3G iPhone and WiMAX: Another Sensational Rumor?

Last week, Craig Mathias wrote a piece on 802.21, a convergence standard promoted by the likes of InterDigital (IDCC) and Intel (INTC). The people at 9to5 Mac immediately saw the iPhone connection, and hatched what I thought was a highly speculative story. That Apple (AAPL) will push this yet official standard to include WiMAX into its impending 3G iPhone, based on convenient interpretation of a series of events, is the work of a very creative mind.

For the uninitiated, 802.21 is one of the various standards being promoted for convergence. So, if the infrastructure is in place, devices using this standard will perform ‘vertical’ handovers across the standards such as WiFi, WiMAX and 3G.

Before I move on to argue why I don’t see signs of a WiMAX-enabled iPhone yet, I should mention that as a fan of the convergence movement, I would love for one of the convergence standards to succeed. The idea of an iPhone enabling this seamless mobility does sound very appealing to me. It is just that I don’t see the impending 3G iPhone implementing it to include WiMAX.

Let me dissect the evidence that the 9 to 5 Mac article presents to defuse the speculation:

In March, that company revealed it has signed-up Apple (and RIMM) as a licensee for its 3G technologies….. This news generated sparks of speculation that InterDigital’s SlimChip architecture might be deployed in products from Apple.

The license agreement between Apple and IDCC is perhaps two-fold. Firstly, it is for the 3G intellectual property. Secondly, as I wrote in an earlier article, the iPhone will most likely have Infineon’s 3G chipset. Infineon (IFX), in turn, uses InterDigital’s 3G stack for which the latter gets a per-unit royalty. I think that Infineon’s solution has InterDigital’s contribution to the baseband design. But to think that the SlimChip will be central to the iPhone based on these signs is a stretch. In any case, 802.21 support or WiMAX is independent of SlimChip. You can read more about my iPhone 3G speculations here.

..we know Apple has aggressive sales targets for this device, and that the company plans to introduce iPhones into more territories this year; we know that some of those target countries, Russia, for example, are moving to adopt WiMax;..

This argument perhaps makes sense when the networks are more mature. In my opinion, a WiMAX-enabled iPhone this year will have limited value if you look at the bigger picture. Putting in a WiMAX solution not only hits its margins but also delays the product launch due to the additional logistics. That does not make economic sense to Apple, and may in fact counter its aggressive sales target.

Apple’s success in bringing new technologies to market was made most clear when it single-handedly popularised WiFi technology (AirPort) when it introduced the iBook in 1999….InterDigital’s move to join the WiFi Alliance this year, followed by its move to license its 3G modem technology to a shadowy (unnamed) Asian fabless semiconductor company also passed under the radar.

Promoting a mobile standard is a much more complicated task. With WiFi, you are talking about interfacing with the consumer directly. With mobile-phones, the effort needs the confluence of the chipset vendor, handset vendor and the carrier. Also, InterDigital joined the WiFi alliance because of the technology’s role as a key component for 802.21. Neither this nor its modem technology licensing moves should relate to the iPhone.

While the idea of WiMAX+3G is great on paper, the logistics involve high-levels of risk that Apple will be unwilling to take. Platform stability and testing issues will limit Apple’s short-term options for iPhone. Hence, Infineon and most others who have already been designed into the current iPhone will retain their places. We will perhaps see GPS capabilities, but WiMAX, in my mind, is a non-starter for this version.

This does not however preclude a convergence standard/implementation like 802.21 from being included in the iPhone. I can see utility in having mobility between WiFi and 3G as a possible trend, and perhaps as the only real seamless mobility possibility for the 3G iPhone. But even this will be met with resistance from the carriers who will fear cannibalization of their revenue stream.

In summary, based on the current evidence and the inherent technical challenges, I will have to reject any suggestion of a WiMAX-enabled iPhone in 2008. I don’t see it, even with the InterDigital connection. To be fair to Andy Space who wrote the 9 to 5 Mac article, he has made it amply clear that this is pure speculation. While I did not find his central idea or his reasons as strong, I did enjoy reading the article for what it is – another out-of-whack and sensational iPhone rumor.

