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August 13, 2014
AT&T said today that it's offering a $200 discount on Apple iPads for anyone buying a full price
iPhone 5S or iPhone 5C, ahead of next month's expected announcement of the *new* iPhone.
If you have the feeling that AT&T wants to liquidate its old inventory of iPhones, you'd be right. We don't
know how many iPhones the wireless carrier has in stock but it's probably a whole lot more than we would have
With a new iPhone 6 expected to be announced on September 9 and in stores by the end of September,
it looks like the new promotion, which is available only in AT&T owned and operated stores, is designed
to sell off inventory of the older model devices.
To be sure, the promotion could also be used to move older iPads as well, as Apple is also expected
to announce a new full-sized and mini-version of the popular tablet in time for the holidays.
Additionally, the new promotion may also have another motive as well-- to boost the company's overall
As more and more consumers already own smartphones, AT&T and other wireless providers are trying
to encourage customers to add other Internet-connected devices to their own data plans in order to increase
AT&T's and Verizon's data sharing plans are all designed to make adding such devices easy and
affordable, while generating more revenue for the carriers.
Adding a tablet to a share plan on AT&T costs an additional $10 a month. Of course, with an
additional device connected to the data plan, subscribers may have to boost their overall data plan.
For example, two subscribers sharing a 4 GB plan for $70 a month, plus device connection fees,
may need to boost their plan to 6 GB and pay $80 per month, plus the additional $10 fee to connect
a tablet to the plan.
In all, a typical AT&T subscriber would likely be paying an additional $20 a month to AT&T, in such a scenario.
While the deal does offer a nice discount for most consumers, interested shoppers should be aware
of the fine print...
For instance, the promotion is only available to customers buying a new iPhone 5S or iPhone 5C
through the company's early upgrade program.
That means that customers will have to pay full price for the device or finance it over 24 months.
At full price, the iPhone 5S starts at $650 for a 16 GB version and the iPhone 5C starts at $550 for
the 16 GB version.
Financing the iPhone 5S with the option to upgrade after eighteen months will cost $27.09 per
month for 24 months.
And financing an iPhone 5C with the 18 month upgrade option will cost $22.92 per month for
The other condition is that the offer is for iPads that include AT&T cellular access. The basic
cost of the cellular enabled iPads generally run $100 more than iPads that only include a Wi-Fi radio. As
the old saying goes, there's no free lunch.
Don't forget that AT&T is also requiring that subscribers sign up for a two-year data plan with
the purchased iPad on top of that.
The newer, more expensive iPads will be discounted by $200, which means that a 16 GB iPad
Air, which usually sells for $630 will now sell for $430.
To sweeten the deal even more for consumers interested in the older iPad Mini with a non-Retina
display, AT&T is also offering a deeper discount.
That device will sell for $200 compared to its usual price tag of $430. Again, the offer requires
a two-year data contract for any iPad.
For consumers interested in buying a new iPhone and an iPad from AT&T and for those who don't
mind purchasing older models, this could be a good deal, but like we said, make sure you understand
the fine print.
In other mobile news
Apple and Samsung said late yesterday that they have reached an agreement on most of their
patent wars, a new development that should put an end to the unhealthy atmosphere the two technology
companies have been immersed in the last several years.
The two firms have agreed to completely abandon patent lawsuits outside the United States, and also
to end legal disputes in countries such as Australia, Japan, South Korea and Britain.
"Overall, this agreement does not involve any licensing arrangements, and the companies are continuing
to pursue the existing cases in U.S. courts," a joint press release said.
Apple and Samsung have been engaged in several lawsuits since 2011. Many of the disputes involved
the design of smartphones, a lucrative sector that the two companies dominate.
Apple had accused Samsung of multiple patent infringements, including the hardware design of the iPhone. For its part,
Samsung alleged that all generations of the iPhone and iPad infringe on its own patents.
But the childish tit-for-tat actions were fairly complex, and the stakes were very high. A
victory in court could force the loser to pull its products from the market, on top of all the
But while there are signs that tensions are easing, the two companies aren't completely giving up their
Several lawsuits in the United States where Apple has so far triumphed in two cases will continue.
Apple has been awarded about $1 billion in those cases, far less than the company was asking.
As expected, Samsung is appealing the decisions. Samsung still faces significant legal challenges
Earlier this week, Microsoft filed a lawsuit against Samsung, claiming the South Korean company owes
it money as part of a patent-sharing agreement the two companies negotiated in 2011. Samsung hasn't
responded as of yet.
In other mobile news
Time Warner and Comcast have said they will soon boost their broadband speeds in Kansas City, which happens to be the first town in the U.S. that Google Fiber will be
rolled out later this year.
