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.