AT&T Wireless

* Update: Looks like my RIM HAPPY DAY slant on this AT&T news was spot on. I just received some info/quotes from RIM on today's news. Read it below. *

AT&T announced some new data plans today that are going to make a LOT of existing AT&T BlackBerry users very happy and likely also help to make BlackBerry the device brand of choice for new first-time smartphone owners. Be sure to check out the press release below for full details. AT&T customers currently on the the $30/mo fair-use unlimited plan (5GB) can choose to stay on it, but that plan is now being replaced by the new Data Plus and Data Pro plans:

  • DataPlus. Provides 200 megabytes (MB) of data - enough to send/receive 1,000 emails (no attachments), send/receive 150 emails with attachments, view 400 Web pages, post 50 photos on social media sites and 20 minutes of streaming video - for just $15 per month. This plan, which can save customers up to 20 percent off their wireless voice and data charges, is designed for people who primarily like to surf the web, send email and use social networking apps. If customers exceed 200 MB in a monthly billing cycle, they will receive an additional 200 MB of data usage for $15 for use in the month. Currently, 65 percent of AT&T smartphone customers use less than 200 MB of data per month on average.
  • DataPro. Provides 2 gigabytes (GB) of data - enough to send/receive 10,000 emails (no attachments), send/receive 1,500 emails with attachments, view 4,000 Web pages, post 500 photos to social media sites and watch 200 minutes of streaming video - for $25 per month. Should a customer exceed 2 GB during a billing cycle, they will receive an additional 1 GB of data for $10 for use in the month. Currently, 98 percent of AT&T smartphone customers use less than 2 GB of data a month on average.

If you've been tuning into the CrackBerry Podcasts for the past five months (including our WES 2010 podcast with BGR/Phonescoop), we've been making our prediction for a long time now on RIM's biggest opportunity to continue selling smartphones and signing up new customers by the gabillions, and that opportunity is the return of tiered pricing to data plans. It was inevitable that a carrier would at some point have to offer this type of plan. It's been unfair for a while now. AT&T Wireless indicated that 65% of its users consume less than 200MB per month -- the BlackBerry users out there! -- yet historically they have been paying the same data rate as the bandwith hogs (iPhone users).

Effectively, BlackBerry users have been subsidizing iPhone users bandwidth demands over the past few years. Now finally, with a dataplan like this, RIM can start to really boast and market the benefits of BlackBerry efficiency.  Previously, the "looming data crunch" argument seemed a bit like an excuse for RIM to cover up some of the areas where it was lagging behind the competition. But with RIM fixing up it's gaps, for example with the new WebKit browser which will be fast AND use 3x less data than the competition for rendering the same page as we were told by AT&T Mobility's President and CEO back at CTIA 2010, RIM will be able to deliver customers with a great all around smartphone user experience that costs less to use on a monthly basis as compared to some of the more data heavy devices. The "average" BlackBerry user (which may not be you if you're reading CrackBerry on a daily basis!) should be able to get away with AT&T's $15/mo. plan.

Back at WES 2010, RIM's CEO made the very valid point that the smartphone market is seeing the shift now from the early adopter to the early majority. For the early majority/majority, PRICE matters. If it didn't, the whole world would already be using smartphones - yet on a worldwide basis the majority are still on crappy feature phones. Over the next few years, as the laggers upgrade their mobile devices and for the first time seek out a mobile device that requires a data plan, the device that can deliver a compelling experience will be one that is attractive to the customer. With AT&T's announcement today, and the odds looking good you'll start to see this type of tiered pricing in a lot of markets, the BlackBerry solution should be very compelling as the smartphone market continues to grow. RIM may lag behind the competition in some hardware/software specs, but as they continue to advance the platform (BlackBerry 6 coming w/ WebKit browser, etc.) it'll more than meet the demands of these consumers at a more affordable price. BlackBerry "power users" may not see the benefit of this type of plan quite a much as the more casual user (200MB might not quite do the trick - though if you're always maximizing the amount of time you spend on WiFi you might be able to bring it down into that 200MB range fairly easily), but a high % definitely will.

