Sidecut Reports

Editor’s note: The following is an excerpt from our most recent Sidecut Report, The Mobile Data Explosion, an in-depth look at the reasons behind the recent surge in wireless data usage, and where devices, networks and service plan charges are headed in the near future. The following excerpt takes a look at the reasons behind the recent surge of data usage, and why it caught even the biggest service providers by surprise. (To download your free copy of the report, click here.)

WHY IT HAPPENED NOW

How did such a shift in data usage catch an experienced provider like AT&T so unaware? Part of the blame might be the fact that there was a sort of perfect storm hitting the mobile data arena the past few years, radical shifts that might have been manageable had they happened alone — but hard to predict or plan for when they happened all at once. The introduction of “superphones” like the iPhone, combined with faster wireless broadband speeds and new addictive applications like Facebook and Twitter gave people the ability and reason to increase data use rapidly — far beyond than what had ever been seen before.

“AT&T is managing [wireless data] volumes no one else has experienced,” CTO John Donovan told the Wall Street Journal in an interview regarding the stress caused by the iPhone.

Why did the iPhone change the wireless data game so radically? When it was first made available to the public in June of 2007, the most paradigm-shifting thing about the iPhone was its touchscreen interface, an innovation that eliminated keyboard buttons in favor of a screen that was immediately much larger and sharper than that of any previous handheld device.

While the touchscreen was in and of itself a cool toy — making its users easily identifiable as iPhone owners with their telltale finger swipes — the combination of a larger screen size and an advanced browser was the real game-changer, providing for the first time an interface that could mimic a full-page website with enough clarity to make iPhone-version applications immediately understandable.

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Welcome to the first in a planned series of video “snacks” — call ‘em Sidecut Snacks — short, tasty bits of information for your viewing pleasure. In our first snack we highlight a couple quick takes from Sprint Nextel CEO Dan Hesse and Clearwire CEO Bill Morrow from their back-to-back keynote appearances at the CTIA 2010 show in Las Vegas on March 24. The topic: WiMAX networks, and the ecosystem that Sprint and Clearwire are building around their nascent national network. Enjoy!

It looks like Comcast’s plans to expand availability of its video content to the web is gaining more fans, and fans who count — namely the networks and broadcasters who put out the kind of content folks want to watch.

As Chris Albrecht notes over at NewTeeVee, CBS and a host of others have signed on to Comcast’s OnDemand Online (or TV Everywhere) idea, making the service more compelling even before it really launches. As we noted earlier, the combination of a vetted online way to watch the cable content you already pay for may be worth its weight in gold to Comcast as a customer-retention scheme. Throw in some low-cost WiMax as an access method and video everywhere starts to sound like an attractive possibility — which means of course here in California we will eventually have to pass a law that prohibits live streaming while driving.

But for content owners and service providers, that will be a good problem to have to solve.

There’s no official company link between the two ideas, but it’s hard to miss the obvious “customer retention plan” Comcast is crafting with its experiments in WiMax wireless services and its TV Everywhere content-on-the-Internet test. By allowing paying customers to view cable content anywhere on the web — and by giving them a low-cost, fast and mobile way to do so — Comcast is building the blocks of an entertainment-option package that will be tough to beat.

At the very least, Comcast should be able to keep a big part of its existing customer base happy simply by helping them view the content they already pay for in more places at more times. And if those customers decide sticking with Comcast for mobile broadband is better than spending more dough on an AT&T 3G card, that’s another feather in the competitive cap.

I’d be willing to wager a pint that most people who remain cable customers do so because they are generally happy (or simply resigned) to paying a certain amount each month for a wide assortment of couch-potato entertainment that’s easy to find. They may be aware of new technology and Internet TV, but when push comes to shove they just pay the cable bill, kick back and grab the clicker.

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Some of the same thoughts had been forming in my head lately, but pal Andy Abramson puts it all out in makes-sense order, seeing a WiMax-enabled offering from Apple in the near future, perhaps as soon as next month’s Apple developers’ conference.

Seeing rumors floating around about an Apple tablet also makes me think of WiMax, since such a device would be perfect for a Kindle-like iTunes experience — bundling in the cost of connectivity would appeal to the simplicity of Apple consumer gear, and such contracts were talked about repeatedly in research we did for our initial WiMax report. All of this is guessing, but wouldn’t it make sense to use the higher speeds of WiMax to power an instant-on iTunes video experience?

Two factors (one which Andy mentions also) seem to point to more WiMax inside Apple: The increasingly close relationship between Apple and Intel, the latter of which wants to push WiMax everywhere and is talking loudly about “mobile Internet devices,” of which there is really only one right now — the Apple iPhone. Second is the Google connection, as in Google CEO Eric Schmidt, who sits on Apple’s board. Since his company just poured a half-billion into the Clearwire WiMax deal, Schmidt would no doubt be in favor of getting Apple to help popularize the technology.

If you want more background on why WiMax makes sense for mobile platforms, order our inaugural WiMax report, which covers all the technology basics. We are in the process of adding our analysis of the recent Clearwire deal, and promise to ship the revised version before Apple’s conference starts.
Anyone who orders now will get both versions for the same price.