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Does the iPhone 5 need LTE wireless to succeed?

Matt Hamblen | Sept. 11, 2012
When Apple announces its next iPhone as expected Wednesday, analysts predict it will have faster LTE wireless capability along with other improvements, including a larger 4-in. display, more powerful processor and overall design changes to woo expectant buyers.

AT&T also touts fast service over its HSPA +42 network that it calls 4G. The company claims its 4G network has a bigger footprint than Verizon's LTE.

Sprint, the third-largest U.S. carrier, still offers unlimited data service plans, and has shown a strong interest in attracting LTE customers with its new service launched July 15 and now available in 19 cities.

On Monday, Sprint announced it had plans to expand its LTE coverage in 100 more markets "in coming months," including major markets such as Boston, Chicago, Los Angeles, Memphis, Miami, Nashville New York, Philadelphia and Washington. The timing of the announcement was viewed by analysts as a clear attempt to woo next-generation iPhone customers, even though Sprint hasn't said when those 100 markets will have LTE service.

In July, Verizon had reached 304 U.S. cities with LTE, while AT&T had 47.

Market research firm IDC recently reported that Verizon had more than 9 million LTE subscribers in the first quarter of 2012. The next biggest markets were in South Korea and Japan, where South Korea's SK Telecom Co., ranked second with 2.75 million subscribers and Japan's NTT DoCoMo was third with 2.23 million.

While the interest in LTE by U.S. carriers is robust, IDC also noted spectrum shortages in Europe that could delay LTE deployments there. In addition to rollouts of LTE by Verizon, AT&T and Sprint in the U.S., T-Mobile plans to roll out LTE in 2013.

"It is imperative that LTE is an available option for each operator to compete in the [U.S.] market," IDC noted in a recent report. "Consumers will continue to demand high-speed data, and operators must be well-positioned in response to this demand."

While the level of LTE competition among carriers is high in the U.S., Kagan and other analysts are unsure whether the carriers will be able to convey LTE's value through marketing to their customers for the next iPhone. Perhaps the next iPhone's cachet and styling as well as its larger screen than its predecessors' will draw the customers despite LTE, the same way the first iPhone lured customers to AT&T fiveyears ago, analysts said.

The data sharing plans that Verizon and AT&T introduced during the summer were apparently in anticipation of a new iPhone as well as a slew of newer LTE-ready Android phones that will place greater demands on their networks, analysts said.

Apple first went to LTE with its new iPad in March, using two carriers in Canada and both Verizon and AT&T LTE in the U.S.. To roll out LTE service anywhere in the world, the next iPhone would need chips that can work over an estimated 40 LTE bands, so it seems fairly clear that Apple will focus on LTE where the markets are more mature -- the U.S., South Korea and Japan.

 

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