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Wi-Fi beats cellular for tablet connections

The NPD Group's Connected Intelligence

Wireless carriers may be pricing themselves out of the tablet market; a new study shows that more tablet owners are choosing to use Wi-Fi only connections instead of cellular for their devices.

“There are multiple reasons for greater Wi-Fi reliance,” said Eddie Hold, vice president of Connected Intelligence, a part of The NPD Group. “Concern over the high cost of cellular data plans is certainly an issue, but more consumers are finding that Wi-Fi is available in the majority of locations where they use their tablets, providing them ‘good enough’ connectivity. In addition, the vast majority of tablet users already own a smartphone, which fulfills the ‘must have’ connectivity need.”

Take the iPad, for example; AT&T's data plan for it is $14.99 for 250 MB of data a month, or $25 a month for 2 GB of data. Verizon Wireless charges $30 for 2 GB a month, $50 for 5 GB; and $80 for 10 GB. To boot, a Wi-Fi-only iPad, with 16 GB, costs $499, compared to $629 for a model that also has a cellular chip in it. The same is true for other tablets that come in both Wi-Fi and Wi-Fi/cellular combinations; there's a premium to be paid for having both.

For most people, getting a tablet with both Wi-Fi and cellular connectivity doesn't make sense, especially if they're using the tablet around the house where they already have Wi-Fi or in other spots that do.

(But: If you're out holiday shopping, and want to buy an iPad or other tablet for someone who isn't familiar with Wi-Fi or doesn't have it at the ready, getting the cellular option certainly makes sense.)

Connected Intelligence's stats tell part of the story:  In April, 60 percent of tablet users only connected via Wi-Fi, "but 5 percent of them said they planned to purchase mobile broadband plans within the next six months.  However, fast forward six months, and the Wi-Fi-only connection base has grown to 65 percent of tablet users, at the expense of cellular connectivity."

There are also many other tablets, aside from the iPad, coming onto the market that don't come with the cellular option, the firm says, and the big one, of course, is Amazon's Wi-Fi only Kindle Fire.

"While many early adopters opted for tablets with embedded cellular — primarily as a 'future proof' play — mainstream consumers are more likely to choose a lower price point and forgo the promise of constant connectivity," Connected Intelligence said.

“There is a relatively low mobile connection rate for tablet users today in light of the fact that these were early adopters, and therefore less price conscious than the mainstream,” stated Hold. “If there is not an ongoing need for these early adopters to be always-on, then the carriers clearly face challenges with the larger consumer audience moving forward.”

That's a certainty. Public Wi-Fi hotspots are expected to quadruple to 5.8 million by 2015, a recent study said. And by then, few of us will be looking to further glom up cellular networks with tablet activity.

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