Monday, June 14, 2010

IPad 3G & impacts for mobile service providers

IPad 3G will force mobile service providers to rethink some of their mobile Internet offerings or face huge number of complaints reaching their customer care. User experience has a volume cost.

Beside the known impact of IPad for mobile service providers with the need to support micro SIM cards - the single format supported by the magic device, another phenomenon touches volume and bandwidth consumption.
Today, we see two different trends in terms of Mobile Internet offerings on the two sides of Atlantic ocean. On one hand, we see in Europe mobile service providers extending their offering towards unlimited offers (however never truly unlimited). On the other hand, AT&T and Verizon start to limit the previously true unlimited.

IPad creates a higher demand in terms of volume and bandwidth. As an intermediate device between PC and mobile, offering an incredible browsing & multimedia user experience, IPad requires HD websites, increases consumption of pictures and videos (Facebook, Picasa, Youtube, etc...). It's just another scale compared with "pocket size" devices.
Moreover, footprint of IPad applications is exploding. Wired magazine, presented end May, offers a very nice magazine but the price to pay, beyond the app store price, is the download of about 500 MB - yes half a gigabyte. BMW also offers a very nice free magazine, containing beautiful pictures and very design layout, but requires download of 157 MB. Each page is a high definition picture.

We can thus guess that a 2GB offering per month will be the bear minimum for an IPad 3G consumption. Or consumers will have to quickly figure out, before their first bill, that they primarily should download applications and consume Internet through home WiFi networks.
If telecom service providers do not adapt their offerings and do not warn consumers to take care of their IPad usage (through a continuous monitoring of the "connectivity icon"), this could lead to severe increase of complaints - as it happened for iPhone bought without special subscriptions.

On the other hand, Apple would probably be nicely inspired to add some settings describing "connectivity subscriptions" within its IPad in order to suggest correct "connectivity behavior" for the benefit of their customers.

Some will say that it's only a transient situation because everything will be "always-on". This however probably requires an evolution of business model to finance LTE networks and scarce spectrum resources or Femto equipments. And it's only the beginning since iPhone 4 also comes with a better screen.

The answer to the question "who will pay for the volume ?" is quite easy : "obviously the consumer !". The actual questions are more "who will charge for the volume ?", "will this volume cost be disguised or not for the consumer ?"
To be continued ...

Benoit Quirynen

1 comment:

  1. iPhone (and probably iPad) cannot download applications bigger than 10MB using a non-wifi connection. It is mandatory to use wifi or download it with your pc then sync your device.

    You also need to take into account that iDevice always wifi when available, and that the difference of speed is so big with 2&3G that most users would naturally wait to be on a wifi connection to initiate any big downloads.

    So I don't think that the release of iPad or iPhone 4 will have a big impact on bandwidth used per user on telecom networks.

    What will impact is the growing number of connected users!


    ps: iPhone 4 now supports video chat but it's limited to wifi for now. Maybe 3rd party applications (skype etc) will allow this on 3G network, this might increase the traffic per user!