The 3G iPhone: Do we have it all wrong? - Macenstein

The 3G iPhone: Do we have it all wrong?

Everyone “knows” Apple is making a 3G iPhone, right? I mean, it’s a given, a sure thing, easy money. In fact, many prospective iPhone users are putting off the purchase of the wunder phone until Apple announces the device.

But what if there will never be a 3G iPhone?
At least in the US.

Macworld UK reports on AT&T’s future purchase of 12MHz of wireless spectrum in the 700MHz band that covers 60 per cent of the US. The deal has been approved by the The US Federal Communications Commission, and potentially opens the door for AT&T to provide WiFi access to iPhone users across more than half of the united states, a region far larger than its current 3G service reaches.

There have been reports of AT&T expanding their 3G network, and some future iPhone markets, like Japan, have ONLY 3G service, so odds both AT&T and Apple they are not planning on completely ditching the idea of 3G anytime soon. However, the purchase of that specific band of spectrum is indeed very interesting. As Macworld says:

“The 700MHz spectrum band carries wireless signals three to four times farther than some higher spectrum bands, making it optimal for long-range broadband networks. This is raising speculation that Apple and At&T could be implementing nationwide WiFi rather than 3G.”

There are three main reasons I give this theory some weight. First, I want it to be true. Second, it would fit well into Apple’s secretive corporate strategy. Apple is not used to the long and very public FCC approval process that goes along with releasing a new bit of mobile gadgetry. Odds are, if/when they decide to release a 3G iPhone, they will have to enter a multi-week to multi-month approval process which will become widely publicized. As soon as official news of the 3G iPhone hits the streets, you can likely expect iPhone sales to come to screeching halt in anticipation. There is really no way around this, and perhaps Apple has resigned itself to this fact and is prepared to take its sales lumps for the greater good. But suppose Apple knew about AT&T’s eventual WiFi plans, and in part chose them as carrier for that reason? Apple has always claimed that 3G chips require too much power to work well in the iPhone. WiFi, instead of 3G, will allow nation-wide broadband internet speeds without Apple having to modify the iPhone, alienate last year’s iPhone customers, and will allow Apple to avoid any new FCC approvals and subsequent iPhone sales hits.

Finally, the idea of a nation-wide WiFi network brings me to the third reason I think this could happen… the iPod touch. Apple has already said they view the touch as a mobile development platform as much as the iPhone. If AT&T were able to provide a nation-wide WiFi network, many iPod touch users would jump at the chance to pay them a monthly fee to be able to access it. Of course, its success would all depends on how much AT&T decides to charge for the service. At $10 a month, every student from 6th grade up would rush out to get a touch. For $20 a month, plus the ability to tether the touch to a laptop to gain mobile WiFi access, likely every college student and Mac business professional would snap one up. Plus, Apple could charge touch users an extra $20 for the tethering application, just as with the recent application bundles. In fact this would likely help spur a boon in 3rd Party applications Apple can sell via iTunes to both touch and iPhone users.

But why stop at tethering? Perhaps for $30 a month, you could access the WiFi directly from your MacBook without a 3rd party wireless card!

Admittedly this is pure speculation combined with a healthy dose of wishful thinking, as I want to pick up a current 16 GB model and not end up crying into my iPhone in 4 months if Apple releases a 3G iPhone. But the potential increased revenue streams which both AT&T and Apple could realize would be major. Imagine using WiFi on your laptop out in the field without a 3rd party card, connecting your home iMac to the internet wirelessly, without the need for wired service running to your home, and of course using your iPhone or iPod touch anywhere there’s cell service to access the web.

Apple’s recent talks with Spanish WiFi company FON, which provides country-wide WiFi in many parts of the world via shared WiFi, also suggest Apple is at least interested in the idea of all its gadgets being able to access the internet.

As always, I leave it to you, faithful Macenstein readers, to tell me how wrong am I about this, as I know your collective wisdom on the technical aspects of such a deal will likely punch holes in my “wouldn’t it be cool” scenario. What am I missing here?

39 Responses to “The 3G iPhone: Do we have it all wrong?”
  1. Javier says:

    Dear Dr,

    I think your guesses are almost correct, except for this meaning no 3G Iphone., anounced a few minutes ago to have inside sources confirming an anouncement tomorrow of a 3G Iphone distributed with Movistar in Spain this June. Applesfera is not one of those crap shouting blogs out there, and they are not rumour devoted site. So i think is pretty believable.

