Already strained, AT&T soon to be coping with iPad | Reuters
By Sinead Carew
NEW YORK, April 5 (Reuters) – If you worry that Apple Inc’s (AAPL.O) newiPad will slow down Web surfing on AT&T Inc’s (T.N) mobile network or cause even more dropped cellphone calls, analysts say you should rest easy.
Later this month, Apple will introduce a version of the iPad tablet computer that can surf the Web on the go using AT&T’s third generation (3G) mobile network. The current iPad, which went on sale this weekend and drew big crowds, works only on short range Wi-Fi connections like those found in cafes [ID:nSGE6340DJ].
Some fear that should the 3G version of the iPad prove a blockbuster hit, it could test AT&T’s network, already under severe strain in some markets from heavy iPhone Web usage. AT&T has said it is now investing heavily to upgrade its network.
The theory is that thousands of new iPad users could spend even more time than iPhone users downloading movies, buying books, or just surfing the Web on AT&T’s 3G network.
But several analysts said worries were overblown, even after a strong debut by the first iPad model [ID:nSGE6340DJ]. More than 300,000 of them sold on Saturday, surpassing some forecasts.
“There’s a lot of worry and it makes for good reading to say it will have an impact. But I think not,” said UBS analyst John Hodulik, who expects sales of iPad 3G to be less than half the sales of the first version of the device.
The main reason is money, with Apple charging $630 for the iPad that allows access to both 3G and Wi-Fi. That is $130 more than the first Wi-Fi only model.
And because the iPad is much bigger than a cellphone, consumers will not carry it everywhere they go, unlike iPhone. This means less demand for AT&T. Even its chief executive predicted more Wi-Fi iPad use than 3G use [ID:nN02183567].
NPD analyst Ross Rubin sees iPad buyers using 3G mostly as a back-up when they are traveling out of town.
“It certainly doesn’t fit in your pocket,” Rubin said.
Stifel Nicolaus analyst Christopher King said it was too soon to tell how many people would buy the 3G iPad and how they would use it. But he sees most users sporadically downloading data to the device, much as they use the Kindle e-book reader from Amazon.com.
“I don’t think its going to be a big issue for AT&T,” he said.
What is more, Hodulik expects that iPhone sales will begin to tail off over the first half of this year, since consumers who do not already have an iPhone will likely wait for a new Apple phone expected this summer. The result would be fewer new users for AT&T’s network.
Hodulik also pointed to AT&T’s public commitment to increase its capital spending by $2 billion this year in an effort to improve its network performance.
“While this is all going on, AT&T has made a significant increase in the amount it’s investing in its network,” he said. (Reporting by Sinead Carew; editing by Paul Thomasch and Gerald E. McCormick)
I’ve seen many folks complaining about iPhone. In fact most of the complaints are more related to ATT network rather than phone itself. Like dropped call, weak antenna signal, slow internet, etc. This trend will definitely get worse with 3G iPad coming along. People will carry iPad in their backpack or laptop bag and will use 3G network as they use for iPhone. iPad replace ebook market? then cannot rely on wi fi only. Combination of Wimax would be ultimate solution to voice and data dumping on 3G network. Why people doesn’t use data has to suffer poor voice quality with the same price??