9 to 5 Mac shows off a mock image of what the newest iPhone 5 will probably look like. Pay close attention to the rounded edges and bezel. (click to enlarge)

Apple’s wildly popular iPhone series gets an upgrade in September as the Cupertino, Calif., company prepares to unveil iPhone 5.  Although the new model is not expected to support 4G/LTE networks, significant upgrades are in the works for the next series of phones:

• iPhone 5 will use Apple’s new iOS 5, which means improved messaging and photo sharing;
• An improved 8-megapixel camera, up from the current 5-megapixel one that got mixed reviews on iPhone 4;
• The introduction of the A5 processor, currently used in iPad 2, to provide more power for apps and features;
• An edge-to-edge screen and rounded glass.

The iPhone currently accounts for half of Apple’s revenue and has almost an 18% share of the smartphone market and dropping.

To counter Google’s increasing share of the smartphone market with its Android operating system, Apple also promises to deliver a stripped-down, less powerful budget-priced iPhone series for the developing world.  While prices have not been announced, the new budget phone is likely to be priced at least $100-200 less than western models.

With iPhone 5 also expected to include built-in support for either GSM or CDMA networks, Apple’s newest phone could be released simultaneously by both AT&T and Verizon.

Whether customers will be able to take their phones activated on one carrier to another is another matter, as is whether Sprint, T-Mobile, and smaller carriers will be allowed to sell it.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Apple Introduces iPhone 5 6-22-11.flv[/flv]

Even without support for 4G/LTE, iPhone 5 is still likely to generate considerable enthusiasm, especially among would-be Verizon customers waiting for the next version of the phone.  But by then, unlimited data plans will be a dream.  Bloomberg News and WFXT-TV in Boston discuss iPhone 5’s release, and a clip from CNBC’s ‘The Titans’ explains the marketing genius of Apple and its iPhone product line.  (2 minutes)

Verizon Wireless will end its unlimited data smartphone plan on July 6th, pushing future customers to choose usage tiers priced at $30 for 2GB, $50 for 5GB, or $80 for 10GB.  But existing customers with either 3G or 4G phones can keep their existing unlimited data plans indefinitely, according to leaked Verizon memos.

Droid Life has become information central about the end of unlimited data at Verizon, thanks to some good connections with employees willing to share internal company memos.  They’ve learned Verizon also plans to make some other price adjustments effective July 7th:

Tethering pricing (in addition to your existing data plan, charged separately):

• 2GB — $20/month
• 4GB – $50/month
• 7GB – $70/month
• 12GB – $100/month

Overlimit fee: $10 per gigabyte.

Tablet plan pricing changes: Delete $20-1GB tablet plan, replaced July 7th with a $30-2GB plan.

From a Verizon memo to employees:

Data Pricing Evolution…The Present
Our legacy data pricing structure was designed to address a somewhat different customer need profile than what we are seeing and can expect in the future.

Consider this. Data usage has more than doubled over the last three years. Consumers and business users alike are doing more and more with their mobile devices. The notion of “send and end” has migrated to “managing multiple aspects of one’s lifestyle through mobility.” Whether it’s social media (85%+ of Smartphone users), mobile internet (88%+ of Smartphone users), or email/applications (71%+ of Smartphone users), this usage has one thing in common—dramatically increased demand for data and media consumption.

As a result, we are evolving our approach around how we package our data solutions and pricing to our customers. Coming soon, Verizon Wireless will move from our existing pricing format to a structure designed to allow customers to choose the right data solution that best aligns with their needs.

The Value Benefit Equation…
With the new usage based pricing plans, the vast majority of our customers will be able to enjoy their typical level of data consumption for the same value that they outlay today. Additionally, for those who have greater requirements for data, we will have solutions that they can tailor to their unique needs.

Perhaps more importantly, given our strong desire to continue to provide enhanced capability and value to our customers, the new data pricing will apply to both our 3G AND 4G LTE networks. So in essence, for those customers in our ever and rapidly expanding 4G LTE network coverage footprint, users will gain the benefit of the fastest and most advanced 4G LTE network in the U.S. all for the same usage based value. More speed. More functionality. Same value.

When Verizon first spoke about AT&T ending its unlimited use plans, we noted company officials seemed hesitant to sign on to AT&T’s specific pricing model.  We interpreted that to mean AT&T was being too stingy in Verizon’s eyes.  Stupid us. Instead, Verizon is going to charge $5 more than AT&T for most of its data plans, presumably milking its much-better reputation for service and reliability.

The existing price for Verizon’s unlimited smartphone data plan is $29.99 per month.  After July 7th, one penny more buys you only 2GB on Verizon’s network.

