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Repeat: AT&T may introduce $20 limited iPhone data plan

post #1 of 122
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With next-generation iPhone hardware and software around the corner, a new report is adding to claims that AT&T is mulling changes to its iPhone monthly service and data plans that could reduce the cost of owning an iPhone and help Apple grow its share of the smartphone market.

Citing people with knowledge of the company's thinking, BusinessWeek claims the exclusive U.S. iPhone service provider "is considering cutting the price of its monthly service package or offering a range of lower-priced plans."

Among the new offerings would be a $20 monthly limited access iPhone data plan that could make its debut before month's end. AT&T currently offers a one-size-fits-all $30 unlimited data plan as a mandatory add-on for iPhone subscribers, which helps push monthly services fees for those customers north of $70 with taxes and fees.

The remainder of the report is mostly speculative and goes on to suggest Apple could introduce a pre-paid or $99 iPhone to accompany reduced plans from AT&T in a bid to attract lower income consumers. It cites a survey indicating that 43% of existing iPhone owners make salaries in excess of $100,000, noting that this pool of wealthy consumers is quickly running dry.

"A cheaper plan, coupled with new and possibly cheaper iPhones, could give AT&T a larger share of the U.S. smartphone market," the report says. "And unless prices drop on other smartphones in AT&T's stable, those rival handset makers, such as Research In Motion could end up losing market share in AT&T's stores."

Claims of cheaper or tiered iPhone data plans, which the report also mentions in theory, aren't new. They've been thrown around for months by Wall Street analysts and researchers who've had the opportunity to sit down with members of Apple's management and probe them on their prospects for growing the iPhone's install base this year.

For instance, less than two weeks ago Cote Collaborative analyst and pricing strategist Michael Cote similarly predicted that there's a "strong possibility" AT&T would cut its entry-level iPhone plan by $10 to $59, saying that the announcement could come as early as next month at Apple's annual developer conference.

The move, which would theoretically shave 14% off the cost of owning an iPhone -- dropping combined 2-year service fees to $1,640 from approximately $1,880 -- would cater to consumers who may find Apple and AT&T's current offerings too pricey for their shrinking budgets.

In February, Kaufman analyst Shaw Wu similarly characterized current iPhone service plans as "too high" for the handset to have broad market appeal. He cited sources who said Apple and AT&T were therefore mulling a plan that would offer future iPhone customers the option of selecting from a tiered set of data plans rather than continuing to pitch the current $30 take-it-or-leave-it option.

A week later, Bernstein analyst Toni Sacconaghi sat down with Apple interim chief Tim Cook, chief financial officer Petter Oppenheimer, and marketing chief Phil Schiller, who similarly told him that the company was considering "different pricing/price points" for the iPhone this year, with Cook reportedly adding that he was "examining iPhone's business model" to see if there was room for other possible changes.

In its report Monday, BusinessWeek also noted that Apple may have greater freedom to mark down the price of its next-gen iPhones with the cost of touchscreens, the most expensive component, having declined by more than 30% in the past year.
post #2 of 122
"To attract lower income consumers" - doesn't sound like Apple.
post #3 of 122
Quote:
AT&T may introduced $20 limited iPhone data plan

I know it's early in the day, but could you guys at least proof the headlines?

We say:

AT&T may introduce ...

---

Maybe time for a second cup. Thanks for all the news you provide the Mac community with.
post #4 of 122
Quote:
Originally Posted by markspain View Post

I know it's early in the day, but could you guys at least proof the headlines?

We say:

AT&T may introduce ...

---

Maybe time for a second cup. Thanks for all the news you provide the Mac community with.

You see the idea of a RUMORS website is to provide rumors. Not to always provide facts! BTW...it was mentioned in the article that this was said by someone from Businessweek.

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post #5 of 122
Great but as long as you get dropped calls and lousy reception, what difference does it make?
How is MMS texting and pics factured into all of this? Won't that be extra?
post #6 of 122
Quote:
Originally Posted by iStink View Post

"To attract lower income consumers" - doesn't sound like Apple.

AT&T has never sounded like Apple.
post #7 of 122
Quote:
Originally Posted by macxpress View Post

You see the idea of a RUMORS website is to provide rumors. Not to always provide facts! BTW...it was mentioned in the article that this was said by someone from Businessweek.

