http://online.wsj.com/article/SB1000...#ixzz12MaxGj8L
By SPENCER E. ANTE And ROGER CHENG
Apple Inc. will start selling the iPad through Verizon Wireless stores later this month, establishing a relationship between the two companies and expanding distribution of the tablet computer ahead of the holidays.
The move puts an Apple product in Verizon Wireless's 2,000 stores for the first time. The iPad will also be the first tablet sold by the largest U.S. wireless carrier when it hits the shelves Oct. 28.
Apple is tapping Verizon Wireless's retail presence as it moves aggressively to capitalize on its lead before a wave of tablet computers from competitors like Motorola Inc. and BlackBerry maker Research In Motion Ltd. hits U.S. stores.
Apple— which originally sold the device in the U.S. only through its own stores and website and some Best Buy Co. locations—has struck a string of deals in the past few weeks to expand the iPad's distribution to Target Corp., Wal-Mart Stores Inc., Sam's Club and all of Best Buy's stores.
Apple also said Thursday it would start selling the iPad through AT&T Inc.'s 2,200 stores on Oct. 28. Apple has offered a 3G wireless version of the iPad with service provided by AT&T since the tablet's launch, but AT&T hadn't been allowed to sell the device.
Apple Inc. said Thursday morning it plans to sell its iPad tablet device through retail stores owned by AT&T and Verizon. Walt Mossberg and Dan Gallagher discuss. Plus: the Digits team gives a Google earnings preview.
The move puts an Apple product in Verizon Wireless's 2,000 stores for the first time. The iPad will also be the first tablet sold by the largest U.S. wireless carrier when it hits the shelves Oct. 28.
Apple is tapping Verizon Wireless's retail presence as it moves aggressively to capitalize on its lead before a wave of tablet computers from competitors like Motorola Inc. and BlackBerry maker Research In Motion Ltd. hits U.S. stores.
Apple— which originally sold the device in the U.S. only through its own stores and website and some Best Buy Co. locations—has struck a string of deals in the past few weeks to expand the iPad's distribution to Target Corp., Wal-Mart Stores Inc., Sam's Club and all of Best Buy's stores.
Apple also said Thursday it would start selling the iPad through AT&T Inc.'s 2,200 stores on Oct. 28. Apple has offered a 3G wireless version of the iPad with service provided by AT&T since the tablet's launch, but AT&T hadn't been allowed to sell the device.
Apple Inc. said Thursday morning it plans to sell its iPad tablet device through retail stores owned by AT&T and Verizon. Walt Mossberg and Dan Gallagher discuss. Plus: the Digits team gives a Google earnings preview.
Verizon Wireless won't sell a 3G version of the iPad. Instead, users will have to buy a separate Wi-Fi device to connect to the carrier's network. The move, however, gets the iPad into the carrier's hands before the arrival of a competing tablet produced by Samsung–the Galaxy Tab–which runs on software developed by Apple rival Google Inc.
The distribution deals indicate Apple has significantly ramped up its output of iPads. Morgan Stanley analyst Katy L. Huberty estimates that Apple increased production capacity to two million units a month in August, up from one million a month earlier. Ms. Huberty believes Apple would like to ramp up to three million a month this quarter, but says constrained supply for components could makes that a challenge.
The distribution deals indicate Apple has significantly ramped up its output of iPads. Morgan Stanley analyst Katy L. Huberty estimates that Apple increased production capacity to two million units a month in August, up from one million a month earlier. Ms. Huberty believes Apple would like to ramp up to three million a month this quarter, but says constrained supply for components could makes that a challenge.
"I'd be surprised if they get north of 9 million a quarter by end of December," Ms. Huberty said.
The announcement follows renewed expectation that Verizon Wireless may soon carry the iPhone. Apple is making a version of the iPhone that Verizon Wireless will sell early next year, according to people familiar with the matter.
Although Verizon has yet to announce a deal for the iPhone, the iPad agreement marks a major advance in the relationship between the two companies. Ivan Seidenberg, chief executive of Verizon Communications Inc., which jointly owns Verizon Wireless with Vodafone Group PLC, has continually demurred on the prospect of getting the iPhone despite expressing interest in the device.