    I think USA is going to go wit AT&T nationwide wireless for a single reason: that option will allow pre 3G Iphone users to have decent speeds nationwide. But the Iphone will still have 3G capabilities. Doing this will result in not selling Iphones in Europe, where you can find 3G and 3,5G strongly implanted by carriers, but no sign of nationwide Wifi´s (except for global third party initiatives like Fon).

  2. Art Vandelay says:

    This is an excellent point. However, I believe this along with 3G could be incorporated. This may be a long term plan, while 3G is short term.

    Also, you guys don’t really believe Apple’s just going to add 3G to the current model? They’re going to completely update it, bigger screen, more space (32 GB would be tight), thinner, non-recessed jack. It’ll be a complete revision.

    Also, 3G is in the next model. The AT&T loser said so.

  3. Lisa says:

    1. Don’t they mean Wimax? I don’t think WiFi specs can go on the 700MHz band.

    2. WiFi is hideously more inefficient powerwise than traditional mobile phone technologies.

    3. AT&T has said nothing of building out WiFi infrastructure. Nor Wimax. This would be a significant capex spend for AT&T, not to mention the time it would take. Investors don’t like surprised like that.

  4. Dave says:

    Well, since the chunk of spectrum that AT&T bought isn’t located in the band that carries WiFi it’s pretty much a moot point.

    They could put a wifi or wimax like service on this chunk of spectrum but existing devices don’t have radios that work on that band so it would require new hardware and a new FCC approval anyways. They could incorporate this into a future iPhone but they are more likely to put traditional 3G service since it’s more universally accepted.

  5. Annon says:

    You missed the point that the 700MHz band is not available everywhere. And I don’t not believe that Apple will produce a product which is USA-only.

    On the other hand. If Apple would be the first company that offers mobiles for that spectrum. Apple could try to get exclusives rights, from a single provider, to sell mobiles for this frequencies.
    I don’t think that a provider would be that stupid… but who knows? In Germany Vodafone quits the talks with Apple, went to the court and now they are pissed off. I also never thought that a company could be that stupid :-/

  6. Jason says:

    “access the WiFi directly from your MacBook without a 3rd party wireless card!”

    Think the MacBook Air. It’s thin and the point for it is broadband WiFi access. I won’t be surprised when we find out that if you own a MacBook Air all your software will be purchased and installed at the touch of a button. Your backups will be handled wireless why not everything.

    Isn’t that what Star Trek was all about. Touch devices, laptops, all unconnected but connected to the Mainframe? Stevie boy must have really liked that show!

  7. Peter says:

    This actually could be the ticket. I was talking to my dad the other day, and he works in the telecom industry. He was telling me that these frequencies are being bid on (much like an auction) for these exact purposes.

    So, I don’t doubt that AT&T is going to purchase the wavelength. It would make sense to include the existing base of customers, rather than exclude them.

    Oh, and for all of you who are just posting wishlists for the new iPhone, get real.

    When was the last time you saw a HUGE revision to any of the Mac lineup?

    Everything just gets new cases, nothing spectacular in the way of giant screen improvements, new headphone ports, etc.. They made the headphone ports that way for a reason => Accessory purchases.

    No, I think it’s much more plausible for apple to keep the same design, but just add the nationwide wifi. Much cheaper in the long run, and you can use it with existing devices other than the iPhone.

    I know my BlackBook would love to see WiFi wherever it goes.

  8. Jonro says:

    I wouldn’t be surprised if Apple wanted a piece of nationwide Internet access. That would make them an “everything” provider, as the Internet encompasses all types of communication, including VoIP. I don’t think any of their current hardware will support the new bands as they are in a different part of the spectrum than 802.11x.

    I am looking forward to being able to do video chats on my iPhone (knowing it would need to be done over WiFi, not Edge).

  9. Coutn Macula says:

    I’m waiting for the 3G iPhone!

  10. AdamC says:

    Good points, Internet is the way to go and WIFi is the gateway. With the iPhone and iPod Touch, Apple already has 2 of the hottest mobile products for the Internet generation and they will keep on developing, refining them to make them more relevant to daily living.
    Great article, thanks.

  11. Ted T. says:

    Your article is wrong:

    700 MHz would not work with either with WiFi or WiMax. 700MHz is excellent for voice. I’m not even sure about 3G data, but allegedly it would be possible to have EDGE at 3G speeds over that frequency.

    In any event, you would need new phones for the 700Mhz spectrum, no matter what they use it for..

  12. chris says:

    Let’s just wait for the iphone nano… the perfect gift for college graduates?