Customers can lock in unlimited data if they sign up for service before the end of the day on July 6th.  All existing customers who want to keep their unlimited data plan can, apparently even when changing phones, for the foreseeable future.  But nothing is forever with AT&T or Verizon.  We suspect “forever” will expire when average smartphone data usage approaches the 2GB limit their future $30 plan will feature.  Currently, the vast majority of smartphone users consume less than 750MB of data per month.

A consumer group has filed a complaint with the Federal Communications Commission alleging that Verizon Wireless is violating its agreement with federal authorities by attempting to restrict the use of third-party wireless tethering applications.

The basis of the complaint, filed by Free Press, is that Verizon agreed not to “deny, limit, or restrict” customers from accessing the applications of their choosing as part of Verizon’s LTE license spectrum agreement.

“Verizon’s conduct is bad for the public and bad for innovation. It also appears to be illegal under the FCC’s rules that govern Verizon’s LTE network. Users pay through the nose for Verizon’s LTE service, and having done so, they should be able to use their connections as they see fit. Instead, Verizon’s approach is to sell you broadband but then put up roadblocks to control your use of it,” said Free Press policy counsel Aparna Sridhar.  “In 2007, Verizon argued aggressively against the adoption of these basic openness protections. Having lost that policy battle but won the auction for the spectrum licenses, Verizon has adopted a new regulatory strategy: simply ignore the rules on the books. The Commission must move quickly to investigate and stop these harmful practices.”

As Stop the Cap! reported earlier, Verizon has taken measures to try and warn off customers using the third-party tethering apps instead of purchasing the company’s $20 tethering plan, which offers 2GB of data usage per month.  In addition to text warning messages, the company has asked Google to disable access to tethering software in the Android Market for Verizon customers.

From Free Press’ complaint:

Efforts to disable smartphone features and create barriers to this useful, productive, pro-innovation activity should cause concern no matter who initiates them; but when Verizon Wireless interferes with the use of third-party tethering applications, that conduct also violates the rules governing its LTE network. When Verizon purchased the licenses for the spectrum over which it has deployed LTE, it agreed to abide by a set of pro-consumer, pro-innovation openness principles. In particular, Verizon promised that it would not “deny, limit, or restrict the ability of [its] customers to use the devices and applications of their choice.” Verizon’s recent move to limit and restrict access to tethering applications by actively requesting that Google make them unavailable in the Android Market (the Google market for mobile applications) deliberately and unequivocally violates this prohibition. The FCC should immediately open an investigation to assess Verizon’s practices and determine appropriate penalties for this clear breach of the Commission’s rules.

[…] When the FCC auctioned the C Block of the Upper 700 MHz spectrum — the spectrum on which Verizon has deployed its LTE offering — the Commission adopted important license conditions to protect the openness of broadband networks. It provided that licensees using that spectrum “shall not deny, limit, or restrict the ability of their customers to use the devices and applications of their choice.” In the words of Chairman Kevin Martin, the Commission adopted the conditions to ensure that “[c]onsumers will be able to use the wireless device of their choice and download whatever software they want onto it.”

The more wireless carriers try to impose punitive usage caps on their customers, the more they will shop elsewhere for wireless service or turn to free Wi-Fi alternatives.  Those are the results of an important new report from Devicescape, a Wi-Fi advocate and software creator that allows for seamless Wi-Fi connections.

At the very top of the findings of the latest quarterly report: consumers overwhelmingly continue to despise usage caps and other Internet Overcharging schemes.  At least 73 percent suggest they will take their business elsewhere if their provider cancels their unlimited usage data plan, with 80 percent making changes in how they consume wireless data — especially moving usage to free Wi-Fi networks and off 3G/4G networks.

Almost 90 percent of smartphone users already connect to Wi-Fi at home and on the road, with 64 percent using Wi-Fi hotspots at work and in shops and restaurants at least once a day.

The report also makes it clear consumers want a hassle-free Wi-Fi experience.  It should be free and open access, with no annoying PIN codes or passwords.

Wi-Fi is quickly becoming an expectation more than a treat, and businesses and communities that don’t provide it will increasingly be judged negatively by some consumers.  An even greater negative reaction can be expected from those who treat Wi-Fi access as a profit center.  Customers don’t like paying extra for access at hotels, restaurants, or while browsing around shopping malls or business centers.  Forget about annoying login or customer agreement screens as well.

While many consumers claim they will switch wireless carriers over usage caps, in reality few are currently doing so for several reasons:

1. The alternative providers still offering unlimited use plans are perceived as having lower quality coverage areas (eg. Sprint);
2. Most major carriers have grandfathered their sizable base of “unlimited plan” devotees, allowing them to retain the popular plans even as they discontinue them for new customers;
3. Customers ultimately have few choices for unlimited service.

