Does the iPhone 5 need LTE wireless to succeed?

Limited LTE network coverage could hurt iPhone 5 sales, says one analyst, while another says customers won't care

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In July, Verizon had reached 304 U.S. cities with LTE, while AT&T had 47.

Market research firm IDC recently reported that Verizon had more than 9 million LTE subscribers in the first quarter of 2012. The next biggest markets were in South Korea and Japan, where South Korea's SK Telecom Co., ranked second with 2.75 million subscribers and Japan's NTT DoCoMo was third with 2.23 million.

While the interest in LTE by U.S. carriers is robust, IDC also noted spectrum shortages in Europe that could delay LTE deployments there. In addition to rollouts of LTE by Verizon, AT&T and Sprint in the U.S., T-Mobile plan to roll out LTE in 2013.

"It is imperative that LTE is an available option for each operator to compete in the [U.S.] market," IDC noted in a recent report. "Consumers will continue to demand high-speed data, and operators must be well-positioned in response to this demand."

While the level of LTE competition among carriers is high in the U.S., Kagan and other analysts are unsure whether the carriers will be able to convey LTE's value through marketing to their customers for the next iPhone. Perhaps the next iPhone's cachet and styling as well as its larger screen than its predecessors' will draw the customers despite LTE, the same way the first iPhone lured customers to AT&T fiveyears ago, analysts said.

The data sharing plans that Verizon and AT&T introduced during the summer were apparently in anticipation of a new iPhone as well as a slew of newer LTE-ready Android phones that will place greater demands on their networks, analysts said.

Apple first went to LTE with its new iPad in March, using two carriers in Canada and both Verizon and AT&T LTE in the U.S.. To roll out LTE service anywhere in the world, the next iPhone would need chips that can work over an estimated 40 LTE bands, so it seems fairly clear that Apple will focus on LTE where the markets are more mature -- the U.S., South Korea and Japan.

Amazon announced an 8.9-in. tablet called the Kindle Fire HD 4G LTE last week that will support 10 LTE bands, seemingly to provide connectivity anywhere in North America. It will sell for $499, the same as the starting price for the iPad.

When Amazon CEO Jeff Bezos announced the new Kindle Fire HD LTE last week, he touted the LTE capability as a key selling point, calling LTE the "ultimate tablet feature." On AT&T, customers using the new Kindle device will pay a discounted price of $50 a year for up to 250 MB a month, a big reduction in the annual cost for data with a new iPad on LTE. That kind of discount might be something AT&T has in store with an iPhone on LTE, some analysts suggested.

None of the major carriers are saying whether they will carry the next iPhone, even though all those currently selling the iPhone are expected to continue to do so. Carriers also are not specifically addressing preparations for data demands expected from the device. Those details are likely to come out shortly after Apple's announcement Wednesday.

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen or subscribe to Matt's RSS feed. His email address is mhamblen@computerworld.com.

See more by Matt Hamblen on Computerworld.com.

Copyright © 2012 IDG Communications, Inc.

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