Apple to Release Subsidized Tablet Through Verizon Later This Year?

The Street's Scott Moritz reports that Apple is planning to release its long-rumored tablet computer "in time for the holidays" later this year. While Apple is reportedly still deciding on a sales model for the new device, Moritz's source reports that initial plans include subsidies from Verizon in order to lock in users for multi-year wireless data contracts while bringing down the upfront cost to consumers for the device, which is expected to carry a premium price tag.

An initial version of the long-anticipated Apple tablet will be subsidized by Verizon, but Apple and Verizon "won't be as tightly integrated" as Apple's iPhone exclusivity deal with AT&T, says one source familiar with the companies, who asked not to be named.

Moritz's report of a premium price tag echoes comments made as recently as yesterday by Apple executives claiming that Apple can not deliver a netbook or low-end notebook at the $399 or $499 price point currently offered by others that still maintains a satisfactory user experience. Apple's tablet has been seen by many as Apple's revolutionary answer to those usability issues, and the Verizon subsidy is seen as a mechanism to address the upfront cost issue. The subsidy would almost certainly have to be considerably smaller than those seen for smartphones, however, as data-only wireless plans do not command the same monthly fees as the combined voice-and-data plans used on the iPhone.

AT&T, for example, collects about $100 a month from an average iPhone customer. The voice portion of that is $68.40 a month, or about two-thirds of the bill, says Michael Cote a wireless strategy advisor with the Cote Collaborative. A subsidy on a data plan device, would by necessity be smaller than one that comes with a phone, says Cote.

Verizon, the largest wireless provider in the U.S., has been the subject of a great deal of rumors regarding partnerships with Apple. Aside from continued rumors of the iPhone making an appearance on its network, Verizon has been mentioned as a partner for two rumored devices from Apple: an "iPhone Lite" and a "Media Pad" that corresponds in many respects to Apple's rumored tablet device.

Moritz has had a spotty record in the past with a number of inaccurate claims, although he was the first to correctly report last year that AT&T would provide subsidies for the iPhone 3G to bring the entry-level price point down to $199.