Analyst: iPhone benefits from carrier rate war
AT&T's rivals have become more aggressive about their pricing, and that — paradoxically — could be good for Apple (AAPL), according to Kaufman Bros.' analyst Shaw Wu.
In a report to clients issued Monday, Wu notes that Sprint's (S) Boost Mobile unit now offers a $50 plan that includes unlimited talk, messaging, Web, and walkie-talkie service. Deutsche Telekom's (DT) T-Mobile, meanwhile, is test marketing a $50 unlimited voice plan plus $25 more for unlimited data/Internet.
So far, AT&T (T) and Verizon (VZ) are standing firm, charging a full $130 a month for unlimited voice and data.
That means that iPhone customers pay more than twice as much for all-they-can-mobile service as, say, T-Mobile customers using Google (GOOG) Android G1s.
How is that good for Apple's iPhone, whose fate is tied for now to AT&T — at least in the U.S. market?
According to Wu, evidence shows that it's the high cost of AT&T's monthly service plans, not the cost of the devices themselves, that is the limiting factor keeping iPhone sales from growing faster than they are. (See here.)
He believes Sprint and T-Mobile's price cuts will boost their lagging smartphone sales, which will in turn put pressure on AT&T and Verizon to cut their rates — to the ultimate benefit of iPhone owners.
"Overall," he writes, "we view lower service plan prices as positive as it should help smart phone adoption maintain its healthy pace, even in this fragile economy."
Wu is modeling Apple to sell 3 million iPhones in its second fiscal quarter, which ends in March, although recent checks with his supply-chain sources suggest that sales are tracking closer to 3.5 million.
He's sticking with a price target of $120 a share, arguing that concern over possible management changes are mostly priced in and that a 15X price multiple these days is "reasonable and conservative."
Apple closed Monday at $86.95, down 4.66% for the day.
There's always some joker to point out how the carriers are saving the consumer money by charging them for a data plan, helping them to avoid outrageous data charges. But, that's bull. It's an easy fix if they're really concerned about the customer: turn the data option off. There. Solved. Thousands have done it themselves by jailbreaking their IPhones, and are walking around w/ what amounts to an Ipod Touch with phone capabilities. Quite happily.
There's always some joker to point out how the carriers are saving the consumer money by charging them for a data plan, helping them to avoid outrageous data charges. But, that's bull. It's an easy fix if they're really concerned about the customer: turn the data option off. There. Solved. Thousands have done it themselves by jailbreaking their IPhones, and are walking around w/ what amounts to an Ipod Touch with phone capabilities. Quite happily.
I am still waiting for a 3g data-only plan that I can have for an ipod touch, then use skype for free. why, whether it's for a purpose like this or not, aren't there 3g internet plans for anyone who would like to use the web on their laptop or handheld anywhere they go?
My iPhone plan costs just $67 a month–that's including all taxes and fees–for unlimited data but a small number of "anytime" voice minutes. I always have leftover minutes. That's just $20 a month more than my previous (voice-only) cell phone plan. Why do all these articles keep saying that iPhone plans cost $130 per month? We do not all want unlimited voice plans. I am actually saving money because the AT&T iPhone is so reliable that I closed my $23 per month land line; my previous cell phone plan from Sprint kept dropping calls.
Ok having been a customer svc rep for a major wireless company. I know what happens when you let consumers purchase a "data" phone without the data package. The iphone sends and recieves data all the time and the result would be not a phone bill in the hundreds, but possibly one in the thousands. By requiring the data pkg ATT is preventing people from having ridiculous data bills. You have no idea how many people overuse their data and then call in to say they can't pay their bill. Data packages are preventative measures to protect both ATT and the consumer.
Ok having been a customer svc rep for a major wireless company. I know what happens when you let consumers purchase a "data" phone without the data package. The iphone sends and recieves data all the time and the result would be not a phone bill in the hundreds, but possibly one in the thousands. By requiring the data pkg ATT is preventing people from having ridiculous data bills. You have no idea how many people overuse their data and then call in to say they can't pay their bill. Data packages are preventative measures to protect both ATT and the consumer.
