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AT&T is considering a cheaper data package pricing for the Apple iPhone, reports BusinessWeek, citing people familiar with the matter.
It's interesting that the rumor comes up at a time when sales of iPhone's are still booming. For the quarter ended March 28, the iPhone and related products brought in $1.5 billion for Apple, quadruple the amount a year earlier and 22% more than the previous quarter.
But by considering a cheaper data package, it appears that Apple and AT&T know they are currently pricing some consumers out of the iPhone market.
Apple needs the iPhone's red-hot growth to continue, especially as demand for desktops and laptops has cooled during the economic downturn. Revenue from those products fell 16% at Apple in its latest closed quarter compared to a year earlier. And analysts are predicting further declines in those areas.
AT&T, of course, also needs the iPhone to prosper. As the exclusive carrier of the trendy smartphone, the wireless provider has attracted scores of new subscribers. But that contract with Apple won't last forever. Certainly, the raft of complaints about the spotty phone service on the iPhone won't help AT&T's case. Indeed, some reports claim that Apple has been talking with Verizon about new phones.
That brings us to the current rumor about cheaper data pricing for the iPhone. At first blush--and the last one, too--the purported plan seems almost laughable. Twenty dollars a month for limited data usage compared to $30 a month for unlimited? Factor in $40 for the cheapest phone plan from AT&T, another $20 for unlimited texting and roughly $10 a month for taxes and whatever else shows up on a cell phone bill each month, and you end up with a $90 bill as opposed to $100 for what could amount to considerably less service.
Given the economic climate, it does makes sense to cut pricing to boost demand. But this reported plan would cut pricing at the expense of the service being offered. That sure sounds like a risky proposition in an ultra-competitive marketplace.
Then again, you would expect a company such as Apple to push its partners to come up with new ways to lock in more customers. The smartphone wars are hot now--and expected to get even hotter this summer when Palm launches its Pre phone.
This is no time to stop innovating. But ten bucks a month?
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