Monday, 11 December 2017
News Tech

The LTE Apple Watch is bad news for your wireless bill


The Apple Watch Series 3 finally completes the picture of what a wearable device should be, thanks to the addition of a cellular LTE radio. Now the smartwatch can stay connected on its own, letting you stream music, send texts, or share heartbeats wherever you are, iPhone or no iPhone. Constant connectivity, after all, is the dream for any “smart” device.

The price of that dream? If you believe Apple, it starts at $399. But when it comes to cellular connectivity, Apple isn’t the only one who gets a piece of the action. If you want to use that fancy 4G LTE radio, you’ll need to fork over $10 a month to your wireless carrier for the privilege, as well as an “activation” fee, which is usually about $30.

Indeed, most wireless carriers are offering promotions for the launch of the Apple Watch S3 that waive the activation fee and give you a few months of free service. And why wouldn’t they? Like any dealer wanting to lure new customers into an addictive and costly habit, they offer the first hit for free.

And let’s be clear about what they’re peddling here: Customers don’t get any extra abilities — all the features work just as well on Wi-Fi, and the LTE connection doesn’t suddenly grant access to some hidden new app. The only thing that changes with LTE is the watch can use the data from their wireless plan — which they are already paying for.

Monthly fees that AT&T charges for 4G-connected devices to share in your data plan.

Monthly fees that AT&T charges for 4G-connected devices to share in your data plan.

You’re probably expecting that this is the part of the piece where I implore you, dear reader, to not fall for this scam. While there is probably some technical justification for a monthly fee (to, again, access data you already own) from a network-management standpoint, there is no way that the cost to the carrier is anywhere near $10 a month. And that’s not just me saying so — mobile analyst Jan Dawson agreed with me when I asked him about it via email.

That wasn’t all Dawson said. He told me that there were many people who would gladly pay the extra $10 a month for the ability to do certain specific activities with their Apple Watch. Things like go for a run while streaming music, or call your mom from your wrist — no iPhone required.

He’s right of course. That’s why my point isn’t just to rail against some random fee on your wireless bill whose only purpose is to pad carriers’ bottom lines. The cost is almost certainly manufactured, but it’s far from the only fee of this nature in society (looking at you, ATMs). And, philosophically, companies offering a service for a fee, and customers deciding whether or not to pay it, is exactly how free markets are supposed to work.

This particular cost hurts the future.

Except this particular cost hurts the future. In a couple of years, the buzzword 5G will become a reality, and the next-gen wireless network makes a lot of promises: Not only will it be faster, but it also brings with it a slew of technologies that expand cellular connectivity to new kinds of devices. Where as 4G tech (including LTE) was all about phones, 5G is all about hooking up everything from smartwatches to sensors to self-driving cars.

It’s a compelling vision: Anything and everything that could benefit from an internet connection finally has one — everywhere. While getting more and more devices connected has been a trend for a long time, the missing piece has been cellular connectivity. Hard for that drone to fly very far if it’s reliant on your cellphone’s Wi-Fi hotspot. But with an always-on 5G connection, its potential is fully unshackled.

It’ll be hard for the 5G vision to become a reality, though, if you get hit with a $10 monthly fee for every device that wants to share in it. It doesn’t sound like a lot, but as anyone with subscriptions to Netflix, HBO, Amazon Prime, Microsoft Office, Dropbox, Xbox Live Gold, Photoshop, and all the rest knows — they add up. 

In the run-up to the Apple Watch Series 3, when LTE connectivity was rumored, I was half-heartedly hoping Apple, with all of its market-moving clout, would make some special deal with the carriers where the device wouldn’t incur a monthly cost. It’s not unprecedented: Amazon made a similar deal with AT&T for its 3G-connected Kindle e-readers (further evidence of the artificial nature of these fees).

It was a vain hope. Maybe when 5G fully arrives (around 2019 or so) carriers might see the potential in the connected vision and start to do away with device fees, but I doubt it. From an accounting perspective, the carriers have a good thing going with these charges, and they have no reason to willingly give them up. But on the consumer side, everyone’s going to have to be selective about the devices they connect. That’s the uncomfortable fine print on a 5G world: It’s a fantastic vision… as long as you can afford the subscription.

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