Report downplays concerns over lack of 3G iPhone
The absence of a 3G iPhone from Apple's product portfolio has been a hot topic amongst investors, but any concerns in that department are currently a bit overblown, says a new report from one Wall Street analyst.
In a brief research note to client investors on Monday, American Technology Research analyst Shaw Wu said he's frequently asked about the lack of a 3G iPhone and what it means for Apple. He explained, however, that he sees these ongoing concerns as "overdone and misplaced" at present, and outlined four key data points in defense of his beliefs.
First and foremost, Wu said, 3G (WCDMA/UMTS/HSPA) is still a relatively niche technology and not widely deployed in the US despite all the publicity and hype. "Even in Europe and Japan, where the technology is more available, network coverage is somewhat spotty," he wrote. "While there are a decent number of 3G phones (~10-15 percent) being shipped, the untold reality is they utilize much more prevalent 2/2.5G wireless infrastructure most of the time.
In addition, 3G is not as field tested as 2/2.5G, the analyst said, also pointing out that RIMM -- the leading smart phone vendor -- has experienced a lot of success with 2/2.5G Blackberries.
Costs of 3G iPhone parts would also be somewhat steep at present, Wu added. "We estimate that 3G components including the baseband, RF transceiver, and power amplifier add about $15 in incremental cost versus the 2.5G EDGE chip set iPhone uses today," he told clients. "We believe these price points need to come down a bit before 3G can be widely deployed."
Another reason Apple has been slow to adopt 3G has a lot to do with the technology's reputation for being a bit of a battery hog. "Our sources indicate that 3G requires about 35-40 percent more power to run [than 2/2.5G components]," the analyst wrote in his report. "This is a key issue as Apple seeks to deliver as much battery life as possible on its highly functional iPhone."
From his supply chain checks, Wu believes a 3G iPhone will most likely ship sometime near or after the middle of 2008. "
We believe by then, the network coverage, price points, and battery life issues will be better addressed," he wrote. "Should Apple decide to ship earlier, it will likely be positioned as a high-end smart phone and allow Apple to re-position the current 2.5G iPhone as a more mainstream product."
While Wu and his team remain concerned with potential softness in US consumer spending, he said it appears that Apple "is once again positioned to buck the trend." He recommends that clients be buyers of the company's shares on pull-backs and said he see upside to his $210 price target in 6-12 months.
In a brief research note to client investors on Monday, American Technology Research analyst Shaw Wu said he's frequently asked about the lack of a 3G iPhone and what it means for Apple. He explained, however, that he sees these ongoing concerns as "overdone and misplaced" at present, and outlined four key data points in defense of his beliefs.
First and foremost, Wu said, 3G (WCDMA/UMTS/HSPA) is still a relatively niche technology and not widely deployed in the US despite all the publicity and hype. "Even in Europe and Japan, where the technology is more available, network coverage is somewhat spotty," he wrote. "While there are a decent number of 3G phones (~10-15 percent) being shipped, the untold reality is they utilize much more prevalent 2/2.5G wireless infrastructure most of the time.
In addition, 3G is not as field tested as 2/2.5G, the analyst said, also pointing out that RIMM -- the leading smart phone vendor -- has experienced a lot of success with 2/2.5G Blackberries.
Costs of 3G iPhone parts would also be somewhat steep at present, Wu added. "We estimate that 3G components including the baseband, RF transceiver, and power amplifier add about $15 in incremental cost versus the 2.5G EDGE chip set iPhone uses today," he told clients. "We believe these price points need to come down a bit before 3G can be widely deployed."
Another reason Apple has been slow to adopt 3G has a lot to do with the technology's reputation for being a bit of a battery hog. "Our sources indicate that 3G requires about 35-40 percent more power to run [than 2/2.5G components]," the analyst wrote in his report. "This is a key issue as Apple seeks to deliver as much battery life as possible on its highly functional iPhone."