  13. Nathan says:

    Now, I know the technical details are a little much for Mac users, but AT&T’s spectrum buy is in the 700mhz band. Wifi (of the b and g varieties) is on the 2.4ghz band. You can’t just make a software update to change bands of radios like that. They’re going to have to make a new hardware device, whether it uses existing HSDPA spectrum or new 700mhz spectrum. Why bother making a device that only works in the US when HSPDA is available in dozens of countries?

  14. w00master says:

    Problem with this theory is that the 700 mhz spectrum isn’t going just up and work “overnight.” It’ll take at least 3 to 5 years to get up and running. Do you honestly think that Apple & AT&T are going to wait that long for high-speed wireless? Nope.

  15. Anonymous says:

    Another problem with this idea is that it will be earily 2009 before the 700 mhz is cleared. Then a couple of months after that before devices are on the market.

  16. Danny de Wit says:

    Hmm… I don’t think WIFI coverage can come even close to ‘broadband out of the air’.

    I mean it’s still an unbelievable pain to get WIFI even in hotels. Let alone everywhere else where I would want to use my iPhone with 3G speed.

  17. Danny says:

    You make some interesting points, however, the first thing you said is that people are holding off buying an iPhone until a 3G version comes out, these are potentially lost customers if this never does come out. Also, ATT announced a 3G iPhone would come eventually, which makes this effect even worse.

  18. herko says:

    There’s one major problem with wifi, and that is roaming. Imagine you’re on a moving train. With 3G you have a constant signal, as the technology is designed to move the connectgion with you, while WiFi is designed for you to find the access points (note the name alone: access point, not transmitter!). Even with long range WiFi (definately not a world-wide available technology!), you have issues swtiching between access points -making you lose your connection.
    Also, the carriers operating in non-US markets may have some objections if Apple and AT&T started to roll out their own infrastructure -the plots for the 3G frequencies have been sold for extremely high prices here in the EU- basically opening up the market for mobile VOIP and much more.

    No, I think Apple isn’t just focussing on the US anymore. Especially with the iPhone, it has an international strategy. And the international mobile communications market is diverse, complex and riddled with (inter)national regulations. Adding another layer of complexity by creating their own infrastructure is definately not part of it.

    Just my 2 cents here tho, nothing from Cupertino to back this feeling up here.

  19. stephen says:

    I’m not much for the technology of 700 capabilities or other technical aspects of all this, but I have wondered WHY the Touch was built. An iPhone without a phone? I guess I’m just not familiar enough with the social rewards of close at hand communicating. Kind of like I don’t get why people will pay extra to text…. But if a wifi network will let an iPod BE a phone, well that is something to think about.

    I bought my Treo because I needed a pda and a phone that I could use in the field at the same time. Email is nice to have. Web is, too. But less important. I sure would like to have the Visual Voice Mail on my phone, though! Apple is brilliant at the ergonomics/interface part for sure.

  20. Rob says:

    Well, as a 55-year-old programmer, I’m coming from the days when cell phones didn’t exist. Fax was a corporate technology. I’m not in anguish from lack of iPhone 3G. I just got an iPhone a month ago and it works well. The “measly” Edge data stream is just fine actually, I’m not worried about streaming movies while driving on a rural road in Vermont. It’s actually more of a computer than a phone, but it works well enough as a phone. I’m waiting, like everyone else, for the SDK.

  21. FunGuy says:

    Well, This might in fact be closer to true, because ATT just won the new Starbucks contract and will be replacing T-Mobile. Also, Starbucks will be giving away 2 hours of free internet per day, and offering monthly subscriptions. For me, its free because I have ATT DSL. 🙂 Yay!

  22. Larry says:

    I keep hearing this complaint about the recessed earphone jack. I have dropped my iphone several times and I believe that jack has saved it from hitting the ground!

  23. David says:

    You are very wrong about the FCC approval process. The FCC only makes the documents public AFTER it has been approved. Not before or during the approval process. Also the headset manufacturer can request a delay in making the documents public. Case in point, the iPhone FCC documents where not made public until May 17, 2008. Just a few weeks before the iPhone went on sale.

  24. David says:

    I meant to say on the above post that the FCC documents were not made public until May 17, 2007.

  25. Jonro says:

    I want a 3D phone because I want to see numbers and photos pop out of the screen just like an iMax movie. What? You said 3G? Oh, that’s different. Nevermind.

  26. Ayo says:

    Apple’s middle name is Alienate… Its called Planned Obsolesces. The early adopters will trash their old I-phones for the new ones while the late adopters buy the used ones. Planned Obsolesces has been Apple’s strategy in the Ipod business for quite some time. Think about it. They always had the ability to put video on the “IPOD Photo” and Ipod Nano. But they waited for the suckers to buy em up so they could introduce the NEW ipods.

