Apple, AT&T mulling tiered data plans for next iPhone - report

[AppleInsider]

Apple and its US wireless partner AT&T are discussing plans to potentially offer next-gen iPhone customers more data plan choices amid fears of losing their business during a time of economic hardship, according to a new report.

In a research note to clients Friday, Kaufman Brothers analyst Shaw Wu said he believes the current plan pricing is too high, which has resulted in some customers balking at the required $70+ monthly fees and taxes just to upgrade to an iPhone. The current data plan is $30 while enterprise customers pay $40.

"Our sources indicate what's holding up new iPhones are not technology issues but rather fine-tuning of its go-to-market strategy," Wu wrote. "Due to fear of lower profits, [AT&T] is more open to developing tiered data plans that fit more in line with today's environment."

Wu doesn't mention any specific possible plans, but he does discuss some new possible models of the iPhone.

"Apple, along with AT&T and its carrier partners, is in the midst of figuring out how to position a second and potentially even a third iPhone model that would be complimentary and minimize cannibalization with the current 3G iPhone," he wrote.

The analyst believes Apple will follow a strategy similar to what the company did with the iPod, expanding the market with more choices. Citing sources, Wu predicts several iPhone models with differing feature sets, adding the possibility of a low-cost voice, e-mail, messaging-only plan with no Internet on what he referred to as an "iPod phone".

His supply chain checks supposedly point to three iPhone models at "a fairly advanced development stage" that await the green light from Apple.

"One of these has a smaller, approximately 2.8-inch screen, but true to Apple's word, we believe it will be less likely to see the light of day in the near term as it appears that software and thus feature sets will be the key differentiator as opposed to screen size, like with iPods and Macs," he told clients.

Wu becomes the latest to disregard acting chief executive Tim Cook's comments about low-end iPhones last month.

"You know us, we're not going to play in the low-end voice phone business," Cook said. "That's not who we are. That's not why we're here. We'll let somebody do that, our goal is not to be the unit share leader in the phone industry. It is to build the best phone."

Piper Jaffray's Gene Munster predicted a family of iPhones, Mike Abramsky of RBC has twice talked up an entry-level iPod phone, and now there is Wu. Of course, the three are not alone.

Wu maintains his $120 price target for shares of Apple, reiterating his belief that the Cupertino-based company is "one of the better names to own in this tough macroeconomic environment."

[ View this article at AppleInsider.com ]

[JavaCowboy]

If this is true, this is the perfect solution to the problems the iPhone is currently facing.

Instead of coming up with an iPhone Nano, the same phone can be made available with different data plans, thus catering to customers with different budgets.

Granted, this won't happen in Canada, where Rogers doesn't even offer an unlimited data plan, but just 500 Mb and 1 Gb plans for an outrageous amount of money.

[anantksundaram]

Originally Posted by AppleInsider

Wu maintains his $120 price target for shares of Apple, reiterating his believe that Cupertino-based company is "one of the better names to own in this tough macroeconomic environment."

[ View this article at AppleInsider.com ]

I believe that should be 'belief.'

So, what' the basis for Wu's belief? If his sources said that new phones are being held up because of 'fine-tuning of its go-to-market' strategy, how is that a comment on tiered pricing? Btw, doesn't the iPhone have tiered pricing already (at least three data plans at different price levels)? And, if these plans were so onerous, how come the iPhone has become a best-seller?

I don't know about this Wu guy.......

[dr_lha]

The solution is not to offer tiered data plans, it is to lower the cost of ridiculously expensive cellphone, data and text messaging plans.

[fraklinc]

Originally Posted by JavaCowboy

If this is true, this is the perfect solution to the problems the iPhone is currently facing.

Instead of coming up with an iPhone Nano, the same phone can be made available with different data plans, thus catering to customers with different budgets.

Granted, this won't happen in Canada, where Rogers doesn't even offer an unlimited data plan, but just 500 Mb and 1 Gb plans for an outrageous amount of money.

