With the popularity of the iPad, operators in a few different countries have been experimenting with subsidized tablets as a way of hooking users in. Last year Japanese operator Softbank started offering the Apple tablet for free with a contract, while in Britain many operators sell 3G iPads below the normal retail price in exchange for long-term contracts.
In France, subsidies are being targeted on a very specific market: students.
With a publicity push from the country’s Ministry for Higher Education, college kids from Paris to Perpignan are being offered a slew of deals to tempt them onto tablets. First market leader Orange started offering iPads and Samsung Galaxy Tabs for just €1 ($1.30) as part of an education package; now Bouygues Telecom, France’s third-largest mobile operator with around 10 million subscribers, is running its own version of the deal.
The Bouygues offer, which is being launched in partnership with the French government’s ministry for higher education, isn’t for those mainstream tablets yet — but instead focuses on the Archos 80 G9, an 8-inch tablet running Android’s Honeycomb OS.
The device itself is only so-so: one CNet reviewer said that while it’s not bad, users should “consider very carefully whether the relatively low price is worth the design and performance problems”. But it is now officially dirt cheap: for €19.90 each month (that’s about $27) students can buy the Archos –which usually costs $299 — for a single euro, and get 1GB of 3G data and unlimited access to the company’s network of Wi-Fi hotspots.
With similar iPad deals on offer, it seems unlikely that deals like this will help competitors like Samsung and Archos wrestle some market share away from Apple, but it may help increase the overall market for tablets, which still has plenty of room to grow. And that is particularly important for Android devices, because while it can claim 30 percent market share on paper, the reality is likely to be far lower, as Kevin pointed out this summer.
This is not to say that subsidies are a slam-dunk, however. When Orange UK started offering cut-price iPads with a 24 month contract at the end of last year, it expected massive take up: in fact, it reportedly sold less than 1,000 contracts in the first week.
But targeting the student market is smart. It’s a big group of potential buyers: in France, around 1.4 million people are enrolled in universities out of a total population of 62 million. And cash-conscious college goers are happy to amortize the costs of a device over the lifetime of a contract, rather than pay up front. And they are voracious consumers of technology: you only have to look at the prevalence of Apple products in universities to see how brand matters to them — plus, if you get them hooked and they may stick around.