Summary:

While all-in streaming as the primary means of getting content onto its devices has distinct strategic advantages for Apple, it’s not without risks — especially for users. What does Steve Jobs know that the rest of us don’t about how all this will play out?

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Apple CEO Steve Jobs has stirred up the issue of removable media with his response to an email query from a MacRumors user last week. The subject matter was regarding Blu-ray Disc drives on Apple laptops and desktops.

“Bluray [sic] is looking more and more like one of the high end audio formats that appeared as the successor to the CD – like it will be beaten by Internet downloadable formats,” he wrote, adding that “we may see a fast broad move to streamed free and rental content at sufficient quality (at least 720p) to win almost everyone over.”

Apple seems to be going all-in for streaming — perhaps from the cloud — as the primary means of getting content onto its devices. Indeed, the next version of Apple TV will reportedly ship with only 16MB of on-board Flash memory, which basically rules out downloading and storing a lot of content on the device itself, let alone off-loading it to a Blu-ray disc. While that has distinct strategic advantages for the company — such as by locking both users and content providers into Apple’s platform — it’s not without risks, especially for users.

In addition to the rising end-user cost of wireless data consumption, the total available wireless broadband capacity in the U.S. remains tightly limited. Meanwhile, the number of advanced mobile devices, not to mention the amount of content available, is poised to explode over the next few years. Bandwidth constraints could be a serious drag on consumer satisfaction and content providers’ mobile ROI.

Last month, President Barack Obama signed a presidential memorandum seeking to make an additional 500 Mhz of spectrum available for commercial use by mobile broadband providers over the next 10 years.

Broadcasters are concerned some of that spectrum will come from their airwaves; cable and telco providers that have invested billions in their own wireline broadband infrastructure over the past decade don’t want to see public resources handed to potential competitors. Both are fighting the initiative at the Federal Communications Commission. Congressional approval is also needed for some elements of the president’s proposal. Given the current political climate in Washington, this is far from a sure thing.

Yet without that additional spectrum owners, of Apple wireless devices may find themselves using Wi-Fi a lot more than 3G. In short, Apple seems to be making a very big bet, in its own business and on behalf of its users, that the current and looming constraints on wireless bandwidth, somehow, will resolve themselves in reasonably short order.

So what does Steve Jobs know that the rest of us don’t about how all this will play out?

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