I think you may have missed his point....
post #8 of 122
Quote:
Originally Posted by teckstud View Post

AT&T has never sounded like Apple.

Quote:
Originally Posted by AppleInsider View Post

The remainder of the report is mostly speculative and goes on to suggest Apple could introduce a pre-paid or $99 iPhone to accompany reduced plans from AT&T in a bid to attract lower income consumers.

I'm saying it's all speculative, but it doesn't sound like Apple. If AT&T wants to bring their prices down to reach a lower income audience, that sounds about right, but when has Apple ever said they are doing anything for the lower income audience? They couldn't care less about the low income consumer if they tried.
post #9 of 122
With two iPhones (a 2G and a 3G), and a Nokia, our monthly AT&T bill is $165.00 for a 700 minutes plan. I've come to realize that is a lot of money. Reason why we will not have another iPhone in our family.

The high price that one pays for the "luxury" of a having smart phone (I believe it is across the board, Verizon or Sprint may not be much cheaper than AT&T) is driving people away. The once hungry market for these products is rapidly disappearing. I hope and believe that Apple is in a better position than its competitors to address this issue.
post #10 of 122
Quote:
Originally Posted by macxpress View Post

You see the idea of a RUMORS website is to provide rumors. Not to always provide facts! BTW...it was mentioned in the article that this was said by someone from Businessweek.

Well, apparently, you didn't get the point of his comment. Read the headline again. "AT&T may introduced $20 limited iPhone data plan." He is talking about proofreading their work before publishing. If they did, they wouldn't publish an article with such a glaring mistake in the headline. The rest of the article is a grammatical mess anyway.
post #11 of 122
Quote:
Originally Posted by Roos24 View Post

With two iPhones (a 2G and a 3G), and a Nokia, our monthly AT&T bill is $165.00 for a 700 minutes plan. I've come to realize that is a lot of money. Reason why we will not have another iPhone in our family.

The high price that one pays for the "luxury" of a having smart phone (I believe it is across the board, Verizon or Sprint may not be much cheaper than AT&T) is driving people away. The once hungry market for these products is rapidly disappearing. I hope and believe that Apple is in a better position than its competitors to address this issue.

Your phone ownership, bill, plan, and views seem to exactly mirror mine!
post #12 of 122
Quote:
Originally Posted by teckstud View Post

Great but as long as you get dropped calls and lousy reception, what difference does it make?
How is MMS texting and pics factured into all of this? Won't that be extra?

Since every single one of your posts regarding the iPhone is like a twin to its predecessor, you might consider just copy&paste... never mind being off topic ofc
post #13 of 122
the Iphone is on the Ipod road...

First go after the high end market and the people who have more disposable incoming, once you saturate that market, go to the next level down...

This kind of back fires when the iphone first release the pent up demand sold all the early adopters and the people where price is not an issue so fast they have to low the price a few months later to keep sales going which angered people.

It should be no surprise that this is what Apples is doing and they are obviously working with AT&T to continue to drive demand. The price of the hardware is one thing, and apple can produces lower cost less feature phones, but the the ongoing cost to have the phone is high people still will not buy in.

I also high doubt that apple is going to get sucked into the old business model of giving phones away to gain market share, this was good for the service provides but bad for the cell phone companies.
post #14 of 122
Quote:
Originally Posted by Sipadan View Post

Since every single one of your posts regarding the iPhone are basically identical, you might consider just copy&paste... never mind being off topic ofc

OK- how's this. While it may be fantastic that AT&T and Apple are now catering to those on the lower end of the financial spectrum, how does MMS factor into their data plan? Will it be extra? Will this be disclosed?
post #15 of 122
Quote:
Originally Posted by Maestro64 View Post

the Iphone is on the Ipod road...

First go after the high end market and the people who have more disposable incoming, once you saturate that market, go to the next level down...

This kind of back fires when the iphone first release the pent up demand sold all the early adopters and the people where price is not an issue so fast they have to low the price a few months later to keep sales going which angered people.

It should be no surprise that this is what Apples is doing and they are obviously working with AT&T to continue to drive demand. The price of the hardware is one thing, and apple can produces lower cost less feature phones, but the the ongoing cost to have the phone is high people still will not buy in.

I also high doubt that apple is going to get sucked into the old business model of giving phones away to gain market share, this was good for the service provides but bad for the cell phone companies.

