Smartphone Data Use Nearly Doubles As Cost Drops

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Mobile data use -- from applications to Web browsing to vide -- is up sharply in the last year, according to new Nielsen data. Over the last 12 months, the amount of data the average smartphone user consumes per month has surged 89%, to 435 megabytes in the first quarter from 230 MB the year-earlier period. For the top 10% of smartphone users, that amount is up 109%, and for the top 1%, a whopping 155%.

Even as data usage has almost doubled, most mobile subscribers are paying about the same amount as a year ago. That translates to a lower cost per unit of data consumed. The amount a typical smartphone user pays per unit of data has dropped by nearly 50% in the last year, from 14 cents to 8 cents per megabyte.

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Nielsen's monthly analysis of more than 65,000 lines showed that people with iPhone and Android devices are the most avid data users, consuming 492 and 582 MBs on average per month, respectively. The latest comScore data indicates that Android accounts for about 36% of the U.S. smartphone market, and Apple about 26%.

Windows Phone 7 users -- although much fewer in number -- have doubled their data use over the last two quarters to 317 MB, possibly driven by the expanded number of apps available. Taken together, the rising flow of data traffic is placing greater pressure on wireless networks.

"This has huge implications for carriers, since the proportion of smartphone owners is also increasing dramatically," states a Nielsen blog post. It also points out that an estimated 37% of U.S. mobile subscribers now have smartphones, up from 23% in the first quarter of 2010. Research from mobile consulting firm Chetan Sharma last month also found that smartphones in the first quarter for the first time made up more than half all mobile phones sold in the U.S.

That's not counting the growing uptake of connected devices like tablets and e-readers, which Chetan Sharma said now account for 8% of the U.S. mobile subscription base. They had the highest first-quarter increase of any device category, up 9.6% from the prior quarter. Overall, the consulting firm estimated that U.S. mobile data service revenue increased 23% from a year ago to $15.4 billion in the quarter.

In the face of rising data demand, major wireless carriers such as AT&T, Verizon Wireless and T-Mobile, have shifted from unlimited to tiered pricing plans in the last year. Sprint CEO Dan Hesse has said the company is considering adopting tiered pricing. Verizon, Sprint and AT&T are also in the process of rolling out high-speed 4G networks to better handle surging mobile data use.

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