Confession: we secretly hope the Palm Pre does very well. Not because we want one ourselves — we’re pretty happy with the iPhone round here — but because we want Apple and AT&T to think we want one so they continue to drive up innovation and drive down costs respectively. Competition is, was, and will forever be a Good Thing.
Case in point: we’ve heard rumors about Apple pressuring AT&T to lower data rates and/or offer lower price points for capped service. Wall Street Journal takes these rumors and shows why competitive pressure may be at the root of them with a little side-by-side comparison to the impending Palm Pre/Sprint rates. Neatly summarized:
So essentially, iPhone users have to pay $150 a month to match what Sprint will offer Pre users for $100
Hey, if Palm can get Apple to get AT&T to knock 33% off the monthly bill, more power to them (and money to us!)
[Thanks to the Reptile for the tip and @CRA1G for melting our hearts -- a little!]
AT&T Mouth of Sauron Speaks!
Business Week is warming up the rumor we heard ten days ago about AT&T considering reducing the iPhone data plan from $30 to $20. This time, however, instead of just a price drop, it’s suggested there could be the introduction of a new, limited data option.
So, high end users could get “unlimited” data for $30, and lower end users could get a capped plan for $20.
Business Week’s sources also suggest that a lower price or price tier is part of the ongoing negotiations between Apple and AT&T regarding the extension of AT&T’s US iPhone exclusivity.
Of course, $99 and pre-paid iPhones are also tossed in for good measure. Apple has stated in the past that they wouldn’t leave an umbrella for the competition, so lower-cost — up-front up on plan — iPhones are seen as putting pressure on RIM’s BlackBerry and Palm’s upcoming Pre, and shoring up Apple and AT&T’s market share.
If you don’t use a lot of data, would a tiered option (already available on many international carriers) appeal to you? Would a lower end or pre-paid iPhone?
We typically don’t follow every little Apple or AT&T lawsuit that closely because, frankly, there are too many of them and the frivolity of some just harshens our collective mellow. Case in point, according to Apple Insider:
Apple, AT&T and several others have been named in a new patent infringement lawsuit, presumably for their connection to Shazam, a maker of music identification software distributed under the same name for the iPhone and several other mobile devices.
The suit was brought by Tune Hunter, Inc. Assuming their case has merit, why sue Apple and AT&T instead of focusing on the actual Shazam app in question? Tune Hunter claims it’s because the iPhone duo are contributing to the infringement. For our part, we couldn’t help but notice Apple especially is contributing towards having tons of money.
They’re also suing Samsung, Napster, Motorola, Gracenote, LG Electronics, Pantech Wireless, and Verizon.
UPDATE: As of right now, SlingPlayer Mobile for iPhone is ranked #9 on the Top Paid Apps list on iTunes. A $29.99 app. Imagine if it had 3G?
ORIGINAL: Gizmodo has a source claiming that while AT&T may have legitimate concerns about their networks ability to handle millions of iPhone users trying to stream long-form video over 3G, they also may have far more self-serving, and perhaps anti-competitive reasons to block SlingPlayer’s access:
AT&T’s working on their OWN application code-named i-Verse, one that performs a similar task as SlingPlayer Mobile. AT&T’s “i-Verse” app works with their U-Verse TV solution that can either load DVR’ed shows from your U-Verse recorder into your iPhone at home, or stream shows across the net over their 3G network.
Which makes little sense to us as not everyone has or wants, or even lives in an area where they can get U-verse. Never mind people in countries where AT&T doesn’t exist. (Though, again, we suspect international carriers are in agreement with this type of arrangement, may have their own services in the pipe, and are gleeful that AT&T takes the heat).
As opposed to SlingBox, of course, which anyone can buy and drop into their setup regardless of service.
The whole situation make us think that maybe Jeremy was on to something when he wondered out loud about AT&T exerting too much control over the App Store…
Looks like our friend Phil over at WMExperts was right all along, Engadget has the scoop, and it’s pretty much what we expected. AT&T thinks their 3G network is just too fragile to handle the iPhone running SlingPlayer:
“Slingbox, which would use large amounts of wireless network capacity, could create congestion and potentially prevent other customers from using the network. The application does not run on our 3G wireless network. Applications like this, which redirect a TV signal to a personal computer, are specifically prohibited under our terms of service. We consider smartphones like the iPhone to be personal computers in that they have the same hardware and software attributes as PCs.
Check out the Engagdet link above for the full statement, which includes the hollow flattery of their considering the iPhone less a smartphone and more a computer…
What about Windows Mobile running SlingPlayer, you may ask? Why is that okay? They think it might be too difficult to police hundreds of individuals side-loading the application, whereas the App Store — controlled totally by Apple — is only a one phone call ban away.
However, the iPhone is also an unprecedented consumer success with millions of users on AT&T, using never-before-seen levels of mobile data, and proven track record for taking down AT&T’s — again fragile — network.
Fear is seldom rationale. We’re guessing AT&T is banning first, asking questions later. It’s much easier to take the heat for preventing it now, then allowing it, seeing Sling adoption rise, network traffic suffer, and taking even more heat for removing it later (or — gasp! — having to build out their network reliability faster).
What’s your take?
The Wall Street Journal has an article up today saying the iPhone uses more data than your average smartphone and suggesting:
In the short term, carriers should abandon unlimited data pricing plans. Both AT&T and Verizon Wireless already charge extra for heavy users with wirelessly connected laptops. They will have to contemplate similar strategies for smartphone users.