Agreed, AT&T 3G data sucks so hard that i only use it between commute and 90% of the time my phone hops on to Wifi automaticly ether at home or work, so yes a cheaper data plan will really help a-lot since i hardly even use the freggin service, ether that or this will be my last iphone and i'll have to move to a ipod touch

[8CoreWhore]

There's no feature of my Iphone 3G that I would be willing to give up - but I'm definitely open to a lower priced plan!

[cameronj]

Originally Posted by anantksundaram

So, what' the basis for Wu's belief? If his sources said that new phones are being held up because of 'fine-tuning of its go-to-market' strategy, how is that a comment on tiered pricing? Btw, doesn't the iPhone have tiered pricing already (at least three data plans at different price levels)? And, if these plans were so onerous, how come the iPhone has become a best-seller?

Certainly not in America. One plan only. I suppose you can count the Edge plan but that's not really an "option" - you buy the iPhone you get the only data plan you can get.

[amac4me]

I simply want a tether option for my existing plan

[lepton]

It's not the data plan that has me annoyed, it is the basic $40 cell plan. It is much, much more than I need. I don't need 450 minutes, frankly 60 minutes is enough for me. I use the phone for data much more than for voice. Having a lower tier voice plan would save me a lot of money.

[Crowley]

Originally Posted by AppleInsider

Apple and its US wireless partner AT&T are discussing plans to potentially offer next-gen iPhone customers more data plan choices amid fears of losing their business during a time of economic hardship, according to a new report.

In a research note to clients Friday, Kaufman Brothers analyst Shaw Wu

[/stop reading]

[nagromme]

In my case the "$70 penalty" for upgrading to an iPhone came out to be only a few dollars more than I was already paying for land line + long distance minutes. So I dumped the land line and basically got unlimited mobile internet for free!

But I know someone else who just got a Blackberry because they could obtain one without any Internet plan at all. They would have gotten an iPhone if it came with just voice and no data. (They still wanted the music/video/apps/PDA/camera/maps/WiFi functionality of the phone. An iPhone with no data plan does make sense: it's the same as someone carrying an iPod touch plus a voice phone, which is common.)

[slapppy]

They should at least offer unlimited text with the data plan.

[tink]

...that I am and owner of a Blackberry Curve with no data plan at the moment.

I would have plopped my cash down for an iPhone in sec if I could have forgone the data plan. At this point in my life I hardly use the data plan but would groove on the sync and media features. I would also want data on demand so that when I do need the net I could get it.

It would be cool if they set up something similar to texting, where you pay a nominal fee per text up to higher monthlies based on use.

If I had more of a cash flow I still wouldn't plop $30/month.... but I did switch to AT&T partially hoping that better iPhone arrangements pan out.

[fmaz]

Originally Posted by lepton

It's not the data plan that has me annoyed, it is the basic $40 cell plan. It is much, much more than I need. I don't need 450 minutes, frankly 60 minutes is enough for me. I use the phone for data much more than for voice. Having a lower tier voice plan would save me a lot of money.

Well put. That is the way ATT should go... more options on the phone plan - why not keep the current data plan $30 and make the phone plan pay-as-you-go (aka Go Phone)... that would make a world of difference...

[alansky]

What is this article referring to? iPhone talk plans cost exactly the same as talk plans for any other mobile phone. The data plan costs an extra $30 a month. Where is this "$70+" figure coming from. It is simply not true.

[trip1ex]

Iphone with no data plan.

Iphone with no gps & lesser storage and no data plan.

Or a NanoPhone with just basic phone and Ipod Nano capabilities.

They need to do one of these things.

[trip1ex]

Originally Posted by alansky

What is this article referring to? iPhone talk plans cost exactly the same as talk plans for any other mobile phone. The data plan costs an extra $30 a month. Where is this "$70+" figure coming from. It is simply not true.

$70/month is monthly fee for Iphone. Add tax and fees to that and (afaik)$5 for a text message plan.

