More 3G iPhone observations

Tuesday, June 10, 2008

Forgive me for the barrage of posts, but I feel it would be better to put my thoughts down here before they either become obsolete or irrelevant (or both.) So here are a few more points to think about.

Firstly, AT&T is subsidizing the iPhone for us. This means that AT&T is paying Apple for the iPhone. Some estimates run up to an extra $200. Apple, in turn, has given up its cut from AT&T service contracts (contrary to my earlier speculation here). AT&T has increased the data plan by $10. So, the total cost of the new 8GB iPhone will still be $199+$240 = $439 for a 2-year contract. But most consumers will look at this increase as a premium that they will pay for 3G. For them, the bottomline will be that they are getting a very cheap iPhone at $199. VentureBeat has a nice post on this topic here.

The second point I wanted to make was on the 3G comparision demo. Apple showed that the iPhone was 36% faster than two competing 3G phones. I posted that this may reflect the capabilities of the modem design. As it turns out, that theory is not bullet-proof. In response to Om Malik's question on AT&T's 3G network capabilities, the company's mobility chief, Ralph de la Vega said that he is confident of being able to deal with the demand. Further, he said " We have a maximum throughput of 3.6 Mbps and soon it will be 20 Mbps. The core of the network is going to run faster as well." This piece escaped my earlier analysis. If the AT&T network currently runs at a maximum of 3.6 Mbps, then an advanced receiver in the iPhone (that supports up to 7.2 Mbps) should have minimal impact on the results. So, now I am left wondering where, if outside of the US, Apple captured this demo that shows the improvement in performance? Or, as unlikely as it seems, are the OS and the browser really making that much of a difference?

I will post more thoughts as I think through this further. Perhaps, I will consolidate these observations into a single post in the future. Until then, I hope you find these tidbits and commentary useful.

Posted by Vijay Nagarajan at 8:30 PM  


It could have been a lab test and not on the ATT network. Doesn't prove/disprove anything.

Anonymous said...
June 10, 2008 at 10:15 PM  

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