I had a conversation the other day with a couple about the iPad. We discussed the Wi-Fi model vs the LTE 4G model. So, which model is better they asked? The answer: This isn't even a competition. The 4G model is hands down the better model. The thing is capable of blazing internet speeds on one of the most amazing devices on the market. So why is every iPad sold not a 4G iPad? I like to call it the Pay for Internet Connectivity Individually on Every Device Everywhere and Go Broke Problem. Let me explain.
Meet Jack and Jill Goodfolk. Jack and Jill have been happily married for 20 years. We can accurately categorize the family as middle class. They have 3 kids: Adam, Jane, and Ashley, ages 11, 13, and 15 respectively. They also love technology and enjoy staying connected. Here is their current set up and what they are paying.
Verizon family plan.
5 lines on the 1,400 minute plan with unlimited text messaging. The minutes and texts plus additional lines per month cost $150. We, however, aren't going to focus on the cost of minutes and texts. We want to focus on data.
Jack, iPhone 4S, $30 for 2GB of data.
Jill, Galaxy Nexus, $30 for 2GB of data.
Adam, iPhone 4, $30 for 2GB of data.
Jane, Samsung Galaxy II, $30 for 2GB of data.
Ashley, iPhone 3GS, $30 for 2GB of data.
Total cost for data connectivity for the family's smartphones: $150.
There is more.
Jack has the new iPad with Verizon LTE, $30 for 2GB of data.
Jill was jealous so she went out and bought herself a new iPad. She wanted to break the Verizon way of doing things and got the AT&T model and is paying $30 for 3GB of data.
The family also has Comcast XFINITY internet at home and they pay $45 a month for it.
Jack also purchased a small condo in sunny St. George 5 years ago and pays $40 a month for internet (part of his HOA fee that was added two years ago).
So how much are the Goodfolk's paying each month JUST IN INTERNET COSTS?
The answer: $295.
I hope this number bothers you. It bothers me. I also don't believe that this number is exaggerated. I think the current model is very pro-Telecom and ISP and very anti-consumer. I think the model is outrageously expensive. Sure you can argue that no one needs internet on all of their devices. I argue this same point, more or less, in a previous post. But we want internet on all of our devices. Our devices are made to use the internet. New infotainment systems in cars are designed to connect to the internet. TVs are now "Smart TVs", designed to connect to the internet. I even saw a Kickstarter project the other day for an internet connected Toothbrush. If you don't think that in the near future that almost everything we use will be connected in some way, you are short-sighted and need to wake up to the Age of Technology. The current model is not conducive to a normal family on a normal budget. Your definition of normal may differ from mine, but most people would agree that paying nearly $300 for internet a month is steep, regardless of income. This is especially true when streaming a HD movie over LTE can eat up your 2GB data allotment in just ONE hour. So not only are you paying a fortune but you are also limited in how you can use your data. The solution is a shared data package that can be used on any device you own at any time in any location. I understand that there may still be a need for data limits until additional spectrum is freed up and infrastructure is built out to support the increasing loads. These limits need to be short term. Shared plans need to be implemented and prices need to be realistic for the consumer. Obama was happy to implement Cash for Clunkers. How about Cash for Connectivity?
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