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

Posted:
in iPhone edited January 2014
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.
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Comments

  • Reply 1 of 121
    istinkistink Posts: 250member
    "To attract lower income consumers" - doesn't sound like Apple.
  • Reply 2 of 121
    markspainmarkspain Posts: 32member
    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.
  • Reply 3 of 121
    macxpressmacxpress Posts: 5,188member
    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.
  • Reply 4 of 121
    teckstudteckstud Posts: 6,476member
    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?
  • Reply 5 of 121
    teckstudteckstud Posts: 6,476member
    Quote:
    Originally Posted by iStink View Post


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



    AT&T has never sounded like Apple.
  • Reply 6 of 121
    anantksundaramanantksundaram Posts: 20,250member
    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....
  • Reply 7 of 121
    istinkistink Posts: 250member
    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.
  • Reply 8 of 121
    roos24roos24 Posts: 170member
    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.
  • Reply 9 of 121
    hillstoneshillstones Posts: 1,490member
    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.
  • Reply 10 of 121
    anantksundaramanantksundaram Posts: 20,250member
    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!
  • Reply 11 of 121
    sipadansipadan Posts: 107member
    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
  • Reply 12 of 121
    maestro64maestro64 Posts: 5,022member
    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.
  • Reply 13 of 121
    teckstudteckstud Posts: 6,476member
    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?
  • Reply 14 of 121
    teckstudteckstud Posts: 6,476member
    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?
  • Reply 15 of 121
    dluxdlux Posts: 666member
    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.
  • Reply 16 of 121
    saareksaarek Posts: 1,341member
    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.
  • Reply 17 of 121
    galleygalley Posts: 971member
    How about a cheaper voice plan? I only use about 100 minutes per month.
  • Reply 18 of 121
    dluxdlux Posts: 666member
    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?
  • Reply 19 of 121
    sipadansipadan Posts: 107member
    Quote:
    Originally Posted by Dlux View Post


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



    good one
  • Reply 20 of 121
    mark2005mark2005 Posts: 1,158member
    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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