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Between the Lines

Larry Dignan, Andrew Nusca and Rachel King

Can Apple win its iPhone 4S bet that 4G isn't ready for masses?

By | October 7, 2011, 2:30am PDT

Summary: Does LTE matter to the iPhone over the next six months? How about a year? Apple’s bet is that it can move a ton of iPhones and still be 4G free.

Apple’s launch of the iPhone 4S was notable for its new features—better camera, Siri voice activation, iOS 5 and iCloud—but what the device was missing in 4G capability got just as much attention.

Tim Cook, CEO of Apple, has said that new speedy networks such as the ones operated by Verizon and AT&T soon require too many design compromises. That’s statement is a diplomatic way to say that Apple wasn’t willing to bulk up the iPhone to support the chips required to support 4G. Apple also doesn’t want battery life to disappear in a few hours.

Given those 4G drawbacks—combined with the reality that coverage can be spotty—it’s no surprise that the iPhone 4S lacked 4G capability.

For Apple, the bet is that design trumps bleeding edge technology. That bet was a no-brainer at the beginning of the year and given current technology Apple’s decision will work for now. Apple is also betting that its set-up with the iPhone 4S can deliver 4G speeds over a 3G network.

iSuppli’s Francis Sideco noted:

With the speeds the iPhone has attained with the existing 3G standard known as High-Speed Packet Access (HSPA), there is no appreciable benefit to adopting LTE, especially given the current spectrum and uplink speed constraints for LTE. Apple declined to offer an LTE-enabled iPhone that would have been more expensive, larger and more power hungry—and instead opted to introduce a device that delivers nearly the same wireless data speed, but with a superior user experience.

CNET News’s Brooke Crothers noted that Apple is saving the iPhone 5 for LTE. Apple is apparently waiting for slimmer Qualcomm chips that can handle both 3G and 4G. Without those Qualcomm chips, expected in the second quarter of 2012, Apple would have to design an SUV-sized device. There’s a reason that LTE devices like the Motorola Droid Bionic and HTC Thunderbolt are so damn big—they have to pack LTE and 3G chips.

Anand Tech added that LTE chips need to move to 28nm to be viable for the iPhone.

In other words, Apple made a logical design choice by keeping the iPhone 4S LTE free.

The Great Debate: iPhone Yes vs. iPhone No | ZDNet iPhone coverage | CNET iPhone event coverage |

So what’s the problem? If you buy into the iPhone 4S it requires a two-year contract with a carrier. At Verizon, you’d have to assume that LTE coverage won’t get better over the next 24 months. At AT&T you have a little more wiggle room.

In our Great Debate, Jason Perlow summed the LTE argument up well:

I believe a large portion of Business users that have been in exit mode from BlackBerry will not find any of the current iPhones as attractive as they could have been had they been launched with 4G. There’s something to be said for 8+ megabits per second wireless tethering from your hotel on the road from your business laptop or tablet that you can get on a Droid Bionic that you cannot get on an iPhone 4S, a 4 or a 3GS.

It’s unclear whether the no-LTE bet pays off 12 months from now should Apple go that long without an iPhone 5.

Will the Motorola Droid Bionic benefit from an LTE-free iPhone 4S?

My buying calculus—I have a contract that’s up in November—is already rattled a bit. Here are my moving parts:

  • I have LTE Mi-Fi and the speeds are awesome when there’s coverage. On a moving train, the downshift from LTE to 3G is brutal. Overall, I’ve found LTE to be disappointing relative to my obviously too lofty expectations going in.
  • I fully expect Verizon’s LTE coverage to improve over the next 24 months.
  • Android, my current mobile operating system, is wearing thin on my patience. If you’re the type of person that loved MS-DOS prompts then Android may be for you. I don’t have the time to tinker and just want things to work. My daughter’s iPod Touch reveals an OS that’s much snappier.
  • I’m not a fan of the LTE handsets on the market today. First, they are pricey at two-year contract rates. And it doesn’t help that these devices are huge. It’s not like I’m petite or anything, but really don’t want a cinderblock in my pocket.
  • Now if I go with an iPhone 4S, it’s quite possible I’ll be feeling downright slow by time I can upgrade.

