The past year, despite the difficult economy, has presented several pockets of strength for the mobile industry, most surrounding wireless data. Increase in data consumption is being driven by changing consumer behaviors, as well as by device availability and a growing catalog of apps. The iPhone has been game changing in how consumers use their phones and consume wireless data. According to a November Bytemobile report, operators with iPhones on their networks have a significantly higher percent of smartphone data traffic (52 percent of all data traffic) compared to operators without the iPhone (4 percent smartphone data traffic).

While the iPhone continues to dominate smartphone usage in the U.S., Android is gaining market share and imparting competitive pressure on the iPhone. Many new Android phones were introduced in 2009, with roughly 15 phones on the market at the end of the year. Among the most remarkable of these releases is Motorola’s Droid, launched on Nov. 5 and available on the Verizon network.

In addition to new device releases stimulating wireless data consumption, the growing list of apps available is also driving data usage. Among the most news-generating app categories in the fourth quarter were location-based services, mobile social networks, and music. In terms of location-based services, a variety of startups introduced offerings in the fourth quarter, but Google was also active in introducing new location apps, including Google Maps Navigation, which is poised to compete with the lucrative carrier-branded navigation offerings.

The mobile music market has also been abuzz in the fourth quarter, as growing usage is ramping up competition. The various players in this space are working to carve out both an audience and a sustainable business model. Similarly, social networks have been actively evolving their services into mobile apps. Specifically, there have been a variety of product announcements and apps released in the fourth quarter that feed off of Twitter. The micromessaging service broke in to the Japanese market early in the fourth quarter, marking the first local language version of the service.

However, as such services proliferate, pressure on the network escalates, and the financial benefit that wireless data service has delivered to carriers is being tempered by degrading network performance. Growing pressure on the network is pushing 4G upgrades to center stage. However, investment in 4G is difficult to support given the still unstable market. In an environment where layoffs still loom large, the investment to upgrade the network may be difficult to sell. Nevertheless, 2010 is likely to present stronger market conditions that will better support the investment needed to make the mobile network upgrades needed.