Apple touts the iPad as “magical and revolutionary” but it’s not the device alone that can make that claim. The service plan and no-contract model, combined with on-device 3G metering show the real revolution is with the data plan for these three reasons.

iPad thumb

Like many others, I waited for Apple’s online store to open this morning. It’s iPad pre-order day, in case you missed it, and I purchased two. The 32 GB model is for my own use and review purposes, while my wife and stepdaughter will share a 16 GB version. Both devices are Wi-Fi models: We have Wi-Fi here at home and I pay for a Boingo Wi-Fi account, plus a 3G MiFi device to use on the road. With the MiFi, I can share 3G with multiple iPads, netbooks and notebooks over Wi-Fi.

While many folks are ordering, some are indecisive on the connectivity options because they’re unsure of how the 3G service is going to work. Typically a 3G plan requires a long-term commitment, but not so with the iPad. Now that Apple has laid out the details of the 3G service, they’re worth closer inspection. From what I can see, this is mobile broadband done right.

Right off the bat, you won’t need to sign up for a 2-year contract to use 3G on the iPad. That’s a huge selling point right there — in fact, I expect many to splurge the extra $130 for the 3G option. Why not plan ahead and pay for the ability to use 3G on an as-needed basis? Again, I’m totally covered with my other plans and devices, but if I weren’t, I would have gone with the 3G option. Contract-free is generally more favorable than a lock-in. Mobile technology is changing far too fast for the standard 2-year contracts. It’s for this reason that I paid full price for my Google Nexus One handset: I have the freedom to change phones — and service providers — whenever I want to.

Monthly pricing

The iPad’s 3G monthly plan pricing is another draw. Through AT&T, you can opt for a 250 MB plan at $14.99 or unlimited data usage for $29.99. While it’s not a true apples-to-apples comparison, these same plans for a laptop 3G data connection are currently $35 for 200 MB and $60 for 5 GB  through AT&T. The unlimited smartphone data plan — like the one used for Apple’s iPhone — is the same $29.99 as for the iPad.

But some may only need 250 MB per month, so saving $10 $15 is a nice option and one that’s not available with today’s smartphones. On a related note, we’re running a poll on how much 3G throughput folks are using with their smartphones. As of this writing, 26 percent of the respondents use 200 MB or less, so it’s possible that 250 MB could be enough. On the other hand, smartphone data usage is typically less than on other devices due to the smaller display and “bite-sized chunks” of web usage. With its larger display, the iPad could be used more than a smartphone, with a usage pattern more akin to a data-hungry notebook. And here’s where Apple is doing mobile broadband smartly.

Turn it on or off with metered mobile broadband

The 3G service can be activated or canceled right on the device. No need to find an AT&T store, hit an Apple retail location or make any phone calls — you simply make the transaction on the device. Not only that, but Apple includes a metering system so you know how much data you’ve used during the service month. That’s handy for those trying to stay under that 250 MB limit. And there’s no need to keep checking how much data you’ve used on the iPad — the device will alert you when you approach 20 percent, 10 percent or zero of the 250 MB plan. Each alert allows you to bump up to the unlimited plan or kick off another month of 250 MB service. That could get dicey if you play the 250 MB game  — eating through that data in two weeks, for example and grabbing another 250 MB essentially cuts your first month short in terms of time, i.e.: you would have been better off with the unlimited plan at the same price. Regardless, the approach provides options and looks easy to manage right on the device.

No service change fees?

It’s still unclear if AT&T will charge any fees to change or cancel the plan. Apple doesn’t mention this on the iPad product page, but it’s standard for AT&T to charge a fee around $36 to activate a 3G device. I don’t think it’s going to apply here, though. For starters, I’d like to think that Apple would outline that in the details and there’s no mention of it. And that type of fee would add a usage barrier that I wouldn’t want to see if I were Apple. We’ll know for sure next month when the first iPad 3G models hit, but I don’t expect to see any type of charge for 3G service changes. It would defeat the entire “breakthrough deal with AT&T” that Apple negotiated for the iPad and mar this mobile-broadband-done-right approach.

Images courtesy of Apple

Related research on GigaOM Pro (sub req’d):

Hot Topic: Apple’s iPad

You’re subscribed! If you like, you can update your settings

  1. some may only need 250 MB per month, so saving $10 is a nice option

    No biggie, but it seems you misspelled $15.

    Sunny Guy

    1. Why save $10 when you can save $15? ;) Clearly my math skills aren’t magical — thanks!

  2. Constable Odo Friday, March 12, 2010

    I think the iPad will only appear magical and revolutionary to low-tech consumers who will find the iPad a very simple device to use without having to master a steep learning curve. Geeks already hate the iPad for being too simple and lacking in the hardware department. The most thing magical and revolutionary about the iPad will be ease of use to get downloadable content. Of course, that is what will attract consumers to buy the iPad once they’ve tried it. It’s not a tech-geek’s device, but I doubt if it was ever meant to be.

