AT&T: Faster 3G version of iPhone due in '08

Computerworld - Apple Inc. will release a 3G version of the iPhone sometime next year that connects to the Internet at much faster speeds than the current model, AT&T Inc.'s CEO said yesterday, according to reports by Bloomberg.com.

At a meeting of the Churchill Club in Santa Clara, Calif., on Wednesday, AT&T CEO Randall Stephenson said, "You'll have it next year," when asked when a 3G iPhone would appear. AT&T is the exclusive mobile carrier for the iPhone in the U.S.

Current iPhones connect to AT&T's EDGE-based network for intensive data-transmission chores such as Web browsing and e-mail. EDGE (Enhanced Data Rates for GSM Evolution) advertises in-the-field download speeds in the 70Kbit-to-135Kbit/sec. range, although its technical top end is 384Kbit/sec. AT&T's 3G (third-generation) network, deployed only in major metro areas at this point, uses HSDPA/UMTS technology (High Speed Downlink Packet Access/Universal Mobile Telephone System) and boasts download speeds between 600Kbit/sec. and 1.4Mbit/sec., according to past AT&T statements.

The iPhone's reliance on the much slower EDGE technology was roundly criticized before the smart phone was launched in June, and the issue has come up again as Apple released the iPhone in Europe, where 3G-based cellular networks are much more widespread than in the U.S. But in September, Apple CEO Steve Jobs made it plain that the iPhone would stick with EDGE for now because of power and battery issues.

"The 3G chip sets are real power hogs," Jobs said at the U.K. rollout of the iPhone two months ago. "Our phone has a talk time of eight hours, and that's really important when you want to use [it] for Internet and music. 3G needs to get back up to five-plus hours, something we think we'll see later next year."

Although AT&T's Stephenson essentially confirmed Jobs' prediction, the telecommunications executive wouldn't speculate on how much a 3G iPhone might cost. Bloomberg quoted Stephenson as saying, "[Jobs] will dictate what the price of the phone is."

Apple spokeswoman Natalie Kerris declined to comment today.

While Apple regularly refuses to talk about any unannounced product, Stephenson's loose lips won't materially change current sales of the iPhone, analysts said.

"Some people will now hold off because of Stephenson's comment, but not enough to impact Apple's business," said Gene Munster, an analyst at Piper Jaffray & Co.

Ezra Gottheil, an analyst at Technology Business Research Inc., agreed. "Some set of people who are aware of the difference in speeds between EDGE and 3G, who use the iPhone primarily for browsing and who also know that they live where AT&T has 3G, those people might delay buying an iPhone. But the number is not terribly significant." The question, Gottheil said, shouldn't be as much about a 3G iPhone as about how widespread AT&T's 3G network is now and will be in 2008. "Even if a phone is available, what's the status of AT&T's infrastructure?" Gottheil added.

Munster took a stab at predicting a timeline for a 3G iPhone. "Will Apple come out with it at Macworld?" Munster asked. "Unlikely. Will they have it ready for the holiday shopping season in 2008? Probably."

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