Add it up and I’m stuck in smartphone limbo. It’s a pretty safe bet that there are other Verizon customers in the same boat. Overall, Verizon customers will have to decide whether the network means more than the design. Apple’s bet is that you’ll go with the design and a few newfangled voice features. My hunch is that Apple’s bet will pay off, but things could get dicey late in 2012.

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Topics

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic.

Disclosure

Larry Dignan

Larry Dignan has nothing to disclose. He doesn’t hold investments in the technology companies he covers.

Biography

Larry Dignan

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CNET News.com. Larry has covered the technology and financial services industry since 1995, publishing articles in WallStreetWeek.com, Inter@ctive Week, The New York Times, and Financial Planning magazine. He's a graduate of the Columbia School of Journalism and the University of Delaware.

For daily updates, follow Larry on Twitter.

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RE: Can Apple win its iPhone 4S bet that 4G isn't ready for masses?
neephius 23rd Jan
4G is awesome and the Pie in the sky Phone(iPhone) is crap coz it has no 4G Apple why do you hold off on putting latest tech into your devices just so that you can add them later and say your innovative?.
Apple you are **** and you are profiteering i.e.: making money from a bad situation for your customers and that???s good for you but what about making it good for your customers. You know iPhone could and will run back to back 2G, 3G; 4G so why not just put it in already. PROFITEERING THAT???S WHY. YOU KNOW LIKE THAT NICE JEW IN Schindlers list movie.
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Android is getting old fast
otaddy Updated - 7th Oct
It was in the right place at the right time and grabbed market share only because devices were widely available around the world backed by multiple carriers.

And at the time, Microsoft had nothing compelling to offer either. But today, Android is a tired looking mess.

I hear my thunderbolt will be getting the gingerbread update..whoo hoo...oh wait, it got pulled again. Oh well, gingerbread is nothing but a service pack anyways...
@otaddy: Two words: Nexus Prime!
have a feature? Buy a new phone!
@otaddy

I'm thinking the Droid Bionic will alleviate any of the concerns you raise.
@chmod 777, ha Android mantra, want the latest Android OS, Buy a new phone every six months. Nice!
@otaddy
www.snapcrowd.com
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It probably will
MG537 7th Oct
Many of us are still using a 3GS or older models and are now ready to upgrade. Add to that a growing smartphone market, more carriers worldwide and the formula's set for many millions sold.
P.S. My order for a white 32GB 4S was just placed. Should receive it some time after oct. 14, not too long I hope.
@MG537

Hope you like it. I sense LTE will arrive in iPhone 5 which should still be at most one year away. I would hate to lock myself into a 2- or 3- year contract on any non-LTE phones.
@MG537
You must be bowing to the Apple God. LOL!
@ryork272 Why, because he bought something you don't like? That's the only way you can explain people making choices different from yours?
@MG537
4G should not be a deal breaker. I have a Samsung Epic 4 G on Sprint. I also live in a prime 4 G area. I was happy at first until I saw how my battery started dying. I turned the 4G feature off. When I need speed for data I simply use the phone's WiFi connections. Apple has it right.
@vince7@...
+1
Just remember how long it took before 3G was released (with a lot of hype), until it actually became usable... Sure, some things indicate that the 4G transition will be smoother, but still
I love Apple products and I think that the new voice feature is really cool. I kept reading all the propaganda about what is the top 10 items users want to see on the new iPhone and the funny thing was, 4G was not one of them. Well to this I say Bull. If and I mean only if you live in area that has 4G like I do. Then the thought of going backwards for a couple cool features, well then Apple and all the people that say it is worth it is kidding themselves. I am lucky enough to work in the industry of technology and specific to phones and the email clients on the phones. I watch the trends closely because of what my users ask for. This being said, did you notice that BlackBerry slipped market share by several points and Apple stayed firm. Well if BB slipped and Apple stayed firm, it doesn't isn't rocket science to figure out Android with it's 4G picked up the loss from BB. So I think the market was really hoping for 4G. Excuses or logical reasons for not having it won't create more market share.
@bethereornot The problem is that 4G comes at a severe cost. You drop half your battery life because the 4G chipsets are not energy-efficient yet. Add the fact that Apple will never give the iPhone a replaceable battery, and you have a heavy phone user's nightmare. On top of that, 4G coverage is horrible. Anyone who travels outside of a few major metro areas will be on 3G, regarless of the 4G label on the phone.