[charlituna]

Originally Posted by anantksundaram

I don't know about this Wu guy.......

isn't Wu the guy that has been wrong more often than right when it comes to Apple stuff. tends to take what he wishes and turn it into some big batch of knowledge. but oops, apparently the bosses at Apple didn't get his memo on what they should be doing.

my thoughts

1. Apple likely has no vote when it comes to ATT prices, coverage upgrade plans etc. They can perhaps suggest but they can't demand. I believe this because they made the same game on ATT over the specs of the phones. So I can see ATT not giving Apple control over service.

2. it is not likely that Apple will ever step back and do a no data iphone nano or whatever you want to call it. that would be taking out one of the 3 components of the phone's design. I also don't see things ever going to edge now that there are reports that ATT is cutting back on Edge service in many areas that have 3g.

3. it is possible that just like ISPs are looking at levels of service and cost with various data caps so that they don't lose customers to promo offers by other companies, cell companies might mix things up a bit as well. ATT might consider a lower limited data plan or even splitting the difference on the unlimited data + texting and making it all $40 or even just adding a limited text for free like before to the $30 plan or some alt plan to avoid cranky customers running the second the contract with Apple is up and they have to officially unlock phones.

but what they do is all rumor until they do it. No matter what Wu says. Just like the 8 core 30 inch imac, the media server, the tablet and all the other times we've been Wu'd

[macxpress]

Originally Posted by dr_lha

The solution is not to offer tiered data plans, it is to lower the cost of ridiculously expensive cellphone, data and text messaging plans.

You've got to be kidding? The phone isn't that expensive.

Having different plans would make quite a difference. Not everyone has the same needs. I myself probably wouldn't even use more than 100 minutes/month, but rather more data. Other the other hand, people I work with use over 600 minutes per month with less data. I also think a text messaging plan should be built into these plans. Quite ridiculous to make people spend $70/mo for a plan and then another $5 to $6 per month for a text plan.

Apple's biggest downfall of the iPhone is AT&T. I'm telling ya...in the US a Verizon based iPhone would kick ass and take names!

[Abster2core]

Originally Posted by JavaCowboy

If this is true, this is the perfect solution to the problems the iPhone is currently facing.

Instead of coming up with an iPhone Nano, the same phone can be made available with different data plans, thus catering to customers with different budgets.

Granted, this won't happen in Canada, where Rogers doesn't even offer an unlimited data plan, but just 500 Mb and 1 Gb plans for an outrageous amount of money.

Before the iPhone came to Canada, AT&T reported that the average data usage per month was 100 MBs and the average user's monthly bill totalled nearly $110 US. From that, most countries cell services dropped the unlimited data plans.

Rogers did as well. And as we know, launched the iPhone with a special 3yr 6GB plan for $30 per month. So far, I have not come near to using 200 MBs per month, and according to information I have been able to see, not many others are too.

One thing that most people in Canada aren't aware of, is that AT&T credit those that are sent instant messages, whether you open them or not. Unlike Rogers, were IMS are only credited to the sender.

Other things are different to. However, Rogers customers are getting a heck of a better deal than AT&T clients, especially when you factor in the exchange rate.

[Abster2core]

Originally Posted by macxpress

I'm telling ya...in the US a Verizon based iPhone would kick ass and take names!

Just how many times must it be said that the iPhone is a GSM phone and that the Verizon 'CDMA' network is not compatible with GSM which AT&T and 90% of the world runs on. http://www.wisegeek.com/what-is-the-...m-and-cdma.htm

[walshbj]

Reminder - we're talking about carriers here. They're not going to make things easier on us because of "economic hardship." More likely, they want to jack up the price of the $30 data plan, so they'll provide another plan with a lower rate.

Verizon is adding a My Circle equivalent - but it will cost their newly acquired Alltell customers more than it did at Alltell. So much for economy of scale.

I have to laugh at how brazenly the carriers scoffed at the breakup and reassembled themselves. While passing all the costs of restructuring, re-branding, and reassembling to us.

