Next week Apple is expected to announce a nifty new iPhone with true videophone support, so AT&T — for now Apple’s sole iPhone network provider in the USA — has preemptively imposed new smartphone data plans with a lower base price but also what appear to be restrictive caps on the total amount of data users can send and receive per month. While pundits like me are arguing whether this is better or worse for iPhone customers, the real AT&T strategy is being so far overlooked. It’s to get us all using smartphones, stupid.
The old iPhone plan gave unlimited data for a $30 monthly surcharge. The new data plans give users 200 megabytes per month for $15 or two gigabytes per month for $25. Going over your agreed limit in each case is expensive — $15 for another 200 megs for the entry plan whether you use the full extra 200 or not and $10 for each additional gig on the more expensive plan. To put this in perspective that extra gigabyte is enough to download one movie from iTunes over the AT&T 3G network, but to balance this AT&T is throwing-in free WiFi access at 20,000 hotspots for your movie downloading pleasure.
For most iPhone users the new plan will save a few bucks. AT&T claims 65 percent are under the 200 meg limit anyway so they’ll save $15 per month not to mention the free WiFi. Power users may well pay through the nose if they can’t force themselves to do big downloads at hotspots, but this generally involves less than five percent of iPhone users.
If not many people are going to be affected and AT&T’s revenue might actually go down as a result, what’s the point? They’re greedy, right? They want something from us. And that something is they want us all in a data plan and pronto.
Average revenue per mobile subscriber line is now falling for all U.S. carriers. There is too much competition, we’ve all got enough ringtones, and those $1,000 teenage texting bills have become a thing of the past. The only way the mobile carriers can get more money from us is to get us into data plans, which involve a surcharge — for now.
And that’s the point. A mobile phone has a life expectancy of 18 months. Two hardware generations from now — three years — all phones will be smartphones. But the risk in this natural evolution for the carriers is that those smartphones will come without associated data plans and their extra revenue. So AT&T (soon to be followed by Verizon) wants to lock us in to a particular revenue model. They want to force an unnatural evolution by selling us data plans while they still can and then keeping us on those data plans past the point where they’ll make sense.
Network capacity is an issue here, but not the major one.
The endgame is all-IP everywhere with no particular differentiation between data types. But until that happens, AT&T wants to get some extra scratch from us for something that — like long-distance is now — they’ll eventually be giving away for free.
Interesting take. It sure makes data plans more affordable. 4-5 years ago, the introduction of family plans with $10-20 incremental pricing for extra lines with shared minutes made giving your kids a cell phone much more affordable.
Up until now, there has been nothing like that for data. Data plans for a family of 4 would be $120–doubling your base cell phone bill. So most kids do not have data plans. At $15 per phone, it is starting to become reasonably affordable to have data for all. I just hope they give us family allowances tools to cap the usage of our teens…oh wait, maybe creating a new source of OVERAGES is the grand strategy!
I’m glad iPhones/Pads are so popular. Now if I’m ever away from a PC, I just call one of friends to look something up for me. And I can keep my phone bill to about $12/month.
Wow. You sound like a cheap shithead.
Handler: Try and Keep it classy.
Sorry Handler that was for … maximill1an
I’m cheaper: My cell phone expense runs $25/quarter. And I don’t use up the allocation, so credits roll over quarter to quarter.
Of course I don’t much like telephones of any variety. If computer interfaces had kept up with the telephone’s, we’d still be using punch cards!
Janet: sounds like you’re on the pre-paid AT&T plan. I switched myself and my sister to the T-Mobile prepaid plan. After a year it will cost us $10 PER YEAR.
OK- the downside is $100 up front for the first year but it buys me 1000 minutes
which is about 4 times what I use.
On the other hand T-Mob’s data plans SUCK. So I’m keeping the AT&T sim card
for data surfing. Maybe AT&T will reduce the cost of prepaid data plans down to
the post-paid setup. I’m paying $20 month for 200 MB on my prepaid but the good news is I’ve accumulated $250 over the years of NOT making voice calls.
And AT&T allows this ‘money’ to be spent on data plans and Apps!
This works for me! Joe F
Addendum. Turns out you can buy $4.99 to extend the AT&T pre-paid data plan another 30 days. That’s even better when I’m not using! … Joe F
Much as I hate phone companies, I can see where AT&T is coming from. Video is going to send demand for 3G bandwidth through the roof, encouraging people to use wifi instead just makes sense. But if history is any indication, it’s a good bet they’ll try to milk this forever to get more revenue out of customers, long after capacity is an issue.
