The Market At Work
As an AT&T wireless subscriber for 10 years now, this got my attention.
Starting Monday, Dallas-based AT&T Inc . will do away with unlimited data plans for buyers of high-end smart phones such as the iPhone and become the first in the wireless industry to charge based on usage.
While the pricing overhaul could reduce some customers’ bills, smart phone owners who want to surf the Web, check e-mail, watch video and stream audio without limits will have to pay more for exceeding data quotas.
By killing its existing unlimited plan, AT&T is likely to ease some of the burden on its wireless network and could pave the way for competitors to follow suit.
I am a heavy data user. I have my nearly three-year-old HTC 8525 with Windows Mobile 6.5. It’s been a champ of a phone, but it’s aging out. I don’t have any complaints about AT&T’s coverage. I was starting to think about getting a new phone, but am certainly in no hurry.
I do know this… I’ll be getting a new phone and switching carriers fairly soon now.
I use my phone for both work and play - often using it for data access for my laptop when traveling. I have evaluated the iPhone, but it still doesn’t have the full feature set I need. So I’ll be looking to Verizon or Sprint or some other carrier for my new phone. Perhaps a Droid? I don’t really like Blackberries.
This is what’s great about a market economy. My provider is deciding to set up its business in a way that doesn’t work for me. Fine. More power to them. But I have the choice to take my business elsewhere. And I will. Easy, eh?
From what I understand, they’re not changing current customer’s plans, even if you renew your contract you won’t have to pay on the new scale (as long as you’re a current AT&T customer that is).
Posted by .(JavaScript must be enabled to view this email address) on June 03, 2010 at 0823 hrs
That would make sense, but I hadn’t seen that in the news stories. I was waiting for my mailer to see what the deal would be for me for sure. Hope you’re right.
Posted by Owen on June 03, 2010 at 0831 hrs
Yeah, the mailer would be the official source of info, but here’s some stuff:
At&T Plan changes - Endgadget link
Posted by .(JavaScript must be enabled to view this email address) on June 03, 2010 at 0837 hrs
Bah, I can’t type today…that’s supposed to read “Engadget” not “endgadget”
Posted by .(JavaScript must be enabled to view this email address) on June 03, 2010 at 0841 hrs
They decided that 65% of their customers are using less than 200Mb a month, and 98% of their users are using 2Gb or less per month. You can keep your current plan, you just have to pay full price for the phone. The positive thing about that is if another carrier comes out with a more attractive plan you are not locked into a contract…
I use far more data than voice, so I will probably end up buying my next handset (Iphone 4G?) and keep my current AT&T unlimited data plan.
Posted by .(JavaScript must be enabled to view this email address) on June 03, 2010 at 0903 hrs
As a current AT&T customer, I find their changes to be a mix of both bad and good. And I think the good edges out the bad. For example, my bill is going to go down by at least $5 a month and I can tether my iPhone now if I want to.
But there are two things that I find objectionable. First, the overage charges to the small data plan are obscene. (Overage charges when you have the 2 gig data plan are pretty reasonable, though.) Second, since the tethering charges are too high. In fact, it should be included free as part of the large data package.
On another subject, what are the features you find lacking on iPhone? Have you looked at the 4.0 update they’ll be pushing out next week?
Posted by scott on June 03, 2010 at 0924 hrs
I haven’t looked at the 4.0 one yet. I will. The original one (and the 3G) didn’t offer the ability to tether my laptop for data access (something i use a lot) or a couple of proprietary business apps that I run on Windows Mobile. One of those apps has an iPhone version now, but the features are limited.
Posted by Owen on June 03, 2010 at 1004 hrs
The big loser here, for now, is Apple. The appeal of the 3g iPad just went in the tank. 2GB might be just fine for a phone, but it’s certainly not going to be fine for a tablet device whose whole selling point is media consumption. Probably not coincidental that AT&T waited until after the big iPad launch to rain on everyone’s parade.
I suspect this has more to do with AT&T’s inability to meet its own infrastructure demands, both now and in the near future. By most accounts, their network is already overburdened. But what’ll be more interesting to me is whether this prompts Apple to try and get out of its exclusivity agreement with AT&T. Getting the much-whipsered about CDMA iPhone on the market would probably do a hell of a lot to help AT&T with its bandwidth issues.
Posted by Recess Supervisor on June 03, 2010 at 1016 hrs
Agreed. I think AT&T underestimated the demand for data that the iPhone would generate. I suspect that they thought that the IPhone users would consume data at about the same rate as previous Smart Phone users, but the easier interface of the iPhone encouraged data usage at several orders of magnitude greater. Their network wasn’t built to handle it.
Personally, as I said, my 3G data access has been fine. Most of the issues of network saturation seem to be happening in huge metro areas (New York, L.A., etc.) and not in the smaller cities in which I spend most of my time.