If you'r reading this article and you're thinking "Kevin's on the BlackBerry Kool-Aid," you need to a) go listen to some CrackBerry Podcasts and you'll realize that's not the case and b) also realize that what I'm saying here is what I believe is RIM's strategic position going forward. The biggest market opportunity for smartphone sales is not necessarily battling at the top of the market for what the early adopters/techies are getting woodies over, but rather the mass market where people yet to own a smartphone. It's a bit of a scary play, but it can work. RIM will always have to keep innovating in order to maintain the strong brand reputation they have enjoyed to date -- they need to be perceived as a leader in technology and not as a low cost solution if they want to maintain their brand equity -- but thanks to plans like this "being efficient" will finally has a sexy sound to it.

Press Release

AT&T ANNOUNCES NEW LOWER-PRICED WIRELESS DATA PLANS TO MAKE MOBILE INTERNET MORE AFFORDABLE TO MORE PEOPLE

DALLAS, June 2, 2010 - AT&T*, the U.S. smartphone leader, today introduced new wireless data plans that make it more affordable for more people to enjoy the benefits of the mobile Internet. Customers can pick the new data plan that best meets their needs - either a $15 per month entry plan or a $25 per month plan with 10 times more data. Current smartphone customers are not required to switch to the new plans, but can choose to do so without a contract extension.

"AT&T helps mobilize everything on the Internet - your favorite web sites, TV shows, music, games and social networks. Virtually everything previously done while sitting at a computer can now be done on the go," said Ralph de la Vega, president and CEO, AT&T Mobility and Consumer Markets. "To give more people the opportunity to experience these benefits, we're breaking free from the traditional 'one-size-fits-all' pricing model and making the mobile Internet more affordable to a greater number of people."

Each plan includes unlimited access at no additional charge to more than 20,000 AT&T Wi-Fi Hot Spots in the U.S. Customers can also use unlimited Wi-Fi at home, in the office or elsewhere if available. AT&T will also help customers manage their wireless data usage by sending free text messages when customers reach different usage intervals, and by providing online tools, including a smartphone app that shows monthly usage information.

The new wireless data plans - including a new tethering option - will be available beginning June 7. Current AT&T voice and texting plans are unchanged.

More Choice

The new AT&T plans provide large amounts of data to enable people to enjoy their favorite online activities:

* DataPlus. Provides 200 megabytes (MB) of data - enough to send/receive 1,000 emails (no attachments), send/receive 150 emails with attachments, view 400 Web pages, post 50 photos on social media sites and 20 minutes of streaming video - for just $15 per month. This plan, which can save customers up to 20 percent off their wireless voice and data charges, is designed for people who primarily like to surf the web, send email and use social networking apps. If customers exceed 200 MB in a monthly billing cycle, they will receive an additional 200 MB of data usage for $15 for use in the month. Currently, 65 percent of AT&T smartphone customers use less than 200 MB of data per month on average.

* DataPro. Provides 2 gigabytes (GB) of data - enough to send/receive 10,000 emails (no attachments), send/receive 1,500 emails with attachments, view 4,000 Web pages, post 500 photos to social media sites and watch 200 minutes of streaming video - for $25 per month. Should a customer exceed 2 GB during a billing cycle, they will receive an additional 1 GB of data for $10 for use in the month. Currently, 98 percent of AT&T smartphone customers use less than 2 GB of data a month on average.

* Tethering. Smartphone customers - including iPhone customers - who choose the DataPro plan have the option to add tethering for an additional $20 per month. Tethering enables customers to use their smartphone as a modem to provide a broadband connection for laptop computers, netbooks or other computing devices. Tethering for iPhones will be available when Apple releases OS 4.0 this summer.

