Can Sprint Truly Tackle the iPad?

Gentlemen, start your engines!

The race for tablet supremacy is officially on. Apple (Nasdaq: AAPL  ) has a significant head start on the rest of the field after launching the iPad to a chorus of oohs and aahs last spring, but the first Android alternatives are starting to pop up on store shelves.

Today, you can preorder the Samsung Galaxy Tab from Sprint Nextel (NYSE: S  ) , and then you can complete the order on Nov. 14. Rival wireless operator Verizon (NYSE: VZ  ) will have Galaxy Tabs available three days before that, but hasn't opened the preorder window yet. The same 7-inch Android tablet is also heading to AT&T (NYSE: T  ) and to Deutsche Telekom (NYSE: DT  ) subsidiary T-Mobile, but we don't have pricing details or release dates for them yet.

These are not the first tablet computers in retail history, as you'll notice if you're watching Project Runway on a regular basis. They are, however, the best Apple alternatives in the new class of tablets that Apple created. These launches will provide the first tests of whether consumers really love the exact design and specifications and app store of the iPad or if they will buy tablets based on pricing and specifications. The Galaxy Tabs will be cheaper than the iPad and come with a fuller specifications sheet other than the smaller screen. Here's how the pricing battle works out:

Product

Sticker Price

Required Data Plan

Total Price Tag

16GB 3G iPad

$629.00

-

$629.00

Verizon's Galaxy Tab

$599.99

-

$599.99

Sprint's Galaxy Tab

$399.99

$29.99 (2 years)

$1,119.75

Sprint is trying the good old carrier subsidy tactic to reduce the prospective tablet buyer's sticker shock. Locking the consumer in to a data plan will make up for the lower upfront cost in a big way. 

It might be fair to assume that people who buy a 3G-capable device will also subscribe to a plan, in which case you could add $480 to Verizon's total price for an apples-to-apples comparison and the cheapest iPad plan from AT&T tacks on $359.76 to the lifetime cost. Seen in that light, the iPad actually becomes the least expensive option. (Though it's worth noting, all these plans offer different amounts of data -- is your head spinning yet?) But there's a reason why discounted up-front costs show up everywhere from mortgages to high-tech gadgets: The psychology behind this trick works.

The Galaxy Tab won't be the last Android tablet to spar with the iPad, but it's a significant release that will show us what the platform is made of. You can predict the outcome of this round in the comments box below.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. He will admit to enjoying both Project Runway and Seminoles football. Sprint Nextel is a Motley Fool Inside Value pick. Apple is a Motley Fool Stock Advisor recommendation. The Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.


Read/Post Comments (4) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 27, 2010, at 1:39 AM, beetlebug62 wrote:

    I think the Samsung Tab is wonderful, so wonderful that it'll probably make Apple the worst stock to own in 2010. What do you think Anders?

  • Report this Comment On October 27, 2010, at 7:17 AM, TMFZahrim wrote:

    Okay beetlebug62, I get the impression that you saw the headline but never bothered to read the article:

    http://www.fool.com/investing/general/2010/01/21/the-worst-s...

    To wit,

    "If Apple doesn't deliver on its expectations in 2010, we could be looking at a meltdown that would make Massachusetts Democrats blush. [...] There's much that must go right for Apple to keep growing, and I'm not buying into a company that's reaching terminal velocity."

    So Apple has in fact delivered on its promises for the most part and has been far from the worst company of the year. Oh, well. In my view, the risk-reward ratio remains terrible.

    Anders

  • Report this Comment On October 27, 2010, at 1:47 PM, rfaramir wrote:

    As an Apple investor (and Mac developer), I welcome the competition. Whether the GalaxyTab is an also-ran or a genuine money-maker is for Sprint's customers to decide. But, they won't "tackle the iPad." They may or may not successfully jump on the bandwagon and make a go of it. They will, hopefully, keep Apple honest.

    One thing Sprint looks to be doing wrong is the *required* data plan. Apple's iPad has a version with no 3G component, and the version that does has an *optional* data plan that is easy to get in and out of (so they say). If you find that you mostly surf at home (say during commercials), you can safely stop the 3G subscription.

  • Report this Comment On October 27, 2010, at 2:36 PM, beetlebug62 wrote:

    Read your comments sections, I pick your analysis apart line by line. Of course, your lack of thoroughness is consistent with your commentary.

    You made the mistaken conclusion that iPhone sales were waning, based upon 7% SHIPMENT growth, even though unit SALES were up 41%. Your fundamental premise was completely wrong based upon data which you totally misinterpreted.

    You say Apple is on a commoditization cliff, and yet show no evidence that Apple has been commoditized in 30 years. Their ASP for the iPhone has held steady at over $600. Tim Cook has answered in conference calls that when they went to multiple carriers in countries they have not dropped prices or gotten lower subsidies. I mean, that should be patently obvious when the ASP holds steady. Your analysis was completely wrong-headed, and you continue to slight Apple, with your illogical rants. You need to step away from the keyboard and think about whether your personal animus is clouding your thinking.

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