Earlier this year, Verizon Wireless (NYSE: VZ) was thought to be preparing their own tablet with help from Motorola (NYSE: MOT) and Google (NASDAQ: GOOG). The three companies were expected to pool their efforts to make an Android or even Google Chrome OS tablet to try and take on Apple Inc. (NASDAQ: AAPL) and the iPad before that tablet became so entrenched as to make it impossible to compete against.
While a Motorola and Google co-developed tablet may still be in the pipeline, it looks like Verizon has other plans for tackling the tablet PC market, and they’re employing the same strategy that’s been so successful for them in the mobile phone market: Supporting anyone and everyone. Earlier this month, Verizon announced plans to sell and support the iPad itself, namely the three WiFi-only models currently available. Rather than wait for the iPad 2 to be compatible with Verizon’s long-term evolution 4G network, the telecom moved to support Apple’s machine while it’s still new. They are selling the iPads in packages with Novatel (NASDAQ: NVTL) MiFi mobile wireless router as a work around. Now it seems that the iPad was only the beginning of Verizon’s tablet plans this fall.
Not even a full week after the announcement that they would sell the Apple iPad, Verizon has announced that it will be selling Samsung Galaxy Tab starting November 11th. The move means that Verizon has decided to support tablets on its existing 3G network rather than wait for next year’s launch of the LTE 4G network. The model of Samsung’s tablet Verizon will sell in the United States has 16GB of memory and runs Google’s Android 2.2 operating system. Verizon will charge $600 for the tablet without a contract. The telecom will also use the same aggressive data pricing it is with its iPad packages, starting at $20 for 1GB of data per month. A number of Verizon’s own apps, common features on Android-based smartphones, will be included in the Galaxy Tab’s including VZ navigator and V Cast Music. In addition to the V Cast Apps market place, Verizon Galaxy Tab users will have access to Amazon.com‘s (NASDAQ: AMZN) Kindle market when the device ships next month.
The announcement of the Galaxy Tab from Verizon is indicative of the company’s long term plans in the emerging tablet market, and casts new light on the continuing rumors that a Droid branded tablet from Motorola and Google would act as the telecom’s flagship in the market. Both the iPad and Galaxy Tab support show that Verizon couldn’t support to stay out of the tablet market going into the holiday season. This product support will begin preparing Verizon’s broad subscriber base for tablet adoption over the next year. The Spring 2011 roll out of their LTE 4G network will come just in time for Verizon, Motorola, and Google to release their own flagship tablet, acquiring new subscribers and encouraging early adopters of the Verizon iPad and Galaxy Tab to upgrade when their first year is done in Fall 2011.
Many analysts were expecting Verizon CEO Ivan Seidenberg to announce a Verizon iPhone during his keynote speech at this coming January’s CES. It’s looking more likely that the big news that day will be a 4G Droid Tablet. It’s not time to buy Verizon quite yet, but curious investors would be wise to wait for the window between Christmas and CES to get in at a decent price per share.
As of this writing, Anthony Agnello did not own a position in any of the stocks named here.
