Apple’s worst kept secret in years has been officially revealed and has received a mixture of ‘wows’ and ‘ho-hums’ from every conceivable quarter but for the service provider world it could be yet another nail in the revenue coffin.
Don’t be fooled for one minute with the news that AT&T will be Apple’s partner and that the 3G option will be a revenue generator for operators. AT&T’s $30 per month unlimited data is pretty amazing. Apple also offered a $15 per month 250Mb plan, but that is less than half a movie download, so it’s hardly relevant. It’s hard to imagine anything what will chew up bandwidth faster than this iPad with its big screen, fantastic browser and ability to download HD Youtubes and videos from the iTunes store. It’s even harder to see how the potential revenues will keep track with the network upgrades and backhaul boosts needed to feed these devices with data.
No surprise that AT&T has announced $18 billion to $19 billion for capital expenditure investment in 2010 which is about $2 billion more than last year on wireless network and backhaul. iPhone zones like New York and San Francisco are the main targets of this overhaul and the operator will increase its capacity, with 2,000 additional cell sites and 400,000 more square miles of 3G coverage.
However, for publishers, the iPad represents everything they could have wished for. Unlike existing eReaders, the iPad screen has high-definition and is brilliant with color. It has a rich multimedia offering with the notable exception of Flash, and means that magazines and newspapers can be easily downloaded and viewed. It is a truly viable alternative to paper and print, easy to handle, goes anywhere, etc.
It’s no wonder that publishers are reportedly lining up to provide content to Apple. They’ve seen the Empire transform the music and applications industries and have figured that it may just be their savior as well. Forget paying exorbitant cover prices for color magazines at the newsstand and subscriptions for your daily newspaper, complete with inky fingers and environmental concerns. Now your iPad will have the latest publications waiting for you at breakfast each day. And you’ll be very happy to pay for this content because it will be cheap and easy.
The New York Times is already talking about returning to the realms of electronic publishing and distribution and Mr Murdoch’s empire, long bemoaning the slowing revenues of paper editions, will be on the bandwagon with bells on.
Sadly, and unless the network operators are part of the value chain or can provide the much-needed billing option, they will miss out again and this time, the blow could be fatal.