They added that this will happen without any price increase. Kansas City is one of the few U.S. markets
where Comcast and Time Warner have real broadband competition beyond phone company DSL.
The mid-west metropolis is the home of Google's first Fiber broadband project, and was announced last year.
Google launched the new service in 2012, offering citizens gigabit speeds with plans to increase
bandwidth up to 10 Gbps.
Understandably, the service has become a hot commodity, with cities offering Google concessions such
as discounts on network access to launch Fiber.
Google didn't return a request for comment on the news. That the cable giants are upgrading their
services in the face of increased competition is ammunition for opponents of the planned Comcast-Time
The two companies have conceded that they have little overlap in their coverage and rarely compete
against one another.
A 2013 study by the FCC found that about 19 percent of Americans have only one provider offering
10 Mbps or faster broadband and just 48 percent are able to choose from three or more broadband wireless
For those that own condos or that rent apartments with restrictions on drilling holes or laying
cable, the choices can be even more limited.
Today's decision could also provide fresh ammunition for net neutrality advocates, who point to
the uncertain state of broadband competition in the United States as an indicator that protections
are needed to prevent service providers from throttling traffic and implementing extra charges.
Overall, cable companies have various arguments up their sleeves for why broadband availability
is lagging in the U.S.
With a growing but dispersed population and wide stretches of uninhabited land, laying cables to
bring broadband service to remote parts of the country can be very costly, they claim, and investments
may not translate to big financial returns in areas with few potential customers.
However, microwave relays could be an answer that could be analyzed down to road. The matter
has been among the key points of the Obama administration's infrastructure policies.
The White House has already pledged billions of dollars to improve broadband access in rural and ill-served
areas, along with public facilities such as schools and libraries.
In other wireless news
Executives from Samsung say that the company will launch two new high-end smartphones
later this year. The new devices will have a new and larger screen that uses new materials.
Samsung will likely introduce the new devices to the Galaxy Note 3 series in the fall. Samsung
also said during its earnings report yesterday that it would introduce "a more diverse product portfolio"
in wearables, but without providing any specifics.
Samsung typically introduces its newest phone-tablet hybrids in the fall. The other premium device
could be Samsung's much-anticipated metal smartphone that has been called everything from the Galaxy
Alpha to the Galaxy S5 Prime.
We've contacted Samsung and will update this report when we have more information. The news
about the devices came as Samsung posted a 25 percent drop in second-quarter operating profits,
marking the third straight quarter of profit declines as competition heats up in the smartphone
Samsung also warned that its second half would remain a challenge as competition in the mobile phone
market leads to lower device prices and severely hurts its results.
"Prospects for growth still remain unclear as competition over global market share intensifies
in the mobile industry," the company said in a press release.
"Samsung expects to see its sales of mobile devices increase with the rollout of flagship products
and of newer models, but profitability may suffer due to a heated race over price and product specifications," the
The period marked the first quarter of sales for Samsung's newest flagship smartphone, the Galaxy S5.
The company vowed the device, which it unveiled in late February and started selling in April, would
sell better than its predecessor, the Galaxy S4.
In May, Samsung revealed that it sold about eleven million Galaxy S5s in the first month
of sales, outpacing the Galaxy S4 by about one million units.
There have been worries lately that sales of the Galaxy S5 are weaker than hoped, and Samsung
hasn't released any updated shipment figures. But now we all know.
There also have been calls for Samsung to use more premium materials in its devices, such as
metal, although the company still has not responded to that yet.
In other mobile news
Samsung is apparently planning to launch a new high-end smartphone in August. The new device
will be designed to take on the iPhone 6, according to various reports out of South Korea.
Over the weekend, Korean publication ET News reported that Samsung is working on a new device
known as the Galaxy Alpha that it plans to launch next month.
Samsung wants to get the mobile handset out to store shelves before Apple has had a chance to
announce the rumored iPhone 6, the report said, citing sources who claim to have knowledge of the
Overall, the Galaxy Alpha is the latest in a long line of potential names for a new rumored
It's believed that the Galaxy Alpha could be the same device with another name that's been
bandied about the blogosphere over the last several months. Some rumors have suggested Samsung is
working on a Galaxy S5 Prime or a Galaxy F, both coming with the same high-end features mentioned in
the Korean news story.
However, this is the first time the Alpha name has come out. Both Samsung and Apple are waging an
ongoing battle in the mobile segment as both companies continue to sell millions of devices each
Combined together, the two are doing quite well, generating over 100 percent of the smartphone
industry's profits, after losses from other firms are taken into account.
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