Mobile data efficiency isn’t a sexy feature that moves a lot of apps and devices, but it’s increasingly going to be a selling point, as mobile consumers look for savings in an data-capped world.
Take a look at Onavo, a mobile data management and compression app that launched on the iPhonein April. The company told me today that it can save more than 7 million iPhone users almost $1 billion a year collectively if they used the free Onavo app. Onavo, which recently raised $3 million from Sequoia, said based on data consumption figures from Nielsen as well as AT&T’s own figures, it estimates it could save $828 million for about 6.9 million AT&T iPhone users who move from a $25-per-month plan to a $10 monthly plan by using Onavo. An additional 460,000 iPhone users would save $110 million collectively if they moved from a $45 monthly plan to the $25 plan.
Guy Rosen, CEO and co-founder of Onavo said in interview with me that as data usage grows, (it’s up 89 percent over last year according to Nielsen) it’s pushing more people into higher data tiers. But using Onavo, which can compress data usage on the iPhone, users can cut their data usage by up to 80 percent. It can’t compress video or VoIP however though the company plans to tackle that. Compression, he said, is going to be an increasingly important tool as the price of data goes up. He said since launching in April, Onavo has saved its users almost 15 million megabytes and an estimated $1 million.
“The new economy is about data. We’re addicted to it but the operators have capacity issues and they’re realizing they have to put a price tag on that,” said Rosen. “With that price tag, something has to be done about it.”
Rosen doesn’t break out how many users it has at this point but it’s probably not going gang busters based on the amount of savings it has produced. But the company is hitting the market at the right time. With Verizon recently joining AT&T in instituting caps, it means that the two largest carriers are clamping down on unlimited data plans. T-Mobile also throttles data for users who go over their monthly limit and yesterday U.S. Cellular said it too, would implement tiered data plans.
With the data crunch expected to only get worse, it’s bringing out more companies who are hammering home the data efficiency marketing message. Opera has been doing more outreach lately, touting its mobile browser’s ability to compress up to 90 percent of web data. Research in Motion last month was hitting up reporters with its BlackBerry DataSmart technology, which allows BlackBerry users to conduct twice as much browsing and four times as much email compared to other smartphones. Skyfire, which offers an efficient browser that lets people view Flash video, has also been positioning the company as more of a “Compression as a Service” offering for wireless carriers and device makers to help with efficient video delivery.
I wouldn’t be surprised to see more app makers, device manufacturers and platform holders talking up their data savings. Much of what makes a smartphone so appealing is its ability to be a mobile, connected computer. But if people start counting megabytes and fretting about overages, it’s going to slow some of the fervor for smartphones or at least curtail some of the activity that happens on these devices. So it’s in everyone’s interest to play up the fact that there are ways to make these devices more efficient on the data side.
This is not without its trade-offs. Privacy-wary consumers will have to be comfortable with compression systems that route traffic through a company’s servers. But with our data addiction expected to grow over time, I think we’ll see a growing interest in companies that shrink our gigabyte guzzling habits.