From his supply chain checks, Wu believes a 3G iPhone will most likely ship sometime near or after the middle of 2008. "
We believe by then, the network coverage, price points, and battery life issues will be better addressed," he wrote. "Should Apple decide to ship earlier, it will likely be positioned as a high-end smart phone and allow Apple to re-position the current 2.5G iPhone as a more mainstream product."
While Wu and his team remain concerned with potential softness in US consumer spending, he said it appears that Apple "is once again positioned to buck the trend." He recommends that clients be buyers of the company's shares on pull-backs and said he see upside to his $210 price target in 6-12 months.
Comments
Granted the price point could be a little lower, but then we consumers always want things to be cheaper.
As far as battery use goes. I've read reports on both sides of the issue. I suppose it comes down to which you want to believe.
I thought the current iPhone was already positioned as a mainstream product? It hasn't been marketed as a high-end smart phone.
Granted the price point could be a little lower, but then we consumers always want things to be cheaper.
Most people would think that a $399 phone is a high end product these days. Mainstream would be lower, maybe much lower. It would be close to the average phone selling price.
An iPhone with 3G could be the first phone where people on a broad scale would actually start using the 3G possibilities. Most people I know with 3G phones still just call and send sms. No video call, no surf, no modem etc. It's just the phone. And they all complain about the battery life.. Some also complain about heat and "sensing the radiation" like "the feel of having your ear against an old TV screen" on 3G phones.. I don't know about that, perhaps 3G radiation is worse than 2G, no clue.. But still, 2G is where world compatibility lies today. All 3G phones must be 2G compatible anyway in order to be of any real world use since 3G isn't covered yet.
I have 3G for my Treo 700p over Sprint, and I use it.
But how often do I use it?
Not that much. Even for the iPhone, people I know say that they don't use the web feature very often.
Like I've said time and time again, in NY state, the only region that has 3G technology is NYC. Ok, let that soak in for a second before I continue..... those New Yorkers that are complaining about lack of 3G support live in the largest city on the face of the planet. What happens to exist more per capita in said largest city in the world???? That's right, FREE WIFI locations.
EDGE is just fine for surfing or pulling email. If you need to do some serious surfing, go find a WIFI location.
I live just fine with my iPhone in a rural setting with the EDGE network and if I need to surf hard, I pull my MacBook out and use WIFI. The iPhone is NOT a laptop replacement.
What has always bothered me is the people screaming out there that the iPhone is worthless without 3G most likely don't even own an iPhone, let alone a 3G capable cell or they don't even live in one of the scant areas in the US that has 3G technology in place.
Like I've said time and time again, in NY state, the only region that has 3G technology is NYC. Ok, let that soak in for a second before I continue..... those New Yorkers that are complaining about lack of 3G support live in the largest city on the face of the planet. What happens to exist more per capita in said largest city in the world???? That's right, FREE WIFI locations.
EDGE is just fine for surfing or pulling email. If you need to do some serious surfing, go find a WIFI location.
I live just fine with my iPhone in a rural setting with the EDGE network and if I need to surf hard, I pull my MacBook out and use WIFI. The iPhone is NOT a laptop replacement.
That's not true for 3G coverage. Go to Sprint's site,or that of Version, for example, and you will see far more 3G coverage than you're stating. I've used it otside of NYC many times.
And if you look at largest cities, you have to look at largest CORE cities. That means the city proper, not much larger metropolitan areas, which may contain additional towns or even cities. There, NYC ranks #11.
http://www.citymayors.com/features/largest_cities1.html
What has always bothered me is the people screaming out there that the iPhone is worthless without 3G most likely don't even own an iPhone, let alone a 3G capable cell or they don't even live in one of the scant areas in the US that has 3G technology in place.
Of they live in Europe where 3G access is widespread and 3G reliant services like MMS and online video are already popular.
It's everywhere in Europe. And Japan has 4G pretty much everywhere.
The US is pretty poor with mobile technology, being stuck in the dark ages.
But how often do I use it? Not that much. Even for the iPhone, people I know say that they don't use the web feature very often.
