News Analysis: AT&T's decision to offer new iPhone and iPad data plans is being universally celebrated by most consumers. But as AT&T makes the headlines, is it really hinting at a Verizon iPhone being announced at WWDC?
has announced a new iPhone and iPad data plan that's scheduled to go into
effect on June 7, the same day that Steve
Jobs will take the stage at the Worldwide Developers Conference
ostensibly announce the iPhone 4G.
plans are actually quite beneficial to the average user. Rather than pay a
standard fee each month, iPhone owners will be able to pay based on the amount
of data that they actually use. Plans will start at $15 for 200MB of data.
Those that use 2GB of data or more will be forced to pay $25. In other words,
current owners stand to gain anywhere from $5 to $15 per month.
owners should be happy to hear the news. But whether Verizon Wireless is all
that happy remains to be seen. AT&T's decision to drop the price of its
existing data plans less than a week before WWDC, and then to put those plans
into effect on the very day Steve Jobs will take the stage, seems awfully
might portend to a Verizon iPhone being announced at WWDC. Admittedly, that is
a long shot. According to recent reports, AT&T
inked an exclusivity deal with Apple through 2012
. So, there is always that
possibility that AT&T is simply trying to be better to customers. But there
is also that possibility that its new plans are part of a premeditated strategy
to beat the Verizon iPhone before it's released. There is certainly no
guarantee that that will happen. But there is a chance. And AT&T's decision
has gotten some folks thinking that way. These are the reasons why.
1. The timing is perfect
AT&T's timing on its new plans couldn't be better. The
wireless company has waited until just five days before the potential
announcement of the iPhone 4G to inform customers and future customers of the
changes. Plus, it has decided to set the plans into effect on the very day that
Steve Jobs will take the stage at WWDC. Some might say that it's a ploy to get
more customers to switch to AT&T and pick up an iPhone. But what if
AT&T's decision to set the new plan into effect on that day was meant to
give it an upper-hand on plans when Apple announces a Verizon iPhone?
2. AT&T stands to lose
money over the short-term
AT&T is a public company that needs to ensure its revenue is
growing each quarter. Its investors expect that. But by changing its data
plans, the company has effectively ensured that at least in the short-term, it
will reduce its revenue. In fact, the company acknowledged that point when it
announced the plans, but was quick to point out that it shouldn't have a major
effect on its financial statements. That strategy of intentionally cutting into
revenue is an interesting one. In business, companies that reduce pricing do so
either because demand has slowed or they want to be a price leader against a
major competitor. AT&T's data prices were the same as Verizon's and it's
the only company that has an iPhone. Why should it lose revenue when it has
what people want?
3. It's deathly afraid of
a Verizon iPhone
little debating that a Verzion iPhone could be a significant problem for
. The company has spent years ensuring that Apple's smartphone
stays with it in the United States
and doesn't travel to competing companies. But that day might be coming to a
close. And AT&T knows that if and when a Verizon iPhone hits store shelves,
it will significantly cut into its revenue. Perhaps that's why it fired the
first shot less than a week before Apple could be showing off a Verizon iPhone.
4. There is no rush
There was absolutely no rush for AT&T to drop the price of its
data plans on June 2. What did it really solve? Consumers seemed fine with the
way things were and AT&T was guaranteeing $30 per month on iPhone customers
that, for the vast majority, didn't even come close to even 1GB of monthly data
use, let alone 2GB. AT&T's decision just doesn't make sense right now.
Dropping rates would make sense if it was concerned with a major competitor.
But to do it when it still has the most important phone in the industry on its
side raises some red flags.