Apple iPhone 4 and AT&T metered data

The price of the iPhone 4 with a two-year contract is $199 (16 GB) and $299 (32 GB). Current iPhone owners are eligible for upgrade if their contract is due to expire in 2010.

There are a number of things that are not included in the iPhone 4: a version of the iPhone running on CDMA that would allow Verizon Wireless and Sprint to offer the iPhone. It looks like AT&T's exclusive is still in place. Still no Flash. Still no micro-SD slot. Still no broadcast video. Still no NFC chip (to enable wireless mobile commerce). So, I guess there's still a lot of opportunity for future editions of the iPhone (5, 6, 7...).

AT&T announced last week that they were eliminating unlimited data plans for the iPhone and iPad, although current customers will be able to retain their plan under their current service agreement. And AT&T has announced lower monthly price of $15 per month that includes 200 megabytes (MB) of data, which the carrier feels will adequately serve 98% of its subscribers. A plan with 2GB of data cost $25 per month, and then it's metered after that at the rate of $10 per GB.

These lower cost plans will help most consumers, but those who download lots of videos could find their monthly fees going up, and, in some cases, way up. A good example: Let's say you downloaded three YouTube videos a day at 500 MB each for 30 days, that would result in a consumption of 15GB which, in turn, would result in a charge of $25 for the first 2G and 13GB x $10/GB = $130 or a total of $25 + 130 = $155, far more than the $30 the subscriber was paying before.

In the short term, this new pricing scheme is good for most consumers and 'expensive' for high powered users. It forces subscribers to do their rich media downloads and uploads using their Wi-Fi connection at home or in public venues.

Longer term, I expect metered pricing to be adopted by all wireless operators. They have spent billions to roll out these networks that are now being used far more than anyone expected. Call it the iPhone effect: Provide subscribers with an easy way to manage rich media (music, photos & video) and they use it - a lot. In the short-term (next year or two), operators like Sprint will continue to offer unlimited plans as a competitive advantage. Also, the AT&T switch to metered plans gives upstarts like Clearwire a chance to offer unlimited plans for those who desire to consume high volumes of rich media.

Long-term (say five or more years from now), AT&T's current pricing will likely be lowered as they bring on advanced and much higher capacity technologies such as Long Term Evolution (LTE). Subscribers will migrate to interacting with more web sites, more YouTube videos, and will be generating more rich media on their phones. I'd expect that operators within five years will offer 5-10GB instead of 200MB in the base plan and see metered rates closer to $1 per GB or less.

So, there you have it. Apple announced the iPhone 4 that generates more rich media in better digital photos and HD video. It uses AT&T's 3.5G HSUPA to assist with downloading rich media (for a price). Now watch for new Android phones from HTC, Motorola and others to match or beat the iPhone 4 feature set.

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