World of Apple

AT&T today announced that it is expanding the eligibility window for customers who wish to upgrade to the iPhone 3GS. Customer who would have previously not been eligible for upgrade until July, August or September will now be eligible on June 18th.

All of that said, we’ve been listening to our customers. And since many of our iPhone 3G customers are early adopters and literally weeks shy of being upgrade eligible due to iPhone 3GS launching 11 months after iPhone 3G, we’re extending the window of upgrade eligibility for a limited time.

We’re now pleased to offer our iPhone 3G customers who are upgrade eligible in July, August or September 2009 our best upgrade pricing, beginning Thursday, June 18.

If you’re one of the many customers who will benefit from this change, please note that our upgrade eligibility tools will reflect this change on Thursday, June 18.

Those who are now eligible for AT&T’s lowest upgrade pricing will be able to purchase an iPhone 3GS for $199 (16 GB) or $299 (32 GB).

Customers who are now eligible but had already pre-ordered an iPhone will receive a credit for the price difference.

AT&T is considering lower cost plans for the iPhone and other smartphones by setting a cap on the amount of data used in a given month.

The comments come direct from AT&T’s CEO, Ralph de la Vega who said at the Reuters Global Technology Summit last week that he could see AT&T capping data in return for lower costs.

“Right now we continue to study what is the best thing that is available, not just from an iPhone point of view, but what you can do to stimulate additional demand,” de la Vega said at the Technology Summit.

The remarks come not long after reports that AT&T is looking into offering a $20 per month iPhone plan that would give iPhone owners $10 a month in savings but see a data cap put in place.

According to Cote Collaborative analyst Michael Cote there is a “strong possibility” that AT&T will drop the entry-level iPhone tariff price by $10.

The $10 price drop would bring the price of the tariff down from $69 to $59, a saving of $120/year. The move is said to be announced at next months Worldwide Developers Conference where Apple is expected to unveil a new iPhone.

Commenting on the current price of an iPhone over a two-year contract, Cotes said:

“This price does not address the whole market,” says Cote. And the price barrier has started to be a concern for Apple. For example, says Cote, “Wal-Mart iPhone sales haven’t met expectations.”

AT&T the official carrier of the iPhone in North America announced today along with its fiscal first quarter results that it had activated more than 1.6 million iPhones during the quarter.

The company which also reported a “1.2 million net gain in total wireless subscribers to reach 78.2 million” said that of the 1.6 million iPhone 3G activations 40-percent of those customers were new to the company.

Randall Stephenson, AT&T chairman and chief executive officer said in a statement; “I am particularly pleased with the success of our iPhone 3G initiative, which has driven strong high-end customer growth and delivered financial benefits ahead of our original outlook. Business and consumer expectations for mobility are on the rise, wireless innovation is flourishing and the opportunities ahead are substantial. AT&T is strongly positioned to lead in the next generation of wireless growth.”

Apple will announce its fiscal second quarter 2009 results later on today.

A report from Telephony Online suggests that Apple’s official carrier of the iPhone in the USA is in the midst of upgrading its network to double the current capacity.

The report states that AT&T is making tweaks to its current HSPA network which will bring the capacity up to 7.2Mbps.

AT&T is increasing the downlink capacity on its high-speed packet access (HSPA) from 3.6 megabits per second to 7.2 Mb/s through software upgrades at the base station, said Scott McElroy, AT&T Mobility vice president of technology realization.

The report goes onto add that AT&T will be looking to implement HSPA+ which will be capable of speeds up to 21Mbps.

Following yesterdays rumour AT&T has confirmed that it will start selling iPhones without requiring a two-year contract, but they will cost $400 more.

Spokesman Michael Coe said AT&T will sell the phones starting next Thursday for $599 or $699, depending on the storage capacity. The two models cost $199 or $299 under contract.

The phone company had said in July, when the latest version of the iPhone was launched, that it would sell contract-free phones in the United States. Such phones are sold in some other countries.

The new phones will still be “locked” to AT&T and won’t work with any other cellular carrier unless they’re modified. AT&T will only activate them on the regular iPhone plans, which include a $30 monthly charge for data access. Prepaid service will not be available.

Boy Genius Report is claiming that starting March 26 AT&T will being offering iPhone 3Gs contract-free to existing customers. The information which appears to have been sourced from internal AT&T training material which states that the 8GB iPhone 3G will sell for $599 and the 16GB for $699.

The offering is only available for existing AT&T customers and does not require a service agreement or device activation.

The training materials go on to explain that customers purchasing no-commit iPhones will be limited to one purchase.

Earlier this week AT&T reported its fourth quarter fiscal results for 2008, in the announcement Apple’s official iPhone carrier in the United States said that it had activated 1.9 million iPhones during the quarter. The numbers are down from 2.4 million activations in AT&Ts third quarter but the activations as a while have played a key role in AT&Ts growth.

AT&Ts CEO Randall Stephenson attributed iPhone sales as reason why AT&T fought the economy to report revenues up 2.4% (to $31.1 billion).

“The success of our iPhone 3G launch has driven wireless growth and helped redefine the wireless data space.”

Fortune offers some analysis of Apple’s deal with AT&T and in particular what has caused such growth for AT&T in 2008.

AT&T has activated 4.3 million iPhone 3Gs since its launch, 1.9 million in Q4 alone — more than double its iPhone activations one year earlier.
The average revenue from Phone users is 60% higher than the typical AT&T customer — thanks to that $30 per month data fee. Their heavy use of Web services helped drive AT&T wireless data use up 51.2% year to year, which as reader Jon in Brentwood, Calif., points out is not necessarily a good thing.
About 40% of the iPhone activations this quarter were new AT&T customers, either buying their first cellphone or switching from another carrier.
The churn rate — the percentage of customers who drop AT&T’s service — among iPhone owners is significantly lower than the rest of the network, sharply reducing marketing costs.

According to a report by Fortune, AT&T has been exploring the possibility of subsidising notebooks by offering them with build-in 3G connections and associated contracts.

AT&T has already begun offering such deals and over Christmas began selling a notebook in association with Acer for just $99.

When speaking to Fortune AT&T’s Glenn Lurie said that he “would very much like to do more business with Apple.”

Last week it was revealed that AT&T is planning to unveil an official tethering plan for the iPhone stating that it was coming “soon”. MacBlogz is now adding further information about what to expect from AT&T:

• 5GB Data Cap (just like Blackberry users) – AT&T will automatically turn off your tethering connection if you use too much bandwidth. Of note, the 5GB cap might get sliced for all users, not just iPhone users, in order to accommodate all new tethering plan customers (bandwidth demand).
• Initial connection through iTunes? (not sure if this is every time you connect, or just for initial setup)
• Expected speeds: GPRS: 30k – dialup speeds / EDGE: 110k – ISDN speeds / 3G: 1000k – slow broadband.
• You’ll want to disable auto-updates for everything, so as to not go over usage limitations.
• Will be +$30/month, new iPhone plans may be rolled out with tethering rolled in.
• Do not pro-rate tethering/bandwidth, it can become a nightmare, instead wait until new billing cycle.
• For unlimited bandwidth, AT&T will tell you to get a wireless PC card.
• No idea on a launch date.