Can AT&T handle the Apple iPad?

Yesterday, Apple CEO Steve Jobs finally unveiled the Apple iPad — time to stop calling it the tablet, folks — a slate-like device that occupies a middle-ground between the company’s popular MacBooks and the Apple iPhone. The iPad has been received enthusiastically on Twitter and Facebook, and the few early hands-on tests are promising.

Of course when it comes to a device this hyped, there’s always going to be a little backlash. In the case of the Apple iPad, much of the concern centers – rightly, perhaps – around the data plan. Here’s the deal: Apple is offering two options for consumers when the iPad launches later this year. The first is an unlimited plan for $29.99 per month and the second has a monthly cap of 250MB for $14.99 a month.

Apple will sell you a Wi-Fi-connected 16GB iPad for $499. For $629, you can get an iPad that utilizes Wi-Fi and 3G, like the current model iPhone. And therein lies the rub. As we have explained in the past, AT&T has major problems when it comes to keeping up with data requests on the iPhone, especially in high-density metro areas. The symptoms include – but are not limited to – dropped calls, dead zones, and weird static squeaks.

Initially, some bloggers speculated that iPad owners would have a choice between Verizon and AT&T. But it looks like AT&T is going to get another exclusive on the Apple iPad. See the issue? Of course, Apple is standing by their man. In a recent interview, Tim Cook, chief operating officer at Apple, called AT&T “a great partner.”

Even AT&T has admitted that its New York network is “performing at levels below [its] standards.” The problem, according to the carrier, is that iPhone users are data guzzlers. On average, the feature-heavy phone gulps down 10 times the network capacity of other smart phones. And as users browse the Web, watch videos, download apps, and stream music on their iPhones, the device has strained AT&T’s network.

In December, AT&T said that it will push back against rampant data usage. New “incentives” to curb bandwidth hogs could include a tiered pricing structure with limits on how much each phone may download or pay-per-usage plans that meter monthly activity. Many shot back at these remarks, reminding AT&T that iPhones come with an unlimited data plan. You can’t use too much of something that’s “unlimited.” Could the iPad’s 250MB monthly cap mark the beginning of tiered pricing for the iPhone?

Either way, the iPad will no doubt add more strain to an already encumbered network. And, for Apple, tethering the iPad to the fortunes of AT&T seems like a risky bid.

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Comments (1)

  1. Submitted by Mark Gisleson on 01/28/2010 - 12:53 pm.

    Just a hunch, but I think the primary market will be people who don’t care about the wifi. I know 16GB doesn’t sound like a lot, but that translates into a substantial library (at least 15,000 books). Even at DVD quality, that’s 4-5 movies (probably more like 15 movies once people start ripping to iPad specs). And it’s clearly more music videos than you could ever run before the battery needed recharging.

    If you need to be connected to the internet all the time you already have a smart phone and you are not the primary market for this device. At least not yet.

    The iPad is for people like me who do everything on their computer but who wouldn’t mind doing some of their reading from the easy chair instead of at their desk. And yes, I could have bought a notebook but who wants a hot notebook in their lap in July?

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