Tag Archives: AT&T

iPhone at $199? Why not?

TechCrunch echoes the rumor of an iPhone at $199, as it did one month ago, although this time saying it is a baseless rumor from reputated BSter Kevin Rose.

The $199 iPhone subsidized by AT&T is an old speculation.

And why not? Apple could well launch the 3G iPhone at $399 and keep the 2G iPhone 8GB at $199 with some AT&T subsidize. AT&T must be extremely happy with the high ARPU and high data usage of their iPhone customers. Now with a new 3G model for the high-end segment, why not keeping the 2G iPhone as a low-end model affordable by teenagers. Teenagers are THE early adopters of mobile apps. The kids will make a better use of iTunes, of Facebook access from Safari and of YouTube iPhone native client. This use will make happy to Apple, selling more songs, to AT&T selling more data usage and to the all the teenagers that dream of an iPhone but don’t have the 400 bucks. It is a win-win-win!

For Apple it means one more opportunity for dominance in a new segment. Apple would increase leverage to negotiate with telcos on revenue sharing, and would have a wider base to upsell iPhone applications and games downloads at $1.99 each, on top of the music tracks and videos at $0.99.

Maybe it is only a rumor, but it could well be another strategic move from Mr. Steve Jobs. You can picture the keynote: Now everybody can have an iPhone.

IMS Vs. Skype

IP Multimedia Subsystem or IMS is an architecture standardized by 3GPP, 3GPP2 and TISPAN, that is the choice of telcos to implement not only VoIP, but also other multimedia services, such as videcalls, presence, instant messaging, push-to-x, videosharing, on-line address book, etc.

As an user, you can envision IMS as a service similar to what Skype offers today but standard-based, with assured quality of service and fully inter-operable among different telcos.

IMS software clients will run on different devices including handsets, PC/laptops and IPTV Set-top-boxes.

AT&T U-verse Voice is already based in this kind of technology.

But, if Skype is already free, why do we need IMS?

1) To avoid ending in a monoploy situation with Skype. As telcos adopt IMS, users will be able to choose their favorite service provider, and that will not impact what buddies you can talk to. E.g., you can not access Yahoo IM or GTalk users from Skype. Once Verizon, AT&T and Sprint have all IMS, you will choose your preferred operator, say AT&T, and still reach your buddies at Verizon and Sprint.

2) Quality of Service. IMS provides for guaranteed bandwidth. This will enable Hi-Def (1080) video calls, that best-effort Internet can not sustain.

3) Carrier grade service, including Emergency Services, not available from Skype.

4) Access from multiple devices and network access. Coupled with IPTV and Femto cells, as an example, you will be able to receive SMS, IM or calls on your TV screen or on your PC, even if you have been called on you cellular. With Femto cells, your presence info could be automatically updated when you reach home. Other services bundled with IPTV would include video conference from the TV, or having a voice, video or chat session open with friends on TV while watching the Super Bowl.

5) Open architecture, including a SDE (Service Development Environment) for developers to add Applications blended with your IMS Service. Applications such as those available in Facebook, could be made available on the IMS Service, bringing to power of Social Networks and Web 2.0 together with IMS.

Skype is a great service, but the potential is bigger with IMS, mainly because of the competition it would generate among telcos, that would drive more innovative applications and a better service at the end of the day.

Why should AT&T sell iPhone at $199

TechCrunch reports a rumor that AT&T will sell 3G iPhones with 8GB at $199 in US. That would mean a $200 discount from expected $399 price.

AT&T must be doing some numbers and verifying that ARPU (Average Revenue Per User) for iPhone is significantly higher than the average. This would be explained by the high-income segment attracted by iPhone and also by the substantial higher access to web and multimedia services from its Safari browser. So the business case of a $200 handset subsidy could actually fly. Apple could also be ready to reduce price or the revenue sharing conditions, considering they only shipped 1.7m units in the first quarter when Steve Jobs’ target is 10 million units in 2008.

The only risk of an end-price reduction is that it might appeal not only to high-income users, but start to attract budget-constrained customers, that would not generate such a high ARPU as measured now.

Still it is only speculations, but we will know soon if TechCrunch rumor was well-founded.

Internet TV or IPTV? Who will win the battle?

While Internet TV enjoys the hype, the reality is that Telco’s IPTV is growing steady, while Apple and Amazon keep mum on their movie download service numbers.

Every week we have news of players entering Internet TV or existing players reinforcing their offers. This week ReadWriteWeb reports news fron Netflix with additional set-top-box support, Hollywood studios creating a JV for VOD, Sony preparing a PS3 video download service and Motorola planning a mobile movie download service.

IPTV makes less headlines, but still AT&T U-verse, Verizon FIOS TV, Telefonica’s Imagenio, Free Telecom or PCCW keep adding subscribers (and new features) to their Pay-TV services. While revenues from IPTV telcos are far bigger than those of Internet TV, it is also true that Telco’s IPTV investment is huge compared to that of Internet TV.

Internet TV main advantages are global reach and the immense choice of a very Long Tail of semi-pros and amateur content creators . YouTube, MySpace and others, together with social networks/blogs provide a distribution power that enables these creators to reach the mass. See BarelyPolitical.com as an example.

Big Media companies content rights are usually negotiated by country, as this maximizes the return for content owners. While telcos do not enjoy the global reach of Internet TV, they are very strong players on a country basis, so Media companies find in telcos a strong distribution channel. That is why iTunes and Amazon Unbox started their service available only in US, to be extended to other countries as rights get negotiated.

This is the window of opportunity that telcos must take, before Apple, Amazon and even YouTube reach the mainstream with a better user experience than today, as bandwidth grows and new set-top-boxes connect Internet to the TV screens.

IPTV brings today QoS and exclusive content to the mainstream. Internet TV brings the nearly infinite choice and movie downloads (only in US) to a younger segment. IPTV has some advantage today. Will they be able to keep it? The battle is still open.

AT&T U-verse: True Convergence

U-verse logo

AT&T launched recently its U-verse Voice service to complement its Quadruple-Play offering: TV, Internet, Voice and Wireless.

U-verse Voice is a high-quality digital voice service. The service is delivered over AT&T managed IP network, which guarantees a secure and reliable service. Among other features, the user can manage calls and services from the U-verse Management Portal, including: Messaging, Call History, online Address Book, Click to Call and location.

See the compelling demo of U-verse Voice, where you can see the richness that IP can bring to telco services.

In this article you can find more details on this truly convergent service, empowered by IP and based on IMS (IP Multimedia Subsystem) standards.