And having been burned by their going-over-your-minutes scam, it kills me to see them try the same ploy with data. Going over 200 megs should just move you to the 2 gig plan, with a small penalty. With the plan they announced, you’d pay $150 for using 2 gigs while you’re on the 200 meg plan, that’s nuts.
“Much as I hate phone companies, I can see where AT&T is coming from. Video is going to send demand for 3G bandwidth through the roof, encouraging people to use wifi instead just makes sense. But if history is any indication, it’s a good bet they’ll try to milk this forever to get more revenue out of customers, long after capacity is an issue.”
These concerns about poor AT&T and the evil bandwidth user-uppers is, to put it frankly, crap.
If AT&T were SERIOUS about wanting to reduce our collective 3G bandwidth utilization there are ANY NUMBER of things they could do NOW to help.
* Why the song and dance needed to login to an AT&T hotspot? It took them forever to get rid of the weird complicated crap that involved text message to login, but even today there is still a stupid manual login process — why? Why not an AUTOMATED process? You know — AUTOMATED as in I DO NOT HAVE TO DO ANYTHING — like the 3G “login” process.
* Why no peering arrangement with all the other hotspot purveyors? If I’m somewhere that has a boingo hotspot available, why doesn’t AT&T make it possible (via AUTOMATIC login) for me to use boingo’s connection rather than that precious 3G bandwidth?
* What’s the pricing model on femtocells? If the goal is to increase bandwidth, then why are they not priced at or below cost — and with NO limits on the number of users? Instead they are being sold as though they are a fancy toy for the amusement of rich people, along with inane restrictions like only working with 10 pre-programmed phone numbers.
* Why doesn’t AT&T provide a trivial to use proxy service that automatically compresses text (email connections), and rewrites web pages (along with text compression and shrinking images) to better fit a given mobile screen — cf google’s mobile web proxy which does this and does it well.
etc etc etc
AT& whines an awful lot about their poor over–extended 3G network. But they appear to have ZERO interest in the various engineering solutions to help alleviate the problem. Which makes one suspect that, just possibly, they are lying, lying, lying.
I think AT&T is doing the right thing: making people pay for what they use. You can argue about the actual rates being fair or competitive, but the markets will sort that out eventually.
After all, you don’t pay one flat fee for water, gas, fuel oil, etc., no matter what the usage, and IP access is really no different.
In the long run, all-IP yes, but bandwidth isn’t free, and it’s going to have to be metered eventually.
Might as well start now.
I didn’t say AT&T was doing the wrong thing. I just wanted to make clear WHAT they are doing. It’s their network.
Rubbish! It belongs to the people who ultimately pay for it – its customers. Again your column is riddled with the assumption that it is OK for companies to manipulate their customers and “want” things from them. It ain’t! A company’s job is to support the structure of the society that allows it to exist in the first place and to respond to the wishes of its customers. If it can do that it is OK for it to make a modest profit for its shareholders. If it can’t it should be regulated out of existence.
When does the revolution begin, komrade?
You imply that Mr. Powell advocates communism, but that’s not what his comment indicates. The recent global financial collapse should be an educational experience. The notion that society creates the environment in which companies might profit is derived from the Enlightenment philosophers who understood the brutality of the state of nature, and whose ideas heavily influenced the rise of the modern, western democratic nation.
Consider for a moment the possibility that contemporary “Internet Libertarians” seem only to have learned one lesson from the global economic meltdown, “bailout bad”, but seem to have overlooked the root causes. Companies which both run our financial system, and treat it as a fossil resource to be extracted, rather than as a tool to create new wealth, are bad for society, and ultimately threaten to destroy the economy which allows them to run unfettered, as we have recently observed. If allowed to fail, the economic destruction rendered by these self appointed masters of the universe would have been far greater than the historical damage they wrought.
Now, I’m not asserting AT&T has that level of potential, but that they like all companies in the western liberal democracies exist in the social contract universe which has generated most of the goods we desire — health, wealth and security — relative to all other forms of social organization which have hitherto been tried.
AT&T and the rest of the cell phone industry in the US have tended for a couple decades to treat their customers as a resource to be mined. At the phone companies, innovation was confined to billing and lock-in strategies, until the gap between what cell phones actually did, and what they could do, became so wide that a PC maker stepped in and took the most profitable market segment away. AT&T gets credit for being smart enough to recognize what was about to happen, and getting on board. It’s clear however that they depend on Apple to do any real innovating, and will be in serious trouble when iPhone becomes available on other carriers, or when other smart phones catch up.
