The headline does not sound right and it could be a scam, but it is not. GigaOM is reporting on Softbank Mobile, located in Japan and their current promotion on the iPad. As incredible as it seems, this offer is legitimate. Reports from Engadget and others show that this is for real. You can even go to their web site, but will have to get it translated.
The offering starts on Friday, December 3rd, for 2 year contracts with the carrier. This looks like a pretty good deal and includes a new iPad with WiFi and 3G for free. Here in the US, the cost for the same iPad on the carrier web sites right now is $629 at both AT&T and Verizon Wireless. Obviously you can find some better deals if you look around, but that is pretty much the price you are going to pay. You can then add to that the monthly charges of $50 per month at Verizon for 5 GB per month (current information on site) and over the 2 year period, you are going to pay $1200. At Softbank Mobile, they are charging $55 (depending on the exchange rate) per month and over the 2 year period, you would pay $1320. It does not seem like that much of a bargain until you add back in the initial price you have to pay for the iPad of $629. That takes the cost to $1829 and makes the Softbank Mobile offer look good.
All of this sounds really great until you try and determine how much data you can actually use with this plan. I have tried to figure that out and it is not easy to find. In looking at this, I found a prepaid iPad plan with 1GB data usage at the same month cost of the free iPad monthly fee. That would seem to indicate that this is not all that good of a deal if I am reading it correct. With $55 at Verizon for 5GB as compared to $55 for 1GB at Softbank Mobile, that does not appear to a great deal. If these are the rates you would expect to pay in Japan, then the free iPad is the way to go.
The offer starting this Friday ends on February 28, 2011, so one can expect these to go fast. This offer will change how things are done if it is really successful. By subsidizing the entire cost of the iPad, they have changed how things are currently being done where the customers pays up front for the tablet, either for free or at a lower price.
We have seen other offers of price reductions in the UK with Orange and T-Mobile where the subsidized price is about $309 (USD), which is a pretty good price reduction. In all of these situations, if you cancel early, you will probably have to pay some addition money to cover the subsidy.
If these kinds of deals continue, it will be great to get an iPad at reduced prices.