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

Posted:
in iPhone edited January 2014
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."
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Comments

  • Reply 1 of 48
    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.
  • Reply 2 of 48
    Quote:
    Originally Posted by AppleInsider View Post


    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."



    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.......
  • Reply 3 of 48
    dr_lhadr_lha Posts: 236member
    The solution is not to offer tiered data plans, it is to lower the cost of ridiculously expensive cellphone, data and text messaging plans.
  • Reply 4 of 48
    Quote:
    Originally Posted by JavaCowboy View Post


    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
  • Reply 5 of 48
    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!
  • Reply 6 of 48
    cameronjcameronj Posts: 2,357member
    Quote:
    Originally Posted by anantksundaram View Post


    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.
  • Reply 7 of 48
    I simply want a tether option for my existing plan
  • Reply 8 of 48
    leptonlepton Posts: 107member
    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.
  • Reply 9 of 48
    crowleycrowley Posts: 5,421member
    Quote:
    Originally Posted by AppleInsider View Post


    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]
  • Reply 10 of 48
    nagrommenagromme Posts: 2,834member
    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.)
  • Reply 11 of 48
    They should at least offer unlimited text with the data plan.
  • Reply 12 of 48
    tinktink Posts: 395member
    ...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.
  • Reply 13 of 48
    Quote:
    Originally Posted by lepton View Post


    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...
  • Reply 14 of 48
    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.
  • Reply 15 of 48
    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.
  • Reply 16 of 48
    Quote:
    Originally Posted by alansky View Post


    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.
  • Reply 17 of 48
    Quote:
    Originally Posted by anantksundaram View Post


    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
  • Reply 18 of 48
    Quote:
    Originally Posted by dr_lha View Post


    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!
  • Reply 19 of 48
    Quote:
    Originally Posted by JavaCowboy View Post


    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.
  • Reply 20 of 48
    Quote:
    Originally Posted by macxpress View Post


    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
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