Common belief in the mobile technology industry is that we are headed towards a mobile data bandwidth crisis because the number of people using mobile data is greater than the current networks can support. Yesterday Todd wrote about this topic and suggests cell phone companies need to move users to WiFi in order to accommodate demand. Michael Mace, who is the CEO of Cera Technology and the former Chief Competitive Officer and VP of Product Planning at Palm does not think the bandwidth crisis is as real as the mobile companies may have one think.
Mace explains the basis for his opinion in a blog post he wrote titled Who Will Pay For Mobile Data? and the post is part one of three he is writing on this topic this week. The basis for Mace’s opinion is research done by Palm several years ago in which they found that only one-third of mobile phone users are willing to pay extra for mobile data features. He also points to more recent research done by Forrester in 2009 showing that 60% of mobile phone users were unwilling to pay extra for mobile data.
According to Mace, about one-third of the population in the United States and Europe have smartphones today, which suggests a huge growth potential for the smartphone market. However, if only one-third of the population is willing to pay extra for mobile data, that means it is possible that the people willing to use mobile data already have smartphones.
I think Mace is making a very good point. We in the mobile technology industry tend to get caught up in the excitement about the newest hardware and software and we have no problem paying nearly $100 per month to fully utilize those capabilities, but there are many more people out there who either can only afford the basic monthly voice plan or really only want to use the phone to make voice calls.
Mace thinks the price sensitivity of the remaining potential smartphone market means that handset manufacturers and mobile carriers will have to find ways to entice users to use mobile data a small bit at a time, and he provides several suggestions on how that can be done. I wonder if another option is for carriers to provide free voice calls, get rid of paying X per month for Y amount of minutes, and instead just sell, for example, a $30 per month 3 GB plan that includes unlimited phone calls and text messages.