Apple iPad coming April 3: Will anyone wait for Wi-Fi and 3G version?

Apple's iPad will be available April 3 in the U.S. for the Wi-Fi model with Wi-Fi and 3G versions coming later in the month. The timing sets up a nice buying decision: Is it worth waiting for the 3G version?

Apple's iPad will be available April 3 in the U.S. for the Wi-Fi model with Wi-Fi and 3G versions coming later in the month. The timing sets up a nice buying decision: Is it worth waiting for the 3G version?

Apple on Friday rolled out the following schedule (statement, iPad special report):

  • The iPad Wi-Fi model will be available April 3.
  • Wi-Fi and 3G models available late April.
  • All iPad models will be available in Australia, Canada, France, Germany, Italy, Japan, Spain, Switzerland and the U.K. in late April.
  • Preorders for all versions start March 12 for pickup April 3.

The basics of the iPad are well known. The 16 GB version starts at $499 and the prices go up from there depending on the configuration and connectivity.

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But this launch should provide us with some interesting data. Will consumers go for the Wi-Fi only version or feel they need 3G (via AT&T) and Wi-Fi. On the surface, it would stand to reason that you'd want both connectivity options. The reality: Wi-Fi may win the day with the iPad.

To wit:

  • What Machead is going to wait almost 4 weeks for an iPad just for 3G?
  • Price will matter and folks will have a hard time justifying another 3G data plan (even if it's monthly without a lot of strings attached).
  • Wi-Fi just works better than 3G and for a device that will be built around Web browsing speed kills.
  • And the iPad will have enough content---games, books, newspapers, magazines---that being untethered once in a while won't be a big sacrifice.

Now let's toss in some total cost of ownership. Wi-Fi and 3G iPads are $130 more expensive at the point of sale and then you're paying at least $14.99 a month for a data plan---no contract though. Even if you only plan to pay for 3G by the sip is it worth $130 just to have the option to use AT&T wireless broadband? For most folks, that math makes it's hard to justify anything more than Wi-Fi.

Simply put, the 3G option just isn't much of a selling point for this likely iPad buyer and AT&T CEO Randall Stephenson knows it. At the Morgan Stanley technology powwow this week, he said:

When you think of the iPad and how that correlates with pricing, the iPad -- it is going to be interesting to see the customer reaction to the iPad. Our expectation is that it is -- there's not going to be a lot of people out there looking for one more subscription revenue stream to put on our network, as a result of an iPad. We think it is going to be a largely Wi-Fi driven product. And that is why you see the pricing of the model to be one that is prepaid in nature.

Stephenson also indicated that the iPad launch will provide an interesting showdown between Wi-Fi and 3G. According to the transcript from his Morgan Stanley chat, Stephenson said:

If you have your iPad and you are an AT&T broadband customer, you go into one of our 20,000 hotspots around the country, you will auto authenticate and you'll be on the Wi-Fi connection with the iPad. If you were to access the wide area network, our 3G network, and you had an iPad with a 3G card in it, you can go on and buy your usage at that moment. You will prepay. And you can buy a $15 plan or a $30 plan. But it is a prepaid plan, and it is somewhat of a buy by the drink approach to this device as well.

We are going to be anxious to see what the customer response to this is and how customers use it. How much Wi-Fi versus wide area network, and what will have to happen with prices over time, I don't know. It is going to be an interesting one to watch. We think it will be mainly a Wi-Fi driven product.

Given Apple's iPad availability schedule we'll have four weeks for consumers to vote with their wallets: Wi-Fi vs. 3G. The Wi-Fi iPads are probably going to win pulling away at the beginning and keep that lead going forward.

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