The release of Apple’s iPad marks the introduction of a new class of device into wireless networks. While on the surface, the iPad looks like an iPhone in larger form, the bigger screen also enables richer applications.

Richer applications equate to more content, graphics, larger and higher-resolution images, etc. - which generate more data traffic on operators’ networks. Recent tests by Bytemobile show that applications on the iPad generate more than 150% of the data generated by the same apps on the iPhone.

Highlights of the Apple iPad test, by popular application, are as follows:

Source: Bytemobile

The actual data consumed by these applications is likely to be far larger since a better user experience will encourage longer usage periods - thereby generating even more data. 

Less than three weeks after its launch, Apple’s iPad already accounts for 26% of the mobile devices accessing the popular website Wired.com.

Source: Wired.com

This couldn’t come at a more sensitive time for operators already struggling to keep up with demand from smartphones and laptops. In the short term, operators are responding with large capital investments in network infrastructure. However, this is hardly sustainable with the pricing of data services dropping relative to the volume of data generated by the devices. For example, an unlimited data plan for the iPhone and the iPad are priced the same at $30 a month, while data consumption for the iPad is going to be more than double that for the iPhone. Further, there are currently no fair-use limits on the iPad plan, which could encourage runaway data consumption for users so inclined. In addition, the operators’ price wars limit the sustainability of large network expenditures in keeping up with overall traffic growth.

The fundamental reality is that network capacity is a constrained resource - even with technological advances and infrastructure expansion investments. However, capacity is not a problem everywhere in the network and at all times of the day. Capacity becomes a problem when congestion occurs in crowded cells and during peak usage hours. Managing congestion solves a large part of the problem for operators.

Bytemobile’s optimization solutions are a critical tools used by operators to manage network congestion. Optimization helps alleviate congestion by reducing data volume in the network and thereby improve the user experience. Optimization also detects the occurrence of congestion by monitoring connections and traffic in the data path. Finally, optimization reduces congestion using various techniques that streamline data flow and reduce bandwidth waste.

By acting as a proxy, these solutions are able to dynamically determine both the amount of bandwidth available and the amount required by the application in use. This information is intelligently combined with knowledge of the priority of various traffic flows to provide the best possible experience for the maximum number of users. As a result, operators can support the adoption of bandwidth-hungry devices like the iPad without unsustainable network expenditures. 

-Girish Wadhwani

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Based on a running tally on its website, ad firm Chitika Labs estimated that Apple has sold more than 562,000 iPads since the tablet computer went on sale last Saturday. From a network perspective, it is being said that iPads will mainly use a Wi-Fi connection which will help decrease network demands. However, with the volume of sales reaching the tens of millions this year - I’d  bet otherwise.

What the media is saying:

In this Reuters piece, Sinead Carew hits on some key points that the iPad may be a test for operator networks, which is a concern since they’re already under strain from heavy smartphone usage.

In this Phone+ story, Kelly Teal summarizes a Broadband.gov blog post where the FCC talks about the iPad’s impact on mobile spectrum.

Connected Planet’s Kevin Fitchard wrote a piece on the impact of the iPad for carriers. As you may have read, it is being said that the iPad is largely a Wi-Fi device (rather than 3G) and therefore won’t plague the network like the iPhone has. Fitchard disagrees, as there have been widespread reports about poor Wi-Fi connectivity which will impact consumer expectations when a 3G version of the device is released in the next month or two.

Lynnette Luna of FierceWireless wrote about the iPad launch and noted that iSuppli predicts that global sales of the device will reach 7.1 million units in 2010, with day-one sales reaching 300,000 units. Luna references the same reaction - it’s mostly a Wi-Fi device - but she points out that when the 3G version comes out, it will be viewed as a 3G and/or a Wi-Fi device - whichever a user prefers at any point in time - and that can impact the network.

Yesterday, Venturebeat reported the iPad 3G will not have data limits (like the iPhone does - 5 gigabytes). Devindra Hardawar writes, “The news further cements the iPad as a device made for consuming media. Now you can stream YouTube videos and Pandora songs over 3G as much as you want without penalty.” He continues to say that although it sounds like good news for consumers, networks in major cities like New York and San Francisco are already strained.

With operators’ capacity challenges already mounting, will the iPad push their networks over the edge?

