iPhone Triples AT&T’s Data Traffic

Wired put out a great piece today on the iPhone, calling it a “4.8-ounce sliver of glass and aluminum … that has forever changed the mobile-phone business, wresting power from carriers and giving it to manufacturers, developers, and consumers.”

Interesting info on the profits to Apple: “The company nets an estimated $80 for every $399 iPhone it sells, and that’s not counting the $240 it makes from every two-year AT&T contract an iPhone customer signs.”

But what’s more interesting to me is this info on what the iPhone has done for AT&T: “40 percent of iPhone buyers are new to AT&T’s rolls, and the iPhone has tripled the carrier’s volume of data traffic in cities like New York and San Francisco.” Tripled!

In my last post, I talked about Yahoo’s widget strategy versus Google’s OS strategy. Which is another way of saying “smart pipe vs dumb pipe”. If a carrier offers a phone running Android (Google’s new mobile OS), they have relinquished all control over the user experience. The same applies to the iPhone except in this case, the OS is married to a specific piece of hardware as well. Both Android and iPhone make the carrier a behind-the-scenes provider of bits. Stats like the one above suggest that the dumb-pipe strategy might be the better approach.

Two other data points:

• Verizon (which reportedly rejected the iPhone deal without even hearing the pitch) announced in November that it was opening its networks to any device (although there’s quite a bit of fine print). See coverage in NYTimes here.
• Sprint is reportedly launching their “Xohm” WiMax service in April. According to a talk I heard by Russ McGuire in November, their vision is allow Xohm receivers to be placed in a variety of consumer electronics devices, using the Sprint WiMax for connectivity. See a good post from him on this topic here.

So how long will it be before every major carrier has at least one dumb-pipe option? I say 3 years.