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Rumors of US iPhone subscription cuts gain momentum

updated 10:10 am EDT, Mon May 18, 2009

US iPhone plan cut coming?

AT&T is indeed considering cuts to its iPhone plans, a new report suggests. Sources for BusinessWeek claim that the US carrier is mulling several options, including lowering the cost of its current subscriptions, or simply introducing a set of cheaper plans. In the latter category would be a plan offering a fixed data cap for $10 less per month; the option could become available as soon as late May.

Such a plan would echo predictions from analysts like Michael Cote, although it has typically been assumed that AT&T will continue offering unlimited data under a main plan reduction. The ability to access profound web and e-mail content at any time has been a key draw of the iPhone.

Making a cut practical for AT&T is believed to be three factors. The director of the Envisioneer Group, Richard Doherty, notes that manufacturing costs may be lowering significantly on Apple's end, possibly by as much as one-third for next-generation hardware. Driving this is the cost of touchscreens, according to Cote, which while normally the most expensive part of the iPhone have declined in price 30 percent over the course of a year.

Consultant Chetan Sharma argues that a price cut could draw 20 to 25 percent more subscribers to AT&T, which may be crucial given stalling additions. The iPhone currently appeals primarily to the wealthy, a comScore study shows, as some 43 percent of owners in late 2008 had salaries in excess of $100,000.

Doherty further comments that AT&T has found itself with less bargaining room, as its exclusive contract with Apple is set to expire and could result in deals with carriers like Verizon, T-Mobile or Sprint as soon as 2010 or 2011. In order to extend exclusivity AT&T may have to bend to Apple's will, which has continually pushed for cheaper prices in order to sell the iPhone to as many people as possible.




by MacNN Staff

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Comments

  1. Lance Moody

    Joined: Dec 1969

    0

    Even better...

    How about a "no data:" or "pay as you go" plan for those of us who mostly use wireless networks instead of their still rather slow network.

  1. testudo

    Joined: Dec 1969

    -2

    but...

    without a data plan, visual voice mail won't work. And, as we all know, without visual voicemail, you might as well have an LG phone. And all your apps might not work at one point or another without access to the data network. And that would be bad!

    Of course, at least you have access to their 'slow' network. There's people who'd want an iPhone who aren't even serviced by any data plan from ATT. But, hey, they should have to pay for data they can't use, too, right!

  1. ebeyer

    Joined: Dec 1969

    -1

    Streaming video?

    With caps for bandwidth consumption, I wonder if AT&T will start dropping its objection to allowing streaming video content (eg., Slingbox) on its network. We may even magically see Flash support for safari.

  1. Jittery Jimmy

    Joined: Dec 1969

    +2

    Bogus.

    This all sounds like a bogus attempt to get people to stop buying iPhones as soon as possible. It seems like AT&T is selling plenty of iPhones; the number of people leaving other providers for the iPhone is nothing short of astounding. The 3.0 OS is likely to attract even more converts.

    This seems like an attempt by competitors to slow the bleeding, in order to encourage the public to hold off until the "Pre" or "Storm2" or "Curve 2" hit the market.

  1. testudo

    Joined: Dec 1969

    -3

    Re: Bogus

    Well, your comment sounds like a bogus attempt to get people to stop believing that there might be a price cut in the iPhone price. Perhaps you work for ATT trying to stave off a product sales drop while people wait for the rumored price drop?

    That sounds a whole lot more reasonable than to think Business Week is getting hoodwinked by ATT competitors.

  1. testudo

    Joined: Dec 1969

    -3

    profound?

    The ability to access profound web and e-mail content at any time has been a key draw of the iPhone.

    Seriously? People love the iPhone because of the depth of the content? I didn't realize the web on other mobile devices was being censored or edited to just the highlights.

  1. Trygve

    Joined: Dec 1969

    +1

    Need pay as you need

    I live between 3 different countries generally spending 5, 4 and 3 months in each respectively. I have an unlocked phone (all iPhones purchased in the Czech Republic are unlocked)... but I can't justify paying AT&T $70/mo for the 8 months that I am out of the US.

    I would love a pay-as-you go or a fixed price per month when in the country.

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