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Is the New iPad Hiding a Major Design Flaw?

Apple's newest tablet allegedly causes rapid data-limit burnout


Apple‘s (NASDAQ:AAPL) new iPad has been an unprecedented success, with the next-gen tablet selling upwards of 3 million units over its debut weekend and driving Apple’s market value to an unprecedented high. Its renovated design hosts a level of sophistication that has charmed even some Apple skeptics.

However, now that the opening weekend honeymoon is over, many iPad owners are noticing a unique hangup.

According to a report by the Wall Street Journal, iPad owners are reporting that the newest tablet has a problem with voraciously consuming wireless data allotment. One purchaser reported that his new iPad burned through the monthly allowance of 2 gigabytes of data streaming covered by his 4G Verizon Wireless plan — in roughly two hours. This iPad owner pays $30 for his monthly subscription, and to further use his iPad for Internet access would have to purchase additional gigs of data allowance at $10 apiece.

While many users were drawn to purchasing the iPad by promises of unprecedented connection speed, the new iPad’s streaming capabilities can rack up a minor fortune through telecom fees. The unmistakable grace of Apple’s content streaming capacity is distinctly hampered by current wireless subscription models. While Apple made sure its next-gen iPad would be the first tablet to carry wireless LTE capacity, relying on the iPad as a streaming device can turn expensive. Even iPad owners who moderate their content streaming can find a month’s 4G allotment burned out within a week — forcing them to put away their device or shell out for more data.

The conflict between data streaming and wireless plans is, of course, not a mechanical flaw, but rather a logistical disconnect between processing power and current subscription models. Verizon Wireless, a joint venture between Verizon Communications (NYSE:VZ) and Vodafone Group (NASDAQ:VOD), currently maintains the dominant LTE network — catering to more than 200 million subscribers above AT&T‘s (NYSE:T) much slimmer 74 million.

Since Verizon and AT&T currently hold a functional duopoly on LTE subscription, the price of using your new iPad ultimately rests in the hands of telecoms. Whether they’ll curb their fees around evolving tablet technology remains to be seen.

Adam Patterson is an Assistant Editor of InvestorPlace. As of this writing, he did not hold a position in any of the aforementioned securitiesYou can follow him on Twitter @ToweringBabble.

Article printed from InvestorPlace Media,

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