-Stacey Infantino

Image courtesy of iLounge via the Creative Commons attribution license.

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In May, Bytemobile sat down with Ronan de Renesse of Screen Digest to discuss the state of mobile media. This week, Ronan has been kind enough to answer some questions for our readers.

1) Screen Digest recently published a report on the state of the 3G mobile broadband market. Where do you see 3G mobile broadband fitting into the overall mobile ecosystem today, and where do you see it in three years? How does this affect what carriers are doing, aren’t doing or should be doing?
Mobile broadband today is worth more than mobile TV, mobile video, mobile music, and mobile games combined. The number of mobile broadband connections has multiplied by 10 between 2006 and 2008 and is still rising. Five years after the launch of 3G, mobile operators have finally found a way to monetize their 3G licenses. However, the real potential for mobile broadband is as a primary home connection, and today’s services work well only as a secondary broadband connection. As a result, growth is likely to decline over the next couple of years until mobile broadband can become truly competitive with fixed broadband.

2) You frequently cover mobile video and mobile TV. How would you assess the current state of the mobile video and mobile TV industries? What is the key driver that will increase adoption (network solutions, handset advancements, content)?
Mobile TV/Video is the mobile content category that has suffered the most from the economic downturn. In 2008, we experienced drastic changes in business models with the emergence of mobile content bundles such as SFR Illymitics in France and disruptive technologies such Telegent Systems’ analog mobile TV chipset. The industry realized that mobility by itself does not justify a subscription fee for mobile TV. Quality of experience (i.e., large screens, premium content, good QoS) is key in order to drive the uptake of paid-for mobile TV services. With the increasing availability of free-to-air services, the industry runs the risk of consumers thinking of mobile TV as a feature (like a camera or FM radio) instead of a service. In 2008, 76% of mobile TV users watched it for free.

3) How do you see the growth in adoption of mobile video and mobile TV affecting network infrastructure? Networks already seemed to be bogged down with data traffic. Are they ready for widespread adoption of mobile video and TV?
The rise of mobile broadband, added to the increasing popularity of smartphones (typically sold with flat-rate data plans), has certainly put a lot of pressure on 3G networks lately. Mobile operators are doing a lot to upgrade their networks as quickly as possible in order to accommodate the demand for mobile data. Fixed networks can only handle widespread adoption of online video and TV, and mobile networks are very far from it - especially considering that there are far more mobile connections in the world than fixed ones. However, there are other ways to get content on your handset than through the 3G networks. Over 90% of videos and music tracks on mobile phones are side-loaded from the PC. Taking control of this delivery mechanism and monetizing or reducing it is a big challenge for handset manufacturers and operators.

4) You recently published a report that discussed how, as the walled gardens come down, handset manufacturers are moving in to provide services to operators. Will handset manufacturers continue to drive and influence the wireless industry? Does anything threaten this influence?
The success of mobile broadband and flat-rate data packages has shown several mobile operators that they are better at selling access than content and that opening the walled gardens can work to their advantage. Mobile operators are therefore increasingly opening up to third-party service providers. Handset manufacturers, on the other hand, are suffering from a difficult economic context where mobile users opt for SIM-only contracts instead of handset upgrades. Handset manufacturers are therefore looking at alternative revenue streams and/or new ways to differentiate from their competitors, and content is coming up as a relatively good option. In addition, Apple has proved with its App Store that vertical integration of hardware, software and services works well in mobile.

5) Forrester recently published a report declaring that the term “smart phone” is dying off. Is there a future for mass-market handsets? Why or why not?
There is certainly still a future for mass-market handsets, which will be primarily driven by growth in emerging markets such as China and India. The recession has also helped to keep low-end handsets in the market. However, there has been cannibalization between feature phones and smartphones which are typically populating the mid-range and high-end device segments in Western markets. Smartphones have been taking market share from feature phones for the past 12 months, as smart phones become more accessible in terms of price and feature-rich. I would say that the term “feature phone” is more likely to die than the term “smart phone.”

Stay tuned for commentary from other key industry influencers on the trends and issues important to the mobile internet ecosystem. If you have any questions you’d like us to ask, feel free to leave a comment or send an email to sinfantino@bytemobile.com.

-Stacey Infantino

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