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Verizon to join AT&T in selling Apple iPads
Reuters - 2 hours 25 minutes ago
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A salesman displays an Apple iPad during its launch in Singapore July 23, 2010. REUTERS/Vivek Prakash
By Gabriel Madway
SAN FRANCISCO - Verizon Wireless will join rival carrier AT&T Inc in selling Apple Inc's iPad later this month as it moves closer to disrupting the exclusive relationship between the device maker and AT&T.
Apple's surprise announcement on Thursday comes weeks ahead of the holiday shopping season, with the company positioning the iPad touchscreen tablet as a must-have device.
There is speculation that Verizon, the No. 1 U.S. wireless carrier, will soon sell Apple's iPhone. AT&T has been the sole carrier for the phone in the United States.
Shares of Verizon Communications Inc were up less than 1 percent in afternoon trading. AT&T shares were down 0.1 percent, and Apple shares were up 0.4 percent.
BTIG analyst Walter Piecyk said the decision to sell the iPad through Verizon was likely an easy one. Apple was initially forced to limit the number of distribution channels as it ramped up iPad production, but no longer.
"They want to sell as much product as possible, and this clearly sells more product," he said. "If my perception is that Verizon's network is better than AT&T's, then by all means, why wouldn't Apple sell it there?"
Analysts said investors are already anticipating that Apple will launch an iPhone that is compatible with Verizon's network sometime early next year. The decision to sell the iPad with Verizon only served to reaffirm that view.
"Clearly you're priming the channel for additional products," said Cowen and Co analyst Matthew Hoffman.
He said selling the iPad will allow Verizon's retail sales force to become familiar with the tablet's software -- and also prepare them to sell the iPhone. The two devices share a common operating system.
JP Morgan analyst Mark Moskowitz said in a research note: "We think the move nicely sets the stage for a wider and deeper relationship with Verizon."
Verizon Wireless stores will sell three Wi-Fi-only models of the iPad starting October 28, because the iPad's mobile technology is not compatible with Verizon's network.
Verizon will provide a mobile high-speed connection by bundling the iPad with its portable hotspot, with prices ranging from $629 for the 16-gigabyte iPad to $829 for the 64 GB model.
In six months on the market, the iPad has eaten into PC sales and spurred a slew of copycat devices.
Apple sold more than 3 million iPads in the June quarter, and might outpace that in the September quarter. Analysts expect the company to sell more than 20 million next year.
Verizon Wireless, a joint venture of Verizon and Vodafone, will offer an iPad monthly data plan for $20 a month, which would allow 1 GB of data usage.
The iPad already runs on AT&T's 3G network, and the carrier's retail stores will sell the device starting October 28. It will offer models that include Wi-Fi and 3G which start at $629.
AT&T said it will offer a 250-megabyte plan for $14.99 a month, and a 2 GB plan for $25.
The iPad is available at Apple stores and big box retailers like Best Buy and Target, and will be arriving at Wal-Mart on Friday .
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