What Does the 3G iPhone Mean to the Wireless Market?

It was impossible this week to miss the media and blogging frenzy over Apple’s (AAPL) introduction of the new 3G iPhone, which - if you believe the hype - will revolutionize the wireless market by giving consumers the power to really use mobile business, personal and entertainment services.

For telecom equipment suppliers, the focus on the new iPhone is fascinating given many people have been waiting for the killer 3G app that will really propel the wireless world beyond voice and text messaging. Sure, it’s great to have faster wireless networks but if there’s no compelling reason for people to use them, what difference does it really make compared with a 2.5G network?

The iPhone may not be the 3G killer app but it could be the device that convinces millions of consumers to finally buy a smart phone, which, in turn, could get them to use wireless services that work better on a 3G network. This could be good news for smart device makers, telecom equipment suppliers and, of course, carriers.

For some insight into the iPhone and how the 3G market is going to evolve, the Wall Street Journal has an interview with AT&T Wireless (T) CEO Ralph de la Vega. For Nortel (NT) watchers, an interesting question involves the future of LTE:

WSJ: You’re already planning the next upgrade to a fourth-generation broadband technology called LTE. What’s the “killer application” you envision running on that super-fast network?

Mr. de la Vega: We have been in search of a killer application in broadband forever — and there is no one killer app. This is about making our networks faster, better and cheaper, so consumers will be able to use data services more without running up a huge bill. A good example of where you’ll see the difference is streaming video, which is a high bandwidth service to put on a wireless network.

More: Speaking of LTE, here’s a press release Nortel issued yesterday morning about how the company is focusing its main wireless R&D resources on 4G LTE and wireless applications, with WiMAX development re-aligning around a strategic agreement with Alvarion. Here’s a Bloomberg story about Nortel’s new 4G/LTE strategy and the Alvarion partnership.

Comments

[Gary Rybold]

I still have a Motorola RAZR. The main reason I have not upgraded is because I think $80 to $100+ per month, every single month is too expensive for the mass market. I would be willing to pay $65 to $70 per month, but more than $70 is too much.