Just as the possibilities of cloud computing and streaming media began to make smartphones exciting, Verizon (NYSE: VZ) killed its unlimited mobile data plan. This is bad news for consumers hoping to leave their computers behind, and for companies seeking to profit from the growing mobile market. However, there are fewer losers here than you might think.
Customers: annoyed, but unaffected for now
If our data consumption rates remain the same, then the capped plans won't affect most customers. The vast majority of smartphone owners use far less than 2GB a month -- the average user only eats up 435 MB -- while the most data-hungry owners use less than 5GB. As it stands now, the 10GB plan appears unnecessary for all but a small niche of users.
Of course, it's naive to assume that smartphone data usage won't grow. Even so, the average user's consumption would have to quadruple before it outgrew Verizon's cheapest data package.
The cloud and streaming media: a mixed bag
The data caps shouldn't make much of a difference for services such as Microsoft's (Nasdaq: MSFT) Office365 and Google Apps. Loading and editing a document on the go doesn't eat up too much data (I've been stuffing my Dropbox folder for two years now, and I've just cracked 20 MB), nor does checking email. Video chat features might eat up a lot of data, but they're better suited for desk work than cruising around town.
I also don't think the data caps will have too much of an effect on streaming video services such as Netflix (Nasdaq: NFLX), Hulu, and Time Warner's (NYSE: TWX) HBOGo, either. First, we're not watching many videos on our smartphones. According to a recent study by Sandvine, the iPhone accounted for just 0.54% of Netflix's traffic. Second, I would be willing to bet that most people who watch a lot of streaming video on their phones do so in places like airports or coffee shops, where they can pick up a Wi-Fi signal for a faster connection.
On the other hand, the death of unlimited data could slow the growth of streaming audio services like Google Music, Amazon's Cloud Player, and Pandora (NYSE: P). Although you can use these services at your desk -- Cloud Player comes in handy at work -- they have the most potential as radio alternatives for your Wi-Fi-free car. However, a person with a 2GB data plan and my not-quite-hellish two-to-three-hour round-trip commute would go over the limit in about two weeks.
In this light, Apple's (Nasdaq: AAPL) decision not to offer streaming as a part of iCloud makes a lot more sense. Unless some unfortunate iPhone user downloads his entire music collection through his data plan, the data caps shouldn't be a problem.
The data caps could also help Sirius XM (Nasdaq: SIRI). Many investors -- including me -- considered streaming audio a disruptive technology that might potentially render satellite radio obsolete. That's still a possibility, but probably not without less pricey data plans.
Foolish takeaway
In the long run, I don't see capped data plans doing much harm to the bigger players I've mentioned here. However, I do think the plans will probably toss another monkeywrench into Pandora's plan to acquire more listeners and pray for profitability.
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