iPhone data price complaints off base

Now I'm not a fan of megalithic wireless operators. But the criticism of AT&T's pricing plan for the new iPhone 3G, especially the monthly cost for unlimited data, is missing the point.

The complaint, lodged by Walt Mossberg and others, goes something like this: "Yes, the new iPhone costs $200 less, but the unlimited data package costs $10 more per month. So after a contract of two years, you'll be out $40 compared to the first iPhone."

But the point is this. We are talking about the iPhone 3G. Its data rates are about three times faster than the old 2.5G EDGE technology on the first iPhone, according to Mossberg's tests.

Which means, minute-by-minute, you'll be getting more data (and thereby more value) from the iPhone 3G.

But there's more. When available bandwidth jumps, people use far more of the service. New applications become possible. Video, for example, is much more reasonable at 400kbps than at 56kps.

So perhaps the comment should be, "For pretty much the same total cost as the old phone, you get a new phone with three times the power and 10-15 times the application utility. Why not stop by an Apple store and pick one up?"

marketing, pricing, iPhone 3G, wireless, mobile, devices, apple, iPhone

New iPhone advertisement a remarkable example of storytelling

I saw a new iPhone ad this weekend a dozen or more times. In it, an airline pilot tells how by using his iPhone he helped his flight avoid a three-hour weather delay and got his happy passengers to their destination on time.

(You can view the commercial on Apple's website here. You'll need Quicktime to view.)

This is an outstanding example of storytelling. There is a simple, compelling, 30-second narrative, related by the person involved. As he talks, he demonstrates how he used the iPhone to check the weather (artfully using many of the distinctive features of the phone, such as the display that reorients itself as you turn the phone and the zoom via touching). I can't imagine a more concise, effective way of helping people understand just what the phone can do.

It's the precise opposite of the glitzy iPod ads featuring wildly dancing silhouettes, which look great, but don't convey much.

Simple, compelling, engaging. Now I want one.

marketing, advertising, storytelling, narrative, apple, iPhone

Friday Haiku #1 - Apple's Product Announcement

Two hundred dollars
Off the price of an iPhone.
Early buyers steamed.

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What's really interesting about the iPhone

It's finally coming out this Friday. Instead of just reading about the iPhone, we can try it.

Lost in all the hoopla is what the iPhone can do for us, the end-users. It's a GSM phone, plus a video iPod, plus a touch-screen. But what's most interesting from my perspective is how the iPhone is the first US mobile phone that has a full-featured browser and allows unfettered access (thanks to Apple's insistence and AT&T's consent) to internet sites. Prior attempts have been hampered by small displays, poor data-entry capability, the tyranny of the operators' walled gardens, or all three.

As of Friday, the mobile internet will be unleashed. What will it be like? How will we use it?

(Photo courtesy of Apple)

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When wireless business models collide, customers lose

Today's Wall Street Journal nicely profiles the "air war" between wireless carriers and handset makers in a front-page article (link - $$).

The two sides play nice when it comes to plain old cellular service, but with both wireless networks (via 3G technology) and handsets (adopting PC-like features) becoming more advanced, their business models are coming increasingly into conflict.

Nokia, Motorola, BlackBerry, Sony Ericsson, etc., want to create the coolest devices--and these days, cool means the ability to take & share videos, play music, connect via WiFi and display maps. The carriers want applications to be offered as additional subscription services downloaded over their networks. Any application that comes bundled on the device, or that otherwise bypasses their networks, takes money out of their pockets.

An example is the sideloading of music (loading it via the PC, like you do with your iPod, instead of over the wireless network). Such a feature is easily provided on any phone that can play mp3's, yet the wireless operators frequently ask for it to be disabled, the better for them to sell tracks for $1.99 or $2.99 each, regardless of whether you've already paid someone else for that track.

One complication is that we Americans buy phones differently. In other countries, you go into a store, buy a phone costing perhaps $100 to $500, and separately subscribe to service from any carrier. Here, buying the phone and subscribing to the service are intertwined. And untangling them is quite difficult, given that carriers sell the phone at a subsidized price to entice you to sign a 2-year contract for service. Americans are far more likely to pay $0 than $300 for a phone.

Which limits the power of the handset manufacturers to innovate. If Samsung, say, refuses to disable a feature that its carrier partner disapproves of, the carrier will say, "OK, I'll subsidize LG's phone instead." And Samsung will lose that channel.

Caught in the middle are we, the users. We want the best applications, the coolest phones. We also want a cellular bill that's less than $200 per month.

Hope is on the horizon. One handset manufacturer has the brand name, market power, and image to negotiate an agreement with a carrier that empowers the end-user and enables many features that are not allowed on standard smartphones.

Its name begins with "A" and its phone will be available starting June 29. But it won't be cheap. Can you guess who it is?

(Photo: "my pda phone" by dreamjay via stock.xchng)

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