Can the Padfone change the restrictive tethering policies of U.S. carriers?
Since we were first introduced to the ASUS Padfone, almost a year ago, we were intrigued by the possibilities created by this seemingly wacky device. Is it a phone, is it a pad? It’s a Padfone! This comic book-reminiscent tagline summarizes the whole idea behind ASUS’ shape-shifting product. Instead of confining their thinking to the proverbial box, the Taiwanese chose to go their own way. The result is a device that is truly ground-breaking, not only in terms of design, but also through the concept that it promotes.
Why run around with three devices, when you can have one? Why waste time synchronizing mail, calendars, or media across devices? Most importantly, why pay tethering fees, when you can use the data that you paid for, the way you want it?
Darcy Lacouvee, our Editor-in-Chief called the Padfone “an ideological shift, and likely one of the biggest shake ups to the world of mobile technology that I have ever laid hands on”. Darcy goes even farther when he says that the Padfone has “so much socialism embedded deep within its soul that I almost want to help the workers of the world unite”. Of course, he then called his last affirmation a joke, but we know him for the aspiring Commander Che he really is.
So, will the Padfone be the hero that liberates people from the tyranny of tethering-hating carriers? Or will it go straight to the dustbin of history, to join the ranks of so many other “revolutionary” devices?
It’s no secret. American carriers don’t like you tethering, or, better said, they don’t like you tethering for free. What they do like is to charge you an arm and a leg for the privilege of using your puny 3 gigabytes/month of data on your tablet or laptop. And why are AT&T and the rest of the gang doing this? Because they can.
Nobody can stop carriers from claiming that tethering is a value-added feature that costs money to offer. And if the FTC doesn’t do anything about the tethering charges, why would the carriers stop? No matter how you play your cards, they win. For carriers, tethering fees are not only good for filling the piggy bank, but also, an excellent tool to kick people of grandfathered unlimited plans.
Now here comes the Padfone, with its innovative 3-in-1 concept. By sticking your smartphone inside your tablet, which in turn can become your netbook, you essentially get a tethering-free method for using your mobile data, in whatever way you consider fit.
I bet carriers hate the idea. Here’s why:
With a Padfone, you can peacefully browse the web, on a smartphone, tablet, or netbook, with one single plan, without having to pay extra fees. No jailbreaking, no rooting, no apps. Remember, you’re not using two separate devices (that would be a breach of the user terms). You are browsing from your phone, which happens to be connected to a 10-inch touchscreen. So carriers won’t be able to claim their $20-$30 monthly protection racket. Multiply that fee by a million, and you begin to understand the magnitude of the problem.
Carriers like you to use as little data as possible, while still hanging on to the 2GB or 3GB monthly quota. You see, the average American smartphone user consumes only 0.59GB of their 2GB-5GB allowance. Computerworld’s JR Raphael did a basic test and determined that a day of heavy smartphone usage consumes about 30MB of data. Over a month, that would be about 0.9GB.
The natural question: why do carriers offer either small and very expensive plans (like AT&T’s 300MB option for $20/month) or large and relatively expensive plans (like AT&T’s 3GB option for $30/month)? Because they don’t want you to pay for just what you need. It’s like a fast-food joint offering a $100 salad and a $75 all-you-can-eat buffet. When you’re starving, you’ll definitely choose the $75 buffet, even if all you wanted was a $10 burger. And guess what, the other joints down the street offer the same menu. Tough luck, buddy!
By making big-screen browsing (not to mention Netflix streaming content) accessible, the Padfone will disrupt the money-making scheme that AT&T, Verizon, and the gang have carefully set up. Padfone users will likely use more than the average 0.6GB of data, and probably reach consumption levels that are close to the 3GB/5GB floor. In other words, Padfone users will be much less profitable for carriers than “regular” users are.
Now this one’s up for debate. We’re not sure how the purchasing behavior of Padfone users will differ from the customers that tout other devices. At least in theory, a cheap Padfone (cheap for what the Padfone offers) should create a bit of a stir in the market. As we’ve saw from the arrival of the Kindle Fire, people are crazy for affordable technology, even if the features or product quality are not cutting-edge.
At around $600-$700 (without a contract), the Padfone may be the next big thing. Remember that ASUS was the company that popularized the original netbook concept in 2007. Back then, few gave a chance of success to ASUS’s diminutive machines, yet they were a smashing hit, until the tablets came over and ruined all the fun.
Could ASUS be doing history all over again? If that’s the case, other manufacturers will be soon to follow ASUS’s lead. This could drastically reduce the amount of standalone devices sold, and hence, the number of plans sold by carriers.
In my opinion, there are three ways in which American carriers might react to the Padfone:
If no carrier will subsidize the Padfone in the U.S., ASUS may have an uphill battle on their hands. It’s not impossible for the Padfone to catch on unsubsidized, but it will be a lot harder. Who might dare to carry it? I don’t think that AT&T or Verizon, with all their grandfathered unlimited plans. Sprint is still offering unlimited plans for $40 – will they risk drawing legions of Padfone-wielding data hogs? T-Mobile? Who knows?
The opposite scenario – what if one of the smaller carriers decides to embrace the Padfone and to promote it heavily? If the Padfone catches on to the public, the other carriers may be forced to jump on the bandwagon. The impact on the entire tech sector would be tremendous, and very hard to predict.
The middle way – the carriers may decide that the Padfone will go down the drain in a couple of months. Some may offer it with a Padfone-specific data plan, designed to offset their potential loses, which we outlined above.
If the Padfone gains traction, some big changes are headed for to the world of mobile technology. Carriers will have to re-do their math, and, hopefully, they’ll be forced to drop those outrageous tethering fees. And not only carriers will be affected. Every player in the tech industry, from Apple to Huawei, will have to take the Padfone into account. ASUS’ wacky device may be just the beginning of a long lineage of similar all-in-one gadgets.
On the other hand, this article may be simple wishful thinking. In this case, in six months from now, we’ll look back at it with sadness (not to mention embarrassment).But again, the Padfone might hit it big, with or without the support of the carriers. Who knows? The release of the Padfone may be the opening act of the next revolution in computing. We can’t wait to see.
What do you think? Can the Padfone change something? Will it rise to our lofty expectations? How will the carriers react to it? Let us know your thoughts!