If you worry that Apple Inc's new iPad will slow down Web surfing on AT&T Inc's mobile network or cause even more dropped cellphone calls, analysts say you should rest easy.
Later this month, Apple will introduce a version of the iPad tablet computer that can surf the Web on the go using AT&T's third generation (3G) mobile network. The current iPad, which went on sale this weekend and drew big crowds, works only on short range Wi-Fi connections like those found in cafes.
Some fear that should the 3G version of the iPad prove a blockbuster hit, it could test AT&T's network, already under severe strain in some markets from heavy iPhone Web usage.
AT&T has said it is now investing heavily to upgrade its network and spokesman Mark Siegel added that it has of course factored the iPad into its network planning.
But some worry that thousands of new iPad users could spend even more time than iPhone users downloading movies, buying books, or surfing the Web on AT&T's 3G network.
But several analysts said worries were overblown, even after a strong debut by the first iPad model. More than 300,000 of them sold on Saturday, surpassing some forecasts.
There's a lot of worry and it makes for good reading to say it will have an impact. But I think not, said UBS analyst John Hodulik, who expects sales of iPad 3G to be less than half the sales of the first version of the device.
The main reason is money, with Apple charging $630 for the iPad that allows access to both 3G and Wi-Fi. That is $130 more than the first Wi-Fi only model.
And because the iPad is much bigger than a cellphone, consumers will not carry it everywhere they go, unlike iPhone. This means less demand for AT&T. Even its chief executive predicted more use on the Wi-Fi iPad than the 3G model.
NPD analyst Ross Rubin sees iPad buyers using 3G mostly as a back-up when they are traveling out of town.
It certainly doesn't fit in your pocket, Rubin said.
Stifel Nicolaus analyst Christopher King said it was too soon to tell how many people would buy the 3G iPad and how they would use it. But he sees most users sporadically downloading data to the device, much like on the Kindle e-book reader from Amazon.com.
I don't think its going to be a big issue for AT&T, he said.
What is more, Hodulik expects that iPhone sales will begin to tail off over the first half of this year, since consumers who do not already have an iPhone will likely wait for a new Apple phone expected this summer. The result would be fewer new users for AT&T's network.
Hodulik also pointed to AT&T's public commitment to increase its capital spending by $2 billion this year to improve its network performance.
While this is all going on, AT&T has made a significant increase in the amount it's investing in its network, he said.
AT&T shares rose 19 cents, or 0.73 percent, to $26.30 on New York Stock Exchange shortly before the close.
(Reporting by Sinead Carew; Editing by Paul Thomasch, Gerald E. McCormick and Richard Chang)