Just switched two lines to Boost from VZW and love it. Only had 400 mins from VZW before with nothing else except mobile to mobile and nights/weekends included for about $95 a month. Now we have unlimited everything for $100, dumped the landline and ended up saving. At that price point and savings in this economy it was a no brainer. Also, no contract and the phones that you pay $50 from Boost are the equivalent in quality that VZW and others still charge you $99 for with a two year contract. Will never go back to the monster that us VZW, not to mention they cripple your phone's native features so you have to be forced into buying all their over priced garbage. We've loaded our own ringtones, wallpapers, GPS software, email apps etc. Try doing that on VZW……
If the economy continues to stay low or if it gets lower, the mobile phone service providers will have no option except to lower rates if they want to stay in business. As people around the world pinch pennies, I'm sure they will pinch pennies with their phones also … if it means keeping food on the table or a roof over their heads.
If the economy continues to stay low or if it gets lower, the mobile phone service providers will have no option except to lower rates if they want to stay in business. As people around the world pinch pennies, I'm sure they will pinch pennies with their phones also … if it means keeping food on the table or a roof over their heads.
I would like to buy an iPhone but feel the AT&T plan is about $15/$20 more a month than I want to pay. I honestly don't care how much the phone itself is (I would pay an unsubsidized price for it) — I just don't want to be locked into an expensive plan.
I would like to buy an iPhone but feel the AT&T plan is about $15/$20 more a month than I want to pay. I honestly don't care how much the phone itself is (I would pay an unsubsidized price for it) — I just don't want to be locked into an expensive plan.
AT&T should offer phones free of any data contract. Rogers in Canada does this. Users with common access to wifi will still be happy, and a lot more people will have the iPhone and a voice contract with T. Over time, they'll notice when they wish they had data over 3G, and then they'll upgrade to include data. In the long term, T will make more money as they get more users switching to their service for the iPhone itself, but most will eventually become data customers as well. Given these trying economic times, this sound strategy makes even more sense than usual.
AT&T should offer phones free of any data contract. Rogers in Canada does this. Users with common access to wifi will still be happy, and a lot more people will have the iPhone and a voice contract with T. Over time, they'll notice when they wish they had data over 3G, and then they'll upgrade to include data. In the long term, T will make more money as they get more users switching to their service for the iPhone itself, but most will eventually become data customers as well. Given these trying economic times, this sound strategy makes even more sense than usual.
It Makes no sense to compare the most expensive plans with each other in this economy. Instead compare the most popular data plans. That's what people buy.
It Makes no sense to compare the most expensive plans with each other in this economy. Instead compare the most popular data plans. That's what people buy.
C’mon, Shaw Wu is not an analyst, rather, he is a cheerleader for a cause of promoting the Apple domination. He does not even do it for money. For heaven’s sake, when Jobs announced that he skips MacWorld, the Apple faithful (literally) began to think about the unthinkable (I stress that I wish Steven Jobs best health, like I do to any other decent human being) – Wu, in a classic religious cult manner tried to calm the masses because “Seven Jobs was ingrained in Apple’s corporate DNA” or some other nonsense like that.
As a favourite past-time, Wu (and other Apple promoters/priests – like Munster) scratch their heads hard to warp reality to show that anything and everything, from inability to continue using Motorola CPUs (trumpeted as a great “good” by warping it as an opportunity to go Intel) to greater competition (try as I might, I cud not understand how more competition and lower prices are “paradoxically good” for the dominant player (AAPL)?
Philip, you are an Apple enthusiast, but I like your column because you are a good writer and you usually tried to stay away from the reality distortion field of the cult that is Apple’s crowd and this is the slogan of your column, isn’t it? So please, when you quote Shaw (DNA) Wu or Gene (Ecosystem) Munster, stay out of the filed that they are firmly sucked-up into…Namaste!
C’mon, Shaw Wu is not an analyst, rather, he is a cheerleader for a cause of promoting the Apple domination. He does not even do it for money. For heaven’s sake, when Jobs announced that he skips MacWorld, the Apple faithful (literally) began to think about the unthinkable (I stress that I wish Steven Jobs best health, like I do to any other decent human being) – Wu, in a classic religious cult manner tried to calm the masses because “Seven Jobs was ingrained in Apple’s corporate DNA” or some other nonsense like that.
As a favourite past-time, Wu (and other Apple promoters/priests – like Munster) scratch their heads hard to warp reality to show that anything and everything, from inability to continue using Motorola CPUs (trumpeted as a great “good” by warping it as an opportunity to go Intel) to greater competition (try as I might, I cud not understand how more competition and lower prices are “paradoxically good” for the dominant player (AAPL)?
