It was only a few years ago that parents started opening their phone bills to find unexpected triple-digit fees for quadruple-digit text message use. Today, parents will be grimacing for yet another reason – data.
The move to tiered data plans, announced this week by Verizon, seems primarily targeted at the consumption of streaming video and music, which makes up 40 to 60% of mobile data consumption. The death of unlimited data isn’t going to alter every part of the mobile industry – web browsing doesn’t consume much data, and most apps are fairly small in size and host their basic functions locally – but it will affect some of the most prevalently used services and may claim some unintended victims along the way
Data In The Enterprise
For many companies, the tiered cost of data will have little effect – a majority of employees will use the office Wi-Fi during work hours, their personal Wi-Fi at home, and only a marginal amount of mobile data in between. But for those companies that have embraced smartphones and tablet computers as a way to mobilize their workforce, the increased cost of data will deal a major blow.
Connectivity has made a huge difference in the mobile enterprise space, especially for some of our own clients such as Xerox/ACS’s FHinspector . Having firefighters document fire safety information out in the field, retrieve information during emergencies, and issue inspection permits on the go saved time and money, but the advantages all reside in instant mobile access.
Raising the costs of data penalizes the enterprise space for using mobile in the way it was intended, and often in ways where it carries the most value.
Bandwidth-Hungry Video
It’s curious that this announcement should also come in the same week that Facebook and Google introduced video chat to their social networks. Though Facebook has yet to include this feature in its mobile app, there’s a good chance that when it does it will take off in ways that Apple’s FaceTime never managed to achieve. Data caps, however, could hinder the move of business and social video interactions to the third screen.
Granted, data caps are not going to suddenly kill mobile users’ love affairs with video – there’s a reason why Youtube is a native app on iPhone and why apps were such a breakthrough for Netflix. Ultimately, it’s a fair assumption that users will either swallow the rising costs or the increasing prevalence of Wi-Fi will grow to accommodate this issue. In the short term, however, these growing pains will prevent mobile from being as friendly an environment for video as it could be.
A New Hurdle For In-App and Incremental Purchases
While there are multiple routes to making money via apps, in-app purchases have consistently proven to be one of the more successful options. The file sizes of these purchases are generally small, but now developers may have to wrestle with the psychological aspect of users who are increasingly conscious of every download they make. Whether it be songs, added photo filters, or new levels, developers will have to first overcome a user’s reluctance to spend money and then overcome their reluctance to use data.
For the most part, it seems users don’t consciously think about how much data they are consuming.
Most users have no real sense for what a gigabyte feels like or how it translates into music downloads or Pandora streaming time. Though it’s not difficult for users to routinely check how much data they are consuming, the same holds true for minutes and text messages and yet hundreds of thousand of users are routinely shocked by their phone bills each month. If users begin to become stingy with their bandwidth and reluctant to make purchases on the fly, it could affect those apps and services, including iTunes, that make the bulk of their revenue this way.
Growing Pains
Although Verizon’s new data caps have made the issue a hot topic, the evolving nature of mobile makes it one that isn’t likely to be around forever. Google is bringing free high-speed internet across the nation, people are increasingly shifting around where they consume media, and the courts are already looking into service provider data price gouging. When consumers realized the almost non-existent cost for providers to send text messages in relation to the high fees that providers were charging, they were up in arms. The same move may now happen with data. Even then, the burden isn’t just with the carriers as studies show that our data consumption has climbed about 89% while our prices have stayed the same. Something had to give and this is the beginning of a tug-of-war for mobile web.
In the mean time, as mobile developers, we must continue to do what we always do – thoughtfully design and develop apps and mobile websites in ways that consume as little data as possible and continue to bear with the growing pains that have become so familiar to this industry.