Even libertarian AT&T stockholders should be able to see that it’s bad for AT&T, in the long run, to treat their customer’s wallets as a resource to be mined. Truly innovative, for this industry, would be implementation of fair rather than confusing and exploitative billing policies, investing in their network to a level that it actually worked for all the iPhone users who sign the big bonus checks of the AT&T executives, and expanding coverage to rural areas of the country. If they did these things, they would become a company their customers liked, rather than loathed, and they would make even more money. Hardly a communist ideal.
Just one question. What planet do you guys live on where a company puts their customer first? I would like to move there.
All joking aside, companies that do right for society and make a modest profit is just not what the greedy companies are today. In a perfect world perhaps but the almighty dollar clouds their judgement. Do you really think AT&T cares about the customer? Maybe to some degree, but not where it should be. Whatever happened to the saying “The Customer comes first.”? Yeah, not today they don’t.
Good article Bob. But one thing. That 5% of users that do indeed go well over the 2GB cap are the ones that are going to be hit the hardest. 5% of how many millions of iPhones? 50? That is a lot. I wish Apple would open it up to other carriers because I really hate AT&T.
A company’s job is to support the structure of the society that allows it to exist in the first place <— I am 46 years old and this tenet you speak of is far far down the list of priorities in every company I have worked for. I really wish that companies thought like this but they, for the most part don't. It's money, faster and more.
The job of a company is to turn a profit for its owners. That is it. Otherwise, why should the owners bother? The fact that companies generally offer services and products that enhance the greater society speaks more to what is profitable than to the altruism of companies. Companies are not pillars of society that should maintain that society at all costs. They are legal constructs written on pieces of paper filed in a lock-box or safe somewhere that allow someone to be self employed and make a living. The more profit, the better the living. That is how it works.
The notion that the only responsibility of a company is to make money for its owners is the at the root of several malfunctions of our society.
Society grants the owners of a company a huge benefit: Shielding the owners from liabilities arising from actions of the company. In return, the company ought to be obligated to operate in a way to benefit society, not just the owners.
Unfortunately, it is hard to make regulations to enforce that. Either the regulations are so loose that it takes little effort to wiggle out of that responsibility, or the regulations are so strong as to smother the entrepreneurism critical to running many companies.
I don’t have any simple answer. At the moment, I’m just trying to point out that the notion that companies should only be concerned about making as much money as possible is a bad one. As I recall, it grew out of a judicial decision in some case shareholders brought against a company many years ago. I’ve never researched it, so I don’t know the details.
Given that I don’t know the details of that case or the decisoin, it is dangerous to suggest a solution, but I’ll offer an idea for consideration. Suppose the relevant statutes (the ones that judicial opinion relied on) were amended to state that making money for shareholders is NOT the only legitimate goal of a company? Perhaps even state (without limitation) some other legitimate goals, such as preserving the environment, promoting education, promoting culture and arts, promoting more equitable income distribution. Not that any of those other goals would be stated to be more important than making money, but that the courts could not automatically decide against a company which accepted less than maximum profit in order to promote some of those other goals. I’m not saying that is what the solution should be, but to start thinking in that direction. Maybe the whole idea is fatally flawed, but I think it deserves some reasonable discussion, and perhaps a good solution could come of it.
The AT&T pricing plan is all about the new video chat feature that’s rumored to be a feature of the new 2-camera iPhone. AT&T is simply covering its arse, as the bandwidth hit on its network from video chats could be immense. Either Apple would have to limit video chat to wi-fi only or AT&T would have to limit the data it allows. AT&T’s price plan means Apple will not need to restrict video chat to wi-fi. Once again, a PR hot potato is lobbed by Steve Jobs into Randall Stephenson’s court. We’ll see on Monday.
As I wrote, network capacity IS an issue, but not the major one. AT&T is addressing here a short-term problem and a longer term problem with the same policy. It’s actually pretty smart.
So…Apple is about to roll out a new device with some killer new features, but AT&T is actively trying to discourage users to actually use those new features by essentially punishing the people that use them the most? This is, of course, unless they are at an AT&T-branded hotspot.
I can’t WAIT to see how the jailbreak crowd attacks THIS one.
