“Apple Inc. will introduce a version of the iPhone next year that can download from the Internet at a faster rate, AT&T Inc. Chief Executive Officer Randall Stephenson said,” Crayton Harrison reports for Bloomberg.
“The device will operate on third-generation wireless networks, Stephenson said today at a meeting of the Churchill Club in Santa Clara, California. San Antonio-based AT&T is the exclusive carrier for the iPhone in the U.S.,” Harrison reports.
“‘You’ll have it next year,’ Stephenson said in response to a question about when the 3G iPhone would debut. He said he didn’t know how much more the new version will cost than the existing model, which sells for $399. Apple Chief Executive Officer Steve Jobs ‘will dictate what the price of the phone is,’ he said,” Harrison reports.
Harrison reports, “The prospect of a new handset may make some shoppers put off buying an iPhone this year, Gene Munster, an analyst with Piper Jaffray & Co. in Minneapolis, said in an e-mail. The number of shoppers who delay a purchase won’t be ‘enough to make a difference,’ he said.”
Full article here.
Is Stephenson trying to freeze sales or is he just stupid? As we’ve often explained (as iPhone users already know), they could cut the speed of EDGE in half today and you’d still have to pry our iPhones out of our cold, dead hands. And, as everyone knows, if you keep waiting for the next product update, you’ll never own anything.
Anyway, this is being treated as some sort of “news” by Bloomberg, but Apple CEO Steve Jobs has already said as much and more precisely, too:
“3G chipsets… are real power hogs. Most phones now have battery lives of 2 to 3 hours and that’s due to these very power-hungry 3G chipsets… [iPhone] has 8 hours of talktime life. That’s really important when you start to use the Internet and want to use the phone to listen to music. We’ve got to see the battery lives for 3G get back up into the 5+ hour range. Hopefully we’ll see that late next year.” – Apple CEO Steve Jobs introducing iPhone to the UK, September 18, 2007. [bold emphasis added by MacDailyNews]
We’ve had our iPhones since June, purchased at the $599 price (we did cash in our $100 rebates) and we’d buy it again today at $599 rather than wait another year. The device is that good and the EDGE “issue” is that overblown.
Blucaso:
Do you really believe the upcoming 3G (and other more ‘wow’) has not been in the queue from day one?
@ Realist and others
Apple, under Steve and also at other times, has pushed technology forward and brought down prices tremendously to the benefit of all. The first I recall was CD drives as standard, Apple ordered a years worth at once from Sony, got the best price ever, then the rest of the industry had to catch up. USB is another great example, DVD burners even better. When Apple introduced them on top end Macs the Mac including burner was cheaper than a standalone burner. Same with LCD screens and flash memory, and probably more I can’t think off. The rest were trying to stick with floppies and serial ports and all that stuff.
There’s always a new, better, cheaper, faster model just around the corner, especially with Apple. Well maybe not always better, cheaper, faster, quite a few people have got shafted with Vista.
@Ray
That looks like 4 cents.
@Realist.
Of course, it’s been in the queue. But if a product mfr waited until all the items in the queue were ready to be the product, the product would never ship. And if the queue was nil, meaning the company had nothing to add to it in the future, then I suspect the product is a dead end.
To be realistic, every product is a trade-off between shipping what’s possible today vs. waiting for what’s possible tomorrow. Apple’s genius is in figuring out when to ship with what at what cost. Look at Origami (OLPC). MS put all those features in it and because of that, it was too expensive for any user’s real usage needs. Look at Zune. It was “first” with wifi but its usage for squirting was useless; the real use for wifi is to access the Internet as in the iPod touch and iPhone.
Apple believes 5+ hours talk time is the minimum acceptable, So no 3G until that requirement can be met.
“As far as he was concerned, he was probably just answering a quick question on a whim. Didn’t think it would cause this much of a stir.”
