When Apple launches its 3G iPhone, the company has an opportunity to have a significant impact on the mobile TV market. The iPhone could provide a compelling mobile TV and video proposition before mobile broadcasting networks become widely available, allowing it to become the mobile video delivery device of choice for many consumers.
Many MNOs are already offering mobile TV services, mainly using 3G streaming to deliver programmes to mobile subscribers. These 3G-based services are constrained by lack of coverage, poor quality of service relative to customer expectations (with low data rates of about 128kbit/s) and significant 3G capacity limitations (as 3G networks can generally only support relatively low penetrations of mobile TV users).
Most MNOs expect to enhance their mobile TV services through the use of dedicated mobile TV broadcasting networks, such as DVB-H. However, it may take many years for these to become widely available, because of the time taken to roll out extensive networks. It will also take time for MNOs to make content and a range of handsets available.
While much attention has been paid to various iPhone service innovations (for example, email, ‘bubble’ SMS, Web browsing and music playback), less has been paid to the iPhone’s ability to deliver attractive mobile TV and video services. Early market research shows that many iPhone owners have already accessed TV and video content, with greater frequency than subscribers using other types of mobile handsets. With added 3G capability, the iPhone will bring a number of highly-attractive attributes to the mobile TV market, as shown in Figure 1.
Figure 1: Distribution methods for mobile TV and video content accessible with the 3G iPhone, in 2H 2008 [Source: Analysys Mason, 2008]
The 3G iPhone is particularly well suited to the delivery of mobile TV and video content for the following reasons.
- The device has video-friendly specifications. These include high-quality widescreen display, substantial internal memory and low battery consumption.
- Users have access to a rapidly increasing range of TV and video content provided by Apple or specifically optimised for the iPhone. By May 2008, the iTunes Store had a catalogue of 600 TV programmes and over 1500 films and by April 2008, Apple iTunes had sold 125 million TV programmes. In addition to iTunes, iPhone users can also access video podcasts, YouTube, TV broadcaster ‘catch-up’ services such as the BBC iPlayer, and their own TV recordings (using PC cards). While it is early days for the iPhone, it is not early days for iTunes video content. The widespread availability of iPods has supported the cultivation of a broad range of TV and video content on the iTunes Store, of which iPhone users can now take advantage.
- The device can support multiple methods of delivering video content, including sideloading, indoor WLAN and high-speed 3G cellular data access. Sideloading allows the delivery of non-real-time-critical content, and provides guaranteed reliability in any location and unrivalled quality of picture and sound (with content typically encoded at 1.5Mbit/s). With WLAN, the iPhone can provide more reliable and better quality TV and video services indoors than those delivered by either 3G macrocells or mobile broadcasting technologies (e.g. DVB-H). The imminent introduction of the 3G iPhone will enhance the device’s video delivery capabilities by adding streamed video delivered over HSPA cellular networks, which is not available with the iPod.
The take-up of the iPhone has been relatively modest, with cumulative sales of about 5.4 million units by the end of March 2008, due to Apple’s initial strategies of constraining worldwide availability and launching exclusively with a single operator in each market. As Apple moves away from these restrictive distribution strategies, there could be a substantial increase in the number of iPhones sold around the world. If the iPhone is able to take a significant share of the worldwide market, it will be well positioned to have a considerable impact on the way mobile subscribers purchase and watch mobile TV and video content.
