iPhone v2: Steve's 3G job

Wednesday, September 19, 2007

Steve Jobs, at the UK launch of iPhone, finally broke the silence and suggested that Apple (AAPL) was actively working on 3G. No surprises there. But what is important is his assertion about the power consumption of the 3G chip. There are four questions/points I would like to reflect on -
  • The 3G version, as I have already mentioned, suffers from a costlier chip also. The average price per 3G chip is closer to $25 as against single digit numbers for the Infineon chip in the iPhone today. Besides, the royalty structure for 3G amounts to about 28% of the average selling price of the 3G phone. Apple typically keeps its cost constant for more features. This will imply reduced margins from iPhone V2
  • The power consumption issue does open up the question of who the baseband supplier will be. Will it be QualComm (QCOM), which has made strides in power management since iPhone V1? Will it be Infineon that has been confirmed to be developing UMTS (3G) baseband chipsets for atleast 2 companies? And if so, where does the recent licensing deal between Apple and Interdigital (IDCC) fit in?
  • Who will supply the A-GPS capability for the iPhone?
  • Would iPhone V2 be HSDPA-enabled?
Answer to the second bullet will partially answer the other two that follow. I will re-visit a few of these questions and possibilities in subsequent articles. In the meanwhile, you could look at these lengthy essays that I had a few months ago.

Posted by Vijay Nagarajan at 7:37 PM  

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