With the new wireless data plans, pricing for a smartphone voice and data bundle now starts at just $54.99 per month for an individual plan, or $24.99 per month for an additional line on a FamilyTalk plan, $15 per month less than the price of the previous entry level bundle.

For new iPad customers, the $25 per month 2 GB plan will replace the existing $29.99 unlimited plan. iPad customers will continue to pre-pay for their wireless data plan and no contract is required. Existing iPad customers who have the $29.99 per month unlimited plan can keep that plan or switch to the new $25 per month plan with 2 GB of data.

Wi-Fi at 20,000 AT&T Hot Spots
The vast majority of smartphones that AT&T offers have built-in Wi-Fi, which lets the devices automatically switch from the wireless network to a Wi-Fi hotspot without prompting, making Wi-Fi even more convenient and easy to use. This enables customers to use Wi-Fi in the home, office and at public locations where available. Using Wi-Fi does not count against a customer's monthly data plan usage total. In addition, virtually all AT&T smartphone customers have access at no additional charge to more than 20,000 AT&T Wi-Fi Hot Spots at Starbucks, Barnes & Noble, and other U.S. locations. Customers can get more information on how to use Wi-Fi and find the location of AT&T Wi-Fi Hot Spots at www.att.com/wifiaccess.

Monitoring and Managing Usage
To help customers easily check their data usage, AT&T has made the information readily available in a number of ways:

* Customer Text Notifications On Data Usage. When customers begin to approach their monthly usage limit, AT&T will send three text notifications - when they reach 65 percent, 90 percent and 100 percent of the threshold. Customers will also be sent emails if AT&T has their email address.

* Data Usage Monitoring. Additionally, customers with iPhones and other select devices can use the free AT&T myWireless application to check data usage. The application is available for download in several smartphone app stores. Also, AT&T customers can call *DATA# from their wireless phone to check their data usage for the current billing period. They receive a free text message with their usage information. Customers can also go online to www.att.com/wireless to see all their usage information, past and present.

* Data Calculator. The easy-to-use online data calculator enables customers to estimate their mobile data usage and get a better sense for which data plan is right for them. It's located at www.att.com/datacalculator.

Customers can learn more about the new plans online at www.att.com/dataplans, by contacting AT&T customer service at 1-800-331-0500, or by visiting an AT&T retail store.

AT&T expects these new data plans to have minimal revenue impact this year and to not affect previous guidance for 2010.

/end press release

RIM's Response to AT&T's new Data Plans

Great news for BlackBerry customers from AT&T this morning! AT&T announced two new pricing plans for smartphone customers based on wireless data usage - $15/month for 200MB and $25/month for 2GB.

RIM welcomes this news since these new pricing plans will translate to savings for BlackBerry customers due to the industry-leading efficiency of the BlackBerry platform. Thanks to RIM's longstanding focus on wireless data efficiency and investment in related technologies and infrastructure, the BlackBerry platform is significantly more efficient than other mobile platforms and this leads to a major advantage for users with tiered pricing plans (see attached note published by Morgan Keegan this morning).

Also, according to Consumer Reports, BlackBerry consumers use about 54 MB of (compressed/optimized) data per month on average (compared to data usage averages that are 3-5 times higher for other brands), which suggests that the large majority of BlackBerry consumers will now qualify to use the $15/month data plan.

Here's a quote from RIM's Co-CEO about AT&T's new pricing plans

"AT&T's strategic pricing move is great news for BlackBerry smartphone customers," said Jim Balsillie, Co-CEO, Research In Motion. "We envision a day when all mobile phones are smartphones and we believe AT&T's new service plans, together with RIM's leading portfolio of BlackBerry products and services, will help attract a much broader range of consumers."

For a more technical and detailed analysis of how the efficiency of the BlackBerry platform offers significant advantages to customers and carriers, you can also refer to recently published Rysavy Research report titled "Mobile Broadband Capacity Constraints and the Need for Optimization."