[Thanks to Dan Butterfield from iPhonAsia for directing me to this article.]

Disclosure: The author was long InterDigital at the time of writing.

Comments

[brewer:]

I don't see this happening yet either, but I imagine when it does that Apple will be first to market. Just as they were with virtually everything else in the technology world that happened after the mainframe age.

What may happen however, is that the new iPhone may allow you to stream any iTunes content from your Macintosh to your iPhone. They might even support iTunes on windows, but that would be incredibly generous, even for Apple. It would mean however, that it wouldn't matter nearly as much if you had 16GB or 32 GB or whatever, you could stream your entire movie and music library right from your broadband setup (Mac most likely) at home.

And it fits the model as it sells more Macs. Apple has an incredible synergy that easily trumps the old Windows+Office of old. Since iPhone is running OS X, it's entirely possible even to use the same applications. The nicest part of it is that all your data reside in one place, but the 'net is used for access. (The problem with net storage so far, IMHO, is that no one wants their data residing on someone else's equipment.) And, after all, WIndows is horribly buggy (Vista) and there is no great backup/versioning system, ala Time Machine, to protect all your data automatically.

2008 May 02 08:52 AM

[mike sanders:]

doesn't this person know the difference between diffuse and defuse, come on man words are your tools you should at least understand them.

2008 May 02 09:56 AM

[PK de C'ville:]

Mike Sanders!

You're a fuel. end of story.

2008 May 02 10:57 AM

[investorslive:]

AAPL great breakout, slight consolidation and then $200

Check it out!

www.investorslive.com/...

2008 May 02 01:44 PM

[Vijay Nagar...:]

Mike, Appreciate your note. Point noted as well. I meant to say 'defuse'. It was a genuine error from my side and will be corrected.

Vijay

2008 May 02 02:09 PM

[Zach Bass:]

The more compelling rumor is GPS enabling geospacial social networking. Or using 802.11x to connect peer-to-peer. I would find these far more interesting and groundbreaking.

-zach bass
www.zachbass.com

2008 May 02 10:14 PM

[Michael Gle...:]

You are right that 802.21 could work well in the iPhone. It would be particularly helpful in fact with WiFi where there can be dozens of networks around for the mobile device to look through before connecting or doing a handover. For a UNIX heritage stack, the .21 approach would be particulalry friendly. I agree that pushing such things down into the MAC or PHY h/w implementation (other than reporting the proper signals) would be unnecessary, and would perhaps lock Apple in where they don't need it.

2008 May 04 11:42 PM

[Webster:]

Just how much does Apple PR pay you and your ilk (Apple media hacks) to keep spreading this BS so Apple can unjustifiably keep their mediocre products brand in the press?? You small j journalists are pathetic.

Enjoy your free iPhones, iPuds and iCrap.

2008 May 05 01:33 AM

[Jacomo:]

iPhone will eventually accommodate WiMAX based systems. It will however not be provided with the 2.5 or 3.5Ghz based WiMAX Nets. They are far to limited in their universal mobile coverage required in any Nationwide network-major foliage issues within select urban and most foliage in Rural markets.
Ultimately, in order to compete with the big Carriers 700Mhz LTE Cell Nets, a WIMAX network will need to be build using one of the following spectrums: 700Mhz, AWS or WHite Space Spectrum.
The latter is the most interesting and the most troubling to the big CellCos. Just watch as they begin to press the FCC and the Congress to keep this (under 400Mhz spectrum) out of the Unlicensed realm.
The COntent/Applications folks would love to see the White Space be open and free.

Jim

2008 May 05 09:43 AM

[jeepfanatic:]

I imagine the WiMAX or LTE iPhone will show up in 2009 or at the latest 2010. AT&T is favoring LTE at the moment, but well see what happens. I'm going to stick with the EDGE iPhone until the 3rd version is released. With a 4G iPhone video chat will be a reality!

2008 Jun 10 11:28 PM