Excuse me, but what iPod is geared to those on the lower end of the financial spectrum?
post #16 of 122
Quote:
Originally Posted by iStink View Post

I'm saying it's all speculative, but it doesn't sound like Apple. If AT&T wants to bring their prices down to reach a lower income audience, that sounds about right, but when has Apple ever said they are doing anything for the lower income audience? They couldn't care less about the low income consumer if they tried.

Yeah, 'cause the whole lower-priced iPod Mini/Nano idea was a complete failure.
post #17 of 122
I have to admit that we get a much better deal in the UK than the US, it's about time the prices came down out there.
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post #18 of 122
How about a cheaper voice plan? I only use about 100 minutes per month.
post #19 of 122
Quote:
Originally Posted by teckstud View Post

Excuse me, but what iPod is geared to those on the lower end of the financial spectrum?

Are you genuinely this obtuse, or is it just an affectation?
post #20 of 122
Quote:
Originally Posted by Dlux View Post

Are you genuinely this obtuse, or is it just an affectation?

good one
post #21 of 122
Quote:
Originally Posted by AppleInsider View Post

A week later, Bernstein analyst Toni Sacconaghi sat down with Apple interim chief Tim Cook, chief financial officer Petter Oppenheimer, and marketing chief Phil Schiller, who similarly told him that the company was considering "different pricing/price points" for the iPhone this year, with Cook reportedly adding that he was "examining iPhone's business model" to see if there was room for other possible changes.

Apple is playing with Palm by making these statements, while daring Palm/Sprint to show its hand. Apple's product secrecy combined with these possible pricing statements puts Palm in a tough spot since the Pre will certainly be compared to the next iPhone. If Palm goes lower, Apple can still be higher-priced, because people already expect the Apple and AT&T brands to be higher-priced. If Palm goes $199 or higher (and Sprint charges $30/mo), and Apple and/or AT&T offers a cheaper option, that will steal a lot of Palm/Sprint's thunder even if the cheaper Apple option really is less value (less capable phone, limited included data). And once Palm announces (if before iPhone), it would look really bad to reprice after the iPhone is announced as it would reinforce the image that Palm is the reactionary follower, and Apple is the leader. But to avoid all this, would Palm dare to take the difficult marketing option of announcing/releasing after iPhone (and will iPhone really be announced on June 8)? Apple has Palm between a rock and a hard place.

Apple acts like its disinterested in what its competitors are doing, but it is keenly aware of what they're doing. Remember that Apple lowered its iPod 30GB to $249 (from $299) in Sep 2006 just before Microsoft was about to intro the Zune 30 in Oct, thus forcing MS to reprice to $249. (How do we know MS repriced? There were preprinted but not yet released ads for the Zune at $299 circulating on the web.) And remember that earlier in Jan 2006, Jobs said that MS would have to enter the hardware mp3 player market, even while MS was denying it.

Fun and games. Intriguing to watch...
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post #22 of 122
Quote:
Originally Posted by Dlux View Post

Yeah, 'cause the whole lower-priced iPod Mini/Nano idea was a complete failure.

Those were meant for lower income people?
post #23 of 122
Quote:
Originally Posted by Dlux View Post

Are you genuinely this obtuse, or is it just an affectation?

Neither. However you appear to be genuinely clueless at to what lower income means.
post #24 of 122
Although my phone sits on Wifi 90% of the time, offering a $20 monthly limited access data plan is not a good sales pitch if you take into account how terrible and slow AT&T 3G service is. How about dropping the $30 plan down to $20. Right now it probably cost Apple 1/2 of what it did 1 year ago to built the units so how about a price cut too, or maybe they already did that and AT&T is being all greedy about it.
post #25 of 122
Quote:
Originally Posted by iStink View Post

"To attract lower income consumers" - doesn't sound like Apple.

The Mac mini and iPod shuffle are priced/equipped to attract consumers who have less discretionary dollars to spend.

