Apple's Worldwide Developers Conference (WWDC) will be all about the software---specifically the future of OS X and iOS 5---and most folks focused on how the iPhone 5 will be pushed off until the fall.
Now the storyline here is that the iPhone 5 will be a major upgrade with a new version of iOS and cloud services weaved into the device.That storyline is fine as far as it goes, but the other loose end here is support for Verizon's Long-Term Evolution network. The next iPhone pretty much has to support 4G or it will have to sit out a year of speedy mobile broadband.
The LTE hook has largely been overlooked amid all the Apple talk this week. Sure, Apple is refining iOS, but it also has to get the battery life for LTE. For that matter, Apple needs a chipset compatible with both AT&T and Verizon and ready to roll with LTE. After all, AT&T will flip on its LTE network during the iPhone 5 lifecycle.
In other words, the iPhone 5 likely launch in September or October is about the hardware and network as much as it is the software. These alleged cloud services built into the iOS will work a lot better over a 4G network.
On Apple's product roadmap, a slightly later iPhone 5 launch also makes sense. An LTE iPhone gives Apple the ability to divide the product line between high end and low end devices. Apple can command a higher price for a 4G iPhone and cut the prices for its 3G models. Those 3G models go to emerging markets and global market share gains.
Jefferies analyst Peter Misek wrote in a research note:
In addition to the later OS, we believe Apple wants its next phone to be LTE capable and have a chipset compatible with both AT&T and Verizon (with the LTE capability on AT&T turned on once their network is ready). Also, we believe the iPhone 5 could contain new chips from Qualcomm incorporating GPS and WiFi on the same chip (and in the future the socket could support Bluetooth and NFC).
Misek cut his estimates for Apple based on the later launch of the iPhone 5, but remains upbeat about the future. Strategically speaking, a fall launch for iPhone 5 allows the hardware (LTE support, better battery life) line up nicely with new software (iOS 5).