INSIDE MOBILE: Why the Demand for Wireless Data Is Growing

 
 
By J. Gerry Purdy  |  Posted 2011-03-04
 
 
 

INSIDE MOBILE: Why the Demand for Wireless Data Is Growing


Recently, I spoke at a RCR Wireless seminar in Atlanta on trends in wireless broadband-using cellular data communications to provide uploading and downloading of rich media such as photos, music and movies with your mobile devices.

The wireless operators are facing a tsunami in the growing demand for wireless data. It's like they are standing on the beach, holding an iPhone and iPad, and looking up to see a wall of white water moving toward shore and thinking, "I wonder what's causing that?"

The operators have a number of very smart people who study network demand. They all know the tsunami is about to hit-and hit very hard. As a result, many of them are looking for creative ways to offload the demand until they can build more advanced 4G networks that can hopefully keep up with users' appetite to send and receive videos, photos, animations and music.

The cause for the tsunami in wireless data demands is quite easy to understand. According to a forecast from Frost & Sullivan on the growth of share of smartphones (as a percentage of all phones shipped in North America from 2009 through 2015), the smartphone share of mobile handset subscribers is expected to rise from 23.9 percent in 2009 to 67.1 percent in 2015. Thus, there is going to be a complete reversal in the percentages, with the more basic feature phones plummeting, from 66.3 percent down to 22.9 percent of all mobile handset subscribers.

Todays Smartphones and Tablets


Today's smartphones and tablets

Today, smartphones include wonderful still image capability, as well as high-definition movie capture and high-resolution displays that make it enjoyable to download all kinds of rich media-from e-mail messages to photos, music and videos. Thus, each new smartphone results in a 3x to 5x increase in the data communications demand.

But it doesn't stop there. Tablets are being purchased in the millions and they are an incremental new market for mobile users. Plus, each tablet user wants to see the news, weather, sports, books, magazines, music and videos. Thus, the use of rich media in tablets is even greater than in smartphones. That results in even more demand. Plus, the demand is only going to keep rising over time.

The operators are dealing with this by making it easier for subscribers to obtain the rich media they need by encouraging the use of Wi-Fi (in-home and out), as well as time-shifting the demand to the evening and night time when the network is at a very low utilization. For example, AT&T is building out supplemental Wi-Fi networks in a number of major, dense downtown areas such as San Francisco and New York.

In the long term, the only real solution is going to come from allocating more wireless spectrum to mobile. President Obama called for just that in his recent State of the Union address. With some help from the FCC, operators will eventually be able to provide more 4G/5G services to hundreds of millions of subscribers who want to benefit from using their iPhones and iPads all day, every day.

That's going to take many years. In the meantime, you'll likely have to "plug into" hot spots to upload and download most of your rich media (such as videos).

J. Gerry Purdy, Ph.D. is Principal Analyst of Mobile & Wireless at MobileTrax LLC. As a nationally recognized industry authority, Dr. Purdy focuses on monitoring and analyzing emerging trends, technologies and market behavior in the mobile computing and wireless data communications industry in North America. Dr. Purdy is an "edge of network" analyst looking at devices, applications and services, as well as wireless connectivity to those devices. Dr. Purdy provides critical insights regarding mobile and wireless devices, wireless data communications and connection to the infrastructure that powers the data in the wireless handheld. He is author of the column Inside Mobile & Wireless that provides industry insights and is read by over 100,000 people a month.

Dr. Purdy continues to be affiliated with the venture capital industry as well. He currently is Managing Director at Yosemite Ventures. And he spent five years as a Venture Advisor for Diamondhead Ventures in Menlo Park where he identified, attracted and recommended investments in emerging companies in mobile and wireless. He has had a prior affiliation with East Peak Advisors and, subsequently, following their acquisition, with FBR Capital Markets. For more than 16 years, Dr. Purdy has been consulting, speaking, researching, networking, writing and developing state-of-the-art concepts that challenge people's mind-sets, as well as developing new ways of thinking and forecasting in the mobile computing and wireless data arenas. Often quoted, Dr. Purdy's ideas and opinions are followed closely by thought leaders in the mobile and wireless industry. He is author of three books as well.

Dr. Purdy currently is a member of the Program Advisory Board of the Consumer Electronics Association (CEA) which produces CES, one of the largest trade shows in the world. He is a frequent moderator at CTIA conferences and GSM Mobile World Congress. He also is a member of the Board of the Atlanta Wireless Technology Forum. Dr. Purdy has a B.S. degree in Engineering Physics from University of Tennessee, a M.S. degree in Computer Science from UCLA, and a Ph.D. in Computer Science and Exercise Physiology from Stanford University. He can be reached at gerry.purdy@mobiletrax.com.

Disclosure Statement: From time to time, I may have a direct or indirect equity position in a company that is mentioned in this column. If that situation happens, then I'll disclose it at that time.

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