[hiimamac]

Originally Posted by walshbj

Reminder - we're talking about carriers here. They're not going to make things easier on us because of "economic hardship." More likely, they want to jack up the price of the $30 data plan, so they'll provide another plan with a lower rate.

Verizon is adding a My Circle equivalent - but it will cost their newly acquired Alltell customers more than it did at Alltell. So much for economy of scale.

I have to laugh at how brazenly the carriers scoffed at the breakup and reassembled themselves. While passing all the costs of restructuring, re-branding, and reassembling to us.

I see it like this and hope I'm right.

In June, Apple and AT&T will have millions of users that will be reaching their 2nd year of their contract. By then, Palm Pre and perhaps a few new Android and who knows what, will be out. We have to hope as iPhone users, that the Pre is really, really good and does a lot. For example we know it does TbT GPS, lets hope it does more like streaming video. Why? This will help force AT&T and hopefully reduce their OVERPRICED package, especially since the US is number #20 in terms of Internet speed WORLD WIDE, you have to wonder how slow we are in terms of Mobile speeds as some countries STREAM FULL TV SHOWS.
In the long run, this should force AT&T to lower prices.

Lets hope as we love our iPhones and need better pricing and phones.

Godspeed to the families of the plane crash last night, God Speed. (If anyone listens to Mac OS Ken, he eeriely says on FEB 12ths PODCAST, anyone see the tree on fire in Buffalo NEW York last night? 12 hours later, a plane crashes there. Very sad, and weird).

[samab]

Originally Posted by hiimamac

I see it like this and hope I'm right.

In June, Apple and AT&T will have millions of users that will be reaching their 2nd year of their contract. By then, Palm Pre and perhaps a few new Android and who knows what, will be out. We have to hope as iPhone users, that the Pre is really, really good and does a lot. For example we know it does TbT GPS, lets hope it does more like streaming video. Why? This will help force AT&T and hopefully reduce their OVERPRICED package, especially since the US is number #20 in terms of Internet speed WORLD WIDE, you have to wonder how slow we are in terms of Mobile speeds as some countries STREAM FULL TV SHOWS.
In the long run, this should force AT&T to lower prices.

Lets hope as we love our iPhones and need better pricing and phones.

Godspeed to the families of the plane crash last night, God Speed. (If anyone listens to Mac OS Ken, he eeriely says on FEB 12ths PODCAST, anyone see the tree on fire in Buffalo NEW York last night? 12 hours later, a plane crashes there. Very sad, and weird).

AT&T doesn't care if you upgrade or not to a 3rd generation iphone --- as long as you remain with AT&T --- which means that they will try to sell you a Palm Pre (at a lower handset subsidy) and still charges you about the same in monthly fees.

Broadband speed is so much faster in the rest of the world than the US --- because they LIE about their speed.

http://www.theregister.co.uk/2007/12...el_speed_code/

Mobile phones overseas don't stream tv shows --- they just receive standard tv broadcast signals.

[TenoBell]

Sprint and the Pre are of no threat to the AT&T or the iPhone. Sprint and Palm need the Pre to be a hit just for both to stay in business.

The iPhone is not overpriced in comparison to similar phones and services in the general market.

The iPhone can download and stream full TV shows right now.

Originally Posted by hiimamac

I see it like this and hope I'm right.
In June, Apple and AT&T will have millions of users that will be reaching their 2nd year of their contract. By then, Palm Pre and perhaps a few new Android and who knows what, will be out. We have to hope as iPhone users, that the Pre is really, really good and does a lot. For example we know it does TbT GPS, lets hope it does more like streaming video. Why? This will help force AT&T and hopefully reduce their OVERPRICED package, especially since the US is number #20 in terms of Internet speed WORLD WIDE, you have to wonder how slow we are in terms of Mobile speeds as some countries STREAM FULL TV SHOWS.
In the long run, this should force AT&T to lower prices.

[samab]

Originally Posted by charlituna

isn't Wu the guy that has been wrong more often than right when it comes to Apple stuff. tends to take what he wishes and turn it into some big batch of knowledge. but oops, apparently the bosses at Apple didn't get his memo on what they should be doing.

