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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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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.


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