Jailbreaking in the U.S. means going to T-Mobile. But thanks to Verizon’s lead I’m sure we’ll see a $350 iPhone early termination fee from AT&T. So the jailbreakers will mod their phones, move them to T-Mobile, generally replicate all the AT&T services, but after having first covered AT&T’s costs ont eh phone. So I don’t think AT&T actually cares anymore, and Apple certainly doesn’t.
Not sure that’s what the term “jailbreaking” refers to among the technical comminity. I think the original poster is talking about technical means of circumventing this as far whether the data use is considered “tethering” but in this case AT&T seems to metering all data use the same and charging for it.
This is idiotic. Whenever you have rationing you discourage people. And everyone is going to be concerned about go over quota so they’ll do their best to ensure *not* being connected to the cellular network before use. Teaching your customers to not use you is not a good long term strategy.
What they should have done is priced how other companies do this sort of thing such as Amazon EC2/S3. The first $5 gets you 10MB, the next $5 gets you an extra 20MB, the next $5 gets you an extra 50MB etc. You still pay for what you use, but when you use more you get volume discounts.
Or what Japan does. Japanese cellphone data plans have a lower limit, like the AT&T plan (say $x for yMB), then they switch to a linear model (pay an extra $z per MB) BUT, and this is the important point, there is an upper maximum price you pay regardless of how much data you use. That way you don’t have the terror of a bill that could be arbitrarily high; and so you get much less of the fear to ever use bandwidth.
But of course this is America, the land uninterested in learning from any other country whether it’s how to run a war, how to run a healthcare system, or how to run a tax system. So we’ll use AT&T’s plan, all the while telling ourselves how what we do here is better than anywhere in the world, no doubt about it.
Are the costs of phone contracts really so expensive in the US? I was just offered a 24 month contract from ‘3’ here in the UK with 300 mins, unlimited texts, 2gb of data, free skype to skype AND a free HTC Desire.
2gb by the way is quite adequate for must stuff you do on a Smartphone
Yer – but ‘3’ are a bit of an odd case, because they own all that pipe which no one is using, so they are giving bandwidth away as a loss-leader, in the hope that they’ll build a subscriber base – quite literally ‘giving away’ as well – I have a Pay-As-You-Go, and I top-up every 6 months or so with a tenner; and with that I get enough free bandwidth (and texts) to last me most of the 6 months until I need to top-up again – so I pay about £20 a year for my personal phone, and basically have unlimited mobile internet for that.
Unless Apple can make an iPhone Nano that is beyond magical, *all* phones will not be “smart” in 2 years – smart is just too damn big for most people. Until someone can make something the size of a Nokia 3110, which folds out into a Nintendo DS-style double screen, most phones will remain decidedly unsmart, at least in terms of their usage. (Because even a 3110 has a web browser, which is serviceable, for an emergency, but no one EVER uses in real life.)
I do have one question for AT&T, and that’s whether the connection to supported WiFi networks will be automatic, which might justify their offloading for downloading from iTunes etc. If it’s easier to remain on the cellular network people are going to do that and be charged for it, benefiting AT&T.
I’m not sure why you think $10 for an extra GB of data is high on a phone.
If use for voice calls that would be good for about 10,000 minutes!
I have a plain old basic cell phone with Sprint. The 2 years on it expires in a few days, but my wife’s phone won’t expire until February. Right now Sprint offers 1 basic cell phone, from Samsung, which I’m reluctant to get since the last Samsung basic phone I had crashed before its 2 year deal expired, and a Samsung phone my wife had crashed, too, long before it’s 2 year contract expired. My current plan is to kill Sprint in February and go with someone that’s much cheaper.
The issue with most basic cell phones seems to be the battery, which seems to start to go just before the 2 years are up. It seems to be impossible to replace the battery, which would keep my current LG phone going for another 2 years. I’d bet most “smart” phones have this problem, too.
I have no use for a “smart” phone; their form factor for casual use is too big, and it will run up the monthly cost to get a data plan. It seems to me the screen size limits web use, too. I had Sprint disable texting for our phones; its price for casual use is way too high. I don’t think I ever sent a text message and the few I received were 100% SPAM. For this I had to pay 20 cents per message! Forget it!
I also have no use for a still camera in a cell phone. As with “smart” phones its cost is way too high for casual use. In any event, the picture quality in most cell phone cameras is terrible. My step-daughter’s families send us quite a few cell-phone camera photos. I don’t particularly like their quality, though we appreciate the photos.
sound like you should get an iphone then…
Here in the UK, we’re lucky in being able to buy the iPhone on Pay As You Go. I may be wrong but I didn’t think that was an available option from mobile companies in the US. I bought a 3G for the equivalent of less than $500 last year and top up $15 at most each month.
