LTE Phones Merely Hint at IPhone's 4G Future
The typical iPhone hardware refresh that Apple (AAPL) used to offer in June hasn’t come. Many now expect the next-generation iPhone to arrive in September. There’s debate over what the handset will look like, but we already know it will run on iOS 5, which adds notable new features that even an Android owner can appreciate. What we don’t know is if the newest iPhone will be available in a single model that supports various 4G networks.
Research firm iSuppli recently ripped apart the HTC (2498:TT) Thunderbolt, an LTE handset that runs Google (GOOG)‘s Android platform on Verizon’s network. What does that have to do with the next iPhone? Quite a bit, actually: ISuppli figures that adding LTE support to an iPhone would boost the cost of the electronics inside the phone by 23.2 percent over what the current iPhone 4 costs Apple. This assumes Apple would use the same networking solution chosen by HTC for the Thunderbolt, which isn’t a good solution.
Aside from the materials-cost bump, the Thunderbolt has separate chips for the 3G and 4G radios, which can drain the battery faster than a chip that integrates all the radios, for example. More radios mean the phone could run hotter and also require more space. Apple has been shrinking the circuit boards in the iPhone line over time and isn’t likely to make the next iPhone bigger by using multiple radio chips. It’s rare that Apple adds a feature to hardware that isn’t fully baked, so I don’t expect LTE support in the next iPhone.
Need another reason? Widespread LTE networks aren’t yet available in the U.S. Verizon is leading the way with LTE coverage in around 75 markets, with plans to light up a total of 145 regions by the end of this year. AT&T (T) however, expects to launch LTE in just five markets this summer and in an additional 10 by yearend, covering an estimated 70 million people. The amount of LTE network coverage simply doesn’t warrant Apple moving the iPhone to LTE yet. And unlike HSPA, a 3G technology used in the current iPhone, not all LTE networks around the world use the same 700 MHz frequency that Verizon and AT&T have built their networks on. In contrast, the iPhone works on the majority of UMTS/HSPA networks that use frequencies of 850, 900, 1900, and 2100 MHz. LTE frequencies are always likely to be an issue, but the short story here is: LTE is still maturing and evolving.
Faster Speed and Response
Depending on your definition of 4G, I would expect the next iPhone to have faster mobile broadband speeds, due to the use of HSPA+ technology. T-Mobile currently uses HSPA+ that offers theoretical network speeds of up to 42 Mbps. AT&T is in the process of upgrading its network to support faster HSPA+ speeds, although not at 42 Mbps. So it’s logical to expect a bump in the mobile broadband capabilities of the new iPhone, not to mention a dual-core processor for faster response. The A5 chip with two processing cores used in the iPad is likely to find a home in Apple’s newest handset.
Given the network situation, it seems far more likely to me that the new iPhone will take the iPhone 4S name since it would mainly add a speed bump in the processor. When LTE becomes more widespread and easier to support with integrated chipsets, an iPhone 4GS would likely follow, just as the iPhone 3GS followed the 3G (although the model with faster network support arrived before the phone gained much processing power).
Here’s the caveat to this line of reasoning: What if the new iPhone were delayed from its yearly refresh to give Apple a little more time to work out efficient LTE support? Will Strauss at Forward Concepts doesn’t think the timing would work: Baseband chipmakers are still too far behind, unless they’ve made greater progress than we know.
Even then, the network-coverage problem would still exist, though it would disappear over time as Verizon and AT&T continue to build out the infrastructure for fast 4G support. And Apple’s iPhone would already be ready to take advantage of the faster speed. I thus consider it unlikely. We’ll know in the next six-to-eight weeks—unless someone leaves a test unit of the new iPhone in a bar.
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