Slash LaneThe 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.
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.
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176 Comments
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.
I can pretty much agree with this. What I've read says the same thing about 3G use, both here and abroad, and I've been expressing that.
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.
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.