iPhone app could help you switch to cheaper data plan

Thanks to seamless background compression, the new Onavo app promises to give you a lot more bang for your data buck. But does it really work?

Onavo compresses inbound data (though not streaming media--yet), meaning you might be able to get by with a cheaper data plan.
Onavo Mobile

Onavo is an intriguing new app that works a little money-saving magic. It compresses your iPhone's data stream, in some cases significantly, resulting in less total data consumption overall. Upwards of 80 percent less, according to developer Onavo Mobile.

That means if you're in a roaming area, like overseas, you stand to pay less for data. And if you subscribe to AT&T's DataPro plan, you might just be able to downgrade to the cheaper DataPlus. Do I have your attention yet?

The first time you run the app, it installs a new profile on your iPhone, one that allows the service to act as a proxy server. Translation: all your data gets routed through Onavo's servers.

(Privacy junkies, take note: the company does collect certain kinds of traffic-related information, like session durations and IP addresses, but doesn't sell any "personally identifiable information" to third parties. I highly recommend reading the company's privacy policy if you have concerns.)

Onavo compresses inbound data to apps like Safari, Mail, Facebook, and Google Maps, and does so entirely in the background. In my tests, I noticed no performance hit while using these and other everyday apps.

That said, I've been using it for only a few hours, so I can't say for sure what the overall impact might be. (One minor glitch: my TweetDeck app now crashes every time I run it. Not sure yet if it's related.)

I can say that the app provides interesting stats on your data usage (including an app-by-app breakdown) and how much of it you've saved overall. Alas, for the moment it doesn't support streaming or VoIP apps like Netflix and Skype, but the developer says, "stay tuned, we're working on it."

Same goes for Android and iPad versions of the app, which, according to a company rep, will be available in 2-3 months. For iPad users in particular, this could be huge, as it might let you get more 3G time with a less-expensive plan.

For now, AT&T iPhone owners who can't quite get by on the $15/month DataPlus plan might find that Onavo makes the difference. If so, you'll save an extra $120 annually.

The Onavo app is free, though it won't always be--the company has yet to decide when the "premium model" will start and how much it will cost. (I hope that doesn't mean there's some kind of subscription plan in the works, as that would kill much of the app's appeal.)

I think this thing has the potential to be a game-changer. Your thoughts?