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iPhone 3GS: commentary on upgrade and tethering pricing…

June 15, 2009 by Ben Robinson - Leave a Comment

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I’ve been reading the InterWebs of within the last week or so, and there’s been ‘quite a bit’ (wow, that’s the understatement of the year) of negative feedback on the costs of both the tethering (using the iPhone 3GS as a wireless modem), and also the cost of the new iPhone 3GS itself.

I can definitely see the arguments from the consumer side – Apple announces a desired new feature and just says “tethering” – great, everyone thinks, now I have a wireless modem too – but they don’t give any detail on the service cost. Likewise, they announce the device, but focus on features. Of course, when reality strikes, suddenly the costs of ownership/usage hit home!

But lets look at this reasonably – that is one fairly expensive device, so was it ever going to be (close to) free to upgrade? No. Does the tethering feature cannibalise the Operators’ USB modem strategy, removing what would have been potential customers? Yes. So you can see from the Operator side of things, they need to cover both the cost of the device, and the fact they now have extra traffic (generated by tethered iPhones) using the data access on their networks heavily.

The sting in the tail for the tethering issue is that most iPhone owners have some form of unlimited web access added to their contracts, so in theory you would think that it might include the tethering too – wrong. Unfortunately Laptop browsing (via the tethered iPhone) would occur at an entirely different usage rate that people just browsing on-device – and hence the Operators need to charge for this in order to cover costs.

But the biggest issues that I can see are really those of consistency and context – last time, with the 2G to 3G device, there was an upgrade path, and it was offered to customers – this time round, people have to bite the bullet. That’s just not consistent. Likewise, with the tethering, no real context was given when it was announced – and people get the wrong idea (about it being effectively free).

Ultimately it’s all about how the powers that be communicate their product and service offerings – if you aren’t clear or you don’t offer explanations, then you end up with a whole series of issues, and potentially LOTS of disgruntled customers. I can’t help think that with consistency and context on-point, a lot of this could have been avoided.

Having said that, it doesn’t matter does it – Apple will still sell loads of iPhone 3GSs!

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