

Sept. 11 (Bloomberg) -- AT&T Inc., Sprint Nextel Corp. and Verizon Wireless plan to sell a tablet computer from Samsung Electronics Co. to rival the iPad, said three people familiar with the matter.

AT&T and Sprint plan to offer the device, called the Galaxy Tab, for less than Samsung’s wholesale price by bundling it with monthly wireless service contracts, two people said. Samsung, the world’s second-largest maker of mobile phones, is scheduled to announce the carriers’ support at a Sept. 16 event in New York, said the people said, who asked not to be named because the plans aren’t public.

Subsidies may help tablets such as the Galaxy stand out against Apple Inc.’s iPad, which starts at $499. Verizon Wireless hasn’t yet decided on such subsidies, said one person.

“The carrier-subsidized model would be very interesting,” said Ashok Kumar, an analyst at Rodman & Renshaw. “The market is going to be very crowded.”

Several companies including Hewlett-Packard Co. and LG Electronics Inc. are introducing tablet computers following the success of the iPad, a 9.7-inch touch-screen that acts as an e-reader, media player, word processor and calendar. The PCs access the Web through data plan contracts that represent the fastest-growing source of sales for the carriers.

Ashley Zandy, an AT&T spokeswoman; Cristi Allen, a Sprint spokeswoman; Jeffrey Nelson, a Verizon Wireless spokesman, and Ashley Lane, spokeswoman for Suwon, South Korea-based Samsung, declined to comment.

First in Europe

The Galaxy tablet goes on sale in Europe in October, before the U.S., and the company has plans for more of the devices next year, WP Hong, Samsung’s head of global planning, said at a electronics conference in Berlin this month.

The device, based on Google Inc.’s Android operating system, has a 7-inch screen and is able to play high-definition videos. The Galaxy has a global-positioning system, cameras on each side for video calling and acts as a mobile phone.

Research In Motion Ltd., the maker of BlackBerry smartphones, plans to introduce a tablet in November, people familiar with the plans have said. Motorola Inc., which makes Android-based smartphones, is also planning a tablet device for the holiday season, people familiar with the matter had said.

“I don’t think any of them are going to seriously challenge Apple for the lead over the holiday season at this point,” said Rhoda Alexander, an analyst at researcher iSuppli. “From a manufacturing standpoint, it would be a huge hurdle unless they’re going to start out of the gate at the volume that Apple is doing -- which would be risky at best.”

Apple, based in Cupertino, California, sold more than 3 million iPads in the first 80 days after it went on sale. To compete, tablet makers will have to offer something unique that the iPad doesn’t have, or cut their prices, Alexander said in an interview.

Verizon Communications Inc., which co-owns Verizon Wireless with Vodafone Group Plc, fell 2 cents to $30.82 yesterday in New York Stock Exchange composite trading. Dallas-based AT&T gained 2 cents to $27.83. Sprint, based in Overland Park, Kansas, climbed 5 cents to $4.45.

To contact the reporters on this story: Amy Thomson in New York at athomson6@bloomberg.net; Greg Bensinger in New York at gbensinger1@bloomberg.net

To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net

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