Android, as we’ve reported before, is a bit of a data hog. Its users consume more data per handset than any other smartphone platform, according to a Nielsen survey (see chart below).
Now while we’ve known that, it’s been hard to understand what that means for carriers. But Sprint is giving us a good look at the effects of Android’s data usage by talking about the positive impact of the iPhone. On its quarterly earnings call, Sprint CEO Dan Hesse said iPhone users would provide at least 50 percent more lifetime value than other smartphone users because of network efficiency and less churn. A slide provided by Sprint shows that the biggest improvement comes from network efficiency, which improves user life-time profitability by 50 percent while reduced churn can help by about 10 percent.
Here’s what Hesse had to say:
There is a misperception that our launch of the iPhone will increase the load on Sprint 3G network and require us to spend more 3G capital. The reverse is true. IPhone users are expected to use significantly less data than the typical user of a dual-mode, 3G-4G device. Even adjusting for more total new customers being added to the network, we believe it will put less load on our 3G network than they would have if we did not carry the iPhone.
I talked with Joe Euteneuer, Sprint’s CFO today and he said that iPhones consume less data than Android devices though a Sprint representative said iPhones trail the BlackBerry. By shifting over 3G smartphone users over to an iPhone, it actually helps Sprint recoup capacity and help with traffic issues, he said.
The Sprint data shows that Android can be a bit of a double-edged sword for carriers. It’s a huge seller no doubt and it’s helped Sprint hit 62 percent smartphone penetration on its CDMA network, following a robust third quarter in which four of every five phones was a smartphone. But the data thirstiness of those device can add to the strain of keeping up with demand. The fact that Sprint can expect to see such a big savings by introducing an iPhone might be some optimistic justification for taking on the big costs for the iPhone. And 50 percent savings seems a little high. But I do believe Sprint is speaking the truth about a real tangible effect in network efficiency with the iPhone.
This has not hurt Android with operators yet and it really hasn’t helped RIM, which is plugging the data-sipping qualities of BlackBerrys. But the fact is this could be more of a consideration for carriers if the disparity doesn’t go down over time. There’s an explosion of data on mobile devices and operators are looking at whatever they can do to help stay ahead of demand. Carriers like Sprint are already talking to Android manufacturers about how to get the phones more efficient but the devices are still leading the pack in consumption.
I think it makes sense for the platform holders to start worrying about being more data efficient in order to help out the operators. Google, for its part, has addressed that in its upcoming Android update Ice Cream Sandwich with new data meters and the ability to set of alarms to help consumers manage their data use. There are still inherent issues with Android and the way it supports data-consuming widgets and apps that update regularly that still make it a pretty data intensive. But the latest Ice Cream Sandwich improvements show that Google understands that it’s not a good idea to be seen as they data hog on a network.
Again, this probably won’t affect Android short-term or the willingness of carriers to sell those devices but as we’re seeing with the iPhone 4S on Sprint, it’s not like these carriers don’t notice the burden Android is putting on their network.
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