The questions is: what proportion of all iPads sold have been 3G versions? My unscientific observation is that the vast majority of iPads are WiFi-only.

This suggests that most consumers don't actually want a cell-network-enabled tablet, and would rather keep the money.

So really it's $500 vs. $699 + features the customer likely doesn't even want.

That's a tough sell.

The problem is it's a difference at all and for a lesser valued brand with a smaller screen that's a losing proposition. It's like a 32" inch Vizio tv costing more then a 35" Panasonic, the whole idea is a nonstarter for most customers.

There are a few ways to look at it.

The cheapest iPad you can get without a contract is $499, compared to $699 for the other tablets.

Then there is your way.

You can buy one for $499 without contract.