The Pink Elephant in the Smartphone Room – TheStreet.com
NEW YORK (TheStreet) — I just looked at one of my cell phone bills, and noted one thing in particular: Last month, I had not made or received a single phone call. I use this particular device almost every hour around the clock, every day. Dozens of apps, more messages that I can count — but not a single call last month.
I took an informal survey among 30 or so friends who are heavy smartphone users. It turns out that one third of them said they make very few or no calls at all anymore. Just like me, they use more apps than they can count to send and receive all sorts of messages, but they have at least one device in which they don’t make or receive calls at least very much. Why am I bringing this up? Back in 1999, a trend started in cell phones in which calls eventually — by 2006 or so — had become “unlimited” in most plans. These unlimited calling plans started out at $100 a month, but these days they can often be around $60, at which point they also include unlimited domestic SMS and at least 2 gigabytes worth of monthly data usage. Excellent examples include Boost and Virgin, both owned by Sprint(S). So we have unlimited phone use for a flat monthly fee — but some of the heaviest smartphone users aren’t making or receiving calls anymore. People pay an imputed $30 or more for unlimited calling, and they don’t use it. Various classes of IP services for voice and SMS are replacing the now-traditional unlimited voice calling plans. Google(GOOG) Voice, Google Talk, Skype, and Research In Motion’s (RIMM) BlackBerry Messenger immediately come to mind. What is an ideal device to take advantage of an all-IP world where the user isn’t making or placing any circuit-switched calls? The answer is the iPad from Apple(AAPL). You can buy an iPad with a $25 data plan from AT&T(T), and effectively get everything you want. Skype and Google Voice take care of the rest. In other words, the iPad is the cheapest cell phone on the market, from a monthly fee perspective.