Update: iPhones and Androids – Data Will Get More Expensive
Think I was a bit dramatic or hasty about my wireless predictions? Of course Verizon and AT&T are lowering wireless costs - except that's voice minutes, not data. Check out this article on Yahoo Finance by David Goldman from Financially Fit: Your Cell Phone Company's Dirty Little Secret. Here's an excerpt:
Data Overload Vs. Revenue
It’s not just about increasing revenue, say analysts. Carriers are banking on the consumer-friendly aspect: phones are more fun and useful with the Internet.
“The ‘naked aggression’ reason is to boost revenue to offset declining voice revenue,” said Charles Golvin, mobile analyst with Forrester Research. “But carriers also realize consumers won’t get the enjoyment out of their devices without data.”
But analysts caution that carriers need to be careful of data overload. 3G data networks are already in high demand from smartphone users, and smartphone usage was up 40% in 2009, according to an IDC study. AT&T has had well-documented 3G network troubles in New York and San Francisco due to the success of the data-hogging iPhone.
“Carriers are getting people to move to data, but they’re doing it cautiously,” said Lamas. “Rather than have everyone move to data immediately, they’re testing the waters and taking the people who can weather higher prices first.”
“Look how much revenue AT&T is getting from the iPhone,” said Golvin. “It’s easy for Verizon to make hay of AT&T’s problems, but it’s a problem that Verizon wishes it had.”
NOTE: AT&T announced it was releasing 6 Android phones at CES in January. Verizon and T-Mobile are working with multiple hardware manufacturers on newer Android devices. The multi-media device by Apple, the iPad will be coming out in both Wi-Fi and 3G starting in March, so you do the math.