Bad idea of the day: A crippled iPhone

By Felix Salmon
May 18, 2009

Olga Kharif speculates that AT&T might release a crippled iPhone later this month:

The exclusive U.S. iPhone service provider is considering cutting the price of its monthly service package or offering a range of lower-priced plans, say people with knowledge of the company’s thinking. One plan that could be introduced as early as late May would include limited data access at a $10 monthly reduction, the people say.

This is a stunningly bad idea. For one thing, $10 a month is not very much money, considering that the cheapest iPhone plan is $70 per month excluding text messages, and unlimited texts (which aren’t included in the unlimited data plan) cost an extra $20 a month.

More to the point, unlimited data is intrinsic to how the iPhone works. Everything from visual voicemail to thousands of different apps, including very data-heavy apps like Google Maps, relies on the fact that the marginal cost of data is zero. If you start limiting data access, you’re essentially limiting the use of the phone itself, and it becomes something to be mistrusted rather than something to be loved. If I press the Mail button by mistake, how much data will I inadvertently use? What happens if I think I’m happily surfing on WiFi, but then for some reason get booted onto the cellular network?

The iPhone was the first phone to be fully integrated into the internet; unintegrating it by introducing a limited-data plan would be a horribly retrograde step, especially when lots of other sexy new phones, including the Palm Pre, are about to be introduced.

Incidentally, at the end of that NYT article, we find this:

“Phones don’t stand the test of time,” Mr. Donovan said. “I look at my personal handset museum, and the coolest thing I had in my pocket eight years ago is laughable.” When it comes to phones, he added, “there are no ‘Citizen Kanes’ out there.”

Not true.


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This article makes no sense. There’s certainly nothing wrong with having a phone that the user doesn’t fully use. Just like GM vehicles with Onstar. Few GM owners subscribe to it simply because they don’t need it. Just like options on cars – why buy a high dollar car and not get all the available options – because the owners don’t need them. Silly reporters.

Posted by Frank | Report as abusive

Does anyone remember the insane phone bills that people were getting when the iPhone first came out — usually for data service overseas or something like that? This was a huge stink for Apple & AT&T. Does a “limited service” iPhone mean that this sort of thing could start happening again?

Posted by Alex R | Report as abusive

A much softer and MUCH more appreciated price cut would be to do away with the ridiculous charge of $20 a month for unlimited text messages. I recently read that this breaks down to approximately $1500 per mb of traffic. This is one of the single greatest ripoffs from carriers.

Posted by unwired | Report as abusive

yes, it’s a very bad idea, but that’s what we should expect from ATT – bad ideas. I don’t know anyone who has a single user iphone account with ATT that pays less than $100/month, so reducing it by 10% isn’t going to attract a lot more customers who are scared off by the $1200 annual operating cost of the iphone. My guess is ATT floated this idea by Apple, which is a lot more adept at recognizing a bad idea, and leaked word out to the media, so that the negative feedback would get ATT to come to grips with reality.

If apple really wants the iphone to move to the next level of ubiquity, they will let their exclusive relationship with ATT expire, and start selling iphones that will work with any carrier. While the iphone has been an obvious success in the US, that has been in spite of ATT, not because of them.

Posted by KenG | Report as abusive

Why is this a bad idea? The iPhone is a status symbol, and no one needs to know that you don’t really have one.

Posted by NE1 | Report as abusive

It’s funny, I knew what was going to be in that link before I clicked it. Luddite that I am, I still use mine. You people might like your ultra-thin, ultra-versatile, ultra-expensive superphones, but I’ll take complete indestructibility and a two-week battery life, thanks.

Posted by WHS | Report as abusive