iPhone 5's LTE limitations may boost Samsung, others OEMs in Europe

Some of Europe's leading operators will likely offer cheaper and more varied alternatives to Apple's new iPhone 5 due to its limited support for European LTE frequencies.

Apple's iPhone 5 does not work on many European LTE networks.

The European GSM model of the iPhone 5 supports LTE in the 850 MHz, 1800 MHz and 2.1 GHz bands. Those bands can be used by relatively few operators in Europe, including EE in the UK and Deutsche Telekom in Germany. Vodafone and Telefónica will be restricted to offering the latest Apple smartphone with access to their slower 3G services.

This iPhone 5's European LTE limitations will "push Vodafone and many other European operators harder into the arms of Samsung," especially as the South Korean company's popular Galaxy S line of phones includes an LTE version that is compatible with their networks, Robin Bienenstock, a London-based analyst for Sanford C. Bernstein, told Bloomberg.

The LTE limitations could also boost the sales of Nokia and HTC, which have each recently unveiled new high-end and mid-range smartphones running Microsoft's Windows Phone 8 software.

In an attempt to sidestep the issue, Telefónica's O2 UK said it plans to offer iPhone customers with a long-term contract the chance to upgrade to an LTE handset once the operator's own LTE service is launched. A company spokesman told Bloomberg that the operator will offer 10 per cent towards buying out the old contract and will pay the taxes.

Vodafone and Telefónica already offer LTE smartphones from Samsung, LG and HTC that can access their LTE networks using frequencies other than the 1800 MHz band.

However, Bienenstock told Bloomberg: "The question for operators now becomes in the near term--how sticky is Apple's software versus the better speeds of the Samsung Galaxy's, and how much subsidy will be put behind this?"

While EE will shortly launch its UK LTE service with support for the 1800 MHz band, the initial deployment will be limited and only cover 16 cities by Christmas. This pioneering move will see EE carry the burden of educating UK customers in the new technology and to its benefits.

"They'll have to do the work to educate the mass market,"  Gartner analyst Gyanee Dewnaraint told Bloomberg. "The mass market doesn't have a clue what LTE is." By the time they do, Vodafone may be ready to offer its own service, she said.

While Apple's new iOS 6 smartphone software has been criticised--most notably for its new proprietary mapping app--the company seems set to face bigger issues in the light that Samsung has indicated that the iPhone 5 infringes on its patents. Samsung, which intends to include the iPhone 5 within its ongoing patent lawsuit, said it would file accusations of patent infringement to include the iPhone 5 as soon as it has had an opportunity to analyse the device, according to Reuters.

Regardless, some market forecasters expect Apple to sell up to 10 million iPhone 5 smartphones by the end of September, while JP Morgan estimates that the launch of the new device could provide a $3.2 billion boost to the U.S. economy in the fourth quarter.

Initial deliveries of the iPhone 5 started last Friday in the United States and major European markets such as France, Germany and the UK. The smartphone then goes on sale on Sept. 28 in 22 other countries, reports Reuters.

For more:
- see this Bloomberg article
- see this Reuters article
- see this Sinchew.com article

Related Articles:
Analysts: Apple's iPhone 5 leaves out many European LTE operators
European operators unite around 1800MHz
Salanave: The (lack of) LTE impetus in Europe
ABI: Apple, Samsung capture 50% of smartphone market, 90% of profits

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