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  • The iPhone Report: No, It’s Not the Map!

    December 15th, 2009

    So let’s understand a few things here. AT&T is the wireless company you love to hate, except for all the others of course. I have been customers of several of these carriers, and I never felt the love. I’m sure most of you tolerate your provider because their network is at least functional in your city, or they happen to have the phone of your dreams.

    Regardless, there are a growing number of reports that Apple is poised to add Verizon Wireless to its growing list of carriers just as soon as their contract with AT&T is up. But even before we go there, just when is that going to happen? Some say next, year, others suggest 2011 or 2012. It’s not as if Apple or AT&T will give up this information voluntarily, unless there’s some strategic advantage, and I’m a little skeptical how that could possibly happen.

    Aside from a few rumors that Apple might avoid Verizon and choose the number four provider in the U.S. instead, T-Mobile, because of its network compatibility, that doesn’t seem to be a viable possibility. So all eyes remain on Verizon.

    So what about the Verizon factor?

    Consider those ads Apple is running now to counter the aggressive “it’s the map” campaign from Verizon that touts superior 3G coverage around the country. Before I get into what this actually means for iPhone users, it appears to be correct that Verizon reaches a larger number of people with their 3G service, largely because they don’t just focus on the larger cities, which is where AT&T concentrates a hefty portion of its high-speed service. So the Verizon map looks far better than it might be when you count the actual numbers.

    But all 3G networks aren’t the same. As Apple cleverly indicates in their new spots, you can hold a phone conversation on your iPhone and run another app, such as Mail or Safari, at the same time on AT&T’s 3G network. Within a mere 30 seconds, you can see the possibilities, which just don’t exist on Verizon’s network, since you cannot multitask a phone call. Yes, Apple gets dinged for the lack of multitasking on the iPhone, but it’s there when it counts.

    So, yes, maybe you’d get better 3G or overall network coverage via Verizon. It may also be true that there will be fewer dropped calls and superior customer service. But at the end of the day, what counts is how your iPhone functions in your city, and whether you are willing to accept the single function telephone limitation as a viable tradeoff. You do see that limitation now with AT&T’s slower EDGE network, just as you did with the original iPhone.

    Remember, too, that Verizon’s CDMA network is a dead-end. As with AT&T, they are moving towards a newer networking technology, LTE (short for Long Term Evolution), which will be deployed over the next few years. When that happens, Apple will be able to build a single product that would provide full functionality on either system and those of other carriers in the U.S. that will adopt the new network.

    Right now, Apple would have to build a separate CDMA version, or perhaps use one of those new Qualcomm chips that supports both CDMA and GSM. That would increase the production cost of the handset to an unknown degree, though perhaps Apple would be able to compensate through higher build levels. Moreover, I don’t pretend to understand the scope of the reasons why you can’t make a phone call and check your email at the same time on Verizon’s 3G system. Maybe there’s a way to work around that constraint, or perhaps customers are simply willing to put up with a few limits in exchange for what they perceive to be a superior system.

    At the end of the day, being able to buy the iPhone from multiple carriers in a given country has been shown to be a good thing. It creates more competition, better pricing and helps force wireless companies to improve their networks to reduce customer churn.

    By the way, I’m also somewhat skeptical about the prospects for this alleged new Google-designed smartphone that is apparently making the rounds among some of their favored employees. Yes, it may be terrific laboratory test bed, with lots of cool new features undergoing trial.

    At the end of the day, however, Google is going to have to decide how it wants to play the smartphone game. If they sell their own unlocked phones, they will confront the very same dilemma faced by Nokia in this country. Without subsidies from the wireless carriers, these devices are very expensive and will appeal only to customers who can afford the price of admission, which would probably be upwards of $600 per copy.

    Moreover, if Google wants lots of handset makers to adopt Android, their own competing product isn’t going to sit very well with those other companies. Imagine how Microsoft’s PlaysForSure partners felt when the Zune came out.

    Indeed, this new Google device may be nothing more than a ploy to take attention away from the iPhone during the ultra-critical holiday season. It may be nothing more than smoke and mirrors, or at best a prototype that may not be released into the real world anytime soon.



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