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Verizon Readies New LTE Tab, World Yawns

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At least Verizon (NYSE: VZ  ) has guts. Either that, or CEO Ivan Seidenberg is just winter coat-in-July crazy. There's no other explanation for asking consumers to eat a two-year data contract for an underpowered, under-apped Android tab -- even one as good as Samsung's Galaxy 10.1 -- when Apple (Nasdaq: AAPL  ) offers an unshackled iPad 2 for just $100 more.

On the one hand, I can't blame Verizon. Tabs aren't exactly cheap to carry, and Android tabs haven't been flying off the shelves in the same way the iPad has. Locking consumers into a two-year deal guarantees cash flow from an otherwise volatile product family.

But on the other hand, I can't see how Verizon sells even one shackled Android tab when the no-contract iPad sits on the next shelf. So what if one has 4G and the other doesn't? That only matters if said Android device is able to use apps that need 4G. Apps like, you know, Netflix (Nasdaq: NFLX  ) and Hulu Plus.

And don't talk to me about Amazon.com's (Nasdaq: AMZN  ) Instant Video. I've used the service to stream episodes of The Walking Dead, and the experience was awful. YouTube does fine but also doesn't synchronize playback. Start a rented film on one device, and you'll have to start over if you switch to another device.

Some users are likely to look past these issues and buy on the promise of 4G. And if they do, Verizon will make a mint on data charges. The cheapest plan begins at $20 monthly for 1 gigabyte of service rising to $80 a month for 10 gigs of data, confirming earlier reports.

Yet on the whole, I expect this rollout to be about on par with the market's reaction to Motorola Mobility's (NYSE: MMI  ) Xoom. In a word, tepid. Do you agree? Disagree? Kick off the discussion using the comments box below.

And if you're looking for more stocks poised to profit from the rise of broadband-hungry mobile devices, try this free report. In it, my Foolish colleagues identify a top-rated broadband equipment supplier that has yet to take off. Click here to get your copy of the report -- it's 100% free.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He owned shares of Apple at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of Amazon.com, Apple, and Netflix, as well as creating a bull call spread position in Apple and buying puts in Netflix. 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. The Motley Fool has a disclosure policy.


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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 June 30, 2011, at 8:22 PM, anothafool1 wrote:

    You are also using Voice with the Samsung Galaxy Tab which is the reason for the 2 yr contract just like any other smartphone / device. I dont believe you have Voice plans with the iPad 2 not to mention the 4G connectivity.

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Tim Beyers
TMFMileHigh

Tim Beyers first began writing for the Fool in 2003. Today, he's an analyst for Motley Fool Rule Breakers and Motley Fool Supernova. At Fool.com, he covers disruptive ideas in technology and entertainment, though you'll most often find him writing and talking about the business of comics. Find him online at timbeyers.me or send email to tbeyers@fool.com. For more insights, follow Tim on Google+ and Twitter.

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