10 Reasons Why ATandT's New Data Plans Hint at Verizon iPhone

 
 
By Don Reisinger  |  Posted 2010-06-02 Email Print this article Print
 
 
 
 
 
 
 

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?

AT&T 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 and ostensibly announce the iPhone 4G.

The 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.

iPhone 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 interesting.

It 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

There's little debating that a Verzion iPhone could be a significant problem for AT&T. 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.



 
 
 
 
Don Reisinger is a freelance technology columnist. He started writing about technology for Ziff-Davis' Gearlog.com. Since then, he has written extremely popular columns for CNET.com, Computerworld, InformationWeek, and others. He has appeared numerous times on national television to share his expertise with viewers. You can follow his every move at http://twitter.com/donreisinger.
 
 
 
 
 
 
 

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