Posted by Owen on June 03, 2010 at 1022 hrs
I’ve been with Verizon for 6 years. I like them but am never so loyal to any brand that I wouldn’t consider switching. My wife and I both have Droids (it’s her first smartphone and my 3rd after 2 Windows Mobile phones). I’ve tested just about every major smartphone out there on every network and have been very impressed with the Droid and the Android operating system as a whole. I’m a heavy data user and if the unlimited option went away, I’d probably be looking for another network.
Posted by Joey on June 03, 2010 at 1031 hrs
It is only a matter of time until all other carriers switch to the usage based pricing. All networks are going to be stressed by heavy users. Something like 3% of smartphone customers account for a huge amount of data traffic, contributing to slow transmissions and dropped calls. Usage based pricing is the only way to get the heavy users to pay for the amount of network they consume.
Heavy users like Owen are going to have to pay more, but guys like me who would like an iphone, but can’t stomach paying $30 a month to pay to use a data network I will rarely access (I am much more likely to use the wifi network at home and at the office) will be signing up for the $15 a month plan.
The market at work… I love it.
Posted by .(JavaScript must be enabled to view this email address) on June 03, 2010 at 1052 hrs
I haven’t looked at the 4.0 one yet.
Just to be clear, I’m talking about the OS update, not a new phone. My 3GS will get the 4.0 update for free when it appears.
they thought that the IPhone users would consume data at about the same rate as previous Smart Phone users, but the easier interface of the iPhone encouraged data usage at several orders of magnitude greater.
Bingo. I further contend that this would have happened to Verizon, too, if they had accepted Apple’s offer to take on the iPhone from day one. We’d all be sitting here discussing how awful Verizon is and why oh why can’t they make an iPhone for AT&T! One could make the argument that Verizon would have responded to the problem differently, but I doubt it.
my 3G data access has been fine
Me, too. In fact, I rarely turn on the WiFi radio anymore.
I think Android is really good technology. One has to be careful, though, when going that route. Some of the phones running them are not so good. Plus, some of them are running old versions of the software. My personal plan is to get Apple’s new phone a year from now when I can upgrade again at a subsidized price. The only iPhone users who are really getting robbed here are the ones who sign up for the small data plan and then incur overage charges—something I will never do. I’ll get the big plan and save $5 a month from my current “unlimited” plan.
And, hey, you guys might find this amusing: Fake Steve chats with AT&Ts; CEO.
http://www.fakesteve.net/2009/12/a-not-so-brief-chat-with-randall-stephenson-of-att.html
Posted by scott on June 03, 2010 at 1055 hrs
The big loser here, for now, is Apple…
I suspect this has more to do with AT&T’s inability to meet its own infrastructure demands, both now and in the near future. By most accounts, their network is already overburdened. But what’ll be more interesting to me is whether this prompts Apple to try and get out of its exclusivity agreement with AT&T.Got that right - it’s all come as a shock to ATT that smartphone users would actually, you know…use their their smartphone. Says a lot about what Apple was able to do with the iPhone though - it really was the first set that you really could use a web browser with any degree of comfort or enjoyment. That alone blew up data usage and when you add in all the apps and downloading music, podcasts, movies & TV…interesting to ponder whether even Verizon’s network could’ve handled it.
It’s been confirmed that Apple’s exclusivity contract with ATT was for 5 years to run until 2012. Whether they can get out of it or whether anything has changed that timeframe is something very few people actually know. Those interested may wish to pay attention - Apple’s Worldwide Developers Conference kicks off on Monday with Steve Jobs giving the keynote. It will be interesting.
Owen - I’m obviously a big Apple fan and really love what they’ve done with iPhone OS. That said, the HTC Incredible with the latest version of Android is really an outstanding device. My business partner has one and I’ve played with it quite a bit. It’s a very worthy competitor to the iPhone - with both advantages and disadvantages, and would have no reservations about recommending it.
To the Apple haters - while they’re not for everyone, anyone using a smartphone today owes them a great deal of thanks. They lit the market on fire and the competition has resulted in everyone being forced to step up their game. Handsets today are miles ahead of where they’d be if the iPhone didn’t exist.
Posted by .(JavaScript must be enabled to view this email address) on June 03, 2010 at 1113 hrs
interesting to ponder whether even Verizon’s network could’ve handled it.
it couldn’t have.
Apple’s exclusivity contract with ATT was for 5 years to run until 2012. Whether they can get out of it
I think it’s likely that we’ll see a Verizon iPhone at some point in the future. But it’s not as simple as just flipping a SIM card. Apple would have to make and sell a different iPhone, one with a CDMA radio in it as opposed to the GSM one for AT&Ts; network. Not so hard, maybe, but it adds a layer of complexity to sales and support that a company like Apple won’t incur if it doesn’t have to.
the HTC Incredible with the latest version of Android is really an outstanding device. My business partner has one and I’ve played with it quite a bit. It’s a very worthy competitor to the iPhone
I agree completely. It’s one of the top Android phones out there.
