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New HTC Jetstream will be $700 on AT&T's LTE network

Price seen as too high given upcoming cut-rate alternatives

AT&T on Wednesday announced the new HTC Jetstream, its first LTE-ready tablet, will go on sale Sept. 4 for $700 and a two-year contract.

Jetstream's price may be too steep for many users, even with a fast LTE plus HSPA+ connection, given expected lower prices for tablets on the horizon. Amazon is expected to introduce a 9-in. tablet soon priced at $299 , while Hewlett-Packard has begun a $99 fire sale for its soon-to-be-defunct TouchPad .

HTC's Jetstream tablet.

The 10.1-in. Jetstream runs Android 3.1 with an expandable storage capacity of 32 GB, but at nearly $700, it would be $100 more than the 32 GB AppleiPad 2 with its 9.7-in. screen.

That premium price for the Jetstream seems to based principally on its fast LTE (Long-Term Evolution) connection and a digital pen input capability that allows for drawings and signatures on the touchscreen.

But $700 still "may be too much to swallow for many users," noted analyst Jack Gold of J. Gold Associates. He also discounted the LTE capability, noting that "most users would be fine with a Wi-Fi-only device" and that adding a data usage expense of $35 for 3GB a month "adds a huge cost."

AT&T and HTC apparently envision customers willing to pay $700, but the pressure is on for lower-priced tablets. "Lower price points increase adoption by users," Gold said.

Sarah Epps, an analyst at Forrester Research, noted in a report Monday that $299 is closer to what customers are willing to pay for a tablet, based on Forrester surveys. The Barnes & Noble Nook Color e-reader, which sells for $249, comes with email and Web browsing capabilities and has sold millions, she noted.

Sony's Tablet S , which was unveiled Wednesday at the IFA consumer electronics show in Berlin, will sell for $600 for a 32 GB version on Wi-Fi, according to the Sony Web site .

The Tablet S has a 9.4-in. touchscreen, putting it in line with the iPad 2 in pricing and size. The Tablet S also has a folder-magazine "wraparound" design and other innovations, but Epps in a blog Wednesday said such innovations won't insulate Sony from Amazon's expected cut-rate pricing.

Epps noted that both Motorola and HP priced their tablets on par with the iPad and were unable to sell them in large numbers until they lowered the price significantly.

She said Sony should realize it needs to lower its pricing on tablets, given its experience with being the first to launch an e-reader in 2006, only to quickly lose market share to Amazon, whose Kindle e-reader undercut Sony on price and offered wireless connectivity.

She said manufacturers are facing a "new reality," since Amazon can afford to lower prices on hardware for a bigger advantage in selling tablet content from Amazon's e-commerce platform.

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen or subscribe to Matt's RSS feed . His e-mail address is [email protected] .

Read more about mobile and wireless in Computerworld's Mobile and Wireless Topic Center.


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