John Paczkowski

Recent Posts by John Paczkowski

Apple’s Tablet: MacBook Airbus?

apple-tablet-jobs-2If the bandwidth-guzzling iPhone is truly the “Hummer of cellphones,” as the New York Times dubbed it last year, you might figure that Apple’s coming tablet will swill data like an Airbus. And that could be true eventually. But at first, analysts say, the tablet is not likely to put much strain on the mobile broadband infrastructure of whatever carrier it ends up with, whether Verizon (VZ) or AT&T (T).

Why? Do they expect the tablet to be Wi-Fi-only like the iPod touch? That would certainly make things a lot easier for the carriers.

No. Most analysts I spoke to said the probability that Apple’s new offering will support mobile broadband is quite high. “I can’t imagine it not having it,” Piper Jaffray analyst Gene Munster told me.

There are other good reasons not to fear the tablet as a bandwidth hog. First, the device will presumably rely heavily on Wi-Fi to off-load wireless traffic onto the wireline network, the assumption being that it will be used most often in locations with Wi-Fi access–homes, schools, libraries, cafes and whatnot. Moreover, a mobile broadband plan will likely be optional.

Second, despite all the hype and hoopla, initial unit sales of an Apple (AAPL) tablet are likely to be too low to have much of an impact.

As Munster told me: “…turn the clock back and look at the iPhone and the first year Apple sold 5.5 million units in the US and the ASP was $475. At that time there were no issues with AT&T’s network. The issues began occurring last year, right around the time we saw the hockey stick in iPhone adoption.”

Regarding the tablet, Munster says, “If this device is $800-$1000, I think adoption is going to be much lower than the hype would lead you to believe. So the bottom like is this: on a per-unit basis it might put a lot of stress on the network, but there will be too few of them on the street to collectively have a real negative impact.”

Presumably, that will give the carrier, whatever company that may be, time to build out in anticipation of increased adoption. A good thing, since a tablet may well pose unique network challenges, particularly if it is used as a streaming video viewer, says Sanford C. Bernstein analyst Craig Moffett.

“Streaming video is uniquely demanding traffic, as it is both bandwidth intensive AND latency sensitive,” Moffett explained. “That’s a recipe for disaster. For that reason, it’s unlikely that carriers would invite that type of usage. A large screen tablet would likely rely heavily on download-to-watch-later to sidestep the latency problem, and would almost certainly provide incentives to shift the most bandwidth-intensive applications to the wired network via Wi-Fi.”

But that’s a future scenario. “I don’t see this as a device that will in the next 12 months inspire people to save their money to buy it, the way they have with the iPhone,” says Munster, who sees Apple selling about 1.4 million tablets in calendar year 2010, assuming it ships in March.

“Certainly, it will take off in due time–this is the future of publishing,” Munster concludes, “but it takes 2-3 years for these things to really get going.”