Friday, February 12, 2010

Tethering and the iPad

Ok, I admit it. The iPad is often in my thoughts. Despite not being a mass market product, which usually is what interests me. What can I do? Anyway… I received an email from an Italian friend today, asking about tethering the iPad (see, it is not just me ;-)

My feeling is that people will simply not buy the 3G model, because the iPad is best used inside (try walking with it in your hands on the street, and watch out for that pole). Therefore, I expect most people to buy the wi-fi model. However, there are moments where 3G would be really useful. Still, adding $20 per month on a data-only plan is insane, if you already have a smartphone and you are paying a monthly data plan for it. Few will do it (and the 3G model is also more expensive…).

What are the other options?

One is that the carrier bundles your smartphone and iPad plan together. If the iPad plan is just $5 per month on top of your smartphone plan, many could go for it. At $10, I doubt it (I am cheap but I am not the only one out there).

The other option is tethering. The device has wi-fi, your smartphone has wi-fi and 3G: you just need to put your smartphone in tethering mode, creating a 3G connection to the carrier network and a wi-fi connection to your iPad. I do it all the time with my iPhone and my Mac. It is very fast, very convenient, in particular when there is no wi-fi around and I have to give a demo at a customer site (where there is often no open wi-fi available).

The problem? AT&T does not allow me to do it. I have to go around it, jailbreak the iPhone, add PDANet and hope not to be caught (if you are AT&T and you are reading this, I am obviously joking. I would never do such a thing).

In Europe, tethering is ok. It is quite expensive, but the carriers allow you to do it. It makes sense. If you are paying for a data plan, and it is metered, why limit you? More data means more revenues, so just go for it. I am told 3 in Italy charges 30 euros per month for 4GB (with voice and SMS included). It is a reasonable deal (although I would keep live video off-limits).

What's the difference between US and Europe? Metered plans.

In the US, we only have all-you-can-eat plans. They are good for users, who do not have to think about data consumption. Data size is not a natural measure. Time is (I know how long 15 minutes are). How big is a MB? Ask common users if they believe their graduation thesis (which took 6 months to write) is larger in size than a 5 minutes video on YouTube of a dog on a skateboard: the dog is not going to win, trust me. Nobody gets that video is so much larger than text. Why would they? All-you-can eat is so much easier to understand, and users do not worry when they click. Unfortunately, they get on drugs and it is hard to quit when you are addicted...

The problem is that the network gets overloaded fast. Ask people in San Francisco and New York with an iPhone. My friends are turning 3G off because it rarely works and sucks way more battery. That is bad bad bad.

So, what about time-based plans? I connect for 15 minutes, I pay for 15 minutes. Sounds easy to understand… Well, they might work for laptops and dongles, but when you have a smartphone always connected (e.g. to receive a stream of Facebook or email), you are screwed. It is always on. It would cost you a fortune.

Any other option? Well, in the desktop world, you pay for DSL based on speed, rather than time or bandwidth consumption. Can this be applied to mobile? I believe so. And I feel it would be the best option. However, for now, nobody is considering it. In my opinion, they should. What you have at home is unlimited connection, always on, you just pay more for convenience. Give me 2G for a very low price, 2.5 for a bit more, 3G quite expensive, 3.5G even more and so on. Maybe it is a bit early and the carriers have no way to bill this, but why not?

That said, tethering is still the best option for the iPad. One device has 3G (your smartphone, which needs it more and it is always on), all your other devices talk to it when they have to (when a high-speed wi-fi hotspot is around, you would always go for it, for speed reasons at least). One bill.

Personally, I believe Steve Jobs knows all this and he is forcing the carriers to adapt. The 3G plan for the iPad is just a joke. He is going to laugh at those that buy the 3G iPad, then laugh at the carriers trying to stop the wi-fi iPads owners to tether. Eventually, the users will win and Steve Jobs will add another nail in the carrier's coffin.

For now, if I have to suck up and get a metered access to have tethering capabilities in the US, I am ready to do it. If I can bet (and I like doing that...), I bet for this to happen in the US fairly soon. The networks are overloaded, the iPad runs on AT&T. AT&T has a crappy network. They have to stop it. They have to add metered plans. It is going to happen soon. In the meantime, they will try to catch the few that overload their network (AT&T, as I wrote before, it is not me ;-)

At the end, though, speed-based tariffs will win. But it will be a choppy road to get there.