Carriers press Apple, MS on LTE
While it was commonly believed – based on previous 3G experience - that LTE services would remain data-only for 2011, in fact US operators raced ahead with smartphones, and handsets are now joining dongles and datacards on 4G networks in Japan, parts of Europe and elsewhere.
This means that, despite obstacles like fragmented spectrum bands and bulky first generation chips, LTE smartphones will be close to mainstream in 2012, and that puts pressure on laggard OEMs to catch up.
US operators are piling on the pressure, with Verizon Wireless downgrading Windows Phone's chances until it supports 4G, and US Cellular saying it's not interested in an iPhone until there is an LTE model.
One of the big disappointments of the iPhone 4S launch was the lack of LTE, and a 4G “iPhone 5” is not now expected until late spring, if then. There have been some good reasons, notably that first wave chipsets would not easily fit into the iPhone's iconic shape, but the decision certainly made Apple look like a follower beside the 4G super-phones of Samsung and HTC, and limited its profile at Verizon.
Now, as Apple seeks to boost market share through distribution via tier two cellcos, one at least is refusing to fall at the giant's feet. US Cellular has already hinted that the iPhone did not make economic sense under Apple's famous terms and conditions, and now Ted Carlson, CEO of its parent firm TDS, has told a conference that the company would wait for a “more cutting edge” iPhone – one with LTE.
In November, US Cellular revealed that Apple had offered it a CDMA iPhone 4S, but the carrier could not make the economics work because of the huge subsidies, which drain profits – there might also have been the need to upgrade capacity in some areas to accommodate data-hungry iPhone users, especially in US Cellular's premier market, Chicago, where it has only 20MHz of PCS spectrum to serve a densely populated metro area of 13 million points of presence (PoP). While the stress on that network from the iPhone would be difficult, the cellco plans to launch its LTE network by year end, initially in smaller markets.
Meanwhile, Microsoft also needs to step up the action on LTE, before Verizon Wireless, the biggest purchaser of 4G smartphones, will make a serious commitment to WP7. That was the message from chief marketing officer Marni Walden, who told CNET: “We've communicated to Microsoft that LTE is critical to us. We need to see a timeline that makes sense if we want to continue to represent them.”
Verizon currently offers only one WP7 model, the HTC Trophy, and has been far less enthusiastic than AT&T, though senior executives have been vocal in favoring the Microsoft OS as a potential “third way” to counterbalance Android and iOS.
But that will require LTE, and Microsoft has so far not indicated when 4G will be supported, nor whether Nokia's first US Lumia phones – due to ship in the first quarter – might include the new air interface. Verizon has said it is in negotiations with Nokia, whose initial US partner is expected to be AT&T, and Walden would only say that the two firms and Microsoft were continuing to work on the issue.
Walden said the "vast majority" of the smartphones the company launches next year will have LTE, and it already offers 16 models, which will rise to 20 by year end. By December 15, the carrier's 4G network will cover 200 million PoPs, higher than its target for 2011 of 186 million. However, Walden said that the launches of LTE handsets would be more sedate next year – 2011 has seen the operator bombarding the market with devices to stoke interest, especially while Verizon was the only major LTE provider. “This year was an anomaly,” Walden told CNET. “I would expect more time separation between devices next year” – probably just one major Droid launch per quarter.