Click here for an amateur video of the line for the iPhone 5 in New York City.
Apple's (NASDAQ:AAPL) iPhone 5 launch today drew large crowds to Apple and carrier stores in cities across the globe, and sales are expected to be strong in the days and weeks ahead. However, a bigger question hovering over the release is whether carrier LTE networks will be able to handle the increased traffic from LTE-capable iPhones.
Crowds massed at iPhone stores from Sydney to New York City this morning. Apple said it took 2 million pre-orders within 24 hours of the device going on pre-sale last week, double what it received in 2011 for the iPhone 4S. However, some consumers have been grumbling that the new proprietary mapping application in Apple's iOS 6 software (it ditched Google (NASDAQ:GOOG) Maps) has produced inaccurate results, and the resulting furor is a rare black eye for Apple (see this separate FierceMobileContent story).
With analysts predicting that Apple could sell 10 million iPhones during the next few days, carriers are bracing for a wave of data traffic. Although LTE smartphones have been in the market since the spring of 2011, many industry observers and analysts think the iPhone 5 launch could be a strong catalyst for LTE adoption and usage.
In the United States, from a coverage perspective, Verizon Wireless (NYSE:VZ) has a clear advantage over its rivals. Verizon's LTE network currently covers 75 percent of the U.S. population, around 235 million POPs, and the carrier plans to hit 260 million POPs by year-end. AT&T Mobility's (NYSE:T) LTE network covers more than 75 million POPs, and the carrier plans to expand that to 150 million POPs by year-end. Sprint Nextel (NYSE:S) launched its LTE network in July in a handful of markets, but the carrier expects to expand rapidly this fall and cover 123 million POPs by year-end.
"We believe our 4G network is up to the test and is best designed to deliver the most consistent speeds in the industry," John Donovan, AT&T's senior executive vice president of network technology, told the Wall Street Journal. Other network executives from Verizon and Sprint similarly said they have been taking steps to boost capacity and improve backhaul ahead of the launch.
Verizon's network generally supports 10x10 MHz channels for LTE, while AT&T's LTE network is deployed in both 5x5 and 10x10 MHz configurations. Meanwhile, Sprint's LTE network works in a 5x5 MHz configuration in its 1900 MHz spectrum. Wider channels generally produce more capacity and faster speeds. However, with half as many customers as its two larger rivals, Sprint may not be at a significant disadvantage for now. Sprint continues to offer unlimited smartphone data plans.
"Sprint needs to get more spectrum to do carrier aggregation, but 5x5 doesn't give you a competitive disadvantage," Recon Analytics analyst (and FierceWireless contributor) Roger Entner said. "You're drowning in capacity. It's the luxury of the spurned that they can make things unlimited again."
With regard to a relative lack of LTE spectrum for Sprint's network, Bill Moore, president and CEO of wireless testing company RootMetrics, said that "out of the gate I don't know that's going to be a major factor," but that over time as more LTE phones come onto the network, it could be.
Aside from raw data traffic, carriers will also have to deal with additional signaling on their LTE networks. Travis Russell, a technologist at Tekelec, which provides Diameter signaling routers to carriers, said signaling traffic will increase as customers buy new iPhones. He said signaling traffic will increase due to new applications like FaceTime video calls over cellular networks, which iOS 6 enables. "This requires a whole new approach to engineering the network," he said.
And though carriers must keep careful watch over their LTE networks, it appears that most consumers don't even know about the technology. According to the Journal, research firm Park Associates indicated that 69 percent of U.S. smartphone users know little about LTE.
- see this MarkeWatch article
- see this WSJ article (sub. req.)
- see this Bloomberg article
- see this Reuters article
- see this separate WSJ article (sub. req.)
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