IPhone users love their wireless data packages and all the fun, cool things they can do with them like download apps, browse the mobile web and watch video. For example, they love to shop. A July report from Yankee Group Research Inc. finds iPhone owners are nearly three times more likely to shop via their mobile phones than smartphone owners overall.
IPhones are also among the most popular smartphones. Beyond Research In Motion’s BlackBerry, which is widely used in the business world, the iPhone ranks second in smartphone adoption. And BlackBerry is losing ground. BlackBerry users represented 37.3% of smartphone users for the three months ending in September, down from 40.1% in the preceding three-month period, according to web measurement firm comScore Inc. Meanwhile, the iPhone held steady in second place with 24.3% of the market. Additionally, it’s widely believed many BlackBerry owners use their devices mainly to check work e-mail and don’t participate too much in other data-sucking activities such as watching video, downloading apps and mobile commerce—at least not as much as iPhone users.
OK. We’ve established two facts. There are a lot of iPhone owners and they like using a lot of data. Those facts conjure up two immediate (if opposing) thoughts in my mind: Lucky AT&T and Poor AT&T. AT&T’s got all the iPhones on its network, a major boon for its revenue. On the flipside, it’s tasked with the challenge of providing wireless data to all those data-gobbling iPhone owners. And it’s proven a costly task. For example, AT&T has a planned investment of $18-$19 billion in its network this year, at least some of which will presumably go to beef up its wireless data services.
AT&T competitors T-Mobile and Verizon lay on thick the sales pitches for their lightening fast 3G and 4G data services available on other smartphones using Google’s Android and Windows Phone 7 operating systems. But I wonder, how fast would their networks be if they were clogged with millions of data-hungry iPhone users?
It looks like I’ll soon have an answer to my question. Verizon will very likely offer the iPhone next year after Apple’s contract with AT&T is up. And I personally am on the fence about the result. Will Verizon experience the wrath of the iPhone data lover and struggle to keep up? Will it be a happy day for iPhone users everywhere as the popular device begins to thin out across several carrier networks? Most importantly, will the speed of the mobile web on the iPhone increase, making impatient consumers more apt to shop from their phones?
Nikki Baird, managing partner at Retail Systems Research, thinks Verizon and any other network with the iPhone will have a tough time ponying up the data capacity iPhone users crave. “I will watch gleefully as the data hogs that are iPhone users rapidly bring Verizon’s network to its knees,” she says. To be fair however, Verizon is investing heavily in its 4G network, likely at least in part to prepare for the iPhone. Just yesterday Verizon announced its 4G LTE Mobile Broadband network that it says will be the fastest and most advanced 4G network in America. It also announced new monthly plans structured to deliver more data for less money over 4G than 3G. AT&T on the other hand is widely perceived as behind the other networks in building out 4G.
Baird, however, thinks the data issue is bigger than the iPhone alone—and that it will only grow. Several industry studies including one from Deloitte LLP show that the pace of wireless data consumption is rapidly outgrowing carriers’ ability to keep up with it, she says. Metering is in our future, she believes, pointing out that AT&T has already started charging for data based on consumption, no longer offering an “all you can eat” package. Yikes. What will that mean for the future of m-commerce?
So are other networks ready to provide the data iPhone users request? Will the iPhone offered on more networks help spread data consumption across several carriers and speed data access for all iPhone owners? Or, does wireless data consumption go beyond the iPhone as a bigger issue all carriers, smartphone owners and m-commerce retailers will face as mobile web and smartphone use increases? I’ve got more questions than answers. So if you’ve any thoughts, feel free to dial in below.