Despite being hindered with a slower EDGE connection, the iPhone actually performs better than competing 3G handsets that download data faster. Apparantly the optimized version of YouTube for the iPhone is what beats out the mobile flash version.

According to a video comparison by German web site iPhone Infoblog, the bandwidth speeds of a 3G connection are all but useful if used on a device that can’t keep up with the massive influx a data.

As you guessed, the iPhone’s EDGE connection dominates in YouTube playback when compared to a UMTS equipped Nokia E61i. The reason comes down to the optimized version of YouTube only being available for the iPhone.

This version utilizes the H.264 format for video playback and the only devices it will play nice with is the iPhone, iPod Touch and Apple TV. But wait, isn’t H.264 processor intensive for a phone let a lone a computer? That would be true but we’d be seeing minimal battery life if it weren’t for a processor dedicated to decoding H.264 content (not YouTube specific, this processor is used for decoding H.264 formatted content from iTunes). Since this is the only processing needed, the chip itself doesn’t need gobs and gobs of Megahertz.

Handsets utilizing Flash for video playback probably don’t have a dedicated processor for decoding. Chances are a 3G handset with a dedicated flash decoder would perform better than a 2G iPhone.

Via: TUAW