Thursday, May 6, 2010

Where is AT&T's iPad Strategy? Maybe It's Time to Come Up With One

So it's no surprise to Uncle Bell that the iPad is a huge success, and even less of a surprise that the 3G version is also a best seller. This despite AT&T CEO Randall Stephenson's prediction that the iPad was a "wi-fi" device. Nope. The 3G version is selling great:

What's particularly interesting in the above article is that it references a survey saying that customers are particularly interested in the lowest priced 3G version, the 16g. What this says is that it's more important to customers to have connectivity than storage. So yep, the whole cloud computing thing is happening fast, and people get that the iPad is a cloud computer (unlike the iPod). It also says that the people who are standing in line and getting on waiting lists for the 3g version aren't just a bunch of rich Apple fans who are buying the most tricked out version they can. These people don't want to throw their money away, they just understand that a 3g iPad is more useful than a wi-fi version. So budget minded people are not only willing to pay $130 extra to be connected, they are willing to pay that for the chance to spend an extra $29.95 a month in service.

It's still a little early to fully eviscerate Mr. Stephenson for his incredibly moronic iPad prediction… well, no. I guess now it is time.

The announcement that the 3G version is selling out should be great news for AT&T, but it isn't, and not just because it makes Mr. Stephenson look like a boob for saying stupid things. The iPad is very bad news for AT&T as I pointed out in an earlier post, Five Reasons AT&T Fears and Hates the iPad. It could be the beginning of the end for AT&T's hold on Apple iPhone customers. As I also predicted, many people are considering the iPad to be an iPhone alternative, mostly due to their hatred of AT&T service pricing and contracts.

Of course, it doesn't have to be that way. The iPad could be a huge opportunity for AT&T to expand it's customer base and influence. The problem is it would require a major change in AT&T strategy to take advantage of what should be a competitive lead. First, AT&T would have to FIX IT'S SERVICE. Something it doesn't seem to be willing or able to do. So instead of giving AT&T a change to bring in a new range of customers, the iPad is likely to introduce a growing number of people to the cult of hating AT&T service and desperately lobbying Apple for an alternative. It would also require AT&T to give up dreams of tiered pricing, addiction to abusive long term service contracts and locked down devices. It would also require AT&T to invest in innovative services for the iPad, to lure customers to spend more than $29.95 a month. None of which AT&T's clueless leadership seems to be willing to do. After all, they think it's a "wi-fi device."

So this is what I'm predicting, AT&T will continue to have no iPad strategy, will continue to downplay it's importance because it can't understand what to do about it, and will force Apple to unlock the iPhone and give competitors a shot at the iPad. Short term, AT&T profits will be great, boosted by the success of the iPad, but the company will be suffer enormously once it has real competition for Apple customers. AT&T might not even survive once the iPhone is unlocked, since it's so dependent on iPhone profits. At minimum, what should be a huge opportunity to be a leader in servicing cloud computers will be thrown away.

So, Mr. Stephenson, time to admit you were wrong. The iPad is a mobile cloud computer that needs good 3G service. If your company doesn't provide it, another will. And meanwhile, thousands of companies are rushing to create great products to take advantage of the iPad, while you company is silent about the issue. Maybe it's time to Rethink Possible.

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