We already know that tablets are cannibalising laptop sales at Best Buy. Will mobile carriers now steal those sales from electronics retailers… like Best Buy?
The trend toward tablet computing is interesting for many reasons — laptop cannibalization, Microsoft Windows disruption, e-reading, etc. — but one of the next shifts could be in distribution and sales, toward mobile carriers and away from traditional PC retail outlets.
Look no further than Samsung’s forthcoming Galaxy Tab, which will go on sale this holiday season with support and distribution from all four major U.S. wireless carriers — Verizon Wireless, AT&T, Sprint, and T-Mobile.
Last night, all four carriers announced that they would distribute the device. Verizon Wireless and AT&T, the two biggest carriers, specifically announced that they would sell the Tab in their retail stores, and I assume that Sprint and T-Mobile will, too.
Samsung hasn’t announced other distribution partners yet — I assume Best Buy is in, and maybe Target, Walmart, Costco, or Amazon. But in terms of the sheer numbers of stores selling Galaxy Pads, it looks like wireless carriers will be in the lead.
The key questions:
- Whether people will be buying tablets in the same mindframe as they’re buying smartphones this holiday season — mostly from carrier retail outlets — or if they’re going to buy tablets where they’d typically think to buy a computer. Best Buy’s CEO famously said that iPads are already cannibalising notebook sales by as much as 50%, which is fine because Best Buy is closing a sale either way. But if people are buying tablets at the Verizon store instead of at Best Buy, that could be a problem.
- Whether people will want to buy Samsung’s Galaxy Tab, or other Android tablets, or just Apple’s iPad, which isn’t yet available from AT&T’s retail stores. I had a chance to use a Galaxy Tab for about a minute this week, and it was fine. Not as nice as the iPad, but probably good enough that some people will buy it anyway.
- Whether most tablet buyers will want to sign up for another monthly service contract — around $30 per month, I assume — or whether most tablet buyers will want wi-fi-only devices with no monthly contracts. This potentially pushes the carrier out of the equation. (If the carriers were smart, they’d also sell full-price tablets without service in their stores, because why not?)
- Whether PC makers are prepared with tablets quickly enough to fight notebook cannibalization. Where are you, HP and Dell?
Carriers obviously are most interested in signing up new data subscribers, which can be done anywhere — in their stores or in retail partners like Best Buy.
But even if carriers are subsidizing tablets down to a loss, they surely would rather sell the tablets in-house than elsewhere. For one, they don’t have to offer any referral kickbacks. And, in addition, it could help them sell more smartphones to tablet buyers, keep customers loyal, sell family plans, etc. And that could be disruptive to the likes of Best Buy.
It’ll be a while before we know what the new sales dynamic looks like, but if tablets can help carriers sell more consumer electronics in-house, rather than via other outlets, it could be a big coup for the carriers — and bad news for electronics retailers.
See Also: The Truth About The iPad, Day 100