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blog

Paying for Convenience. Twice.

John Federico

I'll admit it. I was a Crackberry addict. I had an original RIM Blackberry 850 - the pager sized model that easily clipped to your hip for easy access and you can bet that I took advantage of its handiness.

The 850 operated on the aging Motient DataTAC network and the coverage was soon surpassed by the cellular data networks. It also cost me $50/month. The cost, coupled with the spotty network coverage and short battery life of the device gave me the incentive to drop the service and look elsewhere for my Crackberry fix.

In the summer of 2004, AT&T Wireless (now Cingular) launched the Ogo. A Sidekick-sized device that has three simple functions: email, IM and SMS messaging. Designed for the IM Generation, the pricing, size and feature set was targeted squarely at younger customers.

The unit cost was $99 and the service pricing started at $17.99/month with no committment. I thought, "Why not?" and picked one up.

It's not the smallest or most elegant or even the most well conceived device, but it performs as advertised. Email is delivered every few minutes and I have access to the AOL, MSN and Yahoo IM networks. (I only have a need for AIM, though.)

Lately, in the interest of simplicity, I've thought that I should move up to something that integrates phone, IM and email so I checked out some of the new offerings from Cingular. Now that AT&T and Cingular have merged, the network coverage rivals that of Verizon, so I thought I would give them a shot.

Understandably, integrated devices cost more. After all, there was a lot invested in design, engineering and production, so you pay extra for the convenience of integration.

However, Cingular dings you twice for this convenience. In addition to the higher cost of the integrated device, the data service for these devices is $49 instead of the $17.99 that they charge for Ogo data service.

Why?

I'm a marketer, so you don't have to explain product positioning to me. But it's the SAME SERVICE that I currently pay $17.99/month for.

And the interesting thing is that I'm not even looking at a "professional" Treo 650 - I'm investigating the LG F9100, a consumer grade device that just happens to integrate the three services.

The devices sit side-by-side with the Ogo in Cingular retail stores - how do they justify the price differential to consumers?

Right now, I have Verizon Wireless for my phone service and AT&T/Cingular for my data service. This would have given Cingular the opportunity to have not just my data service, but also the voice service for both my wife and me. (We have a family share plan, which just makes sense...)

Now? The jury is out.

I can always get a Treo 600 running on the Verizon Wireles Network and add data service to it for the same $49/month and know that I'll have the absolute best coverage of any wireless network in the NY Metro Area. Sure, it has it's trade-offs. (Device size, for one thing) but if the cost is the same, why switch providers?

To be honest, it's not so much the cost as it is my incredulousness.

This is something the phone companies still, to this very day, don't "get". When a customer feels as though they've been taken advantage of, they're a customer under duress. As soon as something better comes along, they're gone. There will be no loyalty.