Both items are still "high priced" when matched against comparable products from competitors (PCs, Sandisk players) but they are still in an affordable price range for those who aspire to have a device from a "high quality name brand." It's the same marketing/sales pitch that Abercrombie&Fitch, Coach, Movado, or BMW/Mini makes with its "lower-priced" items, but that's what you can do when you've established a brand name that has a quality or cool aura.
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post #26 of 122
Quote:
Originally Posted by mark2005 View Post

Apple is playing with Palm by making these statements, while daring Palm/Sprint to show its hand. Apple's product secrecy combined with these possible pricing statements puts Palm in a tough spot since the Pre will certainly be compared to the next iPhone. If Palm goes lower, Apple can still be higher-priced, because people already expect the Apple and AT&T brands to be higher-priced. If Palm goes $199 or higher (and Sprint charges $30/mo), and Apple and/or AT&T offers a cheaper option, that will steal a lot of Palm/Sprint's thunder even if the cheaper Apple option really is less value (less capable phone, limited included data). And once Palm announces (if before iPhone), it would look really bad to reprice after the iPhone is announced as it would reinforce the image that Palm is the reactionary follower, and Apple is the leader. But to avoid all this, would Palm dare to take the difficult marketing option of announcing/releasing after iPhone (and will iPhone really be announced on June 8)? Apple has Palm between a rock and a hard place.

I gotta say your analysis of the potential strategy behind the announcement is remarkably sensible. Sounds very plausible.
post #27 of 122
Quote:
Originally Posted by teckstud View Post

Those were meant for lower income people?

Let's see, current yearly income: around $20k. The first generation, 4GB iPod mini was the first iPod I ever owned. I'm pretty sure I'm below the poverty line.

I'm also typing this on my 15" PowerBook G4 that I bought on sale for $1600 a few years ago. You don't have to be rich to put some money into a savings account. (Well that and America's socialist Pell Grant program. )
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post #28 of 122
Yeah, if i had it to do over, I wouldn't have gotten the iphone. I didn't properly consider the costs of the monthly plan. First, I thought I would be able to get 400 text messages for $4.99 like I did with T-mobile only to find out I only get 200 for that price with AT&T with the next tier being 1500 text messages for $15/month. I only need 400!! And I don't need 900 min/month, but 450 minutes is too little. If they want to create tiered plans, create more tiers for the voice and text messaging plans. I wouldn't want to risk a limited data plan so they can charge me $$/kb if I go over. I would love to see something like Sprint's Simple Everything plan for $99.99. Unlimited data, talk, and text/picture/video messaging. That would be prefect and cheaper than what I'm paying now without any limits. I pay $59.99 for 900 minutes, $30 for the data plan, and $15 for 1500 text messages for a total of $104.99 plus tax.
post #29 of 122
I would prefer for AT&T to offer a voice only plan for the IPhone. I want a Touch and I need a cell phone and I don't want to carry to devices. I would pay $100 more for the IPhone if I did not have to get the data plan. Think how many Touch buyers AT&T could have signed up if they had such a plan.
post #30 of 122
I have a $70 per month iPhone plan. I was able to opt out of SMS texting which is good because I never use that. The 450 minutes are about 400 more than I need. The telephone is about twelfth or thirteenth on the list of what I use the iPhone for. I like the unlimited data plan but would like for the cost of the voice plan to be cut about 90 percent because I'm being charged for something that I don't need, want, or use much.
post #31 of 122
Quote:
Originally Posted by mark2005 View Post

Apple is playing with Palm by making these statements, while daring Palm/Sprint to show its hand. Apple's product secrecy combined with these possible pricing statements puts Palm in a tough spot since the Pre will certainly be compared to the next iPhone. ... Apple has Palm between a rock and a hard place.

This was my first thought as well. At the initial Pre announcement, the Palm CEO alluded to the idea that it wouldn't be priced as a loss-leader, and in fact would be so good that it would stay above the low-end battles. Since that time the economy has become a central focus for many consumers, and Palm has had to dance around the price issue.

If Apple introduces a lower-end iPhone (essentially the current model with a price drop), then Palm will have a difficult time gaining market share with their 1.0 product. They have to get everything exactly right at the launch, from inventory to activation to app store to developer acceptance to pundit reviews, or else they are essentially sunk. There is no room for Palm for any screw-ups.
post #32 of 122
Quote:
Originally Posted by Dlux View Post

If Apple introduces a lower-end iPhone (essentially the current model with a price drop), then Palm will have a difficult time gaining market share with their 1.0 product. They have to get everything exactly right at the launch, from inventory to activation to app store to developer acceptance to pundit reviews, or else they are essentially sunk. There is no room for Palm for any screw-ups.

