Consumer electronics devices with embedded wide-area wireless represent the next big revenue opportunity for mobile operators, but the new business will force AT&T and others to create new business models, said Glenn Lurie, president of emerging devices and resale at AT&T Mobility. He spoke at the opening of the Connections consumer electronics show in Santa Clara, California.
It will be critical to offer more choices in data plans to match how consumers use wide-area wireless on netbooks and other portable computers, Lurie said. AT&T currently offers a US$60 per month plan with a 5GB data cap, but it has also trialed a $40 plan and was happy with the results of that trial, he said. He did not specify the cap used on that plan. Consumers should also be able to sign up and pay for AT&T data service on a computer for one day or one session, he added.
How to sell data services on other types of devices is an even more open question, according to Lurie. He expects most portable consumer electronics to have wide-area wireless capability, as well as Wi-Fi, within the next few years. Those will include cameras, personal navigation devices, connected picture frames, in-car entertainment and navigation, game devices, multimedia players, and e-readers. Giving the example of a dog collar that sends out a signal so a lost dog can be tracked -- a product that he said does not yet exist -- Lurie said putting a $10 monthly charge on the dog owner's phone bill wouldn't work for that service.
Lurie said AT&T definitely plans to power a device that will compete with Amazon's Kindle e-reader, which uses Sprint Nextel's 3G network without the user directly paying Sprint. He envisions customers tethering AT&T handsets wirelessly to a thin device like the Kindle with a 10-inch screen. Lurie did not provide any details on talks with potential partners.
However, he said consumer electronics vendors all buy in to this vision of connectivity.
"There's not a single OEM (original equipment manufacturer) on the planet, that I've talked to, that's not all over this," Lurie said.
The iPhone has helped convince device makers they should wirelessly connect their products, Lurie said. Watching what application vendors achieved in products on the iPhone's App Store inspired manufacturers of devices that they can build useful, easy-to-use software for their own small screens, he said.
AT&T's iPhone deal with Apple, which Lurie negotiated, also jogged the mobile operator out of its staid ways. Critics objected to how much AT&T was giving away to Apple, but the success of the phone and App Store taught the carrier a lesson, Lurie said.
"We have to start with a clean sheet of paper," he said.
Faster networks, nearly 100 percent penetration of cell phones in the U.S., and the need for a new selling point for consumer electronics have all contributed to the move toward connected devices, according to Lurie. One other emerging technology, cloud computing, is also playing a role. With their low processing power and small storage capacities, portable devices will rely on cloud-based resources on networks, he said.
"You have to have that element for it to be successful," Lurie said.
Asked about AT&T's relationship with Apple, Lurie said it genuinely is a good one and that he talks regularly with Chief Operating Officer Tim Cook. Lurie also confirmed that in AT&T's first meeting with the Mac maker, which took place while AT&T Mobility was still called Cingular Wireless, Apple CEO Steve Jobs wore a black turtleneck.