Philip, you are an Apple enthusiast, but I like your column because you are a good writer and you usually tried to stay away from the reality distortion field of the cult that is Apple’s crowd and this is the slogan of your column, isn’t it? So please, when you quote Shaw (DNA) Wu or Gene (Ecosystem) Munster, stay out of the filed that they are firmly sucked-up into…Namaste!
The one thing this article does not tell you is that you have to be a customer of T-mobile for at least the last 22 months in order to get the 50.00 plan. If you go there you will find that you will still pay 100.00 a month for unlimited. More research should be done before writing articles.
You have to have a data plan with the Iphone, or you would have an absolutely ridiculous monthly bill because the phone constantly sends and receives data. Not to mention it was in the agreement between Apple and AT&T that the phone must have that data plan. Your bill would be in the hundreds of dollars without it.
The one thing this article does not tell you is that you have to be a customer of T-mobile for at least the last 22 months in order to get the 50.00 plan. If you go there you will find that you will still pay 100.00 a month for unlimited. More research should be done before writing articles.
You have to have a data plan with the Iphone, or you would have an absolutely ridiculous monthly bill because the phone constantly sends and receives data. Not to mention it was in the agreement between Apple and AT&T that the phone must have that data plan. Your bill would be in the hundreds of dollars without it.
Article makes no sense. There is a rate war which AT&T is opting out of, with a ridiculously priced voice and data package for the iPhone. How does AT&T's stubborness benefit the iPhone? What a non-article
Article makes no sense. There is a rate war which AT&T is opting out of, with a ridiculously priced voice and data package for the iPhone. How does AT&T's stubborness benefit the iPhone? What a non-article
S. Wu is a hardware analyst so I would not expect him to know the ins and outs of the different wireless services plans. Boost (old Nextel) is nowhere near on par with the 3G networks at T and VZW and is actually inferior to the (legacy) Sprint network. There will likely be very few customers willing to trade down to Boost Mobile from AT&T Mobility or Verizon Wireless. Those that do will not be impressed.
S. Wu is a hardware analyst so I would not expect him to know the ins and outs of the different wireless services plans. Boost (old Nextel) is nowhere near on par with the 3G networks at T and VZW and is actually inferior to the (legacy) Sprint network. There will likely be very few customers willing to trade down to Boost Mobile from AT&T Mobility or Verizon Wireless. Those that do will not be impressed.
I agree completely about the cost of data plans. I want an Ipod touch and I need a cell phone. Having them together is a perfect solution. The $30/mo AT&T data plan has kept me away. At&T should wake up. The Touch is selling great. I have to think that a Lot of theses buyers would have gotten an ATT phone if not for the monthly price. ATT could greatly expand their number of subscribers by dropping the data plan. I would even pay $100 more for an IPhone without the data plan. Then, who knows, down the road I might find that I really want the data plan and ATT wins some more.
I agree completely about the cost of data plans. I want an Ipod touch and I need a cell phone. Having them together is a perfect solution. The $30/mo AT&T data plan has kept me away. At&T should wake up. The Touch is selling great. I have to think that a Lot of theses buyers would have gotten an ATT phone if not for the monthly price. ATT could greatly expand their number of subscribers by dropping the data plan. I would even pay $100 more for an IPhone without the data plan. Then, who knows, down the road I might find that I really want the data plan and ATT wins some more.
If the plans are cut – ALL mobile devices would benefit. Why does anyone assume this would be iPhone centric?
Considering voice hasn't been a driver for the past 3 years carriers are relying on data plans so I just don't see them ready to forgo this profit to increase user count just yet.
Until iPhone is available cross carrier (read LTE model in 2011) this is a non point.
If the plans are cut – ALL mobile devices would benefit. Why does anyone assume this would be iPhone centric?
Considering voice hasn't been a driver for the past 3 years carriers are relying on data plans so I just don't see them ready to forgo this profit to increase user count just yet.
Until iPhone is available cross carrier (read LTE model in 2011) this is a non point.
With the prices that these people charge per byte, even the data plans are ripoffs. Paying 15c per text message is equivalent to paying 3000 bucks per song from iTunes in terms of $/byte. They apply this same pricing to data plans. If consumers were actually informed about this technology there would be an outcry. Most people feel like they need one of these new smartphones with a data plan to compete. And when their time is more valuable than the extra money they have to shell out.