Ha, love the image Bob. Where do you come up with these? Darth Telecom!!
Essentially, this is the end of video over cellular on the iPad and smartphones.
You will have no trouble at all hitting a 2GB limit in a few days watching video on the iPad.
And your next phone better be one with Wi-Fi support if you want to watch video, or surf real websites (not the crippled, ‘mobile-ready’ WAP versions).
Considering you’ll drop back to 2G once you pass the city limits, it’s clear AT&T still has significant network issues both with providing adequate 3G bandwidth and 3G coverage.
I’m a long-time AT&T customer, and have been planning to upgrade my daughters phone to the new iPhone as her birthday present. I was really concerned with the recent announcement of the data plan changes. My daughter currently has a BlackJack II and uses her current $29.99 unlimited data plan to watch YouTube videos extensively. I didn’t want a repeat of the texting explosion. After reviewing my bills for the last several months, I saw that as much as she seems to use data, it amounted to an average of about 700MB per month. In addition, my AT&T rep told me that any current unlimited data plan will grandfather over to the new iPhone, not just an ‘iPhone’ data plan. So, it’s much to do about nothing on two fronts.
I would like to see more graduation in both cellular and data plans, though, much like Sprint used to do when I was a customer ten years ago. Spint also had free incoming texts at that time, as well.
I currently pay $79.99 for a family cellular plan providing 1400 minutes. I could save $20 by moving down a peg to the next available plan providing 700 minutes, but that puts me really close to my actual usage, and my rollover minutes would be truncated down to 700 as well, leaving little margin for overages.
If I could pay a marginal stepped amount for cellular and data as my usage increased, I could reduce my bill considerably. I rarely use 100MB on my Fuze, and my wife uses far less on her Blackberry, but we both are required to have unlimited data plans.
I agree with Bob, this is a smart move for AT&T, and it will be great for a significant number of their customers. However, plan pricing in general needs to be modified to allow customers better flexibility and greater savings.
AT&T is no better or worse than any of its U.S. competition. They all follow practices which make our European and Asian scratch their heads.
And the network does NOT belong to the people; the airwaves might, but the people have leased them out. AT&T et al are free to make as much money off the network they built to utilize the people’s airwaves as the people will pay to utilize the network. If you don’t like it, don’t use it or use someone else’s network.
Someday perhaps if people keep voting with their feet, the carriers here in the U.S. will adopt more of the European model. Then perhaps I could cut my $217 monthly bill (4 lines, 3 data plans, unlimited family texting) in half. Perhaps with the way AT&T is going, I may be able to do that in the near future.
“And the network does NOT belong to the people” — The fact that the infrastructure is controlled and doled out by organizations not even making a show of doing it well or sensibly is a bit of a concern. The highways system has been maintained reasonably well for 50 years, hasn’t it? The Gov needs to start laying down the info highway mentioned a decade ago, and moving us over to a national data system like they’re doing with healthcare.
“Someday perhaps if people keep voting with their feet” — that’s the goal, because we can’t now. Depending on where you live, you have the option of a slow DSL company from one provider or a fast Cable connection from a bunch of idiots; or vice versa. One provider on each infrastructure or network, and no real choice within the medium. It’s a farce.
I’ve seen muni infrastructure do very well, every time I’ve seen it: customers can hop providers very easily, and the same infrastructure can be accessed by many customers and vendors (unlike, say, power, water or gas). It works very well when operated by a bunch of corrupt public servants as opposed to a bunch of lying corporations — a better flavor of criminal, anyway. Extend this out to wireless, glass and copper on a larger scale and make this twisting mass of backroads and toll booths into a real highway system.
Has anyone looked at Sprint (or Clear) for their 4G coverage? There are options folks. Clear has a 4G package for about $65 per month for two accounts.
Pretty much unlimited higher speed Internet, although they will slow things down when too much demand merits it. Add in a MIFI device and you’ve got the iPhone, the iPad and the Macbook covered. With this, I’ll never touch those AT&T limits and I don’t need to tether to anyone.
I have a have a a jailbreak iPhone and I don’t use AT&T! Got my month to month for $50.00. sweet and simple. All one has to do is exercise some imagination.
