Data Squeeze

Over the past week several new events have happened in the smartphone world, specifically the iPhone world.  The first change, which has solidified my choice to leave the iPhone behind for greener pastures was the decesion of AT&T to no longer offer its unlimited data plan for the iPhone.  Instead they will offer 2 cheaper but ultimately more limited options.  200MB for $15 and 2GB for $25.  Both are cheaper then the current unlimited for $30, but both also come with conditions noticeably absent from the unlimited model.  Overage charges. If one were to go the lower priced model you would be charge $15 for each additional 200MB.  Equaling the price tag but not the service of the unlimited plan.  The penalty for the larger plan is $10 per gigabyte, making it more expensive than the unlimited plan but still more limited.

AT&T argues that for 98% of the people using iPhones right now the data plans are suffient and little to no overages will occur as long as people pick the right plan for them.  So I decided to check my data usage and over the past 3 months I have used at least 2GB.  Granted I use my phone a lot.  I steam music, podcasts, videos, and use the web and email a lot.  I can recognize that I am far from an average user.  I decided to check a more casual user’s data, my wife.  She only uses the phone for occasional email, web browsing, and the rare video.  Over the last 6 months she has only been under 200MB twice, and both instances only by 10MB.  
If I’m reading the numbers and usage correctly the only people that would qualify for the 200MB plan would be people who don’t use any data on there phone aside from the rare email.  AT&T said that 98% of people fit into these plans.  I wonder how many would fit into the 200MB plan.  Based on the data I have, I’m betting less than 10%.  
This is all just the tip of the iceberg though.  With iPhone 4 and iOS4 coming out soon the average data usage on a phone is going to skyrocket.  With backgrounding FINALLY enabled people will be able to listen to music services like pandora while still being able to do email and browsing all while keeping the battery fairly alive.  Netflix is coming to the iPhone finally!, but with each movie coming in at 225MB forget about using it without at least the 2GB plan.  Even then you will be limited to <10 movies if you plan on doing anything else with your fancy new phone.  iAd is coming down the pipe to save the average user money through fancy interactive ads.  iAds will actually cost people once all that pretty interactive ad data starts pushing people over the newly imposed data limits.  Suddenly the casual users will become much larger data users and not completely by their own choice. 
The one announcement that was absent from this week was that iPhone 4 would be on other carriers.  Its starting to look like that always rumored, never confirmed “AT&T exclusive till 2012” rumor is in fact true.  I’m rather surprised that Apple didn’t have the fore-site to also make the unlimited data plans part of that deal.  Without any actual alternative carrier choice, AT&T has dealt a major, possibly mortal, blow to the iPhone.  Price is already the biggest hold out of the general public in the decision to get a smartphone.  Sure the new super-cheap $15 plan will draw out a fair amount of those people, but after they are forced to upgrade to the $25 plan to save money, due to data limits, and still have to watch their usage I feel that this move will hurt sales and the image of both AT&T and Apple.  Worse for Apple is will also cause a stall in sales and decline in popularity because who wants a super fancy phone that you are unwilling to use due to fear of massive debt?  Not to mention that there are plenty of incredible phones on other carriers that do not have these limitations.
I used to think that I could choose my phone based on the model of phone that I wanted alone.  I now know that to be a foolish and childish notion.  You have to look at the whole picture or you will be paying for it for a long time.

I have 6 months and counting till my contract is up. I was considered paying the early termination fee until AT&T doubled it just before the new data plans were announced, a coincidence I’m sure.  On the bright side I get to hang onto my unlimited data until I change anything about my account.  Luckly the next change is going to be canceling my service Jan 6th 2011.  Till then I look forward to the 15+ new android phones to pick from.  Current choice is the HTC Droid Incredible with Verison.