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Verizon Wireless CEO Daniel Mead.  (Source: The Wall Street Journal)
Big Red iPhone 4 launch could have lower-than-expected impact on carrier

Newly appointed Verizon Wireless CEO Daniel Mead spoke with The Wall Street Journal recently about his vision for the future of his company and the wireless industry, which includes the possibility of "metered pricing" for data, and a shared-data family plan option.

"We have not moved in terms of unlimited for consumers in the $30 price point. Some day we may consider metered pricing. We haven't made any final decisions there yet," Mead, who took over as CEO in October, told WSJ.

When asked whether he would consider family plan pricing for data, Mead responded, "We've shared voice minutes and text messages for the family. I think it's fully in the realm of possibility in the not-to-distant future to be able to start thinking through the options ... That's a vehicle to get there." He called it "account-level pricing."

Throughout the interview, Mead talked about LTE ("It is a very practical and encouraging substitution for DSL, particularly when you look at rural markets.") and the future of mobile devices ("I think the world for the next few years is going to be more around tablets and smartphones.") He also mentioned that he felt as if Verizon was hitting "another growth spurt" and was thinking about 300- to-400-percent market penetration (meaning three to four devices per person).

Meanwhile, according to new sales numbers released by ITG Investment Research, Android demolished RIM's Blackberry sales at Verizon over the last year. In October 2009, RIM's smartphone share of Verizon sales peaked at above 90 percent. Since the launch of multiple Android phones from the likes of HTC, Motorola, and Samsung, RIM's share has plummeted to just 19 percent. Devices powered by the Android OS now make up 80 percent of all smartphones sold at Verizon, which does not bode well for RIM.

"The [RIM] decline is led by the lack of a Storm refresh, dwindling sales of the Tour/Bold series, and a failure of the new Curve 3G to yet replace diminishing sales of the Curve 8530," an ITG representative said. 

But LTE and iPhone 4 speculation could actually hurt Verizon in the busy holiday season. ITG expects it to be a slow one, "owing to an expected launch of the iPhone and 4G LTE handsets" in the coming months. Potential shoppers could be holding out for the newer devices set to launch in the first quarter of 2011.

And the new sales numbers show that if an iPhone 4 is released on Verizon's network next year, it could have a low impact compared to what analysts previously predicted. The devices that perform best are the ones that are frequently being rolled out and refreshed, as evidenced by the figures, than those that are static and see yearly refreshes. This approach is evident in the recent success of Motorola, which has steadily rolled out updated Android phones.

"Given the fact that the two latter smartphones [Motorola Etna and HTC Droid Incredibly HD] will connect to Verizon Wireless' new LTE network, and the fact that quite a few Apple fans will wait for the iPhone 5, we think the iPhone 4 would primarily cater to those who are currently buying mid-range smartphones such as the LG Vortex," the folks over at InfoSync write. This prediction is bolstered by the fact that Steve Jobs recently told investors the iPhone would see slimmer margins moving forward.


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Family (shared) data plan would be nice.
By MeesterNid on 12/13/2010 9:58:10 AM , Rating: 3
I know I personally would take a serious look at Verizon were they to offer something like that. Granted the pricing is attractive and not just the individual data plan at twice the cost.




RE: Family (shared) data plan would be nice.
By amanojaku on 12/13/2010 10:16:51 AM , Rating: 2
<off topic rant>
Guess I'm going to be a terrible parent: I don't see the point in family plans. I'll pay for my phone, and my wife will pay for hers. When my kids are old enough to be responsible with a phone (early teens-mid teens) they can get part-time jobs to pay for it, and any other wants. I use cell phones, dressy/showy clothes, toys, etc... as object lessons in adulthood. Anything you want you pay for yourself, and you get that money through honest work. The kids I see who grew up to be successful adults worked hard (and worked smart; flipping burgers pays, but only so much) as kids. There's gotta be a connection, since the ones who did not tended not to be successful.

It isn't necessary to give my 10 year old a cell phone, either. Plenty of parents have raised their kids safely without cell phones. It's more likely to be abused than used properly, in my opinion. Instead, I'll prepare all the "it doesn't matter if your friends have xxx" lectures, reinforce my kids' self-esteem, and make sure I'm a responsible parent where it matters.

Besides, I'll need the money to pay for MY exceeded data caps.
</off topic rant>


RE: Family (shared) data plan would be nice.
By acer905 on 12/13/2010 10:26:08 AM , Rating: 3
There are many people who save lots of money with shared plans.


By mcnabney on 12/13/2010 11:43:44 AM , Rating: 2
As voice moves from minutes to megabytes (by way of VoIP) this is a no-brainer change. If the industry moves toward metered price plans having a 'family share' would make enormous sense.

The barrier to this is that smartphones are being subsidized to the tune of about $350 per device. I would guess that if they do go to an account-level billing option that device 'upgrades' will be provided on the account level. ie - an account plan of 30GB might allow up to 4 SIM cards and two subsidized upgrades every year. The cost of that plan might be $150 per month, but it lets the consumer do what they want with the data.


