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More tablet owners are using their devices through cellular connections in the United States, according to new data from The NPD Group, which found that cellular use of tablets rose to 16 million users in the fourth quarter of 2014, a 95 percent increase from the same quarter one year ago.
That’s still a fraction of the 100 million other tablets being used in the U.S. via WiFi connections, but the rise in cellular tablet users is a significant shift, accord to new research conducted by The NPD Group.
What it means is that mobile carriers such as Verizon Wireless, AT&T, Sprint and T-Mobile are making more of an effort to sell cellular capabilities to their wireless tablet customers, as well as offering more incentives, such as cheap $10 a month add-a-tablet rates and even free or heavily-discounted devices, John Buffone, the executive director of MPD’s Connected Intelligence practice, told eWEEK.
“Tablets have been around since April 2010 when iPads showed up” on the market, said Buffone. “And 2014 was the year that a critical mass of consumers attached their tablets to their data plans.”
And while that impressive growth is good for mobile carriers, they need to do more to get more mobile customers to add even more of their tablets to cellular connections, he said.
“There’s definitely still messaging that needs to be done by mobile carriers to help consumers recognize and understand a use case” for adding their tablet to their mobile plans, said Buffone. Many consumers are still hesitant to pay for such a service, saying that they already can use WiFi at work, in many public places or in their homes, making cellular service an extra cost redundancy that they don’t need, he added.
For mobile carriers, that’s the challenge they face to try to get more tablet users to pay for cellular services, which add revenue for carriers and provide more services for users, said Buffone. To do that, mobile carrier sales people need to stress that those hesitant consumers can get easier navigation, photo posting, email use and more with the larger screen of their tablets, compared to using their smaller smartphones, he said.
“The industry has identified some of those issues and is working on them,” he said. “It’s still a markedly different individual that is taking the leap so far,” including those early adopters who wanted tablets with cellular connections because of their extra flexibility, he noted.
The mobile carriers are offering these lower rates and discounts on devices because they “still need a broader scope of users” to help bring in revenue, he said. Buffone said it’s difficult to know how many more tablet users will move to cellular services for their devices.
“It doesn’t have to reach a majority status to be a significant and lucrative part of the business” for mobile carriers, he said. “You don’t need an entire category to grow to see success in a sub-category.”
The new data is from NPD’s latest Connected Intelligence Connected Home Report, which also found that cellular tablet activations are also more common among more educated and more affluent consumers, compared to WiFi tablet users.
“Tablet owners who connect through cellular data plans possess a very different demographic profile than their WiFi tablet using counterparts,” NPD said in a statement. “Among the characteristics, income is the most prominent. Cellular tablet owners have an average household income of $105,000 versus WiFi tablet owners whose average annual income is $17,000 less.”
Interestingly, a Gartner report in January estimated that while tablet sales soared for several years, they are expected to continue to slow down in 2015, based on the latest sales estimates, according to a recent eWEEK report. Worldwide tablet sales are expected to hit 233 million devices in 2015, up 8 percent from 2014, but quite a bit fewer than the numbers seen in the previous few years.