Short gloss — yes, the iPhone will strain AT&T’s network and the profit on the iPhone plan is probably a bit less on a per-user basis than it is on, say, a WinMo phone. However, ARPU is “average revenue per user”, and the iPhone makes AT&T’s ARPU look high and that’s still what people pay attention to. (And even with reduced profit, AT&T still makes WAY more ARPU and profit per-user with the iPhone than they do off a feature phone.)
As for abandoning unlimited data: like the cable companies, every provider wants to but nobody has figured out a way to do it that doesn’t make end users livid. So, we doubt that AT&T will pull that particular trigger.
Finally, network upgrades aren’t just about giving users speed and better experiences with fewer dropped calls and the like — they’re also about the network lowering their per user cost, and that’s certainly in AT&T’s best interests as well.
So you’re right, WSJ, that the iPhone cuts into some of AT&T’s profit levels, but not so much that it’s going to be a problem. There’s a reason they’re so desperate to re-up their contract with Apple.
[Via Gizmodo]
Apple Insider has a pair of reports up, the first of which cites one analyst following up two other analysts who would all really, really like to see AT&T reduce data plan charges by $10 a month.
So would consumers. However, nothing to back it up yet but wishes and analyst musings to make it so.
The second report highlights that if AT&T does drop rates, and drives adaptions, they’ll only reach saturation level faster, forcing Apple to look again at Verizon and their 15 million customers to drive further growth.
Verizon customers would certainly love it, but can Apple wait long enough for LTE-compatibility to roll out?
Lastly, Dmackdaddy tipped us to what looks like AT&T seeking a lot of “retail sales consultants” in the Bay Area. Looks like some other areas may also be stocking up on staff. Regular business cycle, or just one more sign of the big iPhone 3.0 and iPhone next generation release expected for the summer?
Today AT&T’s very own application, myWireless, was released in the the App Store for all AT&T subscribers to download. myWireless [iTunes Link] is a crafty little app that lets iPhone users manage their AT&T accounts easily from the device itself. You can view your data and minutes usage, view and pay your bill, and you can even add and remove extra features like text messaging and early nights/weekends, all from the comfort of your very own iPhone.
I’ve tested it out and pretty much any option on AT&T’s website is built into this app. You can even access your full detailed bill via PDF file.
It is important to note that you must have an active AT&T Mobility account that is registered for online account management in order to use this application.
Daring Fireball posted a tremendous article about how Verizon, AT&T, and Apple benefit if the rumors about an iPhone Lite and iPad media tablet on Verizon are true-ish (Gruber also looks at Apple’s iPod strategy mapped to the iPhone — go read it now, I’ll wait).
What struck me, however, was how Verizon, AT&T, and Apple benefit from the rumors themselves rather than the actual devices and/or their eventual carriers, if any.
Apple is, according to a separate rumor, negotiating with AT&T to increase the length of their iPhone exclusivity agreement. AT&T’s last earning report showed just how important the iPhone was to their revenues, especially their new customer acquisition and premium service charges. This puts them at a distinct disadvantage with Apple, who could theoretically — if inconveniently — re-engineer the iPhone to work on any of the big 4 US carriers (CDMA for Verizon or Sprint, different GSM bands for T-Mobile). Rumors that Verizon is already talking to Apple, then, pushes AT&T over edge of disadvantage cliff. Obviously this is of great benefit to Apple.
Verizon had what could only be termed a lackluster launch of their so-called iPhone killer, the BlackBerry Storm. With AT&T likely getting yet another mainstream hero phone this year in the form of the 3rd generation iPhone. Sprint, the other CDMA carrier, is getting the less mainstream, but still geek-anticipated Palm Pre as their hot summer hero phone. Where does that leave Verizon? The BlackBerry Tour (”Niagara”) and various HTC Touch series Windows Phones which will — eventually — be upgradable to the profoundly incremental Windows Mobile 6.5. Great gear, perhaps, but not hero phones on the same level as the iPhone or even Palm Pre (or last year’s Android G1 launch on T-Mobile). Rumors that Verizon may (soon) get an iPhone of sorts, or iPad, however, give the perception of a hero phone coming to the network. This is a huge benefit to Verizon, and might even keep some users from switching to AT&T (or Sprint) this summer to get a real device.
Inversely, AT&T benefits not one bit from these rumors. They hurt AT&T’s negotiations with Apple and they may cost them some users who would have defected from Verizon.
We discussed this briefly last Wednesday on the iPhone Live! podcast, and no doubt others have made the same observation this week after reading the series of rumors (yes, even the one about the iPhone Lite actually being the Microsoft iPhone-Killer Pink). However, looking past the devices, it does seem like the rumors in and of themselves carry a hefty benefit for both Apple and Verizon.
Until the 4G Long Term Evolution (LTE) networks roll out in a couple years, that might be the closest we really get to seeing Apple and Verizon together.
While we wait on Apple’s quarterly results call scheduled for later today, it’s worth noting that the iPhone’s only US carrier just posted their own financials and things are still looking good for our favorite little pocket universe denter:
AT&T said 1.6 million Apple iPhone customers had activated services on the AT&T network during the quarter, more than 40 percent of which were new to the telephone operator.
Some analysts worried that the subsidies AT&T was paying for the iPhone were too costly, others that AT&T was too reliant on the iPhone:
They estimated about three-quarters of [AT&T's] net new monthly bill-paying customers were iPhone users.
[via Jeffdc5 on Twitter]
