Verizon (s VZ) could shake up the business model for wireless video with the launch of a new tablet it is reportedly developing with Motorola (s MOT). According to a report in the Financial Times, the companies are building a tablet to compete against Apple’s (s AAPL) iPad, but the new product could also help Verizon by giving it a way to offer new wireless video services.
The new tablet will reportedly have a 10-inch screen and be thinner and lighter than the Apple tablet. It is expected to use Google’s (s GOOG) Android operating system and will also be capable of running applications and video delivered through Adobe (s ADBE) Flash, which could make it an attractive alternative to the iPad. The FT also reports that the device could be tied to Verizon’s FiOS TV service.
Beyond just offering up a new product in the tablet category, the device could open up the possibility of Verizon offering video services to consumers that don’t live in its current fiber footprint. Verizon has spent upwards of $20 billion rolling out fiber to the home to entice them to purchase its pay TV services. But even with that sizable sum, Verizon FiOS still only passes about 12.9 million homes around the country.
Verizon has a national wireless network, however, that allows it to reach customers practically anywhere. That means that it could potentially roll out a video offering on its wireless network, using the tablet as a hook for new subscribers.
And its wireless services will soon get a whole lot more robust, with its next-generation LTE data network slated to launch as early as November 15. The LTE network will provide data rates of 5-12 Mbps — almost good enough for HD video — and be available in 25-30 markets by the end of 2010, covering approximately 100 million Americans. Verizon expects its LTE rollout to cover the entire country by 2013.
According to the FT, the new jointly developed tablet could be available as early as this fall, which would make it just in time for the holidays. But it would also coincide with Verizon’s LTE launch, which means the tablet, when available, could be used to get subscribers on the new data network.
Even if the full Verizon FiOS television experience isn’t delivered via the tablet, it might help Verizon boost FiOS subscribers in homes where services are already available but haven’t been activated. For example, in addition to a set-top box, a customer might have the option of getting a tablet as well, for time- and place-shifting pay TV content. Such a tie-in would be good for Motorola, which gets marketing help for the device from Verizon. If the tablet succeeds, Motorola could also offer it to other pay TV providers.
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