This is why many of us were relieved to see that the 4S was not 4G. I'd much rather have 10 hours of phone use at 3G than 5 hours at 4G. I don't know any grownup who has a 5 hour work day and the vast majority of us don't want to stop to charge our phones in the middle of the day. When 4G chips mature and the coverage expands, I'd love to have the extra speed, but it's not there yet. Apple knew this.
@BillDem where I live 4G coverage from Verizon is great in a very large area. I get a solid 50+ mile radius of 4G and that covers most of my needs. Verizon is expanding it 4G aggressivly. Look at their map now, it is pretty good. I have a Bionic. I could not fathom going back "down" to 3G. No way no how. It is easy to get an extra battery and be set for the day. I did and that is no problem. I knew the new iPhone would not be 4G so I went for the Bionic. Plus the iPhone screen is too small now. Once you have the bigger screen the iPhone seems tiny. The new iPhone is a nice phone and will sell well, but it will not get people that already have 4G or wanted 4G.
@BillDem You do realize that we shut the 4G off when we don't need it right? and for most of the power users I run with. We use wireless headset and have a charge cable plugged into our laptop. I do agree it a battery hog, but man when you use it for internet connection, it really rocks over anything else. I do agree with you and would not say anything bad about the Apple. I live where it is 4G and I also like being able to do more with my phone like the wifi. So I hope you enjoy the new iPhone and I will enjoy my 4G android. When, not if Apple comes with 4G, I will get one, but until then. No toy can make for the loss of 4G for me.
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Missing the point
rhonin 7th Oct
@BillDem
By signing up for the 4S, you are in almost all cases foregoing 4G for the NEXT 2 YEARS.

Not the next 12 months.
@BillDem This 5 hr BS is getting really old. I have a Droid Bionic and leave it in 4G LTE mode all the time. I have corporate email enabled and use the phone for web browsing, a few games and watching an occaisional show on HBO Go/Max Go.

I get 11 MBits/sec download speed and find the battery lasts from 7 AM to 10 PM with power left at the end of the day.

Where I think Apple missed the point is how much smoother and more responsive things like voice command (Google's app which takes the place of SIRI) are with 4G vs 3G speeds.

As to the topic of this blog, my guess is that Apple will do fine with the 4S as most Apple buyers don't seem to look at anything else and therefore don't know what they aren't getting.
@BillDem
Why not have the option? DUH!! Its not like you HAVE to use 4G just because the phone supports it. You Apple lemmings need to see things with your eyes wide open.
@BillDem I agree. I have had an EVO 4G since intro last year and I am in a 4G area but I rarely use 4G. It works great when traveling for the Hotspot service (if you have 4G coverage) but on a daily basis, it is overkill for a phone - and a huge drain on the battery. For the next year to 24 months, I think LTE is best served via a hotspot device but not a phone (or not a phone that is not plugged into a wall).
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not quite
wolf2012 7th Oct
@BillDem You forget a simple but important fact. Namely that 70-80% of iphone sales are overseas. And the networks in Europe and many parts of Asia are far ahead in terms of speed and coverage! But of course, speaking about the USA, you are absolutely right. Only that 70-80% of the market is more important in Apple's planning than 20-30%. Simple as that!
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@BillDem: We've seen it before with other things such as pre-emptive multitasking, protected memory, etc. When Apple delivers a 4G capable phone it'll be the best thing since sliced bread.
@bethereornot 4G is not ready for prime time. infrastructure wise, spotty, battery life wise, may as well have your device wired up to charge 2x a day. Don't waste your time.
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and your point?
rhonin 8th Oct
@m3kw9
I already have to recharge my i4 mid day.
It's not the phone, it's the amount of use it gets.
@bethereornot It's not rocket science, it's pure speculation on your part. BTW, what makes you think you know better what people want that those that answer the survey where they were asked what they want?
You can never defeat free choice in a market economy, I had an iphone 3GS wanted something with a bigger screen got my self a Galaxy S2, some will want a smaller phone some will want it with a physical keyboard, some will want a cheap low spec phone some will want a high end device at the end of the day the iphone one size fits all strategy will not be able to defeat choice.
@saf312
I agree. And the 4G argument is just plain stupid. 4G can be turned off. Use it when you need it.

