Now that Canadians have finally got their hands on the fashionable iPhone from Apple Inc., what are they doing with it? Not much, apparently.
Rogers Wireless Communications Inc. says that in the first four weeks following launch of the device, 95 per cent of customers used less than 10 per cent of their data allotment.
Some iPhone owners may be more interested in the sizzle than the steak, using the device as a fashion statement first and a smart phone second. But given that early purchasers of new gadgets tend to be tech savvy, there's a more likely explanation for the trend. "Individuals are hesitant about exceeding their data [limits]," said Michelle Warren of MW Research & Consulting in Toronto.
Rogers set a cap of six gigabytes a month on its $30-a-month data package for the iPhone. The trouble is that with a new class of device running on a new high-speed wireless network, most customers do not yet know what usage translates into.
In addition, Rogers' initial pricing for its iPhone plans generated widespread criticism for being out of step with what AT&T Inc. charges in the U.S., making customers extra sensitive to data charges.
Rogers initially priced its iPhone monthly data plan at $100 for six GB of data and $30 for 300 megabytes, before yielding to consumer pressure. The current plan charges $30 for six GB of data, on top of standard voice charges, to customers who sign up before Sept. 1.
Liz Hamilton, spokeswoman for Rogers Wireless, said 95 per cent of iPhone buyers used less than half a gigabyte of data in the first four weeks, and 91 per cent used less than 200 MB - that's the equivalent of downloading about 50 songs or 12 minutes of high-quality video. "We were surprised at the amount of data usage - that it was that low," she said.
AT&T, the exclusive iPhone carrier in the U.S., allows customers to use as much data as they want on their monthly plans. When the company introduced the first iPhone a year ago, data traffic on its network ballooned.
U.S. smart phone users have no reservations about jumping on and off the Internet as they need it, Ms. Warren said, predicting that Rogers, Bell Mobility and Telus Corp. will all do away with limited-use data plans by late next year.
Rogers is taking steps to get customers more comfortable with data usage and to try to spur use of smart phones. It has decided to extend the current pricing plan for another month and will make it available to owners of all devices.
A new set of pricing will kick in beginning Oct. 1, balancing consumer concerns and actual usage patterns, Ms. Hamilton said. A monthly fee of $30 will buy one GB of data instead of six GB. A cheaper package of $25 will give 500 megabytes.
To address customer concerns over racking up large monthly fees for unwittingly exceeding data limits, Rogers will add three features.
All data plans after Oct. 1 will be unlimited for the first three months to give customers a sense for how much data they are using - and plans can be upgraded or reduced without penalty. Secondly, customers will receive a text message alerting them when they are nearing the maximum and when they have surpassed it. Thirdly, data charges will be capped at $100 a month regardless of usage, giving "the ultimate cost certainty," Ms. Hamilton said.
Although Rogers declined to provide actual sale numbers of the iPhone, Ms. Hamilton said the company has sold an amount "well into the six figures." That ballpark number exceeds expectations on the Street. Greg MacDonald of National Bank Financial had forecast quarterly iPhone sales in excess of 70,000; a survey this week of some retailers led him to conclude that number was likely far too low.***
The power of 1 GB
1,000
The number of books of 100,000 words each that can be
downloaded
17
The number of hours of MP3
music that can be streamed
250
The number of songs that
can be downloaded
1
The number of hours of high-quality video that can be
downloaded in the MPEG-4
format