It won’t. Most iPhone buyers don’t follow tech news closely enough to even hear of this, and if they did, someone would probably have to explain what 3G is and why it matters. And most people who DO follow tech news and know what 3G means for the iPhone already knew that it was coming in the near future (i.e. next year).
The iPhone already gets tons of free advertising. I’m Canadian, and on the national news the other night they were talking about the new wireless spectrum being auctioned off and how the government is going to hold some of it back for new start-up companies to give competition to the “Big Three” that have a stranglehold on the Canadian market and are causing us to have one of the highest cell phone rates (especially data plans) in the developed world. Guess what phone they used almost exclusively as an example? The iPhone. They even went into detail about the speculation that the high data plan prices are keeping out phones with more advanced data features… such as, you guessed it, the iPhone. They even went so far as to compare the AT&T;data plan for the iPhone to a similar plan from Rogers to show that what costs $60/month in the US you would pay $140+/month from Rogers for less minutes and less data.
Then I flipped to a rerun of the daily show I hadn’t seen, and guess what? They had a sketch about the iPhone and one of their guys wanting it so much that when Jon told him it was on sale he ran to the store knocking people out of the way only to find it was on sale the next day, etc. They did include a bit about some tech guy talking about its shortcomings and high price, but still… talk about your free advertising, which is my point: For most people, this kind of thing, if they even hear about it, pales in comparison to the hype (free of cost to Apple) generated by the media and the internet.
I disagree with MDN’s take. People who know that they will have to wait almost one year for 3G will easily plunk down $400 now and upgrade later for another $300-$400. They will probably offer some sort of upgrade trade-in rebate anyway. It’s better to disclose now than to be forced to disclose in 4-6 months. Another brilliant Apple move. $400 is not that much money for the average iPhone user.
Is it just me or is this going to piss Jobs off? He does not like leaks, so unless this was pre-planned marketing strategy (and I don’t see an upside to announcing this now, before the holidays) then he just spilled the beans and will incur the wrath of Jobs. I wonder (hope) that Apple had some stiff penalties in the contract in case someone at AT&T;leaks info? Wouldn’t it be nice to have a breach of contract that allowed them to get out of the 5 year deal earlier than expected?
I wouldn’t want that now of course. Apple needs AT&T;for a compliant wireless partner for a while longer. Once the landscape changes more (such as Verizon opening their network up to other devices) then Apple will have the leverage and power to pull away from AT&T;.
I have had the product since 15 hours after initial sales. I agree with MDN’s take There has been few places where Edge 2.5G has not been available. I’ve done stock trades on my Iphone in Vegas (gambling on my own terms), I’ve had Google maps plot me a course from Myrtle Beach to RDU and drove from midnight to 3:00am to catch a 6:00 AM flight. Most Apple equipment that I buy new I keep for 1.5 to 2 years minimum. I would have to see how pervasive ATT’s 3 G network is at the time of release before upgrading. If it’s only 4 or 5 major metropolitan areas then I don’t think it’s worth it. People who wait tend to be people who are always waiting. Intelligent informed consumers will make decisions base on facts and available data and act accordingly. But there will always be those of us that have to have the coolest things.
Realist: yeah, what Mark said. Exactly.
So do you believe that Apple had it “ready to go” and left it out intentionally? JUST to sell you an upgrade in 6 months?
Newsflash from smalltown America… 3G doesn’t exist here – and probably won’t for years. This announcement has no consequence in my real (personal) world. However, the moment I walked out of MacWorld keynote last year and called my boss about the iPhone, his first question was… Is it 3G? Big city dwellers and world travelers like him should be pretty glad (however impatient).
Blucaso
Absolutely. The marketing strategy is so compelling, the behavior of consumers is so completely predictable, manufacturers can’t resist the practice. And, nobody anywhere is better at the practice than Steve.
TowerTone,
That was disgusting. And I laughed my arse off!
I`m hoping this information gives hope to the release of the iPhone in Japan. I`ve been saving and waiting for a year ! I just hope that SoftBank (or whomever) has affordable plans… or else my banker (wife) will shoot the whole idea down !
