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How iPhone 3.0 Will Impact Wireless Networks

The iPhone (s aapl) has disrupted many aspects of the mobile industry, but nowhere is its impact more evident than in rise of mobile data usage. The number of U.S. mobile Internet users has more than doubled since the device was first introduced to stand at 46 million at the end of 2008 from 22.4 million in July 2006, according to Park Associates. The market research firm predicts that there will be 60 million smartphones sold in 2013.

iphonedatausageEurope.gifBut more importantly, the iPhone has spurred us to use the mobile Internet more and more. A report from 3G Americas shows that in Europe, data usage on iPhone increased substantially when the 3G version of the device came to the market. (See graph.) It’s hard to discern exactly how much bandwidth is being used by the average iPhone user, but the usage patterns point to heavy data consumption.

With the release of the new iPhone 3.0, I think the networks are going to come under an even heavier load as we’ll see another big spike in mobile data usage (which explains why AT&T has been hustling to upgrade its wireless network.)

Chetan Sharma, a veteran mobile analyst who is part of the GigaOM Analyst Network and is the author of “4g: State of the Union,” thinks mobile data usage is going to jump at least 1.5-2 times with the new release.

The reasons are pretty simple: The 3.0 release improves the user experience, which would prompt people to use their device more. Multimedia-related technologies such as video streaming, MMS, built-in search and in-app sales are some of the key new features that are going to suck more bandwidth. (For complete feature breakdown of the iPhone 3.0, check out TheAppleBlog.)

And let’s not forget about push notifications: The more notifications we get, the more we’ll be using the iPhone. Sharma agrees, saying he thinks the upgrades will “spur new development, which means means more downloading.”

17 Responses to “How iPhone 3.0 Will Impact Wireless Networks”

  1. A major component of this story is it’s another point in the transition of telecom from low value, high cost services (think long distance) to a high-value, low cost service (as in dumb data pipe). Telecom is terrified of a future where voice services move to the data side of the phone and they’re left competing over bandwidth and latency. For $20/month.

  2. The impact will not be sudden because for this better experience people will have to buy altogether a new iPhone as old iPhones with 3.0 OS are not faster, which will be slow process. Most will upgrade their software only.

  3. Well, I hearken back to an observation by the late, great George Gilder (okay, he’s not deceased – sorry George!) that when resources shift from scarcities to surplus, tremendous value and wealth is created.

    The whole mobile broadband model has been shaped on a scarcity premise. With iPhone 3G S, Pre, Android, etc. racing to market, the game starts to really change to a surplus play. I am not mathematically smart enough figure out the economic indigestion AT&T, et al will contend with in riding this wave, but seeing AT&T back down a bit on their upgrade path for iPhone 3G owners is suggestive that they realize that this is the next major pivot point in the industry.

    History suggests that it’s better to model yourself to be like Google (create and ride the goodness of surplus) than AOL (milk the cow of scarcity), something not lost on the carriers. The challenge for the wireless guys is to get you onto a bundle ALL-YOU-CAN-EAT package that includes your mobile devices, notebooks, home networking, and then figure a way to create a 1+1=3 on top of that.


    READ: ANALYSIS – iPhone 3.0: Block the Kick Strategy

  4. internet teethering is working great in Singapore … now, that gives me an option to access internet on my laptop while outdoor without looking for a wi-fi hotspot. now, do you think that will have impact on data usage? i bet it will.

  5. ScottK

    There was an article in USAToday about the strain the ATT network is under and it is probably not going to get better soon. I know they are trying to get ahead of the curve, but we may all be in for poor network perfomance as more of these devices hit – even Sprint and VZW as they add Pre’s, more Blackberry’s and WM devices. Come on LTE!

  6. The biggest impediment to my bandwidth usage on the iPhone 3G is phone’s processing speed. Whether it’s accessing data locally, or on the network, it seems to run at the same pace. If the new release is faster, that alone would increase my iPhone usage and corresponding bandwidth usage as well.