Its probably a generational thing but I use the web on my iPhone pretty often. Not really for long periods of time like I would on a computer. But I often look up information or read the NY Times while I'm waiting.
Market Share reports that the iPhone tops all mobile web browsing in North America. Which means most iPhone users are using the web frequently.
What happens to exist more per capita in said largest city in the world???? That's right, FREE WIFI locations.
In my experience, mostly in SoCal and Denver, free wireless is pretty hard to find. Even inside businesses and coffee shops, it is all locked down. Besides I don't want to check my email from a free wireless because I can't trust providing my password.
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Its probably a generational thing but I use the web on my iPhone pretty often. Not really for long periods of time like I would on a computer. But I often look up information or read the NY Times while I'm waiting.
I'm not so sure that's true. Certainly not for me. I've always been a tech head. It's just that it isn't as useful as some seem to think. I almost always know where a place is that I'm going to, and there are other sources for this info. Using the phone almost always means that you need info at the last minute. I'd rather take the time in advance. It's called planning. That isn't all that age related, just how organized you are.
I do use it to check stock prices, weather, sports scores, and some news. I do have several programs on my phone for directions, maps etc, but they are only needed occasionally.
Market Share reports that the iPhone tops all mobile web browsing in North America. Which means most iPhone users are using the web frequently.
It doesn't mean that it's being done frequently, just that it's more frequent than with other phones.
In my experience, mostly in SoCal and Denver, free wireless is pretty hard to find. Even inside businesses and coffee shops, it is all locked down. Besides I don't want to check my email from a free wireless because I can't trust providing my password.
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Even here in NYC, the coverage is not that great. What I find, walking around with a WiFi network finder, is that they are clustered. Major areas without any, then all of a sudden, a small area will be all covered. But, mostly not.
It's just that it isn't as useful as some seem to think.
Which is the whole point. A fully rendered web page is far more useful than only the text.
Using the phone almost always means that you need info at the last minute. I'd rather take the time in advance. It's called planning. That isn't all that age related, just how organized you are.
I'm not sure exactly what function you are talking about. I agree the phone should not substitute good planning. But being able to access the fully rendered web at any time is convenient.
If you have a job where you travel a lot having maps on your phone is a great help. This past week I was just on a shoot in San Francisco. I've been there a few times and have a general feel for the city, but we still needed maps to help us get around. I was looking at Google Maps on my iPhone but I had to find where we were and could not always tell the number of miles to where we wanted to go.
Our sound recordist had a Verizon phone with triangulation software. He could see where we were real time and could see the number of miles to where we wanted to go. But his phone could not show a fully rendered map the way the iPhone could.
I travel a lot for work and that definitely showed me the advantage of GPS. I look forward to when the Google triangulation software comes to the iPhone.
It doesn't mean that it's being done frequently, just that it's more frequent than with other phones.
6 of 1, half dozen of the other. Semantics.
Some numbers from Swiss telecom company Swisscom about coverage in Switzerland and elsewhere:
Switzerland
99.8 % EDGE/GPRS
90 % UMTS
45 % HSPA (90% until mid 2008)
PWLAN > 1000 Hotspots
And that's in a country that has a big percentage of area that is simply rocks, mountains and snow.
If you look at EDGE / UMTS availability here: http://www.swisscom-mobile.ch/scm/kd...s_edge-de.aspx it looks even worse.
Edge may be present in many countries, but so is UMTS. And HSPA is spreading quickly. I have a good idea, why Apple hasn't introduced the first generation iPhone here yet.
Even here in NYC, the coverage is not that great. What I find, walking around with a WiFi network finder, is that they are clustered. Major areas without any, then all of a sudden, a small area will be all covered. But, mostly not.
Many social areas around Manhattan do have free WiFi. Places where people are encouraged to stay and relax. City Parks, City Libraries, Whole Foods cafe, places like that.
I have a good idea, why Apple hasn't introduced the first generation iPhone here yet.
There are a lot of places where Apple has not introduced the iPhone. Switzerland is more than likely on this list because its a small market.
