Bill Shock Coming To New iPad Owners

In a few weeks, when the first bills arrive, third-generation iPad owners might be in for a bit of a shock.

The new iPads are less than a month old, and users are still in the honeymoon phase with their cellular carriers because the bills haven't been sent yet. But PJ Gupta, CEO of Amtel, says the new iPad owners are in for bill shock when it arrives. The new iPad consumes greater amounts of bandwidth than the iPad or iPad 2 due to the retina display.

Is that true? Common sense tells me that an HD Blu-ray movie will stream the same amount of data regardless of the node, and that an iPad 2 and the new iPad would measure the same data usage provided they streamed the same content. But I'm wrong. I confirmed it with Raymond Soneira, president of DisplayMate Technologies Corporation.

"Many streaming services, including Netflix, adjust the bps [bits per second] based on the quality and speed of the available connection. The new iPad has LTE so it is likely that it will be fed a higher bpi and run up the data plan faster," Soneira said. So users who have upgraded their iPads without changing their habits will see a larger bill.

"It's conventional wisdom these days: tablets are information consumption devices, not production," said Larry Seltzer, BYTE editorial director. "So reading is certainly a key part of that. But if they're so good at video and have fast networks, will people use them for those applications?"

A global IDG survey says they will. Fifty-nine percent of business and IT professionals "sometimes" use their iPad for entertainment and 31% do it regularly.

Even without streaming video, the iPad eats megabytes like candy. A colleague of mine bought the new iPad and opted for the 250MB-per-month plan from AT&T. Without streaming a single movie over LTE, his iPad consumed 60MB in its first three days. Why? He was cautious enough to turn off cellular data when he was in a hotspot. We tracked it down to downloading PDFs and attachments via Microsoft Exchange. A graphics-rich PDF can easily top 5MB. It adds up fast. Downloading Flipbook consumed 15MB alone.

Now what about those users who aren't conscious of their data usage because it's paid for by the company? Seventy-five percent of iPads are purchased by consumers, but increasingly the employer is picking up the tab for the data. If the employees were paying for the data themselves--like my coworker--they'd keep an eye on the meter, but when it's paid for they'll pass the bill shock onto the employer.

Amtel is one of a handful of emerging companies that offers a Mobile Device Management (MDM) solution that alerts users and the administrator when they're approaching their cap. The administrator can extend the cap or allow the data plan to be cut off. A product like Amtel's MDM and similar products such as MobileIron or Boxtone work as designed, but I wonder how often a company actually enforces it. Imagine telling your best salesperson that she's reached her cap three weeks into the month, so you're shutting her down. You wouldn't dream of it. The company will eat it every time. "The winner here are the carriers," said BYTE columnist David Chernicoff. "Eight hours, or so, of unfettered Netflix, will suck up 5GB of mobile data."

The new iPad's display is a noticeable improvement over its predecessors and because it looks so good, it's going to get more use. "People are more likely to use it for movies when the picture quality is higher and run up the data plan that way also," said Soneira.

In the consumer space this might give NetZero an entrance into a pricey data market. The California company came back to life this month offering 200MB free per month to users who purchase a $100 NetZero hotspot that converts a 4G signal into Wi-Fi. Its no-contract plan offers 500MB for $9.95 a month. AT&T charges $50 for 5GB, so NetZero is more la carte and might be cheaper if used right. But then again who wants to lug around yet another device?

In only a few weeks--when the bills come--we'll know just what kind of bill shock the retina display will cause.