Can Apple Support Multiple iPhone SKUs?

Posted by Simon in Apple with No Responses Yet

I’ve been longing for a 3g iPhone ever since the original iPhone launch.  I simply will not be buying one until it is available with a 3g connection, what is, in effect, the minimum standard in the UK and most of Europe.  It’s been speculated that European sales of iPhone have been hit by the lack of 3g support, and I’d have to agree.  I’ve had a 3g capable phone for a number of years, I’m used to broadband speed on-the-go, I don’t want to give it up.  As far as I’m concerned, there’s no benefit in being able to get to a web page in 10 seconds if it takes 2 minutes to load.  I’d rather spend 30 seconds getting to a web page and wait 10 seconds for it to load.  I’m net up by 90 seconds.

The problem Apple has is the same one that plagues phone manufacturers the world over.  Different mobile telecommunication infrastructures.  For example, there is GSM, GPRS, EDGE, HSDPA, CDMA, UMTS, HSOPA…  And to add confusion to this already confusing mix of acronyms we have AT&T in America.  They have just paid a very large sum to grab a chunk of the 700MHz spectrum.  And as well all know, AT&T is Apple’s carrier of choice in America.

So where is all this going?  iPhone has only launched in two territories, North America and Europe.  Unfortunately, they are two very different markets.  In North America, 3g penetration is low, very low.  Whilst AT&T has recently announced an expansion, it’s still far from ubiquitous.  Whilst in Europe, 3g has much better coverage.  In North America, AT&T is investing in the 700MHz spectrum, in Europe, and specifically the UK with O2, investment is going into HSDPA (3.5g).  There’s a close to zero chance of Apple having access, through their chosen carriers, to the 700MHz spectrum across the countries they have launched in across Europe.

It’s a difficult situation which, as far as I can tell, only has two outcomes.  The first is that Apple launches a 3g iPhone across all territories.   This is analysts, such as Shaw Wu of American Technology Research have been speculating on:

 Apple could possibly position the new iPhone as a high-end smart phone, with the current iPhone being shipped as a more mainstream product…  Via MacWorld

This will suit Europeans and likely sit well with the majority of North Americans who actually care about wireless data speeds.  Those who live in the largest 350 cities covered by AT&T’s 3g network.  The simple fact that AT&T are expanding their 3g network adds some weight to this argument.  No doubt Apple would build in a minimum availability clause into the contract.

Te second possibility, and the one that intrigues me most, is the possibility that Apple releases multiple iPhone SKUs.  Yes, strictly speaking we already have this, with the multiple capacities available, but what I’m talking about is having different chipsets for each territory.  Before you scoff, it’s worth noting that other manufacturers, such as Nokia, already do this.  In fact they have done this with the most advanced of phones, the N95.  So if Nokia can do it, can Apple?

The observant amongst you will have noticed 2 things.  Firstly, I’m assuming that there will, no matter what happens, be a 3g version of iPhone.  Simply put, they won’t hit their own targets unless they do because Europe isn’t biting.  If they are to charge at least 3 times the cost of every other mobile phone, we need a better value proposition.  Secondly, I’ve started calling it iPhone as opposed to The iPhone.  This is in line with Apple’s marketing in the hope it makes me sound like an Apple Marketing shill.  I thank you.

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