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iPad 3G firmware unlock by design would benefit both AT&T and Apple

iPadWhile other cellphone carriers have been encouraging customers towards smartphones with data intensive use-cases, such as ski-lift surfing, AT&T has been under fire over its data network.  The carrier, which recently caused waves by saying it would focus on educating some customers to reduce their data usage, has now said it does not expect widespread 3G adoption of Apple’s forthcoming iPad.  Randall Stephenson, CEO of AT&T, said he expects the iPad to be a mainly “WiFi driven product”.  Personally I agree with him, as I don’t believe many people have a compelling use-case for mobile data service on a smartphone as well as an iPad, although maybe we would if we get addicted to the iPad.  I actually think that the main hindrance to iPad 3G adoption will be Apple’s pricing and 3G implementation strategy rather than anything to do with AT&T.

What I mean is that buyers must decide at purchase whether they will ever use the iPad over 3G, as Apple has not announced any ability to enable 3G on the WiFi only version.  Unlike some device families where lesser models carry disabled hardware components, the 3G iPad is actually fifty grams heavier than the WiFi only model so it’s unlikely that the lesser model has dormant hardware.  So once consumers choose the WiFi version, they are out of AT&T’s catchment group forever.  If they choose the 3G version, AT&T has them depending on whether they ever choose to subscribe (it’s a non-contract plan).

I do think it would have made more sense to package the 3G radio in all iPads and recoup the cost by, say, charging a firmware upgrade fee upon first use of AT&T’s network which the carrier could have passed back to Apple.  This would have been win-win for both AT&T and Apple, enabling users to upgrade to 3G when ready and probably leading to more 3G users over the device life than the current model.  You might think Apple doesn’t care if you use 3G or not once you’ve bought the device because the data plan revenue goes to AT&T, not to Apple.  While this argument holds water superficially, Apple is in fact benefitting from 3G usage in a big way.  Every iPad shipped with 3G means more potential for users to wrap themselves up in Apple’s ecosystem.  When I use an iPad over 3G it means I will be using Apple’s ecosystem instead of a 3G Windows tablet.  I’m consequently more likely to buy more songs on iTunes, use iWork for document downloads instead of MS Word and spend more money in the App Store.  Even if I’m not ready for a data plan from day one, a 3G enabled iPad means I can go for it when the time is right for me to graduate into that model.

We can buy most Windows netbooks or tablets and decide to put them onto 3G immediately, when we’re ready, or never.  I think the Apple ecosystem would have benefitted from giving iPad owners the same choice.

Neil Berman

www.theonbutton.com

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Mar 3, 2010 - Posted by | Analysis, Apple, Mobile | , , , , ,

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