Munster has been saying about iphone nanos for a long time now. I really like to see you guys say that he is an idiot as well.

[NotRs]

Just how many times must it be said that the iPhone is a GSM phone and that the Verizon 'CDMA' network is not compatible with GSM which AT&T and 90% of the world runs on. http://www.wisegeek.com/what-is-the-...m-and-cdma.htm

This is a moot point, but Verizon actually had first shot at the iPhone and turned it down. Thus proving that Apple is completely capable of making (and more than likely has already made at least one prototype) a CDMA based iPhone.

[cameronj]

Originally Posted by hiimamac

In June, Apple and AT&T will have millions of users that will be reaching their 2nd year of their contract. By then, Palm Pre and perhaps a few new Android and who knows what, will be out. We have to hope as iPhone users, that the Pre is really, really good and does a lot. For example we know it does TbT GPS, lets hope it does more like streaming video. Why? This will help force AT&T and hopefully reduce their OVERPRICED package, especially since the US is number #20 in terms of Internet speed WORLD WIDE, you have to wonder how slow we are in terms of Mobile speeds as some countries STREAM FULL TV SHOWS.
In the long run, this should force AT&T to lower prices.

A little Econ 101 for ya. Wireless internet speeds in other countries will not affect ATT one iota because ATT is in no way competing against those carriers.

[NOFEER]

sprint has a 50$ unlimited everything plan that's where
AT&T verizon sees pressure not phone price it's the monthly
Bill problem people see. People have become smarter
When it comes from smart phones
It's the monthly plan costs.

[Rot'nApple]

Originally Posted by dr_lha

The solution is not to offer tiered data plans, it is to lower the cost of ridiculously expensive cellphone, data and text messaging plans.

Agreed. althoough I'm gonna be flammed especially by those who have a hatred for AT&T but I would like to see the philosophy that the longer the contract, the lower the data plan. They got your phone plan rates and for a longer period of time.

I'd say $40.00/mo for unlimited data for a one year commitment.

$30.00/mo for unlimited data for a two year commitment.

$20.00/mo for unlimited data for a three year commitment.

$10.00/mo for unlimited data for a four year commitment.

$5.00/mo for unlimited data for a five year commitment.


I've been with my current cell provider for 5 years easy and I just pay for talk for $44.00 a month for the past five years. So to add the cost of lunch at a fast food hamburger chain, i'd pay the $5.00 a month to get unlimited data for internet, e-mail etc.

Just my thoughts. How many out there, how long have you been with your current phone provider?

[TenoBell]

Tim Cooke has said their will be no iPhone nano. All Apple has to do is sell the current iPhone for $99, and sell a new iPhone with new technology at a higher price.

Originally Posted by samab

Munster has been saying about iphone nanos for a long time now. I really like to see you guys say that he is an idiot as well.

[TenoBell]

Sprint has been forced to offer highly competitive rates to attempt to stop the hemorrhaging of subscribers. Most of Sprints lost subscribers are going to AT&T and Verizon. So who is the pressure on?

Originally Posted by NOFEER

sprint has a 50$ unlimited everything plan that's where
AT&T verizon sees pressure not phone price it's the monthly
Bill problem people see. People have become smarter
When it comes from smart phones
It's the monthly plan costs.

[TenoBell]

I don't think this is a bad idea. But both AT&T and Verizon have very successful businesses and their isn't much incentive for them to do this.

Originally Posted by Rot'nApple

Agreed. althoough I'm gonna be flammed especially by those who have a hatred for AT&T but I would like to see the philosophy that the longer the contract, the lower the data plan. They got your phone plan rates and for a longer period of time.

[teckstud]

Originally Posted by Abster2core

Just how many times must it be said that the iPhone is a GSM phone and that the Verizon 'CDMA' network is not compatible with GSM which AT&T and 90% of the world runs on. http://www.wisegeek.com/what-is-the-...m-and-cdma.htm

He just doesn't want lost connections (AT&T) like we constantly read on here and unlike what the rest of the world experiences.

