Tuesday, January 11, 2011

Why there's no 4G in Verizon's iPhone 4

Apple COO Tim Cook, left, greets Verizon Wireless CEO Dan Mead during the iPhone announcement Tuesday in New York.
Apple COO Tim Cook, left, greets Verizon Wireless CEO Dan Mead during the iPhone announcement Tuesday in New York.

Just a few days after Verizon announced a slew of new 4G phones and built hype for its recently launched 4G network, executives from the largest U.S. cell carrier announced that it would finally get the iPhone.

But it's a 3G version.

And because it runs only on Verizon Wireless' older CDMA network, not the fourth-generation technology, users won't be able to make phone calls and connect to the internet at the same time.

The iPhone 4 will be available in stores February 10, with pre-orders for Verizon customers beginning a week before, the two companies announced in New York on Tuesday.

"The number one question I've gotten is: When will the iPhone work on Verizon?" Apple COO Tim Cook said.

Perhaps the new question he'll get will involve an iPhone 4G. Cook got one of those immediately after the announcement, during a question-and-answer session with reporters.

"Verizon customers told us they want the iPhone now," Cook said, explaining why the carrier will begin selling a 3G version first. The first batch of chips designed for Verizon's 4G network would require Apple to rework the phone's casing and "force design changes we wouldn't make," he said.

Last week at the Consumer Electronics Show, Verizon Wireless said it will have 10 devices that take advantage of its faster 4G network, including four phones, by midyear.

Motorola's Xoom tablet, which is coming out in the next few months, will have only a 3G chip to start, but owners will be able to upgrade to 4G at Verizon stores later in the year.

Verizon and Apple gave no indication that the Verizon iPhone 4 can be upgraded. However, images on tech blogs Tuesday suggest that some changes appear to have been made to the phone's casing, including an extra ridge in the top corner.

Apple traditionally releases new iPhones during the summer. When asked when an upgraded version of the phone for Verizon would debut, Cook declined to comment.

By launching an iPhone with 3G first, Verizon may be playing it safe in anticipation of an upgraded phone later, one analyst said.

"Verizon has a very large, very deep CDMA network, whereas their 4G LTE network is still relatively new, not completely pervasive and somewhat unproven," said Dan Hays, a consultant for PRTM who works with major U.S. carriers but declined to say which ones because of non-disclosure agreements. "I think that this opens the door for Apple to have the iPhone 5 be a 4G device."

Apple's partnership with Verizon involves a "multiyear, non-exclusive deal," Cook said Tuesday. "We've been looking forward to today for a long time."

Verizon COO Lowell McAdam said talks with Apple began in 2008. The pair has been testing the phone for a year, McAdam said.

"We have a tremendous 3G network," Verizon Wireless CEO Dan Mead said. He said Verizon hasn't identified a problem with the antenna, which plagued the AT&T model, on its version of the iPhone.

Like on AT&T, the Verizon iPhone will cost $200 for the 16-gigabyte version and $300 for 32 gigabytes.

Verizon did not announce service pricing or say whether customers would be able to purchase an unlimited data plan.

AT&T, which is now no longer the exclusive U.S. carrier for the iPhone, released a statement Tuesday saying Verizon's network may produce slower download speeds and poorer battery life. The statement also pointed out that you can't talk and Web-surf on the Verizon phone at the same time.

"The fact that you can't do voice and data simultaneously on CDMA gives an opening to AT&T for advertising," analyst Hays said. In fact, AT&T and Apple have run commercials touting the ability to talk and access data at the same time.

"I think that Apple and Verizon's choice of using the CDMA network for the initial launch of the Verizon iPhone was actually very much anticipated," Hays said. The first iPhone, released in 2007, could access only AT&T's 2G Edge network.

Because the hardware is CDMA-only, the Verizon iPhone may be impractical for international travelers. AT&T runs on a GSM network, which is common around the world. By contrast, CDMA is not widespread overseas.

However, the 2G network technology Verizon uses is also used in parts of Asia. Apple could sell these models to carriers there, whereas a dual-band handset might not as easily recoup the costs to make it, said Tina Teng, an iSuppli wireless-communications analyst.

Verizon Wireless sells 10 "global-ready" smartphones that pack GSM chips in addition to Verizon's CDMA. Verizon and Apple did not say whether the new iPhone 4 would have a GSM chip, but it's unlikely. Verizon says the iPhone 4 can be used to access data in more than 20 countries, though plans aren't cheap.

"I think that if there was (GSM inside), they would have said so," Hays said. "I didn't expect a world-phone version. I think that would be uncharacteristic for Apple. They tend to have very tightly designed solutions."

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