2008-07-09

How to Price iPhone Data

Well, well, well. The people over at ruinediphone.com are still not happy. 6GB is not enough they say. Well, it is enough for me! In fact, when I though about it long and hard, 400MB was plenty as well.

Now I can get 6GB for a few dollars more (depending on the price of Visual Voice Mail.). I'll gladly pay that, sort of an insurance in case I go on a Youtube bindge while stuck in traffic (on the bus).

Although ehmac, ruinediphone et al can certainly take credit for the major price reduction, I think it had more to do with the battery life of the iPhone. Rogers marketing finally realised that people wouldn't be streaming online media 24/7 because of the limited battery life in 3G conditions.

I've advocated Disney World (flat rate) prices in the past. The possibility of using something without additionnal charge is actually worth money. Apple markets "possibility" with absurdly high capacity iPods. The vast, vast majority of people never fill their iPods. Those who do could easily make room. Yet people are willing to pay money for this extra room.

The 3G network is there weather people use it or not. That is the problem. To use an analogy, once the plane if full, the only option is a new plane. A new plane is expensive. You are better off charging thousands of dollars for the last few seats. On the flip side, if there are empty seats, you might as well give them away (or charge $1 like Easyjet or Jetsgo).

But the same plane that is at capacity at rush hour, could be almost empty at lunch time, then full again at 6PM. So you lower the price when demand is lower, increase it when demand is higher. The competion will affect demand, but the main factor is people's schedual.

That is why Rogers and others offer freeish evenings and weekends phone calls. Demand is low. Way below the capacity of the network.

But have you ever tried to make an important phone call only to get the "all circuits are buzy" message? That used to happen to me all the time with Clearnet in Toronto. That is not fun. I would pay more not to have that ever happen to me.

So if the Rogers 3G network is "curently unavailable" because some dumb dumb is streaming music while away from his phone. He should pay to add capacity to the network, not me.

I'm far from convinced the plane is full (especially here in Moncton), but I do know that networks don't grow on trees. Someone has to pay for them.

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