AT&T (T) plans to make its mark in media tablets.
The phone company will expand the roster of media tablet PCs for which it provides service beyond Apple's (AAPL) popular iPad. And a top executive for AT&T says the carrier will do so even if that slows the growth of other wireless devices, such as netbooks and e-book readers.
Demand for Apple's iPhone and iPad has been a big driver of AT&T's wireless business. AT&T activated 450,000 iPad users on its network in the second quarter. IPad sales began April 3.
AT&T provides wireless data services for a wide range of portable devices, including mini-laptop PCs, called netbooks, and electronic-book readers sold by such companies as Amazon.com (AMZN),Sony (SNE) and Barnes & Noble(BKS).
Because they have multiple uses, analysts say tablet PCs could cut into sales of netbooks, e-readers, GPS devices and more.
But if consumers prefer tablets, AT&T wants to ensure that its wireless network stays in the thick of things, says Glenn Lurie, president of AT&T's emerging devices unit.
He says AT&T is working with a wide range of tablet makers, including startup OpenPeak, which in June said it had raised $52 million from chipmaker Intel (INTC), General Electric(GE) and other investors. OpenPeak and AT&T plan to bring the OpenTablet to market this year.
"They are a close partner," Lurie said of OpenPeak. "They're in an exclusive relationship with us. We're definitely digging in with them.
"We've also got very strong relationships with Dell (DELL), HP (HPQ) and RIM (RIMM)," he added. "We're working with anybody and everybody that is building or talking about a tablet device."
Dell this month rolled out its first tablet, called Streak, with AT&T as its service provider. The device costs $300 if consumers sign up for a two-year service contract with AT&T; or $550 without a contract.
AT&T won't say whether it'll sell the OpenTablet at its own retail stores or subsidize its cost.
OpenTablet Makes Calls
The OpenTablet has been designed for multiple tasks, including managing home energy and security systems. It's also primed for entertainment and multimedia uses.
Boca Raton, Fla.-based OpenPeak says consumers will be able to use the tablet for social networking, downloading books, navigation and sharing video. Unlike the iPad, it's also designed to make phone calls.
Lurie says media tablets could become the Swiss army knife of computing devices. "Bottom line, we're heading toward a computing device that will be all-encompassing," he said.
He says tablets will be used at homes but also at offices, since the device can be hooked up to keyboards.
Lurie says tablets won't put netbook makers out of business. And some users will continue to prefer stand-alone e-book readers, he says.
Still, he expects a wide array of media tablets to emerge, at many prices. The iPad costs $499 to $699, depending on memory size and wireless capabilities.
"There will be a continuum of tablets," Lurie said. "The question is, what do they replace? I don't know the answer, but there will be a ton of innovation.
"A company like us better plan on having a wide variety choices for its customers, just like we do with smart phones today."
Software applications are making smart phones more versatile. Amazon recently made its Kindle e-reader software available on Google (GOOG) Android-based smart phones.
Facing more competition in e-readers, Amazon reportedly is mulling building a tablet and other devices.
AT&T has a stake in what companies win and lose. One of AT&T's partners, startup Plastic Logic, this month shelved plans to market a touch-screen e-reader.
Netbook sales took off in 2009 but will slow, says market research firm Gartner. In a report, Gartner analyst Raphael Vasquez says media tablets and similar devices priced lower than the iPad " will significantly detract" from netbook sales in 2013 and onward.
AT&T rivals such as Verizon Wireless also are working to bring more tablets to market.
By REINHARDT KRAUSE, INVESTOR'S BUSINESS DAILY August 20, 2010
