Saturday, January 30, 2010

How Sprint and Verizon Could Take Some Business Away From Apple and AT&T


Drop the price of the MiFi 3G data modem to between $100 and $200 (preferably $129) and sell unlimited data on it for $30-40 (preferably $30) per month without a contract.  These things would sell like hotcakes, would negate most of the reason to purchase the 3G enabled iPad over the “regular” iPad, would be far more versatile than the iPad’s device-centric service, would allow you to break free from AT&T’s crummy coverage, and just might knock-out some iPhone sales too.  (People could get the iPod Touch and MiFi in lieu of an iPhone.)  And just think of all the fun Sprint and Verizon could have poking fun at Apple and AT&T while advertising this.

I don’t know if engaging in this kind of price war would be in the best business interest of Sprint and Verizon.  What I do know is that at $60 a month with a 2-year contract, there’s no way I’d consider buying a MiFi modem.  For $30 a month with no contract, I’d be on my way to Radio Shack right now to pick one up.

P.S. -- This brings up an interesting question.  Apple says their 3G iPad has a SIM card slot for using wireless services.  Does that mean you could take out your iPad’s SIM card and pop it into a wireless modem and use your $30 unlimited data plan with your computer?


thinking said...

I do agree that a key is the pricing and contracts on the data plan. A big breakthrough with the iPad is that ATT will offer the data plan for a low price without contract. That's huge.

The MiFi is cool, but...
1) not enough people know about it. Go out on the street and ask the average person and most will give you a puzzled expression. Presumably this could be cured with enough effective marketing, but this device will never be as sexy to market as an iPad or iPhone.

2) Even though it's simple enough to use, it still requires the carrying of a second device, which multiplies complexity for the consumer. Carrying an iPod Touch and a MiFi may be worth it for better Verizon coverage, but to the average consumer it still seems a lot more than carrying an one device in an iPhone.

As an aside, I wonder what's happening with all those rumors of Apple and VZW closing a deal to allow VZW their version of the iPhone?

As another aside to the technophile on this blog, Nikon has a press conference scheduled for Feb 3, and rumor has it that they will be launching something that they think will be a surprise.

Clint D said...

IF there is a way, Verizon will screw up the iPhone - should they get it. Verizon has a history of locking up features and replacing the software of good phones with their own disjointed mediocre versions. With the iPhone they can't replace the software, but you have to wonder if adopting the iPhone would be akin to giving up on all of their attempts to make money off downloadable ringtones and music (which I can't imagine is any significant amount given how limited and lame it is).

With that said, my guess is that Apple won't let Verizon mess with the iPhone, so IF it comes to Verizon they will have inked out a deal to allow it to exist pretty much as-is... that leaves hardware... will it be smaller? Gain something? Lack something? If Verizon is smart, their version will be compelling enough to take away business from existing AT&T users. After all, Mac users LOVE to upgrade... and most cant say too many nice things in particular about AT&T service.

Shawn said...

I've..umm..heard that you can jailbreak your iphone and use it as a 3g modem via pdanet (yes, the same app that was on the treo). I've also heard that it works pretty well in "emergency" laptop usage situations, like downloading papers to read on the plane while you wait to pull away from the gate.

thinking said...

Clint: good point about Verizon crippling features on its phones.

That may be one reason why Apple hasn't signed a deal yet with VZW. I can almost guarantee you that there is no way in Hades that Steve Jobs would allow VZW to mess with his baby.

VZW should ink the deal with Apple and compete on their natural advantage: their coverage. Sure it would be the same phone, but they could play up the coverage angle huge. In fact, I bet there would be a lot of Apple fans who would gladly do all sorts of testing for free to determine which carrier has better coverage. If the nod went to VZW, that would be priceless to their reputation.