I have a Droid X and like it but the 3G hotspot is frustratingly slow (Verizon). When I upgrade I want 4G. I was disappointed with the new iPhone. I would have considered it.
@saf312 Choice is great and we all have it. Apple is not trying to satisfy everyone's wants and desires or to be a one size fits all device. They are producing what they believe will satisfy the most people in one device.

@ryork272 The argument that the 4S is a failure due to no 4G is plain stupid. Yes, you can turn off 4G service but that is not the point. The point is that they didn't see the market demand for 4G making it worth including it with the shortcomings. We all know that you can turn 4G off but the average consumer would not do so and the 4S would have gotten bashed for poor battery life just like the other 4G offerings.
As a Verizon iPad & BB user eligible for an upgrade since Jan '11, I was hoping to upgrade to iPhone 5 in June. I was disappointed to wait for an Oct announcement, and even more disappointed to find out Apple took 16 months to deliver an incremental upgrade, not a new model.

ICloud looks like the most compelling feature, but locking in a two-year contract without a 4g phone doesn't feel like a good tradeoff for my needs, especially with 4g widely available here in the bay area.

Perhaps a silver lining in waiting for the 4s is that the rumored Nexus Prime is announcing next week so I have another option. If the specs are as good as the rumors, I'd give it strong consideration.
@Agarya I waited until Verizon go the iPhone before I upgraded my 3G to the 4 though I ended up staying with AT&T. At the time I expected something in June but also expected them to follow the previous pattern of an S version so that times my upgrade at 18 months to the potential 5 release.
You could try an HTC Titan Windows Phone. Best of both worlds - clean, tinker free operating system with your choice of hardware.
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Luv to but....
rhonin 9th Oct
@joeyw72
When is it launching?
You forgot to mention that the real market that cares about 4G is miniscule. Perhaps a few of your readers on ZDNET, but not the general public.

The 4S is far from an incremental upgrade. While the case may look the same, every aspect of the phone was redesigned to provide a major performance increase. This combined with iOS 5 will satisfy the vast majority of users.

If you are desperate for 4G, and do not want to wait for the efficiency of the combined chip, you might want to wait for the new WP 7 phones which should be out soon. It seems to be competitive in functionality, but does not have integrated Google spyware as do all Android phones.
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@jorjitop It it just in it infancy & is about to explode. 4G phones are flying off shelves and on backorder in many cases. Once you experience the speed of 4G, nothing else will do. Video, web pages, photo uploads/downloads, cloud streaming.... it is all instant! I could never go backwards to 3G. The ne 4S will sell well, but it will miss out on a significant market that is about to explode. Locking in to 3g for 2 years, not for me!
@tgschmidt

All that great speed is good until one finds out the cost of using that mobile data.

I thought telcos told us unlimited isn't really unlimited?
@tgschmidt I have a 4G hotspot and hate it when it can only get 3G but that is way to often for me to want 4G on my phone considering the drawbacks.
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Miss
rhonin 7th Oct
@jorjitop
Hope you're happy with your 4S with no 4G for the next 2 years - the length of a standard contract.

If you believe most don't care, look at the impact of the Bionic adds, the EVO adds and adds for TMobile.



Btw, after seeing my wife's Samsung with 4G and what the battery life is like, 4G is a requirement.
@rhonin I don't know about all the carriers but I love how 2 is used all the time when I know at least on AT&T you are eligible for an upgrade at 18 months. Sure, that's a long time but it's not two years.
4s won't be any kind of sales success, 5 will be out next year. Without the window dressing of a new exterior most people will just wait.
@bergrrt@... also 6 will be out a year after that. You better wait for 6. Plus 7 will be out a year after that, you bette wait for 7 Plus 8 will be out a year after that, you bette wait for 8 Plus 7 will be out a year after that, you bette wait for 7 Plus 8 will be out a year after that, you bette wait for 8 Plus 9 will be out a year after that, you bette wait for 9 Plus 10 will be out a year after that, you bette wait for 10 Plus 11 will be out a year after that, you bette wait for 11 Plus 12 will be out a year after that, you bette wait for 12 Plus 13 will be out a year after that, you bette wait for 13 Plus 14 will be out a year after that, you bette wait for 14
@m3kw9

While upgrading the cellphone is like an endless walk on the treadmill, the one time that one should be investing is when advances arrive that greatly expand the use case of a smartphone. The jump from 2G to 3G (not referring to iPhone models here) counts. The feature that replaces a point-and-shoot camera counts. The availability of a application ecosystem counts. The jump from 3G to LTE counts.