By GruntboyX on 12/13/2010 12:47:42 PM , Rating: 2
It depends... In my case, It only saves me about 10 bucks. for two lines the share plan has little in the way of economies of scale.


RE: Family (shared) data plan would be nice.
By Murst on 12/13/2010 10:45:29 AM , Rating: 4
I'm just wondering...

So when you get your car insurance, do you pay for your individual plan, and let your wife get her own individual plan, even though you could bundle those 2 and get a lower price? And what about health insurance? Do you both get individual plans instead of the family plan?

The point of family plans is to save money. I'm currently getting 4 phones at the moment. I pay $135 monthly for 4 phones, 2 w/ data. If I wanted to get those separately, I'd be paying around $200.

quote:
Guess I'm going to be a terrible parent

Nah, just because you suck at saving money doesn't mean you can't be a good parent.


RE: Family (shared) data plan would be nice.
By amanojaku on 12/13/2010 11:17:11 AM , Rating: 3
Insurance is a need, and that is something I will always pay for. I'm talking about wants, and a cell phone is still a want for a young person.

The point I was making is I could pay $200 for individual plans, $100 for a family plan, or just $40 for MY plan. My kids can buy their own phones if it's that important to them, which is one method parents use to teach them responsibility. It's not just the contribution of money. You have to shop for the plan, contact people to establish and maintain the contract, monitor your usage, etc...

An eight year old kid doesn't need a phone; a 16 year old kids doesn't need one, either. The difference is the 16 year old will be an adult in a few years and will need to learn to shoulder this type of responsibility. I see too many dependent "adults" these days. Teach independence.


RE: Family (shared) data plan would be nice.
By ebakke on 12/13/2010 11:27:12 AM , Rating: 2
quote:
The point I was making is I could pay $200 for individual plans, $100 for a family plan, or just $40 for MY plan.
I think you're still missing the point of his argument. If you're willing to pay $40 for YOUR plan, and your wife is willing to pay $40 for HER plan, why would you not pay $60-70 for a shared plan that covers both of you?


By amanojaku on 12/13/2010 11:45:40 AM , Rating: 2
Ah, good point, I definitely missed that. Unfortunately, I just looked up family plans from AT&T and Verizon and see they're offering less minutes on the family plan for more money than what I have now! A family plan starts at $60 and gets you 550 minutes, or 700 for $70. I pay $45 for 600! Family plans must not be for frequent users, unless you get the unlimited plan.


By namechamps on 12/13/2010 10:48:36 AM , Rating: 2
Rather than having them pay full price (plus get slammed on deposits due to lack of credit) why not get a family plan and have them pay you for service. i.e. if family plan is $100 per month then they pay $25. Teaching responsibility while still being less expensive than paying $80+ for an individual plan.

One can teach responsibility without forcing them to get a bad deal. Your kid still learns responsibility, the family saves some money. The only "loser" is Verizon shareholders.

If anything it might make them more responsible with money. After years (say age 15 to 18) of paying $25 per month the idea of paying $100+ for an individual plan with all the bells and whistles will seem like the ripoff it is.


By nafhan on 12/13/2010 10:56:33 AM , Rating: 2
The point of family plans is that you can save a lot of money by putting several phone lines under one bill. That's it. If proving a point about monetary independence is more important than saving money, don't get a family plan.
Also, the argument about young children having phones is a completely separate issue.


By ChipDude on 12/13/2010 11:05:49 AM , Rating: 3
Take a look at SPRINT, best value plan around. They charge extra for 4G but if you area got it it rocks!

I was worried with the bad rating sprint has but for the last 2 years has been good so I stayed with them. 4 smartphones on family plan totally saves major $ compared to what ATT and Verizon offer. In this economy that adds to serious bucks!


By plupien79 on 12/13/2010 4:21:37 PM , Rating: 2
Agreed. I have a family plan on my SMS why not data... $30 a month per phone is ridiculous....


By BostonTechie on 12/15/2010 11:14:49 AM , Rating: 2
I have 5 phones under our family plan (2 adults / 3 teens). Our 2yr contract obligation ended last month. However, we are not upgrading our phones, even with the discounted pricing due to all of the touch screen phones requiring a minimum $10 per month data plan, with some at $15. I'm not paying an additional $600-$900 per year just to have a new touch screen phone. With no contract to keep us at VZ, we are looking at gong to Virgin Mobile. The $25 per month per phone is looking attractive. If VZ were to come out with a family data plan, I would stay with them.


No duh
By bob dole on 12/13/2010 11:03:19 AM , Rating: 1
iPhone and Android are like Cell and Gohan. iPhone thinks it’s the epitome of perfection, while Android has tremendous hidden power.

Blackberry is like Vegeta, its cocky, talks a lot of smack, thinks of himself as the greatest, but gets demolished and thrown by the wayside when Cell and Gohan battle.

