Cellular connections for tablets grew nearly 50 percent in the first quarter of 2013, compared with the first quarter of 2012, but are still only used on 12 percent of the tablets in the U.S, according to an NPD Connected Intelligence research report.
The report noted that while wireless carriers are making inroads in getting tablet owners to use the cellular capability on their devices, an overwhelming majority of tablet owners still don't use it. AT&T and Verizon Wireless dominate the connected tablet market, primarily because most consumers purchase the tablet connection from their current cellular (smartphone) provider.
"Most consumers haven't found that key application convincing them to add a cellular connection," Eddie Hold, vice president of connected intelligence at NPD, said in a statement. "Another setback is that many tablets purchased today do not include a cellular modem, which further limits the directly addressable market for mobile operators. Instead, these operators need to focus on tethering and mobile hotspot solutions in order to grow the market more rapidly."
The early popularity of Apple's iPad, available on Verizon and AT&T, has helped the two top carriers gain a very significant share of the market, the report noted. However, where cellular connectivity has been activated, usage consumption is actually lower than smartphones, with an average of 850MB of cellular data used per month, compared with 1GB on smartphones, suggesting tablet users are sticking to WiFi in order to surf the Web and download content.
This was borne out by the fact that tablet WiFi data use, which averages around 10GB of data per month, is more than 2.5 times the amount of WiFi data being used on smartphones.
"Tablet cellular consumption is very similar to that of smartphones, and typically exhibits similar traits," Hold stated. "The difference in consumption on the WiFi side comes from much higher video consumption on tablets (4GB per tablet per month), which accounts for 40 percent of all tablet data traffic, compared to less than 10 percent of data consumption on smartphones."
The report leverages on-device metering (the SmartMeter) with a panel of 2,300 users to provide a measurement of mobile data use, including both cellular and WiFi data. The study uses a mix of carrier financial data, consumer panel information, sales data and other proprietary sources to create a view of the connected device market.
"The combination of a current dominant position and the launch of mobile share plans last year have helped the top two carriers strengthen their market share," Hold said. "However, unlike smartphone subscriptions, these tablet users can prove to be far more fickle in their ongoing need for cellular tablet connections, and all carriers need to work hard to show the value and benefit that comes from an always-on tablet solution in order to defend—and expand—their all-important tablet base. Finding the key use scenarios for mobile tablet use, rather than the current nomadic tablet usage, is key."