Verizon, AT&T To Sell 4G iPad
Verizon Communications Inc. and AT&T Inc. will sell a version of the coming iPad that runs on their newest fourth-generation wireless networks, according to people familiar with the matter, as the battle to cash in on big investments in mobile broadband heats up.
Context & Ripple Effects
This extends a two-year courtship between Apple and Verizon: sources said back in January 2010 that Apple's tablet would ride Verizon's 3G network, and by early 2011 Verizon was lined up to sell an iPad connecting directly to its own network. The new wrinkle is that the coming iPad reportedly runs on fourth-generation networks from both Verizon and AT&T at once — and that the claim comes from people familiar with the matter rather than either company, so it remains unconfirmed.
The timing matters for the carriers' economics. AT&T has spent the past month repositioning after its failed T-Mobile takeover: it filed with the FCC in January to transfer the promised $1 billion in spectrum, restructured its smartphone data tiers effective January 22nd, and doubled its contract upgrade fee to $36 days before this report. A flagship LTE tablet is exactly the kind of traffic driver both carriers need to justify their broadband buildouts.
First-order effects
- Verizon and AT&T each gain a marquee device for their young 4G networks, giving them a premium hardware anchor for selling higher-priced data plans to tablet buyers.
- Apple widens its US distribution beyond the single-carrier arrangements of prior iPad generations, letting customers pick the network rather than the network constraining the device choice.
Second-order effects
- T-Mobile — freshly abandoned as an acquisition target and still without the iPhone or iPad — is positioned as the odd carrier out, echoing its February 2011 play of countering Verizon's Apple deal with its own Samsung Galaxy S 4G and G-Slate Honeycomb tablet.
- Sprint faces the same exclusion pressure, and any third-carrier iPad arrangement would likely surface through retail channels rather than carrier announcements.
Third-order effects
- If every major tablet generation ships across multiple carriers, US wireless competition shifts from exclusive-device lockups to whose LTE coverage and data pricing win the same device — pushing monetization onto plan structure, as AT&T's January tier changes already signal.
- With horizontal consolidation via M&A blocked by regulators, the carriers' remaining lever for recouping network investment is device-driven traffic growth, making premium tablets a recurring battleground each product cycle.
The trend: Tablets are becoming the flagship monetization vehicle for US carriers' 4G investments, with Apple's multi-carrier strategy eroding exclusive device deals.