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Summary:

Instead of providing a stand-alone smartphone, FreedomPop plans to sell a WiMAX modem shell, which customers can fit over their iPhones. Getting the iPhone itself appears to be the customer’s concern, but Freedom may convince them with one 1 GB of free data.

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FreedomPop’s plans to launch a ‘freemium’ mobile broadband aren’t just ambitious, they’re a bit zany – zany bordering on genius. Instead of providing a stand-alone smartphone and dealing with pesky issue of providing voice, it’s leveraging its data-only deal with Clearwire to sell a WiMAX modem shell. Customers then fit that shell over iPhone 4 or 4S and get instant broadband access. Getting the iPhone itself – and accompanying voice plan – appears to be the customer’s concern. But FreedomPop is providing them a lot of incentive to go to the trouble: 1 GB of free data.

TechCrunch broke the story on Tuesday and FierceWireless confirmed it with FreedomPop VP of marketing Tony Miller, though some of the details are still fuzzy. It’s not clear, for instance, if the 1 GB is a one-off deal, which switches over to metered data plans once the initial bucket is used up, or if it’s a recurring month-to-month allotment of gratis data. Either way, FreedomPop plans to get paid. After customers use up the gig they’ll be charged a 1 cent for every additional megabyte consumed, Miller told Fierce, which falls in line with what the average $10 per gigabyte most of the major operators charge for overages.

The WiMAX shell is essentially a mobile hotspot, which connects to the iPhone and up to 8 other devices through Wi-Fi, according to TechCrunch, and Fierce reported the roughly $75 cost of the shell will be fully refundable once service is canceled, as long as it’s still in relatively good shape.

FreedomPop’s WiMAX deal with Clearwire has its limitations. Its 4G network covers 130 million people today, but Clearwire hasn’t announced any plans to continue its nationwide expansion. The bring your own iPhone model could present a problem as well, as AT&T, Verizon Wireless and Sprint, all require you to sign up for a data plan when activating the iPhone. Even at a bare minimum plan, customers will still be forking over $15 to $20 a month for data connectivity they may have no intention of using.

What would be interesting is to see if FreedomPop sparks a movement toward buying unlocked iPhones. Customers could theoretically get a micro-SIM from AT&T or T-Mobile for a voice-only plan, and then use FreedomPop’s WiMAX for data, falling back to Wi-Fi where 4G is unavailable. The price of entry is steep though. Apple started selling an unlocked version of the iPhone 4S in November for $849.

The other big question is how FreedomPop can sustain such a business model if it truly does give away 1 GB a month for free. According to a recent report from wireless analyst Chetan Sharma, only the top 30 percent of U.S. smartphone users consume more than 1 GB a month. FreedomPop will likely attract a lot of hard-core data users in the 30th percentile, but there’s a good possibility many customers will never breech that 1 GB cap. NetZero is also trying its hand at a free 4G service – and is also using Clearwire’s network – but it’s drawing the line at 200 MB a month before it expects customers have to sign up for a paid plan.

  1. They need an iPod and iPad shell more then an iPhone shell. Most iPhone owners are stuck with 2 year contracts. Curious about the amount of iPhone 4/4s out there without a data plan or off contract.

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    1. Kevin Fitchard Wednesday, March 21, 2012

      Hi Pete,

      You mean people using an iPhone as a combo phone and iPod Touch? Don’t know but interesting question.

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      1. What I mean is most people don’t need this for an iPhone… I see a much bigger market for people that would need/want this for an iPod or iPad.

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      2. Kevin Fitchard Wednesday, March 21, 2012

        Yeah, I was wondering that myself. You’re right the service would be perfect for an iPod Touch or iPad.

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    2. Good idea. I know a guy with an iPod touch who uses VoIP on it for long distance calls. Strap this thing on it and he’s got a full on cell phone. For less than an ATT/Verizon contract.

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  2. Thanks for the info but how about a link to FreedomPop to make it easier on your readers to check out what you’re talking about?

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    1. Kevin Fitchard Wednesday, March 21, 2012

      Hi Chris,

      It’s an easy Web search away: http://www.freedompop.com. I didn’t link because there’s little info there. FreedomPop hasn’t started marketing any of the services on their Website

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  3. Aple started selling unlocked version 16gb for $649

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    1. Kevin Fitchard Wednesday, March 21, 2012

      Hi ILA, definitely more enticing but still a hell of a mark up over the subsidized price.

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  4. Michael W. Perry Wednesday, March 21, 2012

    FreedomPop might want to tweak that shell and bring out a model for the iPhone 3G/3GS. There’s a lot of people with those phones who’ve no longer on data contracts. They might also have would with a short iDevice cable and connector for iPod touches/iPhones/iPads.

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  5. Who makes the shell?

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