Nokia is like Goku, at one point was the most powerful, but has been surpassed by Cell and Gohan. He’ll end up dying in for no reason in some futile attempt to beat Cell.




RE: No duh
By Chris Peredun on 12/13/2010 11:37:28 AM , Rating: 2
quote:
Android has tremendous hidden power


Naturally. The model number for the Samsung Galaxy S is the i 9000 .

(I'm sure everyone knows where I'm going with this one.)


RE: No duh
By dayanth on 12/13/2010 12:43:12 PM , Rating: 2
that's not powerful enough, until the model number is over 9000...


RE: No duh
By Tony Swash on 12/13/10, Rating: -1
RE: No duh
By amanojaku on 12/13/2010 2:52:05 PM , Rating: 2
I think the point of the article was to show Verizon ISN'T desperate to get the iPhone because the iPhone would do little to improve Verizon's sales. That's what Android is doing, and it's doing that better than the iPhone can. You also, leave out, conveniently, the fact that Android is sold from multiple carriers, forcing Verizon to take in a fraction of the Android revenue. Once Apple spreads the iPhone around AT&T will see a quick erosion in profit.


RE: No duh
By Tony Swash on 12/13/2010 5:31:18 PM , Rating: 1
quote:
I think the point of the article was to show Verizon ISN'T desperate to get the iPhone because the iPhone would do little to improve Verizon's sales.


I fear we are reading different articles. Did you perhaps read this paragraph?

"By 2009, Verizon was probably optimistic that they could head off AT&T (and Apple) at the pass. With the vast array of vendor Android roadmaps laid out in front of them they saw a way to stem the flood of defections. I think that optimism dissipated sometime this year and was replaced by a more dreadful prospect than what iPhone presented in 2007.

It is perhaps coincidental that the rumors of a Verizon deal with Apple seem to have started in earnest right after August. It’s thin, circumstantial evidence, but the only evidence we have to corroborate the data above is that Verizon has been signaling more desperation.

Reading further into the data, I would say Verizon faced these problems and decided that they had to throw in the towel. Apple may be the devil, but so could be Google. Apple was predictably evil. But Google? The devil you know is perhaps better than the one you can’t predict."


quote:
Once Apple spreads the iPhone around AT&T will see a quick erosion in profit.


But not Apple's profits. When the iPhone is spread around in the US the game will change again. What fun.


bad graph, bad!
By alu on 12/13/2010 10:06:02 AM , Rating: 2
who chose the colors in that graph?




RE: bad graph, bad!
By devonz on 12/13/2010 11:15:28 AM , Rating: 2
Seriously! We couldn't go with more contrasting colors and brighter ones too? All those dull blues greens etc are just...blah and not the easiest to distinguish which key color is actually which line.

What's wrong with black, red, green, blue, pink, yellow, etc which are MARKEDLY different at least?


Why would anyone do this?
By Solandri on 12/13/2010 12:31:19 PM , Rating: 2
quote:
He also mentioned that he felt as if Verizon was hitting "another growth spurt" and was thinking about 300- to-400-percent market penetration (meaning three to four devices per person).

Don't think that's going to happen. If you already pay for Verizon service on one device, why would you pay for it again on 3 more devices? The only way that makes sense is if you could use all 4 devices simultaneously, which I doubt most people can.

I predict what's going to happen is your cell phone is going to be your link to wireless service, since you already carry it around with you all the time. Items like tablets and laptops will connect to your cell phone and use it for Internet connectivity, rather than having their own separate connection.

Yes, I know the service providers lock down the phones right now so they can't act as wireless hotspots. But if more people start wanting to connect 3-4 devices via the cellular network, they're going to demand the hotspot feature rather than pay Verizon 3-4 times over. (The alternative - make cellular data service available for reasonable prices - is such an anathema to Verizon that I don't see it happening either.)




RE: Why would anyone do this?
By DanNeely on 12/13/2010 2:07:09 PM , Rating: 2
I suspect a big chunk is the standard DT writing fail. 3-4 devices per customer is more likely. ie Mom, Dad, Kid1, (Kid2).

While there will be some people with that many devices (phone, hotspot, tablet) it probably won't be common unless they go to a bucket of data pricing plan where your ##GB/mo of data can be shared with as many devices as you have on your plan without having to pay a huge fee for each additional device.


IF Verizon was smart...
By btc909 on 12/14/2010 3:19:56 PM , Rating: 2
They would offer fixed 4G wireless. I have plenty of customers that are stuck with DSL only. It would be great to be able to have an outdoor antenna mounted with a directional or omnidirection antenna (depending on how many towers are in the area) on the side of a house or office building with NO DATA CAPS. This would be fixed, no "mobile broadband". 4G speeds should easily handle multiple users. IF Verizon was smart.




RIM is getting pasted
By cscpianoman on 12/13/10, Rating: 0
"Can anyone tell me what MobileMe is supposed to do?... So why the f*** doesn't it do that?" -- Steve Jobs














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