The iPad, like the first versions of the iPhone, has a number of limitations (such as no camera and no multitasking capability), and it is tempting to believe that these will limit its success. Apple will refine the iPad through OS updates and new hardware, but still needs to deliver a compelling experience for the initial version of the iPad. It cannot rely purely on improvements that are not yet delivered to establish the product.
Specialized MVNO
If, as Apple’s announcement seems to imply, the device will be tied to AT&T, even in international markets, this may leave a greater legacy, with local carriers potentially cut out of the revenue loop created by such a relationship, except through roaming charges.
The potential for many more such selective agreements to be made between platform vendors and specific carriers is clearly a concern for those excluded from such deals. It is also consistent with the idea of tight interdependency between specific SMART and LEAN players outlined in Ovum’s Telecoms 2020 Vision report series.
As with Amazon and the Kindle, Apple with the iPhone and iPad is essentially acting as a highly specialised MVNO, piggybacking on AT&T’s international access agreements. But while there appears to be very little scope for other carriers to join the party, there may in practice prove to be opportunities for regional operators to act as the host carriers for the iPad once its geographical reach extends beyond the US and the as-yet-unannounced initial international markets.
AT&T’s data plans for the device are cheap compared to current big-screen mobile broadband prices, but are nowhere near as generous. Users opting for the 3G device can pay either $14.99 per month for 250MB or $30 for unlimited data, both without the need for a fixed contract term.
The “unlimited” plan is a good deal cheaper than the $50–60 per month plans currently seen for netbooks. However, 250MB per month would be limiting for many users on an iPhone. Significantly, both plans come with free access to AT&T’s Wi-Fi hotspots. This reinforces the idea of the device as nomadic rather than truly mobile like the iPod or iPhone.