A lot of people have commented on the fact that if you get an Apple iPhone, you have no choice but to get your phone service through AT&T. For a lot of people, this is a deal-killer. Why would Apple do this? Doubtless they got some sweet deal, but it doesn’t seem to be a sweet deal for their customers. But, the hype surrounding the iPhone means that Apple is probably not really suffering much in the way of people not buying the iPhone because of this restriction. If there were a real competitor out there, perhaps things would be different.
So, strike one.
What about micropayments? People— particularly those of the sort who don’t understand that something can have value without necessarily having economic value— have long wondered how to monetize the web. “Micropayments” is a term that’s come up a lot. Wouldn’t it be great if people could be charged a couple of cents for each web page they viewed? Well, no. But the idea is that somehow people should be paying for all of this directly, despite the fact that the world’s most successful web company seems to give away a whole host of really cool stuff without needing to charge people each time they use it.
There is often a lot of head-scratching around why people don’t like micropayments. To me, it’s a no-brainer. I much, much, much prefer having a “flat rate” plan than a “pay as you go” plan. This is especially true for something where I get billed after my usage. Fuel for my car is something I buy on a “pay as you go” plan, but I pay for it up front before I use the fuel, and I know how much I’m paying for it. Back when I was a kid, and subscribed to the Quantum Link online service, I almost never strayed away from the “basic” areas. There were “premium” areas, and we would get something like an hour a month free from the premium areas. If there was something I wanted in there, I would be in and out as fast as possible. Likewise with GEnie; I wrote scripts that would allow me to instantly download all of the message boards from a premium area, and then do my response posts all at once, so that my “time in area” would be very brief. When the clock is running, I’m afraid of the bill that will come. It makes it difficult for me to enjoy or comfortably use a service when I spent the whole time nervous about how much money all of this is eating up. If I must have a micropayment, at least I need some sort of meter to know how much I’m using or (as is the case with electricity and gas bills) some sense of stability about how much I’m going to pay each month.
Here is a story on BoingBoing about a guy who ended up with a $3,000 bill from AT&T because he used his iPhone on an international trip. With a different bit of hardware, he could have had a $70/month flat rate, so it’s apparent that this bill is beyond ridiculously high. AT&T is not backing down, either; the best “bribe” they could offer him was just a bit more than a 10% reduction, which on $3,000 for most of us doesn’t make it any more reasonable. If he doesn’t pay up, all of his family’s phones get disconnected on August 14.
Obviously, the very first thing he should do is move all of his family’s phones— including his wife’s business phone— to a different carrier. If this isn’t a lesson that AT&T should be avoided whenever possible, I don’t know what is.
But the fact is, if you want to use the iPhone as a phone, you are stuck; you have to go with AT&T. So they can pull crap like this, because there’s no worry of a mass defection of people to other carriers when they find out that AT&T is screwing customers over.
Vendor lock-in is bad. Boo to Apple for doubling the vendor lock-in with the iPhone. (There’s not much they could do about the Apple lock-in, but tying it to an AT&T lock-in was a bad choice.) Micropayments are usually bad, especially (as in this case) when you can’t monitor how much you’re being charged until the exorbitant bill comes. Give me a flat fee so I know what I’m going to be out!