Having recently conducted power consumption tests of various cell phones chips and components as part of my work I can confirm that the 3G chip set power consumption is typically between 40% and 65% more hungry than an Edge based chip set. Considering that Apple has a history of trying to meet or exceed the best commercial options in battery life and useful power levels I can understand why 3G has been postponed.
If you then add in the simple fact that since the iPhone’s launch and obvious market penetration there is no doubt that the chip set manufacturers for 3G are now far more ‘motivated’ to improve the power consumption profile than they have ever been before. Clearly the first major manufacturer of these chips to reach acceptable (to Apple) power levels is going to make a killing. My client has invested more than 20 million into a specific project to identify possible improvements in this one component. That investment was authorised by their board less than 24 hours after SJ made his statement about power levels.
When will some CEOs understand what not to answer in interviews?
With all respect, AT&T;CEO Mr Stephenson only had to say “That’s not my call” or “We provide cellular services, ask that to the phone maker [Apple]” or something similar and then move on.
And be aware that his very confident answer “You’ll have it next year” means it can be any convenient business day between Jan 2, 2008 and Dec 30 2008; anyway I keep Mr Jobs estimate of late next year.
Realist, you amaze me. I’m glad you’re sticking to your guns, but you amaze me nonetheless.
See, I think it’s pretty obvious that in any business there is going to be “spin” about any choices or compromises that were made. Nevertheless, I think there’s obviously some degree of accuracy in this case. Fenman echoes what Steve has said, that 3G chips are power hungry. Add to that the oft-cited lack of full 3G network availability throughout the US. And I’m sure the 3G chips are not LESS expensive than the Edge ones.
So you have a simple business decision… use a technology that’s going to chew up the battery faster, be more expensive, and be useful to only a small fraction of the users, or use the option that’s currently available nationwide, uses less power, and is still at least acceptable in performance? Which would you choose?
I think it’s so simple to see that Apple chose the technology that had the most advantages for them RIGHT NOW at the price point that would make the iPhone a success.
If 3G was available in most major metropolitan areas nationwide, Apple had batteries that could handle 3G for 6 hours at a time, and the cost was comparable, I think you’d see it in the iPhone released in 2007.
Aside from the fact that you WANT 3G in your phone, and you’re inherently cynical about Apple, what reasoning supports your assertion that they intentionally left it out? You cite Steve’s being “better at the practice” than anyone else. How so?
You mean that Apple continues to improve its products? Well, I guess that’s true. But I see Apple in a different light than Motorola or HP or Dell. Take their battery claims… as a recent 3rd party test showed in the Zune 80 vs. iPod Classic – the Zune was advertised as having roughly the same battery life as the iPod (about 30 hours). Problem is, the Zune was overestimated by about 100%, and the iPod was getting about twice its “rating”. Does this sound like the practice of a company that overpromises and underdelivers? That relies on “spin” and leading the user down the path of constant upgrades to achieve usefulness? Quite the opposite.
The fact is, Apple does improve its products regularly. They also tend to release the new, improved versions at the same (or even lower) prices than their predecessors. This isn’t a detriment, it’s an asset. It’s also the nature of technology. Only dinosaurs like Microsoft and a few select others can afford to release a product every 4 or 5 years with no serious attempts to improve it, and still survive. Apple makes no promises that the product you buy today will be the “best” in its class for years to come. But it will function at the same level for years, regardless of what innovations may come down the pipeline in 6 months.
I just don’t understand your reality, it doesn’t fit with what I see.
3G – Yawn.
Here in Los Angeles where 3G is available, there are also many many open WiFi networks – I can walk down the street and often pick up 8 or 9 nets, and very often one of them is open. There’s a Wifi net at my quickie oil change place fercryinoutloud.
If iPhone didn’t have WiFi, 3G might be an issue. But I really don’t give a rip about 3G – I’d rather have the battery life.