AT&T Data Caps: Innovation Killer?

AT&T's decision to drop its unlimited data plan today may put the brakes on innovation, makers of smartphone apps warn. AT&T—whose example other firms are expected to follow—says that the limits have been set high enough that they'll only be an issue for a small minority of customers, but developers say the psychological effect of data limits will cause users to shun data-hungry applications.

"What created this lively app world we are in was the iPhone on one hand, and unlimited data plans on the other,” the chief executive of driving directions app creator Waze tells the New York Times. “If people start thinking about how big a file is, or how fast an application is refreshing, that will be a huge inhibitor.”