[fmaz]

Originally Posted by alansky

What is this article referring to? iPhone talk plans cost exactly the same as talk plans for any other mobile phone. The data plan costs an extra $30 a month. Where is this "$70+" figure coming from. It is simply not true.

You have to have the data plan... $30
You have to have a phone plan... $39 (450 min - this is the lowest price plan)

Total $69

Taxes + Fees add another $9 (give or take a few)

Total $70+ This is where the figure comes from... so yes it is True...

[fmaz]

Originally Posted by anantksundaram

I believe that should be 'belief.'

So, what' the basis for Wu's belief? If his sources said that new phones are being held up because of 'fine-tuning of its go-to-market' strategy, how is that a comment on tiered pricing? Btw, doesn't the iPhone have tiered pricing already (at least three data plans at different price levels)? And, if these plans were so onerous, how come the iPhone has become a best-seller?

I don't know about this Wu guy.......

No ATT doesn't have a tiered data plan - its $30 unlimited. Texting is broken out as a separate charge $5 for 200 messages up to $20 unlimited, and the phone plans start at $39 for 450 mins.. and goes up to unlimited for $99.

so if you did the full plan it would be $30 date, $99 phone, $20 texting.... or $150+ taxes and fees...

Its no mystery that the economy is cooked... ATT and other companies (think cable) need to rethink how much they charge for their services - if one has to chose to eat or spend money on minutes one never uses, eating will win that budget battle... every business is rethinking its strategy and ATT is wise to do so (assuming Wu really has some insider info).

Wish list:
iPhone Go Phone 8g, same form factor as current 3G - all the features without the expensive phone plan... optional data plan (you can connect to web via wifi if you want to skip the plan)

[hillstones]

Originally Posted by macxpress

I'm telling ya...in the US a Verizon based iPhone would kick ass and take names!

Keep dreaming. Verizon is shit. Verizon screws their customer by trying to charge for features built into the phone! Verizon would disable the entire iPhone and make you pay for every little feature. Case in point: My Moto Razr phone with AT&T had Bluetooth enabled. A friend of mine had the same phone but with Verizon. The software on the phone sucked, and they disabled the Bluetooth! If Verizon could charge you a monthly service for just turning on the phone everyday, they would!

[hillstones]

Shouldn't the article be called: "Shaw Wu pulls more crap out of his ass and expects his idiot readers and investors to believe the shit he is trying to shovel."

[hillstones]

Originally Posted by NotRs

This is a moot point, but Verizon actually had first shot at the iPhone and turned it down. Thus proving that Apple is completely capable of making (and more than likely has already made at least one prototype) a CDMA based iPhone.

Incorrect. Apple went to carriers BEFORE they designed a phone. All of them turned it down except for AT&T that knew whatever Apple would come up with would be successful. The other carriers are a bunch of dumbasses. This was specifically stated in the keynote that originally announced the phone. So they didn't have any prototype to show anyone.

[macxpress]

Originally Posted by hillstones

Keep dreaming. Verizon is shit. Verizon screws their customer by trying to charge for features built into the phone! Verizon would disable the entire iPhone and make you pay for every little feature. Case in point: My Moto Razr phone with AT&T had Bluetooth enabled. A friend of mine had the same phone but with Verizon. The software on the phone sucked, and they disabled the Bluetooth! If Verizon could charge you a monthly service for just turning on the phone everyday, they would!

Yes, they're phones suck and I can't stand the fact that Verizon controls every move you make. People say Apple is bad, Verizon is worse. I bet this is why Verizon turned Apple down. You know Apple wouldn't allow Verizon do what they normally do with their ohones.

Their wireless service on the other hand is the best out there in the US hands down. This is what I was referring to. AT&T wireless service, just plain blows. Their 3G coverage is a joke! Verizon's 3G coverage is pretty damn good. I could even get it here out in the sticks.