    1. Are you kidding? I’m as geeky as they come and I think this looks awesome. A 10 hour tablet, fully touch-enabled, with a 10″ screen and under 2 pounds! I don’t use any of the extra stuff (except the keyboard) on my current subnotebook. It’s basically a browsing device. While I’d probably use flash if it was there, it’s lack is by no means a showstopper for me.

      HOWEVER, I’m still probably going to wait for v2. ;)

      1. A device that runs only one app at a time. And the apps I can install are dictated by his godliness.

        Yeah…this is a device everyone needs!

    2. I just think it’s amazing that we live in a world where”low-tech consumers” are using a .5 inch thin, 1.5 lbs multitouch enabled 10 inch tablet with constant data connectivity.

    3. And what hardware would be lacking exactly? I’m not even an apple fanboy and I can’t find anything wrong with the hardware, and if you heard about OS 4.0 you know multitasking and a lion’s share of other enhancements will make the 3G ipad a viable laptop alternative…..

  3. I don’t see anything magical or special about the monthly plans except you get a good rate. There is prepaid data plans available for AT&T where you can do the same thing with any phone or device. It is supposed to be an “unlocked 3G device” so what if i want service service from another provider besides AT&T, how would that “data plan” software help? It will be interesting to see how they handle this in other countries where it is offered.

    1. Good points, Stuart. But I think there’s a huge change coming from the result of the iPad. The data plan might be available on other devices, i.e.: with prepaid data, but Apple is going to market this and greatly raise awareness to the mainstream consumer. Far more people will know about these types of plans through the Apple iPad than from AT&T — the carrier simply doesn’t market prepaid data plans often or well.

      And while the device is technically unlocked, the U.S. model only supports AT&T’s 3G frequency, so the moving to another carrier is sort of a moot point in this country.

    2. What do you mean “except for the good rate”? That IS the point. It is a 3G plan, with a good rate, and no contract. Where else have you seen anything like that?

      It is so easy to be cynical, esp. with companies like Apple and AT&T. But why is it so difficult for people to give credit where credit is due? This IS something new, and a positive step forward for mobile broadband.

      1. I’ve had prepaid data on AT&T for years and I’ve had the unlimited postpaid data plan (not 5GB) for years also. AT&T used to offer UNLIMITED data for $19.99 for 30 days on prepaid and only recently limited it to 100MB for $19.99 and that is for ANY device, not just one special plan with a special sim. This is not a positive step forward, the micro sim is definitely a step backwards–or more realistically, a way to say “we have an unlocked device” but make it only useful on carriers that make a special sim just for this one device.

    3. You don’t see anything magical about avoiding activation fees, not having to contact the carrier in any way/shape/form, and the choice at anytime to change to another plan or cancel without any fees or again having to contact the carrier?

      Please tell me where else I can get a 3G data device that I can activate/deactivate/change plans without contacting the carrier in any way!

      1. I can add (or remove) 3G data to my account directly from my non-smart Verizon phone… press left on the d-pad, press something to add features, and add the “vpak”. Then tether that data to my laptop via usb or bluetooth. $15/month. Have been doing that for ages now.

  4. WOAH – now hang on a minute! This is a MASSIVE shift in the tectonic plates of OEM’s, mobile operators and pricing. With this model Apple is effectively an MVNO (mobile virtual network operator) on AT&T. And with very good monthly tariffs.

    I don’t see any AT&T logo on the iPad interface, there is no way for AT&T to subsidise the device to drive up adoption.

    Could anyone get the Unlimited data plan on another type of device? Why a special rate plan just for one device?

  5. Brian S Hall Friday, March 12, 2010

    What’s magical is that this is a slick device, with WiFi, 16gigs, Internet, 100,000+ apps (most low-cost) and can be made for about $300.

    Imagine what we’ll have, for $100, in just 5 years. That will be the revolutionary part.

    1. Agreed and by then there should be a ton of iPad optimized killer must-have apps. In 5 years hopefully the iPad will be mandatory in most schools as tomorrow’s youth go gaga for future gen iPads. Yeah Baby !

      Apple just gets it, they rock. Why can’t the other tech companies understand what touch-enabled apps are all about ? We will prolly never get an answer to that one but I am guessing it because those other companies are run by old-timers with fog on the brain if you know what I mean.

  6. Fact that this is < 0.5 thick and 1.5 lb and yet can do most of the things expected from a netbook is revolutionary. For casual or on the go mailing, browsing, reading and editing docs you can’t beat an ipad, I dont need a 2.5lb/1 inch notebook for these tasks. 3g rate and option is good. I wish this works on tmobile too

    1. You do know that you are spending around double the price of a netbook for the 1 lb. weight savings? IMHO, it is a bit more evolutionary than revolutionary. But, YMMV.


