Posted by: Arik Hesseldahl on July 02
So Apple called today, a little annoyed with my portrayal yesterday of AT&T’s iPhone pricing. The main difference on plans for the new iPhone versus the old are simple: The data plan is $10 more a month, mainly because the faster connection will mean higher data usage; And text messaging is charged separately.
First there’s the data. IPhone users are traditionally heavy data users — mainly because of the iPhone’s excellent Web browser, no argument there. Faster pipes will mean even heavier usage, the thinking goes, and I’m inclined to agree on that point. AT&T spent a lot of money to build out its 3G network, and is entitled to make it back.
The other main difference this time around is that SMS text messaging has been pulled out as a separate billing item. Is this a mistake on AT&Ts part? I certainly think so. Charging fees for text messaging outside the usual data charges will only drive users to us instant messaging. There’s little doubt in my mind that Apple will bring an iChat client to the iPhone, hopefully sooner rather than later, and AOL has already demonstrated an instant messaging client that should debut soon. Plus there are other options, including Beejive’s Web-based application. Dear AT&T: This is a dumb idea, okay?
Everything else, is essentially the same as you would get with any other AT&T phone. The plans are essentially the same.
One other thing that’s different, and actually better: AT&T is waiving the fees associated with upgrading from an old iPhone to a new one. If you have a first-generation iPhone and still have 23 months to go on your existing contract, you don’t have to pay the usual fees associated with the upgrade. That is better, and I’m told that this is the first time that AT&T has ever done something like this.
But if you just bought a Blackberry on AT&T a month ago? Another story. That’s when the higher price for upgrading kicks in, because AT&T still has to be made whole somehow on the subsidy they laid out for the first phone.
All that considered, I still think wireless pricing plans should be greatly streamlined, and this doesn’t apply just to AT&T but to all the wireless carriers. Give me a flat monthly fee, or if you must, a selection of three flat monthly fees (for light, medium and heavy users) without a lot of tricky options to consider and weigh, and be done with with it. Here I think the wireless carriers still have a lot to learn from Apple, home of the 99-cent song download, and $129 single-price operating system. Keep it simple!
AT&T is out to fleece the customer. How is that so difficult to understand?
Very good post.
I've been with Comcast Metrophone/Cellular One/Cingular/at&t for as long as I can remember. Only now am I annoyed at the pricing of things. I am getting the 3G iPhone, but when at&t's sole contract with Apple is up, I may consider switching carriers for the first time in 11+ years.
Most of now its great to write stories about Apple because you will get more hits to your website. I never heard a story about the Razr plans being bad...yet the only difference is the data. I guess you all are bored an need some volume to the site. Here I am...looks like it worked...for now. Soon, people might just stop falling for it.
I completely agree. Apple wants to sell as much iphones as they can, but AT&T is only going to deter people from getting the new iphone.
And yes as you said, I'm willing to pay 10 more for faster internet (we'll see how good it is). But price of the texting is ridiculous.
I think it's Apple that wants to kill off SMS, and just move everyone to IM over the Internet. With the extra charge, iPhone users will be discouraged from paying for and using SMS, but be encouraged to use IM since it doesn't cost anything extra. So iPhone users will be more closely tied to computer/Internet users, but be more disconnected from users of dumb-phones (and users of hard-to-use-IM-on smartphones), which is what Apple wants, because they don't make dumb-phones, do they?
One more thing: Apple had email with photo attachments from day one but still hasn't implemented MMS. See a pattern? Do you think MMS will come before Adobe's Flash or after?
I love my first-generation iPhone, and was thinking of moving up to the 3G. The only think is I live in a 2G USA. AT&T talks about everyone using the fast 3G for downloads, what about all of us that would have to us AT&T 2G network (for the next year and a half) and be paying for a 3G network thats not there.
Sprint has started offering $99 all-you-can-eat plans for unlimited voice, text, data, email, picture mail, etc... and I would LOVE to see AT&T move to this model!
Personally, I think SMS is really stupid. It cost so much when there are so many other forms of communication that are more efficient and much cheaper to use. I mean $.40 a message ( receiving + sending ) is just alittle bit cheaper than using the USPS.
" The only think is I live in a 2G USA. AT&T talks about everyone using the fast 3G for downloads, what about all of us that would have to use AT&T 2G network (for the next year and a half) and be paying for a 3G network thats not there."
Check in with AT&T. As I understand it--and I may be wrong--you can still get the old iPhone plan for the same price. I would imagine you'll be able to upgrade your plan when 3G becomes available in your area (for yet another 2 year commitment).
You rolled over FAR too easily.
Spend some time working through AT&T's family plans, data plans, etc etc then actually try to read the bill.
Then tell me this isn't insanely, malevolently, complex.
Apple had a good clear cut plan. The new scheme is just as evil as every other plan.
Don't let Apple fool you on this one.
I was sold on the 3G until I considered the implications of doing business with AT&T.
For those of you that do bite, here's what I suggest. Don't buy the text message plan. Instead, send a video every time you want to send a text message. If this catches on with iPhone users, AT&T will have no choice but to include text messaging with every plan -- because texting is the least bandwidth intensive service you can consume on their network.
Articles like these are fine as long as you include the information that Arik did...
"Everything else, is essentially the same as you would get with any other AT&T phone. The plans are essentially the same."
There are a lot of articles that fail to mention this and make it seem as though the iPhone, in particular, has a high price.
The complaining about AT&T does get a bit silly. I haven't seen any other plan that is significantly better. Most of the all-you-can-eat models are 100 bucks or more which is 30 bucks more than AT&Ts iPhone plan for unlimited data. Even after adding the five bucks for 200 SMS messages, its still 25 more. Just forget SMS and use AOL...its free from the app store at launch.
If AT&T's iPhone plan is so bad, what is the better one?
Arik, ATT is not doing anything special by letting the 1st Gen. iPhone users upgrade W/O extra cost . We did paid Full Price for our iPhones. I added 2 different Smartphone to my plan( Both purchased on eBay) and Only when I added my 1st iphone did ATT make me add 2 years to my contract. Plus its in ATT best interest to have us upgrade as now they are getting $15.00 minimum extra each and every month. I'm not complaining. I feel the extra cost will be worth only .50 Cents extra a day for a Better Phone experience of not worrying were to find a Hot Spot, Better GPS and a Better iPhone.
"...when 3G becomes available in [my] area..."
This might happen *after* ATT becomes available in my area. No rush though. :-)
Funny story is how a girl at work switches over to our wireless network to get her "i" while the "Phone" side is in search of those illusive 5 bars that they show us in those illusive television ads.
A blog on the daily doings of Apple and the many companies in its orbit, with insight and analysis by two longtime Apple-watchers BusinessWeek Senior Writer Peter Burrows and BusinessWeek.com Senior Technology Writer Arik Hesseldahl.
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