Is the iPhone a step back for operators trying to push 3G?



Is the iPhone a step back for operators trying to push 3G?
Answering a question about the iPhone during last month's FierceMarkets WiMAX Strategies conference, Sprint Nextel's Barry West, CTO and president of the company's 4G WiMAX business, heralded Apple's new device as the wave of the future. He believes the iPhone will be a large success because Apple is so good at creating iconic, easy-to-use devices. The main flaw, however, is that the many advanced applications and data services on the iPhone would be better served on broadband connectivity like WiMAX, which the iPhone's EDGE and WiFi capabilities can't provide.

"It's sort of missing a critical piece, in my opinion," West said. The iPhone's support of EDGE is indeed the primary flaw of the device, as noted by the flood of industry pundits, commentators and critics. The sophisticated capabilities of the device can't be fully exploited by an EDGE network with sparse access to WiFi.

But the iPhone also flies in the face of what operators around the world are trying to do: make money from 3G. They are looking for innovative ways to persuade customers to adopt services on these higher speed networks to monetize their investments and deliver data services at a more cost-effective price point. Move into the WiMAX realm, and it's about providing a broadband Internet experience quite cheaply, something that is not affordable even on today's fastest 3G networks. Now apply the iPhone on a 2.5G network, and it's a step back. Do operators who sign an exclusive deal with Apple really want a million or more users actively using their 2.5G networks?

Nevertheless, the European and Asian operators who are in negotiations to bring the iPhone to those regions are torn. They are witnessing the overwhelming response to the device in the U.S., and they most likely will have to succumb to the fact at this point, customers are enamored with the iPhone's form factor.
--Lynnette

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