I have to admit I’ve been more than a bit skeptical of recent reports touting mobile video as The Next Big Thing.  Yes, it’s something a lot of people (especially younger people) seem to want, it’s a great use case for us mass-transit users, and with Moore’s Law apparently still in effect, current hardware can now support an excellent user experience.

My issue, though, is with the network.

As an AT&T customer, I’ve found that poor and unstable connections (even in Manhattan) make mobile internet radio unusable, let alone (more bandwidth-intensive) video.  At home across the river, it only gets worse:  I can’t even get dependable voice coverage in most of my apartment.

In short, I am a little underwhelmed with the performance of the AT&T voice and data networks.  And although Apple has doubled its share of the smart phone market over the past year, it’s still only 10.8% (still roughly half that of the RIM/Blackberry numbers).  Nevertheless, as a recent article in the New York Times suggests, while mobile video in general is a hot topic, it’s the iPhone in particular (and by extension, AT&T) that leads the way:

• Software: The new iPhone 3.0 operating system now supports streaming video in addition to progressive download (more on that here).  The ability to stream rather than download video opens up many possibilities, including the streaming of live events and of longer-form programming than would otherwise fit onto the device as a temporary file.
• Hardware: Speaking of file storage, capacity on the soon-to-be-released 3rd generation iPhones has doubled, to 32/16GB (up from 16/8GB).  More local data on the phone can only mean more network traffic – already we see that the iPhone 3G S now supports the taking (and more importantly, the sharing and publishing) of video (something previously available only as a hack available on “jailbroken” iPhones).

Apple is in the business of selling a brand, while AT&T is in the business of selling a commodity.  These are two entirely different business models, and indeed the two companies have clashing agendas: Apple seeks to preserve their enviable margins by maintaining their equally enviable brand value through technical innovation, while AT&T seeks to preserve their (less enviable) margins by managing the levels of network traffic such innovations demand.

It makes for an interesting relationship.

Until now AT&T has been able to take “evasive action” to avoid the kind of network traffic mobile internet video would cause by successfully demanding that video-intensive iPhone apps (such as those from Joost and CBS) use wireless 802.11 (wifi) networks only.  This time, though, its Apple pressing the case – and one has to think AT&T would be disinclined to push back very much, given the positive impact the iPhone has had on their bottom line and the recent rumors of a possible future Verizon iPhone.

What everyone is waiting for is the next generation of wireless network technology – “4G.”  Whether this will consist of a (long-awaited) proliferation of WiMax–enabled hotspots and/or the rollout of LTE cellular technology remains to be seen – but Cisco, for one, is bullish on the technology’s impact on mobile video usage: according to a recent Cisco study, by 2013 video is expected to account for 64% of all mobile data traffic.

I have a friend at my gym who works in the industry (on the content/publishing side) who wholeheartedly concurs with Cisco.  Although his company maintains a leading multinational presence in online media on multiple platforms, he’s relatively sanguine about any current technical shortcomings at the wireless network level - what’s more important to him is how today’s teenagers are getting accustomed to using mobile technology, and what their expectations are for the future.  In this context, a demand for mobile internet video seems assured - and despite the current “reality-gap” between rosy projections for the future and the current sorry state of wireless data networking, perhaps 4G technology will have the time to catch up with the pace of current software and hardware improvements and prove Cisco’s predictions correct.