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AT&T shocked the iPad users this week with an announcement that it will eliminate the unlimited data plan they offer now. In fact, this unlimited, no contract plan was one of the reasons many people, including me, bought iPad 3G in the first place. Even though many will not agree with me but I want to make a claim that AT&T’s unlimited plan is one of the reasons why iPad was attractive to many people. If not for many, having a tablet device with a data plan to go with me was the biggest attraction for me. If you are not convinced about the importance of unlimited data plan, check out this post about what the new AT&T plans mean to the iPad users.
When AT&T unexpectedly announced its plan to kill the unlimited plan with a spin on the savings for most of their data plan users, many in the tech blogosphere were outraged and claimed that it will kill mobile innovation. I think we are not doomed like what some people predict. Yes, I am outraged at AT&T’s decision to change the plans one month after iPad 3G was released. Yes, I am outraged that their capped plans will curtail the users from tapping the full potential of the iPad, Yes, I think that Apple should have secured an agreement with AT&T to continue offering this popular unlimited plan. Yes, I think that Apple should reimburse the buyers of iPad 3G some money because most of them bought it because Apple highlighted the availability of unlimited data plan from AT&T. However, I don’t think it is going to kill mobile innovation in any way.
Let me offer my reasons here:
- Mobile innovation is not entirely dependent on Apple’s products alone. There is a big world out there where iPad doesn’t mean anything but other mobile phones mean many things
- Mobile innovation is not entirely dependent on AT&T alone. Even though Apple aligned closely with AT&T, Android phones are much more open and works with other providers too. A competition between these providers supporting many different smartphones other than iPhone and iPad will keep the mobile innovation going
- In fact, the mobile developers should innovate and work towards technologies that cuts down on data usage. Even though it is not an innovation per se, 0.facebook.com is a good example of how to work around the restrictions of telecom providers. This provides an opportunity for app developers and companies behind video streaming to innovate so that their services are lean on data usage
- Unlike iPhone, iPad is not locked to a single carrier and not bound by contract with any carrier. This allows users around the world to use with any mobile carrier of their choice. Even in US, this offers an opportunity for T-Mobile to jump in and offer a plan that matches with AT&T’s unlimited plan. This also offers an opportunity for Sprint and Verizon to slash prices on their Mifi router based plans to attract iPad users. Such competition in the market place will prevent the so called death to mobile innovation
Even though I am outraged at the move made by AT&T, I now expect the other mobile broadband providers to jump in and take the market share. After all, US is a capitalistic country and capitalism means competition in the marketplace through innovation. This is a great opportunity to other providers to be innovative and take a shot at the iPad mobile data market. Step up folks.
Actually I go one step more and suggest that the tariff should be by the sip and in return, they must assure Net neutrality. I don’t think it will kill innovation at all. AWS charges by the sip with no adverse effect. Indeed I contend that that is why they are able to give total freedom to its users. No?
I don’t disagree at all. As long as they price competitively, such a pricing model will be more interesting and will help the low end users greatly.
I like the low end lower cost plan – it might just allow me to buy a smartphone! Previously I would never have got enough value to make it worth $30 per month.
Also most smartphone users will end up paying less then before. it is only the heavy users who will pay more (only 2% of users I remember as the figure I heard).
Now what I would really like to see is even lower cost plans for unsubsidized and unlocked handsets. If the high plan cost is to cover handset subsidy why are there no cheap plans for unlocked unsubsidized handsets?