"At some point, Apple will get with the program," Mr. Seidenberg told investors at a conference last month.
Spokeswomen for Verizon Wireless and Apple declined to comment on the two companies' relationship. An AT&T representative declined to comment on Verizon selling the iPad.
Verizon Wireless is making sacrifices to carry the iPad. It will offer customers the option of bundling their iPad with its "MiFi" gadget for about $130, less than half the current cost of the device. The MiFi device, about the size of a business card and roughly 0.4 inches thick, connects to cellular networks and creates a portable Wi-Fi hotspot that can support up to five Wi-Fi-enabled devices.
Verizon Wireless is also cutting the price of its data plans for the iPad, offering users 1 gigabyte of data for $20 a month, compared with current options of $40 for 250 megabytes and $60 for 5 gigabytes. Users can pay more for bigger plans, including a $50 a month plan for 5 gigabytes.
Over the last year, Verizon Wireless has put its muscle behind devices built on Google's competing Android operating system. Many analysts believe the carrier's success has put pressure on Apple to cut a deal with Verizon to help blunt the rise of Android.
The iPad deal will give Apple an inside view of Verizon Wireless's network capabilities for the first time. "Apple will be in the catbird seat to see how the Verizon network performs," said Richard Doherty, president of the research firm Envisioneering Group.
Mr. Doherty believes companies and families may prefer Verizon Wireless's hotspot to AT&T's built-in 3G, because they could cut their data costs by sharing access. "The Verizon data plan has to got get people at AT&T thinking," he said.
Verizon Wireless's iPad/MiFi bundle is priced the same as iPads with AT&T's 3G service, ranging from $630 to $830 depending on the size of the devuce's memory. AT&T offers a cellular data plan with a 250 megabyte limit for $15 a month, and a 2 gigabyte cap for $25 a month.
The announcement follows renewed expectation that Verizon Wireless may soon carry the iPhone. Apple is making a version of the iPhone that Verizon Wireless will sell early next year, according to people familiar with the matter.
Although Verizon has yet to announce a deal for the iPhone, the iPad agreement marks a major advance in the relationship between the two companies. Ivan Seidenberg, chief executive of Verizon Communications Inc., which jointly owns Verizon Wireless with Vodafone Group PLC, has continually demurred on the prospect of getting the iPhone despite expressing interest in the device.
"At some point, Apple will get with the program," Mr. Seidenberg told investors at a conference last month.
Spokeswomen for Verizon Wireless and Apple declined to comment on the two companies' relationship. An AT&T representative declined to comment on Verizon selling the iPad.
Verizon Wireless is making sacrifices to carry the iPad. It will offer customers the option of bundling their iPad with its "MiFi" gadget for about $130, less than half the current cost of the device. The MiFi device, about the size of a business card and roughly 0.4 inches thick, connects to cellular networks and creates a portable Wi-Fi hotspot that can support up to five Wi-Fi-enabled devices.
Verizon Wireless is also cutting the price of its data plans for the iPad, offering users 1 gigabyte of data for $20 a month, compared with current options of $40 for 250 megabytes and $60 for 5 gigabytes. Users can pay more for bigger plans, including a $50 a month plan for 5 gigabytes.
Over the last year, Verizon Wireless has put its muscle behind devices built on Google's competing Android operating system. Many analysts believe the carrier's success has put pressure on Apple to cut a deal with Verizon to help blunt the rise of Android.
The iPad deal will give Apple an inside view of Verizon Wireless's network capabilities for the first time. "Apple will be in the catbird seat to see how the Verizon network performs," said Richard Doherty, president of the research firm Envisioneering Group.
Mr. Doherty believes companies and families may prefer Verizon Wireless's hotspot to AT&T's built-in 3G, because they could cut their data costs by sharing access. "The Verizon data plan has to got get people at AT&T thinking," he said.
Verizon Wireless's iPad/MiFi bundle is priced the same as iPads with AT&T's 3G service, ranging from $630 to $830 depending on the size of the devuce's memory. AT&T offers a cellular data plan with a 250 megabyte limit for $15 a month, and a 2 gigabyte cap for $25 a month.