I must be slow but I don’t follow the logic. If a contract runs two years and a plethora of smart phones will be flooding the market by three years time and these smart phones might not have data plans (not sure how that will work), how is what AT&T is doing now all that different than before. You mean they dangle that cheaper $15 dollar fee for those who have not bitten the data bait yet and then they hope to reel them up to the $25 eventually? Are there that many people who want data but are put off by a $30 charge but will go for $15? I guess. I must admit that I live in a data bubble because a lot of the people I know have smart phones so I don’t know what the market breakdown is for smart phone ownership vs. regular cell phone, but there has got to be a segment that would never want data and we already have $99 iPhones at Wal-Mart so the barrier to entry for many, you’re saying, is that extra $15?
Coverage by tuaw (and others) indicated that users on the lower plan can rev up to the 2gB plan, if they do change before the end of the billing cycle, without penalty. Users on the 2gB plan can start a new term, again if they make the change before the end of the cycle. So it is essentially 250mB/2gB or 30 days whichever comes first. Beware that the billing cycle does not match month boundaries.
The egregious charge is for tethering, since it doesn’t allow more data. You’re paying just for the privilege (I’ll stay jailbroken with MyWi, thank you very much;-)
I personally think there are two issues relevant to metered usage (that I didn’t see touched on here).
First is Econ 101: Optimal profit is from setting pricing so that marginal cost = marginal revenues. What with auto-pay accounts, the bill being $18.32 one month, and $23.50 the next is not the nuisance it used to be, and if there were a simple formula such as $10/month includes your first 100 MB and overage is $2 per 100MB or part, you’d not have people gaming your unlimited, not put off because they had to over-buy (and a competitor offered a lower entry point that was very profitable for the competitor).
Second is a sense of fairness. Why-oh-why didn’t AT&T say, “we expect to get less revenue from this pricing for most customers, but eventually it’ll help us get better service and be able to support more people because we’ll squeeze out the people who use data as if it was free. We think that’s a better way to work with customers and it’ll work out OK for us.”
The new pricing includes the gotcha component of overage costing significantly more than the pre-committed (some is fair, but it’s really lopsided), and the extra cost for tethering just has no support in either of the two issues I point out.
Anyway, the potential ubiquity of Android might help here: With a similar interface across providers, customers’ loyalties to the providers will drop. (As that’ll cut the oligopoly pricing power of the providers, I salute that.) Companies that offer “unlimited” data to try to get new signups will eventually have to put up with people basically torrenting their connections, making it a very expensive proposition. Companies that charge more for the first 100 or 200 MBs will lose the very large number of mid-wave adopters who will buy more and more data over time. And those that set punitive overage charges will just piss off everybody. Give it another 5-10 years, and we might see “market forces” show the providers how to maximize their profits by serving more, happier customers.
Bob, You hit the nail on the head with this article. The mobile telcos are scrambling to define customer expectations before the cat is out of the bag and we realize we don’t need to be spending all that we do spend for telecommunication services.
Verizon has pulled a fast one by changing Mobile Web 2.0 from a voice based service to a data service. What’s the difference? When Mobile Web minutes were billed as voice, night and weekend usage was free. Now all usage is billed 24/7. Nice move Verizon but I’m not buying it so you just lost $5 in monthly revenue from this subscriber. Small potatoes but I bet it adds up.
I have no problem with businesses trying to maximize their revenues. They can price their services however they want but if I don’t like it I won’t be buying.
I noticed that everbody is focused on AT&T/Apple ecosystem. Verizon already is doing something like this. They are charging $9US a month for a simple data phone think LG ENV2 or ENV3. Now for $6 more a month the Apple IPhone data plan is looking very attractive. In my opinion AT&T may be doing this partly in competition with Verizon
[…] I, Cringely » Semi-Smart – interesting take on AT&T’s change of tariff for the new iPhone […]
AT&T is already well on their way to putting everyone on a data plan and they don’t need the iPhone for it. Fact is, AT&T requires a data plan with any phone that is either (i) a smart phone or (ii) has a full keyboard. Minimum data plans start at $5/month for unlimited texting. Oh, and did I mention they only carry about 4 phones that do not meet those requirements?
Fortunately for me, my NexusOne (directly from Google) just works since I just had to switch the SIM from my Motorola v180 to it. No carrier or contract changes needed. So I get a smart phone with WiFi access and no required data plan.
The real thing behind this AT&T decision is probably SKYPE. Skype is now the biggest telco with more than 500M users. With the ability to offer cheap voice communication they are the real thread to companies like at&t.
Remember at&t banned skype from iphones in their early days.
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