AT&T CEO not confident in 3G appeal for iPad. Perhaps the remedy is more attractive data plans?
When the chief executive of a telecom is pessimistic about its most notable product launch on the horizon, there might be cause for concern.
AT&T CEO Randall Stephenson said he expects the cheaper Wi-Fi version of Apple's iPad to dominate the market over the pricier AT&T device, which can connect to the Internet anywhere the network offers 3G service. (Which Verizon argues isn't in very many places, but AT&T is working on it.)
"My expectation is that there's not going to be a lot of people out there looking for another subscription," he said during an investor meeting webcast, as Reuters reports. Stephenson envisioned the iPad would be a mainly "Wi-Fi-driven product."
Neither AT&T's nor Apple's stocks saw a drastic impact from the statements. Maybe that's because Apple would presumably still sell devices (even if they're of the less expensive variety), and AT&T is a major player in the subscription-based Wi-Fi game, with hotspots at Starbucks and Barnes & Noble.
Still, a 3G iPad seems attractive in theory.
IPhone subscribers obviously appreciate being able to tap into the Internet from anywhere, rather than having to be wirelessly tethered to a limited-distance Wi-Fi broadcast. Otherwise, they'd just buy iPod Touches. Congruently, Stephenson said the iPhone would be "an important part" of the company's lineup "for quite some period of time."
AT&T could have gone several directions with the data plans for iPad. The telecom could have encouraged smart-phone subscribers by giving breaks to those who are already AT&T customers. Or what about allowing iPhone users to tether the data they already pay for to the iPad (even for a nominal fee), similar to Verizon's feature for the Droid (and AT&T's for BlackBerry)?
Instead, AT&T will charge $14.99 per month for 250 megabytes -- by some estimates, not enough to cover most users -- or $29.99 a month for unlimited data -- what many already pay for 3G access for their smart-phones. That's on top of a device that costs $130 extra upfront.
A hardware expert tells Computerworld that the pricing is "ridiculous." How much does a 3G chip cost? $7?
No wonder AT&T is rightfully doubting the potential of the 3G iPad. Hey, guys, are we still in a recession?
-- Mark Milian
Photo: AT&T chief Randall Stephenson. Credit: Andrew Harrer / Bloomberg