The Pre has an app store? As for the price, Palm has alluded to the possibility that the Pre will actually cost more than the iPhone.
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post #33 of 122
Quote:
Originally Posted by algalli View Post

I would prefer for AT&T to offer a voice only plan for the IPhone. I want a Touch and I need a cell phone and I don't want to carry to devices. I would pay $100 more for the IPhone if I did not have to get the data plan.

I've been holding out, and will consider buying the next generation iPhone when it arives. But... I am closely watching the activation and account cancellation process. While I like the idea of an always-connected data device, I have lived this long without one. I'm fine with WiFi-only for data.

I have an existing AT&T phone plan (a grandfathered $29/month voice-only) and my SIM card works fine in an iPhone (I've tested it). So my plan is to buy a new iPhone and associated iPhone voice/data plan, pay the cancellation fee, and use the device with my existing SIM. In the long run the cancellation fee is far less than the two-year iPhone plan, especially after taxes and fees.

Yes, I'll be missing out on some of the goodies like A-GPS and maps, but again, I don't have those now. The value of a phone, camera, and iPod Touch bundled into a single device is worth the compromise and accompanying savings.
post #34 of 122
Quote:
Originally Posted by algalli View Post

I would prefer for AT&T to offer a voice only plan for the IPhone. I want a Touch and I need a cell phone and I don't want to carry to devices. I would pay $100 more for the IPhone if I did not have to get the data plan. Think how many Touch buyers AT&T could have signed up if they had such a plan.

Totally agree and have made that point since day one. You can get a Blackberry wihtout data plan - why not iPhone?
post #35 of 122
Quote:
Originally Posted by Galley View Post

How about a cheaper voice plan? I only use about 100 minutes per month.

YES!!!. I barely use my phone as a phone. There's a waste of $30 a month. Plus, with email and SMS, how many phone calls get made any more? Why not cut the phone end a bit.
post #36 of 122
Quote:
Originally Posted by teckstud View Post

OK- how's this. While it may be fantastic that AT&T and Apple are now catering to those on the lower end of the financial spectrum, how does MMS factor into their data plan? Will it be extra? Will this be disclosed?

Yes it will be disclosed! Are you a moron (rhetoricalquestion)? Do you really think they are going to publish that information now when MMS isn't even available yet? The features you talk about are not even available yet! They will be soon enough with 3.0 and THEN you'll get the answers to your question. Patience people 3.0 will be here soon enough.
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post #37 of 122
Well, if the rumor is true, then I have a few observations. #1, I already have a $20 iPhone plan, on the original plan. The $30 data plan introduced with the iPhone 3G is *precisely* why I did not buy a 3G. (Apple, AT&T, ya better be paying attention - I'm guessing I'm not the only one) #2 If AT&T continues to be greedy in this regard, and issues a new $20 data plan that is crippled, then I can assure both AT&T and Apple that I will not be buying the next iPhone that comes out in June either. If Apple wants to sell more iPhones, they need to "reign" AT&T in again, and pressure them to quit being so greedy. Don't get me wrong, I think all cell companies are greedy, but sadly we're stuck with AT&T for the moment.

What I'm also curious about is what happens when those of us with 1st gen iPhones' 2-yr contract is up (June 30th +/-), aren't we free to switch carriers, and isn't Apple then forced to allow this?
post #38 of 122
Quote:
Originally Posted by teckstud View Post

Totally agree and have made that point since day one. You can get a Blackberry wihtout data plan - why not iPhone?

And I'm opposite. I'd buy an iphone without a voice plan just to get net access when no wifi is available...
post #39 of 122
Quote:
Originally Posted by algalli View Post

I would prefer for AT&T to offer a voice only plan for the IPhone. I want a Touch and I need a cell phone and I don't want to carry to devices. I would pay $100 more for the IPhone if I did not have to get the data plan. Think how many Touch buyers AT&T could have signed up if they had such a plan.

I thought you could do voice only with the iPhone.
post #40 of 122
Quote:
Originally Posted by anantksundaram View Post

I think you may have missed his point....

Quote:
Originally Posted by hillstones View Post

Well, apparently, you didn't get the point of his comment. Read the headline again. "AT&T may introduced $20 limited iPhone data plan." He is talking about proofreading their work before publishing. If they did, they wouldn't publish an article with such a glaring mistake in the headline. The rest of the article is a grammatical mess anyway.

Sorry, I misread his post. I shouldn't be allowed to post this early in the morning.

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