I am not convinced that any new features in iPhone 4GS or even iPhone 4G would be in that category. After all, iOS 5 will be compatible with the 3GS too.

Once every several releases, there will eventually be a compelling case to upgrade.
@m3kw9 I'm waiting for the iPhone NTSF.SD.SUV
@bergrrt@... ATT just recorded record sales of the iPhone 4S, better than any phone they've ever sold.

Only three barriers to the iPhone selling more units:
1. manufacturing capacity
2. Technical hurdles related to the different flavors of GSM/CDMA.
3. lack of carriers

Now Apple has one device they can sell to all countries and telcos and by keeping the design similar to the iphone4, they will maximize production very quickly.

The iPhone 4 and 3GS are the no. 1 and 2 selling smartphones. People don't care about a new form factor or LTE.
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So near sighted
rhonin 8th Oct
@Synthmeister
Take a look at the number of who is buying...
The majority are current iPhone users, the majority being 3GS...
After investing in an infrastructure it is hard to change.

Like many here have mentioned, you really don't know what you are missing till you try it.
@rhonin So you seem to think it's a problem that iPhone customers are so happy with their devices that go ahead and get a new model? Every manufacturer out there is looking for this kind of customer retention. I do agree though that once you invest in one ecosystem it's harder to move to another. I don't have a lot of money invested in the iOS ecosystem but spent the time to get the apps install that make it all work great for me. It would make any other ecosystem have to offer me something very compelling to switch and at least with my last upgrade back in January they didn't.
@bergrrt@... Guess you didn't hear that the 4S set yet another sales record on preorder day. Also find it funny that here we have yet another comment about most people waiting a new exterior like it's a fashion statement. Actual iPhone buyers don't make this claim only haters that always claim the only reason people buy iPhones is as a fashion accessory.
Apple also only make one form factor for worldwide usage of the iPhone and most of the world doesn't have 4G/LTE.

It's not in Europe and not coming until 2013 in The UK (trials next year) for example.
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4G is still a concept
paferg 7th Oct
While Verizon and others have been aggressively pushing 4G as a selling point for some time, the reality is that it's more a concept than an actual feature at this point. My 4G-capable Evo (not exactly a new phone, I realize) barely makes it through the day as it is, and if I turned on 4G regularly, it would be dead by the afternoon. For this I would get a spotty 4G signal (in Minneapolis) that is sometimes faster than 3G, but far from reliable. As most people know, even though the tech-obsessed may hate it, Apple adds features when they think they are fully baked, not just because they are technically possible. That's why you won't find many of Android's marginally useful and poorly-implemented features on iOS, even though it would be nice if iOS could do those things. 4G networks are just not there yet, and Apple knows that adding bulk and weight to their phone to appease a small segment of the market isn't a worthwhile tradeoff. The carriers want you to believe that 4G is a necessity, so they can recoup their infrastructure expenditures, but that doesn't mean it's worth using at this point. If you must have a giant phone that does 4G and has a raging 3 hours of battery life, you have plenty of options.
Verizon is so desperate to push 4G is because you can't use phone and data at the same time on their 3G network.
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and?
rhonin 7th Oct
@paferg
The average battery life of my i4 is about 6 hours on a good day.
I use it that much.
4G is awesome and the Pie in the sky Phone(iPhone) is crap coz it has no 4G Apple why do you hold off on putting latest tech into your devices just so that you can add them later and say your innovative?.
Apple you are **** and you are profiteering i.e.: making money from a bad situation for your customers and that???s good for you but what about making it good for your customers. You know iPhone could and will run back to back 2G, 3G; 4G so why not just put it in already. PROFITEERING THAT???S WHY. YOU KNOW LIKE THAT NICE JEW IN Schindlers list movie.

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