AT&T   is   charging   $10   pert   month   for   the   GPS   mapping   feature   on   the  iPhone.   That   is   $120   per  year,   versus dedicated mapping devices from Tom Tom and others that will be under $200 by the end of 2009.  It is also charging about $50 a month extra for broadband Internet connection as opposed to the purchase of a third-party $199 device that links the regular iPhone to a computer. The AT&T thinking is something like the following:  "Our iPhone users have already paid a premium price for their handset. They are premium-price consumers. If they want a classy iPhone with classy GPS and classy broadband, we have it. People who own an iPhone, are they going to carry around a Tom- Tom? Are they going to buy a gray-market device to connect their phone to a notepad? I don't think so. They will pay up."

What is the logic behind AT&T's monthly extra charges for GPS mapping and the Internet connection?

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The key logic behind ATTs monthly extra charges for GPS mapping and internet connection on the iPhon... View the full answer