OK, so over the past couple days there have been many rumors about Verizon and what they may bring to market to compete with AT&T and the iPhone. Stay with me here as this post is going to be a little bit all over the map with the info I am reading.. just trying to catch up!
CNN Money has a post about Verizon and the possible iPhone Lite as well as a small touch pad device. With that said, there are a few rumors around this happening, not just this one. I cant find the original source but the posts seem to come from the New York Times, USA Today, and Businessweek according to the article.
There have been rumors swirling for about a month on some 10 inch touch screen devices that Apple is purchasing, this could line up with a device they are shopping around, or it could be something new they are bringing to market on their own. I actually believe that going to the carriers looking for a deal is a good solution, and here is why. People have been snatching up netbooks for a while now. These are great little “always connected” devices for accessing data so long as you are near Wi-Fi or happen to have a netbook with a 3G card built in. If Apple wanted to bring a netbook to market they would have to be concerned about how it will cannibalize sales on the $999 Macbook. Many people (my wife included) have a Macbook that is primarily used for accessing Email, Facebook, Recipies, booking trips, online banking, etc.. NOTE: Very little application access.
If you are trying to differentiate yourself against OTHER netbooks in the market, you surely can not do it on price right now. Hell, even the OLPC laptops are selling for $199 still. If you try to come in at the $200-$400 range, the only differentiators you have is the brand. Don’t get me wrong, an Apple netbook at $400 would sell like hotcakes I think, I just don’t see Apple doing that. You need to find something more.. something exciting and different to give people yet not cut off future sales of the Macbook line.
Apple has to be looking at the success they have had with the phone. Partnering with a carrier to provide the infrastructure while they provide a portable computing platform and closed ecosystem for selling applications, what could be better! This is working on AT&T so far.
OK, so I am Apple, I know I want to protect my Macbook sales.. and I want to bring a small netbook type device to market. The logical thing I could do is try to repeat success I have had with the iPhone.. bring a small touch screen connected netbook to market that has constant connection. The flaw here is if I am an iPhone user, I am on AT&T in the US.. so would I want to subscribe to Verizon for the access?
If this is the plan for Verizon, to get an Apple netbook deal, does it hurt Verizon as a “dumb pipe” play even if this is not a phone? Sprint sold access with Kindle.. that apparently worked for them. I seriously just don’t see Verizon getting the deal for a connected device from Apple. It would fragment their loyal customer base and cause TWO contracts for access. Verizon is already starting to subsidize netbooks for users by allowing a $50 price so long as you sign up for data access on the device. AT&T is testing it’s own netbook subsidy as well. As a side note, why would carrier do this? The hope for the carrier is to increase awareness of mobile data usage, get people hooked on access to content 24/7 and then close the deal on multiple channels of data for each subscriber. From there you want to collect usage data and leverage that to extend your relationship with you subscriber base. We are already seeing places in the world where mobile penetration rates are greater than 100%, it won’t be long and AT&T/Verizon would love to see data penetration rates there as well.
OK, rambling.. back to the main topic. More rumors.. We already know the rumors about Apple and Verizon. Today we have more coming out about Microsoft and Verizon trying to launch a device code named “pink”. Apparently it is a windows mobile based device that Microsoft is working on with a modified OS to be more touch screen friendly. First things first.. Apple nailed the usability because the iPhone was designed from the ground up to be touch screen, not a hack on top of an already outdated OS. Second, iPhones are popular because they are also great media devices. Microsoft either has to concede that Zune is failing and just let people use Media Player in the Windows Mobile OS, or they have to pull out all the stops and take a run with the Zune phone. I vote for the former. Serisously, there is nothing wrong with playing to your strengths Microsoft. Let Zune die and realize that for your mobile play, Windows based OS with Office suite and Media Player is REALLY a good solution. Just do it right. Don’t hack it.
Where does this really leave us then? Well, besides having more fodder to chat about tomorrow.. I think Verizon needs to close a deal with Apple for an LTE based iPhone as well as a heavily subsidized netbook if they have a chance to start playing in the “Apple spotlight”. (if they care) However, I think Apple would be better served by working with AT&T to offer a bundled plan that is a subsidized netbook, and if you sign up for a tethering plan on AT&T iPhones (something we know the 3.0 OS will support) it would give AT&T an opportunity to milk just a little more money from their already willing spenders on the Apple money train. If I pay $30 a month for internet on my iPhone, would I pay $50-60 for my iPhone/Netbook combo? Maybe. It could be bumped to $75-$100 for unlimited pricing and try to pull people from their ISP and use this as primary access. Think of the data that could be gathered on their user base.. cross sell opportunities, etc.
WOW.. After re-reading that.. it really is a lot of info with my standard free-flow writing. As promised, I don’t go back and re-write things.. I do a quick error correction pass and leave it as a stream on concious. What are your thoughts after reading this? Should Verizon try for Apple? Should Apple secure a deal with AT&T to leverage more data rate and try to negotiate a portion of the data subscriber piece?