AT&T's recent decision to retire its $29.99 per month unlimited data pricing plan in favor of offering new subscribers a tiered model based on usage--a move since copied by British operator O2--could benefit Research In Motion and its BlackBerry smartphone portfolio but may prove detrimental to Apple's iPhone, according to an analyst note published Monday by Susquehanna Financial's Jeff Fidacaro. Forecasting the introduction of reduced entry-level data pricing will encourage a significant number of subscribers to swap their feature phones for smartphones, Fidacaro contends that BlackBerry devices are ideally positioned to capture this new business, crediting their affordable prices and emphasis on low-bandwidth applications like email and instant messaging. Conversely, data caps could limit future adoption of the iPhone, a device synonymous with high-bandwidth apps like streaming video.
"In our view, tiered pricing could create adverse behavior by consumers as users will watch their data usage more closely and avoid overage fees (similar to when we used to wait until 9pm to place a wireless call so as not to use up minutes)," Fidicaro writes. To support his argument, he cites a recent study issued by bill analysis firm Validas, which states that that the average iPhone user in the U.S. consumes 273 MBs of data per month (far above AT&T's 200 MB entry-level data limit) while the typical BlackBerry user consumes just 54 MBs.
AT&T's decision to institute data caps could pose enormous repercussions for the developer community as well, appearing likely to impact the creation of games, location-based services and other applications that consume significant bandwidth or require constant refreshing. "What created this lively app world we are in was the iPhone on one hand, and unlimited data plans on the other," said Noam Bardin, CEO of turn-by-turn solutions provider Waze, in a recent interview with The New York Times. "If people start thinking about how big a file is, or how fast an application is refreshing, that will be a huge inhibitor."
Chief among developer concerns: AT&T subscribers will begin closely monitoring and fretting about their data consumption, limiting application use or delaying an impulse app purchase. While AT&T will alert customers when they near their monthly data quota and enable subscribers to track their use via the operator's website, few customers understand how much data a particular app consumes, posing additional challenges. In addition, developers may scale back their applications, eschewing more robust features.
For more on the Susquehanna Financial forecast:
- read this Apple 2.0 article
Developers fear new data pricing to hinder app use
AT&T kills unlimited data pricing, supports iPhone tethering