Carriers are pitching tablets to be the next big growth engine, as nearly every Tier 1 operator has shown impressive postpaid tablet additions over the past few quarters.
To be sure, device financing has helped push more people onto tablets. The idea of adding $20 to $40 per month to their wireless bill is probably more palatable than plopping down $600 on a new iPad. Of course, operators are hoping those devices, with their large screens for optimal video viewing, will drive more data usage and at least for right now that appears to be what’s happening.
According to numbers from Strategy Analytics, tablets accounted for just .1 percent of carrier revenue and .7 percent of U.S. data traffic in 2010. Fast forward to last year, and tablets accounted for 2 percent of revenue and 9.6 percent of total traffic.
“They are certainly making a contribution,” said Philip Kendall of Strategy Analytics in emailed comments. “It does not flow through to revenue quite as much, but they are helping to lift top lines at carriers.”
While traffic generated by tablets may be picking up, a Jan. 5 Gartner report called for continued “slow” demand for new tablets in 2015, noting that the collapse of the tablet in 2014 was “alarming.” Gartner expects worldwide tablet sales will reach 233 million in 2015, an 8 percent increase over last year.
“In the last two years global sales of tablets were growing in double-digits,” Ranjit Atwal, research director at Gartner, said in a statement. “The steep drop can be explained by several factors. One is that the lifetime of tablets is being extended – they are shared out amongst family members and software upgrades, especially for iOS devices, keep the tablets current.”
I’m not exactly sure how this all pans out over the next five years in terms of tablets as the next big growth driver in wireless. That said, even with a drop in tablet sales, it appears like users will continue to chew through wireless data on their slates.
What do you think? Are tablets as big a deal for carrier balance sheets as they’ve been made out to be?