  27. Erik says:

    This is BS.
    Current WiFi standards operate on 2.4GHz (b,g,n) or 5GHz (a,n).
    There’s no way existing iPhones or other wifi devices will be able to start using 700MHz for Wifi. Maybe AT&T have plans for nationwide Wifi/Wimax, but it’s not going to work on existing devices.

  28. Joe Smith says:

    If only such were the case. It sounds too good to be true, but I think that it would totally help Apple and AT&T grab plenty of new customers.

  29. Greg says:

    3g is a battery hog. There is a reason the Black Jack comes with 2 batteries and clamshell to charge the 2nd battery while the first is in use.

    What good is 3g in a iPhone if you can only use it for 20minutes. And there is no way to keep a spare battery at the ready.

  30. The speculation about “WiMax” or a similar “WiFi” technology has been around for a while now. Similar article posted before MacWorld can be found here.

  31. Tim Prescott says:

    “Apple’s middle name is Alienate… Its called Planned Obsolesces. The early adopters will trash their old I-phones for the new ones while the late adopters buy the used ones.”

    How many times to you have to see the word iPhone (and iPod) written to know it’s not spelled “I-phone” or “Ipod.” Seriously. It blows my MIND how many seemingly intelligent people just don’t notice that they’re typing the word completely wrong.

    It’s on every billboard. It appears in every commercial break. The web is sprinkled with the words. Yet a sizable part of the population still hasn’t noticed that it’s not spelled “I-phone.”

    Doubleyou tee eff?

  32. wlazorik says:

    UK Macworld made the mistake of referring to WiMax as WiFi. There is no way AT&T would invest in building a nationwide network of access points with a range of 300 meters. Granted there are methods to convert a normal 2.4ghz WiFi signal to 700 or 900mhz like the Ubiquiti SR9, but it requires hardware on both the access point and client side. Such a network would be completely incompatible with all current forms of WiFi including the iPhone. Now a future version of the iPhone with WiMax capability would definitely be something to see, but it won’t happen before the 3G version.

  33. Chad says:

    While an interesting article, it fails to notice AT&T’s future call to adopt LTE technology. The current standard of 2.5G and 3G is still the standard, and will be the standard, for wireless communication for all US carriers until 4G hits the market years from now. WiMax or nationwide Wi-Fi will not account for the carriers technology needs in communication outside of internet browsing. Apple will still release a 3G handset in the near future to take advantage of today’s market – as was stated by AT&T’s CEO in the fall of 2007. Any plans for wireless internet connectivity on a nationwide scale is billions of dollars and years away.

  34. chris says:

    WiFi does NOT work over 700mhz. It can’t, and it won’t ever. Sorry, all the info here is wrong…Pls do some research.

  35. cezar says:

    battery technology has come a long way, apple will find a way to make it work

  36. buy3giphone says:

    Very nice article with a great insight … but now, the 3g iphone has been confirmed ….
    by Apple itself !!..

  37. SavedByTechnology says:

    The 3g iPhone will roll out in June. Why else would Apple stop selling v1.0 iPhones on their website? I picked up my refurbished v1.0 8gb at the local AT&T store (in Manchester, CT) for $249. I’ll live with that until I can get my hands on a refurbished 3g iPhone sometime in ’09. I’m just hoping in the meantime that Apple will make some serious upgrades in v2.0 firmware. The Notes app is really sorry. Please…someone…tell me how to ‘undo’ a deletion! Rock on iPhone users!

  38. 7egend says:

    The 700mhz band is for their PTT service, much like the iDEN for NexTel which I believe is also 700Mhz.

    Although it is very expensive to purchase and erect new hardware, AT&T has plenty of money to do so, but their plans are to boost the existing hardware they have to support the required speeds for the time being until they can engineer a service that would trump the 3G service.

    The 3G iPhone is definately being released because of AT&T’s reccent anouncement of up to 22mb/s 3G network. Which let’s face it is just as fast if not faster than any wifi you will be connecting to be it at home or at a starbucks.

    Nation wide WiFi is a great idea, but you are talking about some serious hardware, and a serious optical connection hitting the towers that are beaming out the signal. You are going to be depending on a trunk line capable of handling millions of users. Especially with data intensive apps such as youtube and the future video confrencing, the network is going to get hammered if users use the iPhone to its full potential.

    But im no telecom engineer or anything. But in order for the wifi idea to work you are going to need atleast 2.4Ghz equipment for it to work.

    Great article.

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