Apple Flouts Verizon's Text Charges for iPhone Users—Saving Customers a 4,090 Percent Markup
Here's a stock tip. It looks like Apple has figured out a way to take a huge chunk of Verizon's business and give it back to the people who use iPhones. Instead of having your texting conversation over a cellular network, why not just do it over the internet on your phone? That way, it's just part of your data plan, and the tiny amount of information in a text message isn't going to overload your data plan. Texting will be effectively free. And that's bad news for Verizon, AT&T, Sprint, and anyone else whose business model is to overcharge the crap out of people for their text messages.
More than two trillion text messages are sent each year in the United States, generating more than $20 billion in revenue for the wireless industry. Verizon Wireless alone generates as much as $7 billion a year in revenue from texting, or about 12 percent of the total, Mr. Moffett said, and texting brings in about a third of the operating income.
Yeah, I'd sell my Verizon, if I had any. And it couldn't happen to a bigger set of swindlers.
Professor [Srinivasan] Keshav estimates it costs the carriers about a third of a penny to send text messages. Considering that the major carriers charge 10 to 20 cents to send and receive them, “it’s something like a 4,090 percent markup,” he said.
At 20 cents and 160 characters per message, wireless customers are paying roughly $1,500 to send a megabyte of text traffic over the cell network. By comparison, the cost to send that same amount of data using a $25-a-month, two-gigabyte data plan works out to 1.25 cents.
I hope Apple confiscates all that business and gives the money back to the people. The mark-up on text messages is nothing less than theft. Imagine, a third of Verizon's operating income is based in a simple crime that Apple can now rectify. Bring on the iMessage.