Video: The new mobile battleground

(This story is part of Connected Planet’s Mobile Data Paradox microsite –  an ongoing collection of features, blogs and opinions on the key question facing mobile operators today: how do you make a business of 4G and mobile data?

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Verizon Wireless (NYSE:VZ, NYSE:VOD), Apple (NASDAQ:AAPL) and AT&T (NYSE:T) may have just done Sprint (NYSE:S) and Clearwire (NASDAQ:CLWR) a favor. I’m sure they don’t see it that way, but in embracing new high-bandwidth multimedia on platforms such as the iPhone 4, the Droid X and Samsung’s new Galaxy line, they’ve focused on a group of services where the differences between 3G and 4G could come into acute focus.

The latest batch of smartphones have one thing in common: They are all video-centric devices coming with the screen size, camera resolution and processing to support the most robust video communications and playback. The operators and the handset-makers have collectively established a new benchmark for smartphone performance — one that a 4G network can meet much more easily.

The biggest problem for Sprint and Clearwire is one of education. How do they set their WiMax network apart from the far more ubiquitous 3G networks of their competitors? On the broadband access side of the equation, the value proposition is easier to sell. Not only are Sprint and Clearwire selling a faster service than the competition (though they may face increasing competition from T-Mobile’s high-speed packet access-plus network), they’re selling unlimited access at comparable or lower prices to the capped plans of the 3G operators.

The smartphone is a tougher sell, though. With the exception of AT&T, the 3G operators don’t cap their smartphone plans. But most significantly the vast majority of smartphone applications — browsing, e-mail, widgets, cloud-based apps -- perform just as well on 3G as they do on WiMax. Even short-length buffered YouTube videos do fine on a good 3G link. So what WiMax needs is an application on which it can really shine. There’s not a terribly huge audience for quick downloads of 20 MB documents, but in video 4G has found the perfect mate. The 3G operators are pumping up the video market. Sprint and Clearwire must only show that their high-speed WiMax network can deliver that video much faster and at better quality than the competition.

The issue, of course, is execution. Footprint is a big factor. Clearwire is making progress on its rollout, but WiMax is still in a limited number of markets, while 3G networks reach hundreds of millions of subscribers (in VZW’s case almost the entire population). Sprint has an EV-DO network as fallback, allowing it to offer as good a user experience as its competitors when customers are outside the WiMax footprint. But “Faster than VZW — sometimes” is hardly an ideal marketing slogan.

The other big factor is promoting and distributing the applications themselves. Sprint is pointing out the video capabilities of its two 4G devices, the HTC EVO 4G and the new Samsung Epic 4G Galaxy smartphone, but that amounts to a list of specs. The burden often falls on the customer to go out and find video apps in the Android Market, and once found they aren’t always the easiest to decipher. Don’t get me wrong. Qik and Fring are great apps, but they require the customer to do a lot of work to get them running. I downloaded both to my Android device and was highly impressed with the test call and feature set, but I was unable to place a video call — namely because I don’t know anyone else with Fring or Qik installed on their phones.

Now compare that to Apple, which puts its new FaceTime app into the call menu — no installation, no registration and no hassle. The service only works from iPhone 4 to iPhone 4 and only if both devices are connected through Wi-Fi — huge limitations — but you can’t argue with the ease of use or the massive advertising campaign focusing solely on the FaceTime service Apple has launched.

Sprint has already taken steps in that direction. The new Samsung Epic comes with the Qik video chat app pre-loaded, and the device also comes with access to Samsung’s MediaHub online video library and AllShare music and multimedia social networking service. But there have also been some problems. When the EVO 4G launched, Qik servers were quickly overloaded, leading to the developer temporarily pulling the app.

And while there seem to be plenty of video services available for these 4G devices — including Sprint’s standard bevy of TV content — there’s really no big-name brand or single app that Sprint has marketed to raise awareness about 4G's video capabilities. Maybe Sprint should take a page from A&T and Verizon’s book and start signing content deals with the big video brands out there: NFL, Blockbuster, Netflix. The opportunity is there; Sprint and Clearwire just need to make the most of it.