Why You Should Wait for the LTE Verizon iPhone

Rob Enderle
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There has been a lot of drama this week surrounding the new Verizon iPhone. But what has many of us scratching our heads is Verizon's insistence that it is a LTE phone. LTE and the similar WiMax from Sprint are really the only true integrated 4G smartphone networks coming to the U.S. in the near term. If you are using a data-intensive smartphone, this network will provide much better bandwidth and lower latency than any 3G variant. But the confusion is that the new iPhone for Verizon is a 3G phone and this announcement was kind of like Ford going on about the benefits of a V8 engine and then launching a V6 Mustang-some are already arguing that the iPhone 4 on both Verizon and AT&T is simply too slow.


Let's talk about waiting for the LTE version of the iPhone today.


HSPA+ vs. LTE and WiMax


HSPA+, which is what both AT&T and T-Mobile are calling "4G," is a 3G voice-focused technology (the "+" just means the vendors have been able to accelerate it). LTE and WiMax are both data-focused technologies and jump well beyond the capabilities of their CDMA base for Sprint and Verizon. This has most of the analysts who cover this space arguing that HSPA+ is more of an enhanced 3G, because it still favors voice and not data, and that LTE and WiMax are 4G. Now between LTE and WiMax, LTE appears to have the lead as the more prevalent standard, but WiMax has been rolled out more aggressively. Confused yet?


Since the topic is the iPhone, maybe we can simplify this a bit.


iPhone LTE Playing the Odds


First, the iPhone isn't available with Sprint or T-Mobile, so that takes two of the vendors and WiMax out of the discussion. If you are considering a Research in Motion or an Android phone you might actually want to think about a 4G Sprint phone over any of the others because WiMax is more widely deployed and Sprint is improving its customer satisfaction score. But the topic is the iPhone and the first Verizon iPhone is not an LTE phone.


Now if AT&T, as expected, has the iPhone 5 and it is an HSPA+ phone, and Verizon doesn't get the LTE version of the iPhone until much later, AT&T could end up with the faster phone. But, I expect that within six months (assuming Verizon doesn't get an LTE iPhone 5 in June) Verizon will get this update because it is aggressively pushing LTE and it knows the risks of missing both the iPhone 5 and LTE.


In terms of probability, with "1" being certainty, I place a .7 probability that Verizon will have an LTE iPhone 5 at the launch of that product and a .9 probability it will have one at year end. This suggests, at best, that new AT&T iPhone 5 users will have a 5-month early adopter advantage with their HSPA+ iPhone 5 and that most will regret making that purchase when the true 4G iPhone shows up on Verizon.


Wrapping Up


Given the iPhone 5 is due in June, this leads to my standing recommendation: Do not buy a new iPhone (unless you're not interested in the 4G capability). Another reason not to buy the current version on Verizon now is that Apple is new to CDMA, Verizon's chosen technology, and initial phones from any vendor on a new network often have growing pains associated with them. In addition, the current 4G iPhone is very fragile, so fragile that there is a class action lawsuit pending against Apple because of it, and the next generation iPhone is rumored to be redesigned to address this shortcoming. (You can mitigate this problem with a good protective case or bumper, however, so it isn't critical.)


Finally, in the second half of the year we should be awash with updated RIM, Windows Phone 7 and Ice Cream (Android 2.4) smartphones, most of which will be vastly more capable than current offerings. So my recommendation to wait for the iPhone applies to all current 3G smartphones where data usage is heavy.


In short: The iPhone to get will be the 5th generation LTE iPhone from Verizon expected sometime in 2011.

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