Where customers are stuck with a usage-capped data plan, they economize wherever possible.  In particular, many rely on Wi-Fi service instead of the wireless service provided by their wireless provider.

Ironically, that’s fine with many carriers, especially AT&T, which has been promoting efforts to offload as much 3G traffic as possible onto local Wi-Fi hotspots instead.

Verizon Communications is a study in contrasts.  It runs one of the most advanced wired broadband services in the country that wins rave reviews from consumers and businesses, is on the verge of ending its unlimited use data plans for smartphone customers on the wireless side, and has launched a major “police action” against individuals that are using their smartphones as wireless hotspots without paying an additional $20 a month for the privilege.

Verizon Says No to Data Caps and Consumption Billing

When you run an advanced fiber to the home network like FiOS, the concept of data caps is as silly as charging for each glass of water collected from Niagara Falls.  That’s a point recognized by Joseph Ambeault, director of media and entertainment services for Verizon.  Talking with GigaOm’s Stacey Higginbotham, Verizon continues to insist their network was built to handle both today and tomorrow’s network demands.

“Our network is always engineered for big amounts of data and right now there are no plans [to implement caps], but of course you never want to say never because things could change.”

However, in the same conversation he talked about how the FiOS service has gone from offering a maximum of 622 Mbps shared among 24 homes in the beginning to tests of 10-gigabit-per-second connections in individual homes that Ambeault mentioned. For now, Verizon is testing 10-gigabit-per-second-shared connections and offering up to 150 Mbps home connections. This kind of relish for massive bandwidth is not evident in conversations with folks at AT&T or even those cable firms deploying DOCSIS 3.0. Which is why when Ambeault added, “We don’t want to take the gleam off of FiOS,” as his final say on caps, I tend to believe that Verizon may be the last holdout as other ISPs such as AT&T, Charter and Comcast implement caps.

Verizon Says Yes to Ending Unlimited Smartphone Data Plans

Verizon is among the last holdouts still offering unlimited data plans for smartphone customers.  Priced at $30 a month per phone, these plans have proved very profitable for Verizon in the past, in part because they are mandatory whether you use a little data or a lot.  But now as data consumption grows, Verizon’s profits are not as luxurious as they once were, so the “unlimited plan” must and will go, probably within the next three months.

Verizon has always been hesitant about following AT&T’s lead for wireless data pricing, which delivers a paltry 2GB for $25 a month.  AT&T still sells its legacy unlimited plan, grandfathered for existing customers, for just $4 more per month.  So while AT&T can claim they’ve reduced the price for their data plans, they’ve also introduced a usage allowance.  Those exceeding it will find a much higher bill than the one they would have received under the old unlimited plan.

Verizon will probably echo AT&T’s tiered data plans, perhaps with slightly more generous allowances, but the real excitement came from Verizon CFO Fran Shammo, who told attendees at the Reuters Global Technology Summit it was prepared to finally introduce the much-wanted “family data plan,” which would allow every family member to share data on a single plan.  That’s a potential smartphone breakthrough as customers resistant to paying up to $30 a month per phone for each individual data plan might see their way clear to buying smartphones for everyone in the family if they all shared a single family-use data plan.

“I think it’s safe to assume that at some point you are going to have megaplans and people are going to share that megaplan based on the number of devices within their family. That’s just a logical progression,” Shammo said.

Of course, the devil is in the details, starting with how much the plan will cost and what kind of shared allowance it will offer.

Verizon Says ‘Oh No You Didn’t Tether Your Phone Without Our $20 Add-On’

Phandroid posted this copy of a message Verizon customers are receiving if they are using unauthorized third party tethering apps. (Click to enlarge.)

Earlier today, Verizon Wireless customers using popular third-party tethering apps to share their smartphone’s built-in Wi-Fi Hotspot with other nearby wireless devices began receiving the first of what is expected to be a series of warnings that the jig is up.

Tethering allows anything from a tablet computer to a netbook or laptop to share a Verizon Wireless data connection without having to pay for individual data plans for each device.  Third party software applications bypass Verizon’s own built-in app, the 3G Mobile Hotspot, which involves paying an additional $20 a month for a secondary data plan delivering a 2GB monthly usage allowance.

Just as AT&T hated to see the possibility of lost revenue passing them by, Verizon has begun ferreting out customers using these apps and sending them friendly reminders that tethering requires an official Verizon Wireless add-on plan.  While the third party apps are not yet being blocked, most expect Verizon to gradually crack down on their use if customers persist in using them.  Verizon can also block the sale of the apps from the Android Market and can also insert roadblocks to prevent their use.  Or they can follow AT&T’s lead and threaten (perhaps illegally) to automatically enroll customers caught using tethering apps in their paid tethering plans.