Verizon Drops Galaxy Tab Price to $499, Tosses in $60 in Free Movie Rentals (Updated)
Is Verizon ringing in the New Year with a price drop to its Samsung Galaxy Tab (our review)? According to one of our peeps and that picture above, stores should be changing out displays to reflect a $499 price change …
Context & Ripple Effects
Samsung spread the Galaxy Tab across every major US carrier in late 2010, but Verizon's version drew fire almost immediately — a November Mobile Gadgeteer post called out how the carrier mishandled the Tab's pricing and policy. T-Mobile had already put the same device on shelves at $400 on contract, leaving Verizon's tab the most expensive way to buy Samsung's 7-inch slate.
The reported cut to $499, paired with a rumored $60 in free movie rentals, reads as Verizon correcting that positioning ahead of two threats: Apple's iPad and the Motorola Xoom Android tablet Electronista says the move is meant to counter. It also extends a familiar Verizon pattern — the carrier pulled nearly its whole smartphone lineup below $99 back in August 2009 when competitive pressure demanded it.
First-order effects
- Shoppers at Verizon stores would pay roughly $100 less than the Tab's earlier sticker, with an unconfirmed $60 movie-rental credit sweetening the bundle at launch.
- Verizon repositions the Tab from premium-priced curiosity to a credible iPad alternative heading into the Xoom launch window.
Second-order effects
- Rival carriers stocking the identical Samsung hardware face pressure to match the $499 level or invent their own content bundles, eroding whatever margin premium the Tab carried at launch.
- Content partners gain a new lever: rental credits attached to hardware purchases turn media catalogs into a carrier differentiator alongside network and price.
Third-order effects
- If the pattern holds, Android tablets inherit the carrier smartphone playbook wholesale — subsidized hardware, periodic aggressive repricing, and promotional bundles — compressing tablet pricing toward a sub-$500 floor set by whichever carrier moves first.
- Tablet value migrates from the device itself to the attached services (connectivity plans, content credits), giving carriers and media partners more say in which slates succeed than spec sheets alone would suggest.
The trend: Android tablets are being pulled into the carrier-driven discounting and bundling cycle that reshaped smartphone pricing, with each carrier's cuts resetting the competitive floor.