Which is the whole point. A fully rendered web page is far more useful than only the text.
That's the difference between information and glitz. If you get the information, you don't need the glitz. That doesn't meant you might not want it, but that's something else.
I'm not sure exactly what function you are talking about. I agree the phone should not substitute good planning. But being able to access the fully rendered web at any time is convenient.
Convenient, yes, at times. But how often is that? I have several good mapping programs on my phone Tube2 is one of them, and it does a fine job of showing me the subway, LIRR, Metro-North, Jersey Transit. With all of those, I can input my starting point, and it will show the trains needed, even showing a graphic of the train moving down the track with the stations highlighted, as well as the stations needed for transfers, and the new trains. It also has a map of New York sector by sector, with clickable locations. They update the maps on a regular basis. I also get Google maps on my Treo 700p, and it looks just dandy, about the same as on the iPhone, except that the screen is 320 x 320.
If you have a job where you travel a lot having maps on your phone is a great help. This past week I was just on a shoot in San Francisco. I've been there a few times and have a general feel for the city, but we still needed maps to help us get around. I was looking at Google Maps on my iPhone but I had to find where we were and could not always tell the number of miles to where we wanted to go.
There you go. Not always as useful as one might think on the iPhone. You're not the only one.
Our sound recordist had a Verizon phone with triangulation software. He could see where we were real time and could see the number of miles to where we wanted to go. But his phone could not show a fully rendered map the way the iPhone could.
I travel a lot for work and that definitely showed me the advantage of GPS. I look forward to when the Google triangulation software comes to the iPhone.
6 of 1, half dozen of the other. Semantics.
There are several good GPS units for the Palms, but, even though I've always thought of getting one, just for fun, I never bothered.
Remember that I'm not saying that these features are NEVER useful, just that they are not usually needed.
Someone is clearly trying to cover up the fact that EDGE is not cutting edge, pun very much intended.
Some numbers from Swiss telecom company Swisscom about coverage in Switzerland and elsewhere:
Switzerland
99.8 % EDGE/GPRS
90 % UMTS
45 % HSPA (90% until mid 2008)
PWLAN > 1000 Hotspots
And that's in a country that has a big percentage of area that is simply rocks, mountains and snow.
If you look at EDGE / UMTS availability here: http://www.swisscom-mobile.ch/scm/kd...s_edge-de.aspx it looks even worse.
Edge may be present in many countries, but so is UMTS. And HSPA is spreading quickly. I have a good idea, why Apple hasn't introduced the first generation iPhone here yet.
Something that people don't seem to realize is that just because a service is available doesn't mean that everyone will avail themselves of it. Coverage doesn't mean usage.
Market Share reports that the iPhone tops all mobile web browsing in North America. Which means most iPhone users are using the web frequently.
That's not that surprising though is it?
Browsing on other phones available in the USA is a pretty terrible experience. It's like turning up at a race on a carbon fibre Bianchi to find everyone else is on Schwinn Orange Crates.
That's the difference between information and glitz. If you get the information, you don't need the glitz. That doesn't meant you might not want it, but that's something else.
It can be glitz. On many websites the graphics help with the presentation of information. I would say flash is guilty of most often being more glitz than substance.
Convenient, yes, at times. But how often is that?
I'm saying being able to surf the general internet is convenient, not only mapping.
There you go. Not always as useful as one might think on the iPhone. You're not the only one.
The presentation of the map on the iPhone is great. Not being able to find where you are is a real limitation. But we already know how they are going to remedy this.
Remember that I'm not saying that these features are NEVER useful, just that they are not usually needed.
Yeah, we don't need a map to get around NY.
Browsing on other phones available in the USA is a pretty terrible experience. It's like turning up at a race on a carbon fibre Bianchi to find everyone else is on Schwinn Orange Crates.
The software usability impacted web use more than 3G has. There was the comparison showing the LG phone with 3G rendering web pages not much faster than the iPhone. It'll be interesting to see the numbers that come out of Europe.