The iPhone 4’s Dirty Little Secret

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As usual, Steve Jobs and Apple (Stock Quote: AAPL) managed to mesmerize the entire consumer world yesterday with the release of the new iPhone 4. Two of the biggest draws about the new iPhone are that it has access to a Netflix app, so users can watch movies in the palm of their hand, and it also has a new camera which allows users to take videos, edit them and send them off to friends and family instantly.

On paper, these both sound like competition killers, but there is a downside to these two features that may not have been apparent on stage during Apple’s developers conference.

As we reported last week, AT&T (Stock Quote: T) recently decided to stop offering its unlimited data plan for all smartphone users and instead replaced it with two cheaper plans, one with 200 megabytes of data per month and the other with 2 gigabytes per month. So, now iPhone users will have to moderate their Internet usage or face extra charges. For example, with the largest data plan, users will be limited to visiting 4,000 Web sites, sending 1,500 e-mails with attachments and posting 500 photos to social networks a month. At first blush, that sounds like a lot, until you factor in these new features.

Let’s start with the Netflix (Stock Quote: NFLX) app. There are no exact numbers out yet on how much of your data plan this uses, but according to Wired, “If you were to do nothing else with your 4G iPhone’s 3G connection but watch Netflix movies… you’d only be able to watch a handful each month – between three and six full-length films.”

Similarly, there will likely be limits on how many text messages and e-mails containing videos that you’ve taken on the iPhone that you can send (and receive). AT&T has yet to put up specifics on how this will work, but I did speak with one Apple representative who told me that sending videos by text or e-mail will certainly “affect your data plan,” but she said they are “still coming out with new information.” One thing the representative was able to tell me is that posting videos you take on your phone to Facebook will likely drive up your data usage significantly. “You may want to get the higher data plan if you post videos to Facebook a lot,” she said.

One question worth asking now is whether AT&T deliberately scrapped its unlimited data plan because they knew that these services were coming out and didn’t want users to overload their network by watching, sending and receiving an endless amount of video. Either way, what seems apparent is that iPhone 4 users will have access to some cool features, but only in moderation.

Check out MainStreet's coverage of secrets that Apple doesn't want you to know.

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