    2. Power of Youth sri Saturday, March 13, 2010

      Agree, you cannot beat an iPad and at this magical price, i mean WOW. Under $500 people !! Most would easily pay $1000 for it. Unbelievable Price, IMO nothing with this much power even comes close.

  7. I’m looking at the pre-order page now debating to get the WiFi+3G version. It is nice there’s no contract and should be easy to turn it on or off. I mainly want it for the A-GPS.

  8. Will be interesting to see the average data usage of an ipad owner. Why do I get the feeling it will be right over 250MB causing owners to pay for 5GB when they use way closer to the 250MB. ATT is quite clever to create this pricing structure, they are going to make bank on this.

    1. Brett,

      I predict that your “feeling” regarding user’s iPad data usage will be proven quite incorrect. In the past 30 days, on my iPhone, I have clocked data usage at approximately 911 MB. Please keep in mind, this is on a device who’s ‘window’ to the cloud is physically much smaller than the iPad’s.

  9. Steve Jobs’ definition of magical and revolutionary = smart guy’s definition of ripoff. Let’s charge $130 for a 3G radio that costs maybe $15 to mass produce.

    That’s always been the problem with Apple – they think their hardware is proprietary, try to hide the specifications, inflate the price tag and never reveal how much it really costs them to manufacture a device.

    Don’t get me wrong here, I’m all for a $30 unlimited 3G plan, but gouging consumers $130 for hardware that now comes standard in millions of smartphones and costs perhaps one-tenth of that to manufacture is nothing but a high-tech scam. It’s clear Jobs has a knack at mesmerizing the uneducated consumer and putting a nice grip on their disposable income.

    1. If you don’t buy, you aren’t being “gouged”. Everyone can see the rates and costs clearly, and know what they are paying for. If you feel gouged, its your own fault for paying for it. Stop worrying about how others define what is a value or not.

    2. It is high priced, yes, but I wouldn’t call it a scam. You’re getting GPS in there as well and, as pointed out elsewhere, it may be that some of that $130 goes directly to AT&T to offset the overhead caused by the REVOLUTIONARY (for the US, anyway) ability to activate/deactivate the plan at will, without any carrier intervention.

      The $130 isn’t just going to the 3G chip. If you want to complain about something ridiculous, complain about software where you get the same disc as everyone else, but you have to pay $100 more to unlock extra features. That doesn’t even require hardware!

    3. “That’s always been the problem with Apple – never reveal how much it really costs them to manufacture a device.”

      Ha-ha! What manufacturer does? Most of the time we know retail prices, sometimes we know wholesale prices, but what circumstance do you know of, in which the manufacturer clearly made known its manufacturing costs? Tell you what, eager beaver junior woodchuck fraud detective, perhaps you should contact your State’s Attorney General and make them aware of the massive fraud machine that is Apple Inc.

      1. Apple are the masters of inflating prices. There is a point here.
        Take the PowerPc days on Macs. Apple claimed they were way ahead of x86 architecture and that’s why consumers had to pay a premium. We all know how that ended…

        Apple pricing is nothing but a scam for dumb users…and there seem to be no shortage of them.

  10. hello everyone

    i have a question , does the ipad 3g version will work in the other countries such europe if i buy it from USA? or it will be locked.
    for exampl, if France telecome provide the micro-sim card, can i use this micro-ssim card in ipad 3g bought from USA? ..

    thanks all :)

    1. I spoke to an Apple counselor on line. No way to change micro-sim cards, no way to reprogram the micro-sim card from foreign cards to US cards or vice versa.
      This in my mind is problem Numero Uno with this device. How dumb is it not to have a device that can switch carriers?
      How hard would it be to make it able to switch between Softbank or DOCOMO in Japan and AT&T in the US?

    2. George McIntyre Myth Tuesday, May 11, 2010

      Hi everyone. I got my wife ;) a new iPad 3G for her birthday. It was pre-ordered in California and it arrived last week. Its her birthday today so we opened it and fell in love all over again – although this time not with each other.

      I had ordered an extra SIM card for MOVISTAR (Spanish Telecom operator) and I cut it down to size and put it in the SIM slot. At first I got only the 3G symbol but no internet but then I went into Settings and Cellular Data and then entered the following:

      APN: movistar.es
      username: movistar
      password: movistar

      It then worked like a dream – super fast internet at home on 5Ghz wifi and outside using 3G.

      Word of warning. I had to go to the local shop again this morning for another card because I was hasty and cut some of the metal part of the SIM card. DO NOT DO THIS! You will regret it. Fortunately a new SIM is only 6 euros.

      Also, I found the APN info by googling. So should work for other countries as well.

      Hope this helps

Comments have been disabled for this post