October 25, 2010 / 6:46 PM / in 7 years

Sprint's Tab is cheaper but requires a contract

NEW YORK (Reuters) - Sprint Nextel plans to sell iPad rival, the Galaxy Tab from Samsung Electronics for a third less than the tablet computer’s price tag at Verizon Wireless but, the offer still comes with a catch that at least one analyst said would limit sales.

<p>Head of Samsung Telecommunications Europe Thomas Richter presents the Samsung Galaxy Tab tablet computer at the Internationale Funkausstellung (IFA) consumer electronics fair at "Messe Berlin" exhibition centre in Berlin, September 2, 2010. REUTERS/Thomas Peter</p>

On November 14 Sprint, the No. 4 U.S. mobile service will kick of sales for $400 for the Tab, which is seen as the most credible competitor so far to Apple Inc’s popular iPad, which has on sale for $630 since earlier this year.

But while Sprint customers will pay less up-front, they may end up forking out more cash over time as the discount comes with a two-year contract requiring monthly service fees starting at $29.99 for two gigabytes of data downloads.

Verizon will charge $20 per gigabyte of data but will not require customers to sign a contract. Sprint customers can also sign up for a $59.99 per month plan allowing for 5 gigabytes of data downloads.

So, including the service fees, Sprint customers would end up paying $1,120 over two years at the least, and Verizon customers who use 1 gigabyte of data every month would pay $1,080 over two years.

Since most of the U.S. population already own cellphones, operators are eyeing future growth from connections to new devices like tablet computers or laptops.

CCS Insight analyst John Jackson said consumers may prefer the flexibility of forgoing a contract but questioned whether either operator will see much success against iPad as their pricing is not cheap enough in comparison.

“Neither of these are an obvious recipe for success,” said Jackson. He said that consumers may go for the Verizon product while Sprint’s best hope would be to sign up business people who travel a lot.

Other analysts have cited a price tag of $400 or lower as appropriate for Tab if it is to compete well against iPad.

Verizon Wireless, a venture of Verizon Communications and Vodafone Group Plc, had said it will start selling the Samsung device November 11.

Reporting by Sinead Carew; editing by Gunna Dickson

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