October 26, 2010 Leave a comment
By ROGER CHENG, WSJ.COM
Sprint Nextel Corp. said it plans to sell Samsung Electronics Co. Ltd.’s Galaxy Tab tablet computer for a third less than Verizon Wireless.
Several major news organizations are lining up behind a new tablet device from Samsung Electronics Co. built on Google Inc. software, in order to broaden mobile readership beyond owners of Apple Inc. popular iPad. Jessica Vascellaro reports.
Sprint will sell the device for $399.99 in exchange for a two-year commitment to a data service plan. Sprint will begin selling the Galaxy Tab on Nov. 14, three days after Verizon Wireless.
Verizon Wireless said last week it would sell the device for $599.99, but offered a prepaid data plan without the requirement for a contract. Sprint will also offer the tablet for $599.99 without a contract.
For any mobile product, getting the proper marketing and subsidy support from a carrier is crucial to a successful launch. A subsidized device can dull much of the sticker shock that comes from seeing the actual retail prices. Carriers are willing to offer a discount because they can lock customers into multi-year service agreements.
Verizon Wireless’s decision to sell the product without a subsidy had some industry analysts speculating that it wouldn’t fare well against the iPad, which the carrier also plans to sell for as little as $629.99.
Consumers who buy the Galaxy Tab from Sprint have to sign up for a monthly $29.99 plan that includes two gigabytes of data, or a higher end $59.99 plan with a limit of five gigabytes of data.
For consumers who don’t want to sign up for a contract, Sprint customers can pay $29.99 each month for 2 gigabytes of data. Verizon Wireless, in comparison, offers 1 gigabyte of data a month for $20.
Sprint plans to support the device a marketing campaign to promote the new category of tablets, according to David Owens, who is runs the carrier’s marketing for product launches. “It’ll be a substantial campaign and an important part of our holiday theme,” he said in an interview, but the effort wouldn’t be as strong as its marketing for flagship smartphones, such as its Evo 4G.
Samsung’s Galaxy Tab is the electronic makers’ big push in the mobile business for the holiday season. Having launched its Galaxy S line of phones on all of the major U.S. carriers, it has followed up with the Galaxy Tab. AT&T Inc. and T-Mobile USA, a unit of Deutsche Telekom AG, are expected to sell the tablet as well but haven’t yet announced pricing.
Samsung’s entry into the market represents a chance to make up for lost ground. Product executive Hankil Yoon has said he expects the Galaxy Tab to ship 10 million units and take a third of the global tablet market this year.
The Galaxy Tab is the latest product to attempt to tap into the explosive growth of the tablet market, first sparked by Apple Inc.’s iPad. Many device makers, such as BlackBerry maker Research In Motion Ltd. and Hewlett-Packard Co., have recently announced tablets to rival Apple’s popular product.
The Galaxy Tab runs on Google Inc.’s Android software. It’s smaller than the iPad, which has a 9.7-inch screen. Unlike Apple’s device, it supports Adobe Flash, enabling it to show more video found on the Internet. It has a camera on each side and a slot for expandable memory, among other features.