Will operator data caps hurt iPhone, Android more than Blackberry?
An investment house research note links data cap trends directly to smartphone success.
If and when mobile operators start charging by the byte, smartphone vendors will feel the crunch, too, as devices able to deliver fewer bits per feature — such as simple and highly-compressed Blackberry e-mail messages — will be hit less by the bandwidth crunch than devices with more content-heavy applications.
It may seem odd in the days of expanding bandwidth to be thinking about preserving bits again — much like in the early days of the Web — but looming data caps and the emergence of more bandwidth-consuming mobile apps has put that consideration back in play, according to a research note today from Peter Misek, technology analyst with Canaccord Adams.
“On a per-[megabyte] basis, wireless texting has been the most profitable application for service providers, generating about $1000 per [megabyte] used,” Misek wrote, noting that “as the industry moves toward Web browsing, streaming and content downloads, the per-[megabyte] revenue for carriers has dramatically fallen.”
That financial equation, as well as straightforward concerns about bandwidth availability, has led to recent high-profile calls — such as a recent speech by Dick Lynch, chief technology officer for Verizon — for mobile operators to move more aggressively to instituting data caps or tiers. Though not all market watchers agree, using pricing to manage consumption is likely to prove an irresistible solution to the bandwidth crunch — at least until 4G networks arrive.
In particular, Misek pointed to Rim’s BlackBerry platform — especially the data compression capabilities enterprise server and operations center platforms — as helping enterprises and operators squeeze more data down wireless pipes. For instance, BlackBerry service is capable of sending 11 times more e-mails per 500 megabytes of data capacity than an iPhone. With that same bandwidth, the Blackberry can deliver 7000 Web pages versus 3000 for the iPhone. “With more talk of usage-based pricing models coming to the forefront, we expect that the consumer will become even more attuned to the bandwidth differences between the BlackBerry and others,” he wrote.
That bandwidth advantage translates into carrier advantages as well, Misek claimed. “We believe that in a scarce spectral environment, RIM’s NOC/BES architecture and compression technology will be worth tens of billions of dollars to global operators,” he wrote. “There is no contention on our part that the iTunes and App Store platform is the superior global content platform. But if you can’t connect to the Internet, having the best platform will not matter.”
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© 2013 Penton Media Inc.
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