AT&T Says Tablet Owners Eventually Realize WiFi-Only 'Stinks'
For a feature story on the connected car market, I recently spoke with Chris Penrose, senior vice president of AT&T's Emerging Devices organization. While AT&T hasn't yet shared pricing details concerning the Long Term Evolution (LTE) connectivity that it will soon support in a number of vehicles, Penrose shared the carrier's thinking on the subject.
"We see a lot of different ways in which a car can be enabled. It could be a monthly package or a stand-alone data plan ... or it could be part of a larger package with safety and security features," Penrose said.
"If I have a big bucket of data for my family, there should be no reason I can't hang my car off of that as well," he continued. "If a customer has decided not to buy a monthly package, he could still be able to, for a fee, turn it on as needed, say for a trip."
There's also a "Kindle model," he added, in which a user who hasn't turned on the data capability in an e-reader but wants to download something essentially pays for the cost of the data in the price of the download (the book, in that example).
Something else Penrose said has also stayed with me, particularly since T-Mobile has since announced a new tablet strategy—part of which encourages AT&T tablet owners to bring their devices into T-Mobile stores, pay a one-time fee of $10 for a T-Mobile SIM, and then enjoy 200MB a month of free data for the life of the device. Or really, the life of the user. T-Mobile calls the offer "free data for life."
Penrose said AT&T's thinking around connected cars has been informed by experiences with tablets. According to T-Mobile, 90 percent of the tablets sold in the U.S. have been WiFi-only—less because of the up-front costs (again according to T-Mobile) than because people are nervous about the associated data costs.
"We've been working hard ... to drive down the cost of the module in the tablet, and also offering bundling offers, trade-in offers," said Penrose, referring to how the prices of tablets have come down, and AT&T is working to keep chipping away at costs for the consumer.
Speaking to why in-car LTE will be superior to WiFi, Penrose explained, "People want connectivity everywhere. In our studies, we've found that most people bought WiFi-only tablets, but at some point, they find themselves out of house, or somewhere without WiFi, and they can't connect, and they think, 'This stinks.' People may have bought a WiFi tablet [the first time around], but they realize that with their next tablet, they want cellular."
T-Mobile couldn't agree more.