Apple Inc. joined the competition for wireless phones that operate at the
industry's fastest fourth-generation speeds Wednesday with its highly
anticipated iPhone 5 announcement in San Francisco.
The phones -- set to arrive in retail stores at the end of next week --
will use Long Term Evolution, or LTE, technology to deliver video and
downloads at 4G speeds.
Customers who shop for one will discover that wireless carriers' LTE
networks remain under various stages of construction. In the battle for
subscribers, the differences may convey an advantage to Verizon Wireless, the
nation's largest service provider.
Verizon's LTE network already operates in more than 370 markets. That's
far ahead of No. 2 AT&T Inc., which announced its 62nd LTE market this week.
Sprint Nextel Corp., which had claimed a first-to-4G advantage in 2009
with its WiMax technology, lags further behind in building an LTE network.
It's ready for the new Apple phone's LTE speeds in 20 markets.
All three carriers have LTE service in Kansas City. But elsewhere,
coverage is decidedly uneven.
The question will be how much difference that makes to shoppers who can
pre-order an iPhone 5 starting Friday and look for them in stores a week
later.
Christopher King, an equity analyst at Stifel Nicolaus & Co. Inc. in.
Baltimore, said Verizon's broader LTE coverage will appeal to some shoppers.
But other carriers have their selling points, too.
"It's hard to see any significant market share shift," King said.
Sprint's marketing has focused on its wireless service plans that offer
unlimited data use.
In contrast, new pricing plans at Verizon and AT&T allow customers to buy
a set amount of data capacity to share among several devices. More data
capacity is available if a subscriber exceeds the purchased plan, but at an
additional cost.
David Owens, vice president of product at Sprint, said the unlimited plan
appeals particularly to consumers who want to know what their phone bill will
be each month.
AT&T and Sprint have both promoted their plans to expand their LTE
networks.
AT&T said it will cover more than 100 markets by the end of the year.
Sprint said this week that its LTE customers will begin to see the network
show up sporadically in 100 more markets where work is under way but not ready
for an official launch until later this year.
Analyst Mike McCormack with Nomura Securities said in a report Monday
that Sprint's LTE rollout "is rapidly closing the LTE gap." It will cover 250
million potential subscribers by the end of next year, McCormack wrote, which
he pegged as "parity" with the larger carriers.
All of the new iPhones will pick up the faster LTE service where it is
available from that customer's carrier and rely on the standard service of
each carrier where LTE doesn't yet exist.
AT&T's claim is that the shift will be less for its customers thanks to
AT&T's nationwide network that uses HSPA+ technology. Dubbed a 4G network by
AT&T, it operates faster than 3G networks but not as quickly as the LTE
service the carriers are rolling out.
Of course, not all phone shoppers are focused on speed.
Samsung and Google's Motorola Mobility are among the manufacturers that
have already introduced LTE handsets, which carriers say enables quicker
video, music and other content downloads, compared with the existing 3G
wireless networks.
This is Apple's first 4G phone but that hasn't hurt the sales of earlier
models. Consumers have snapped up about 244 million iPhones since the first
one launched in 2007.
And the new version promises many other features for buyers.
The phone is thinner, taller and lighter than the iPhone 4S. It means a
bigger screen; there is room on the screen for another row of icons.
With the new model, Apple is ditching the connection port it's used for
iPods, iPhones and iPads for nearly a decade in favor of a smaller, narrower
one. That means Apple is still the holdout in an industry where other
manufacturers have settled on a standard connector for charging and computer
backups.
There will be adapters available so that the new phone will be able to
connect to sound docks and other accessories designed for the old phones.
Thanks to new technology that eliminates a separate touch-sensing layer
in the screen, the phone is 18 percent thinner and 20 percent lighter, Apple
marketing head Phil Schiller said during the announcement.
The camera on the back of the iPhone 5 has the same resolution as the one
on the iPhone 4S, but takes pictures faster and works better in low light,
Apple said.
The front-facing camera is getting an upgrade to high-definition, letting
users take advantage of the faster data networks for videoconferencing.
The iPhone 5 will arrive with a new version of Apple's operating system,
iOS. It will be available for download to older phones on Sept. 19.
Analysts expect Apple to sell tens of millions of units before the year
is out.
Pre-ordering the device online will be key to getting one quickly, said
Sprint's Owens.
"When these products get announced, the availability is always dicey
because of the overwhelming demand," Owens said.
The Associated Press contributed.
