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AT&T (NYSE: T) -- the iPhone and iPad's exclusive wireless carrier -- has announced a set of tiered pricing plans for access to its 3G network through Apple (Nasdaq: AAPL) mobile devices. It's a move, according to the company, designed to allow customers more choice over their pricing plans and usage. Critics, though, are not so sure.
On the heels of the announcement, websites were buzzing with lists of pros and cons of switching to one of the new metered plans. Macworld, for instance, published a complicated table of price comparisons between the plans for those who own both an iPhone and an iPad and must figure out how to estimate their usage for both gadgets combined.
Sky's the Limit?
The lower-end package, called "DataPlus," will cost just half of what iPhone users currently are paying for unlimited data, but their US$15 per month will buy just 200 MB. That will be "good for consumers," according to Carl Howe, director with the Yankee Group. In fact, even power users who choose the higher plan at 2 GB of data for $25, will see a slightly lower bill for data.
Even many heavy iPhone app users could remain well under the 200-MB limit if they access websites primarily through WiFi connections rather than 3G.
Where things get sticky is with tethering, which has been a sore spot for iPhone users who have been frustrated by AT&T's lack of support for the iPhone's capability to function as a modem for laptops and netbooks.
Now, those who want tethering must buy one of the metered plans and also pay $20 more per month for the tethering privilege -- regardless of data usage, which is included, nonetheless, in the metered total. That stings.
"The old, non-iPhone tethering option offered you 5GB of tethering data for an extra $30 a month," Gizmodo pointed out. "The new plan charges you $20 extra to use the same 2GB pool of data for tethering. You are not buying extra data. You are simply paying extra to use it for tethering."
The data cost per megabyte is higher under all of the new plans, as Gizmodo shows in a comparison chart.
"The gotcha," said Howe, "is if you're a big user of Pandora or Spotify, or if you're planning on watching everything you ever wanted to see on Hulu."
iPhone and iPad users who have purchased their devices in part to break free of expensive services such as cable TV or satellite radio might be in for a rude awakening when they see how much data they're transmitting.
Stifling Innovation
The new plans indicate a distinct preference on AT&T's part for the BlackBerry platform with its data compression and thus lower resource utilization, speculated Cult of Mac blogger Ed Sutherland.
The BlackBerry, however, remains a more business-oriented device, while the iPhone and iPad have been positioned specifically for consumers who crave online media on the go.
"This may stifle innovation," observed Howe. Entrepreneurs who want to launch streaming music or video sites -- or even services such as sitter-cams -- may think twice about doing so if consumers must think about paying for the data bandwidth to access the service.
Even more troubling are the implications for mobile advertising, which may experience a quantum leap with the new iAd service to be launched with Apple's iPhone OS 4 this summer.
"All of a sudden," noted Howe, "advertising is not looking nearly as attractive, with the consumer having to pay to see the ad." This, he noted, will take a "lot of spin" to go over well.
