Samsung Tablet Prices Cut Again in Rising Challenge to IPad
The Tab, made by Samsung Electronics Co., now costs $199.99 with a two-year wireless-service contract, according to the carriers’ websites. In January, Sprint cut the price to $299.99, while Verizon reduced the price to $499.99.
Carriers are lowering the prices for tablets that connect to the Web using mobile-phone networks to earn data revenue and compete against Wi-Fi tablets which are available without monthly contracts. The cheapest iPad 2, which has Wi-Fi only, is priced at $499.
“If you’re a tablet vendor, you have to incentivize the carrier to make shelf space for it, and the carrier wants to sell two-year contracts,” said Tavis McCourt, an analyst at Morgan Keegan & Co. in Nashville, Tennessee.
Sprint, the third-largest U.S. wireless carrier, reduced its price for the Galaxy Tab at the beginning of this month, said Mark Elliott, a spokesman. Verizon Wireless, the biggest mobile carrier, cut its prices last month, said Brenda Raney, a spokeswoman for the Basking Ridge, New Jersey-based company.
Dallas-based AT&T Inc. (T), the No. 2 carrier, has held the price for the Tab at $549.99 after slashing it by $100 earlier this year.
Wi-Fi Ultimately Cheaper
While tablets that can connect to mobile-phone networks give the users Internet access in a wider area than Wi-Fi-only tablets, they also require a data-service contract, making them more expensive ultimately, McCourt said. Still, the lower initial price and carrier promotion will help boost demand for the devices, he said.
Wi-Fi tablets connect to the Web using so-called hotspots available in libraries, bars, hotels and users’ homes.
“As tablets go from being early adopter to mass-market, and the total two-year cost to the consumer becomes more and more important, the Wi-Fi versions are far more cost effective,” McCourt said.
The iPad 2, which has a larger screen than the Galaxy Tab, is also available as a version that can connect to mobile-phone networks. That version starts at $629.
Sprint, based in Overland Park, Kansas, rose 9 cents, or 2 percent, to $4.64 at 4 p.m. in New York Stock Exchange composite trading. Verizon Communications Inc. (VZ), which co-owns the wireless company with Vodafone Group Plc (VOD), fell 4 cents to $37.85. Samsung fell 2.3 percent to 923,000 won at close of trading in Seoul.
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