Sprint’s price undercuts a rival, but forces users into a two-year contract
Sprint has become the second of four carriers to announce its plans and pricing for Samsung’s alternative to Apple’s iPad, the Galaxy Tab. The unit will be available from Nov. 14.
According to a statement from the carrier, the tablet PC will be sold to Sprint customers for US$399.99 up front with a two-year contract. Users will then choose to pay either $29.99 per month with a 2GB data plan or $59.99 per month for a 5GB data plan; both come with unlimited messaging.
Rival carrier Verizon is charging users $600 up front for the Samsung Tab but will not force users into a contract. Its 3G data plans start at $20 per month for 1GB. AT&T and T-Mobile have not released their Galaxy Tab pricing to the public.
Analyst Roger Kay said most users would be attracted by the lower unit price offered by Sprint. The Samsung Tab gives the carrier a good alternative to the Apple iPad, which is not available to its customers, added Kay, president of Endpoint Technologies Associates.
“To consumers, opening price points are very important,” he said. “To be able to say $399 is really good. The fact that there’s a little asterisk that says ‘with a two-year contract’ will cause some people to balk, but most people are used to them with phones.
“Apple did everything they could to tout the $499 price point. … If you actually want the full experience you could be out $800-900. But it was the $499 number that stuck in people’s head.”
Kay said that Samsung’s distribution deal with AT&T and Verizon meant the vendor already had excellent market coverage without Sprint and T-Mobile. But he said the vendor would be satisfied if the junior partners could sell units.
“They probably didn’t need Sprint,” he said. “Samsung is a first-rank device maker and Sprint is probably a second-rate carrier. … “At the moment Sprint doesn’t have a relationship with Apple and I think that the also-rans are banding together trying to build up their strengths and it’s probably a good strategy. … They don’t really have any alternative because if they don’t offer something they risk being left behind entirely.”
The analyst also claimed Samsung’s Tab was a better product for consumers than HP’s Slate 500.
“It’s better, but then it’s aimed at different markets,” he said. “HP is aiming at corporates and it has Windows and it’s got Windows’ manageability for corporate IT, which is a good reason to charge $800 for it.
“But in terms of the targeting, [the Sprint Samsung Galaxy Tab] is better. It has a very attractive opening price point with 3G communications already built in, with a contract pricing that isn’t terrible.”
