Apple (NASDAQ: AAPL) fans have long suffered from large-screen envy as the smartphone maker has resisted the urge to increase the screen-size of its iconic iPhone. But rumors are that the Cupertino, Calif., company is close to giving in to temptation with plans for an iPhone 6 whose screen could run as large as 5.5 inches, with a smaller variant that might be offered simultaneously coming in at 4.7 inches. But along with larger screens could come higher wireless data consumption, which mobile operators, depending upon their network's capabilities and data pricing, may meet with cheers or jeers.
When Apple officially launched the first iPhone in June 2007, its exclusive operator partner was AT&T (NYSE: T), whose network promptly enjoyed suffered experienced massive growth in mobile data traffic from users of the iPhone as well other smartphones. AT&T executives admitted they had not been prepared for the onslaught of data traffic and were racing to upgrade their networks to handle it.
Since then, mobile operators have long gotten used to the fact that data usage is growing exponentially, and there are plenty of large-screen smartphones and tablets as well sucking up bandwidth on their networks now. So, will a new iPhone 6 with a larger screen, if that truly comes to fruition this fall as rumored, cause an uptake in mobile data traffic and again impact mobile networks? That might depend upon whether or not cellular customers save their data-intensive activities for Wi-Fi offloading opportunities.
Studies have documented the fact that larger screens on smartphone beget more overall data consumption. Last November, The NPD Group said monthly Wi-Fi and cellular data consumption on smartphones with screens 4.5 inches and larger is 44 percent greater than it is on smartphones with screens less than 4.5 inches. The firm noted the growing availability of larger smartphones has coincided with an overall uptick in smartphone data usage.
"Most of this data consumption on larger phones is coming from greater usage of social media, navigation, video, retail, and music apps," said NPD. It noted at the time that Facebook (NASDAQ: FB), Google (NASDAQ: GOOG) Maps, YouTube, Amazon (NASDAQ: AMZN) retail and Pandora Radio are the apps most used among consumers with larger phones.
Similarly, OpenSignal said in March 2013 that it had collected data showing that each additional square inch of screen area leads to 288 MB of extra data downloaded per month over Wi-Fi. However, the firm said screen size was having a much weaker impact on data use over a cellular connection.
OpenSignal attributed this difference to the fact when people are on the move, they use their cell phone for their immediate needs, so even if they have a larger screen they are not induced to consume more data. I don't agree 100 percent with that hypothesis. My guess is that consumers are aware of what their data caps and overage fees are. So, while they might want to consume more cellular data on a larger-screen device, they generally delay gratification by waiting until they can use a free Wi-Fi connection rather than a pricey cellular one.
One side benefit of Apple unleashing larger iPhones would be that the devices will likely have more room for larger batteries ready to fuel power-sucking features and functions. That, in turn, could again lead to more wireless data consumption because, as we all know, a smartphone can't consume data when its battery is dead.
It seems increasingly likely that Apple will release one or even two iPhone variants with screen sizes that exceed the 4-inch screen on the iPhone 5s and 5c, given that the tablet market, which Apple dominates, is showing signs of stabilizing. Highlighting that trend, IDC recently slashed its forecast for tablet shipments, saying they will rise this year by 12 percent, a significant slide from the 52 percent increase seen in 2013.
Tom Mainelli, IDC program vice president, devices and displays, attributed the rise of phablets--smartphones with 5.5-inch and larger screens--as one factor prompting a slowdown in the overall tablet market. Phablets, he said, cause "many people to second-guess tablet purchases as the larger screens on these phones are often adequate for tasks once reserved for tablets."
The firm noted that in the past year alone, the phablet share of smartphone shipments has more than doubled, from 4.3 percent in the first quarter of 2013 to 10.5 percent in 2014's first quarter, representing 30.1 million units shipped.
The numbers show that many in the public are lusting after big-screen smartphones, so odds are that Apple will aim to satisfy those potential customers. What is less of a sure thing is exactly what impact an iPhone 6 with a larger screen might have on data consumption over cellular and Wi-Fi networks. We might have that answer in about a year.-Tammy | @tammys_take