To the Apple haters - while they’re not for everyone, anyone using a smartphone today owes them a great deal of thanks.
Amen, brother. And the same goes for the personal computer, digital music downloads and more.
Posted by scott on June 03, 2010 at 1121 hrs
I just thought of an additional complication with bringing iPhone to Verizon and CDMA: you wouldn’t be able to use data services while on a call. And Apple has shown a lot of TV commercials demonstrating that this is what the phone does.
Posted by scott on June 03, 2010 at 1250 hrs
The only iPhone users who are really getting robbed here are the ones who sign up for the small data plan and then incur overage charges
I quote myself to now correct myself. The other people who are getting screwed are the people who pay for the ability to tether. Since you’re already paying for a capped amount of data, tethering is just using that data service in a different way. You’re not actually using more data, so you shouldn’t have to pay anything at all for tethering.
Posted by scott on June 03, 2010 at 1302 hrs
interesting to ponder whether even Verizon’s network could’ve handled it.
it couldn’t have.My buddy at Lucent might disagree. Though their networks are much better to begin with, it’s probably safe to say they would’ve been stressed by the iPod’s data consumption. But I know he’d argue they (Alcatel-Lucent) have the hardware to handle it, the only is questions is whether Verizon would buy it and stay ahead of capacity.
But it’s not as simple as just flipping a SIM card. Apple would have to make and sell a different iPhone, one with a CDMA radio in it as opposed to the GSM one for AT&Ts; network.
Considering Jobs had OS X engineers maintain x86 compatibility (Project Marklar) from day one, I think it’s very safe to say there are iPhones out there running on GSM - compared to OS X on x86, a GSM iPhone actually is relatively simple. If Jobs was prescient enough to make sure the desktop/server OS was able to transition to another processor/instruction set, I’m almost certain he had the same approach with their mobile OS. Heck they went to Verizon first so they were up & running on CDMA from the start.
What is most interesting, might be the fact that the exclusivity contract with ATT will come to any end at what looks to be perfect timing to coincide with the transition to LTE (GSM and CDMA’s replacement). At this point, why bother putting users on CDMA for a brief period, when you can jump straight to the next generation technology. That’s always been one of Apple’s advantages - they’re not as heavily weighed down by supporting legacy hardware the way Microsoft is.
Posted by .(JavaScript must be enabled to view this email address) on June 03, 2010 at 1330 hrs
a GSM iPhone actually is relatively simple.
Yes, that’s true. But i never said the problem was with R&D. It just complicates manufacturing, sales and support. And maybe the biggest problem is with marketing, as they have already put out a lot of ads showing the iPhone using data services while on calls—something you can’t do on GSM.
What is most interesting, might be the fact that the exclusivity contract with ATT will come to any end at what looks to be perfect timing to coincide with the transition to LTE (GSM and CDMA’s replacement). At this point, why bother putting users on CDMA for a brief period, when you can jump straight to the next generation technology.
Now you’re talking. But that kind of network ain’t gonna be rolled out next week. I actually had a friend of mine who wanted to bet me $20 that Apple was going to roll out a Verizon iPhone at WWDC. Total nonsense.
(Watch, now it’ll happen because I said it couldn’t.)
Posted by scott on June 03, 2010 at 1340 hrs
Industry wide LTE adoption is going to be a huge leap forward. It will be here soon.
Posted by .(JavaScript must be enabled to view this email address) on June 03, 2010 at 1345 hrs
Just make sure you don’t email the CEO with your concerns:
Posted by hsgbdmama on June 04, 2010 at 0700 hrs
I just bought an EVO 4G. It should be arriving at my house tomorrow. I’m trying out Sprint coverage, because I’m tired of AT&T pricing, and not so good smart phones. I’m not happy about the BS “Premium Data” $10 / monthly charge on top of an “Unlimited Data Package” at $29.99 / monthly on top of a $69.99 / month unlimited calling and texting plan. But I’m thinking that either the govt will overstep its bounds and force Sprints hand, or a Class Action lawsuit will, or a grass roots uprising will.
Even with all those plan stacking charges, it’s still cheaper than VZ or AT&T.
Posted by .(JavaScript must be enabled to view this email address) on June 04, 2010 at 2159 hrs
Before you rush to change networks, realize that Verizon is almost certainly going to follow with tiered plans of their own, and don’t be surprised if Sprint does, too. Also don’t be surprised if your phone minute plans gradually get phased out and everything becomes one giant data plan with volume choices over the next five years.
Posted by Jib on June 06, 2010 at 1621 hrs
EVO 4G…. Oh.My.God.
Posted by .(JavaScript must be enabled to view this email address) on June 07, 2010 at 2122 hrs
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