You have to love the ritual: Every June at the Mac Worldwide Developer’s Conference in San Francisco, Steve Jobs delivers a keynote address. For the past few years, he used this opportunity to announce the next iPhone as well as to give an update on a few other products. And, when it’s a big announcement, he likes to wait until the end of his talk and say, “Oh, and just one more thing” (which usually brings cheers from the audience). Steve used this year’s occasion (Monday, June 7th) to announce the iPhone 4 -- the fourth model of the iPhone since it began to ship three years ago in June 2007.
Enhancing rich media is clearly the focus of the new iPhone, which introduces a much-improved digital camera, video capture in HD, and a forward-facing camera to enable video calls. The new iPhone supports AT&T’s next generation of high speed wireless data communications called HSUPA (high speed uplink packet access) to provide 7.2Mbps downlink and 5.8Mbps uplink capability. HSUPA finally brings faster data communications speeds to AT&T’s network (along with much broader coverage).
The iPhone 4 is a lot thinner at 9.3 mm, and that’s very cool because thinner handheld devices feel better in your hand. The metal band on the side of the iPhone 4 is actually part of the wireless antenna.
The iPhone 4 has a new high resolution display that Apple calls the Retina Display – delivering 3.5" diagonal, 960x640 pixels (326 pixels per inch), and a solid 800:1 contrast ratio (that’s a 4x improvement). The iPhone 4 digital camera is now 5MP with 5x digital zoom, and the video can capture HD movies at 720p at 30 frames per second (fps).
Other new features in the Apple iPhone 4 include delivery of Version 4 of the iPhone OS -- now branded as iOS4 -- that includes multi-tasking (allowing users to do multiple things at the same time, such as listen to music while browsing the web or playing a game). Multi-tasking is even more important for the iPad where users desire to open and interact with multiple applications at the same time.
Folders now available on the home screen are actually very useful because people are downloading an array of applications. Folders allow you to group your apps by whatever category you’d like to use. And, Apple added threading to email which is really helpful – you can each email exchange between you and someone else in one place. Outlook 2010 will have this same feature.
And, yes, Steve did his famous “Just one more thing” by announcing FaceTime – video calling over Wi-Fi that will likely now become popular, especially with the younger crowd. Apple will support FaceTime with 3G later. FaceTime is a nice addition, but I think he should have kept the famous closing to announce something really big such as signing on with Verizon Wireless or coming to peace with Adobe over Flash.
The price of the iPhone 4 with a two-year contract is $199 (16 GB) and $299 (32 GB). Current iPhone owners are eligible for upgrade if their contract is due to expire in 2010.
There are a number of things that are not included in the iPhone 4: a version of the iPhone running on CDMA that would allow Verizon Wireless and Sprint to offer the iPhone. It looks like AT&T’s exclusive is still in place. Still no Flash. Still no micro-SD slot. Still no broadcast video. Still no NFC chip (to enable wireless mobile commerce). So, I guess there’s still a lot of opportunity for future editions of the iPhone (5, 6, 7 …).
AT&T announced last week that they were eliminating unlimited data plans for the iPhone and iPad, although current customers will be able to retain their plan under their current service agreement. And AT&T has announced lower monthly price of $15 per month that includes 200 megabytes (MB) of data, which the carrier feels will adequately serve 98% of its subscribers. A plan with 2GB of data cost $25 per month, and then it’s metered after that at the rate of $10 per GB.
These lower cost plans will help most consumers, but those who download lots of videos could find their monthly fees going up, and, in some cases, way up. A good example: Let’s say you downloaded three YouTube videos a day at 500 MB each for 30 days, that would result in a consumption of 15GB which, in turn, would result in a charge of $25 for the first 2G and 13GB x $10/GB = $130 or a total of $25 + 130 = $155, far more than the $30 the subscriber was paying before.
In the short term, this new pricing scheme is good for most consumers and ‘expensive’ for high powered users. It forces subscribers to do their rich media downloads and uploads using their Wi-Fi connection at home or in public venues.
Longer term, I expect metered pricing to be adopted by all wireless operators. They have spent billions to roll out these networks that are now being used far more than anyone expected. Call it the iPhone effect: Provide subscribers with an easy way to manage rich media (music, photos & video) and they use it – a lot. In the short-term (next year or two), operators like Sprint will continue to offer unlimited plans as a competitive advantage. Also, the AT&T switch to metered plans gives upstarts like Clearwire a chance to offer unlimited plans for those who desire to consume high volumes of rich media.
Long-term (say five or more years from now), AT&T’s current pricing will likely be lowered as they bring on advanced and much higher capacity technologies such as Long Term Evolution (LTE). Subscribers will migrate to interacting with more web sites, more YouTube videos, and will be generating more rich media on their phones. I’d expect that operators within five years will offer 5-10GB instead of 200MB in the base plan and see metered rates closer to $1 per GB or less.
So, there you have it. Apple announced the iPhone 4 that generates more rich media in better digital photos and HD video. It uses AT&T’s 3.5G HSUPA to assist with downloading rich media (for a price). Now watch for new Android phones from HTC, Motorola and others to match or beat the iPhone 4 feature set.
Written By:
J. Gerry Purdy, Ph.D.
Principal Analyst
Mobile & Wireless
MobileTrax LLC
gerry.purdy@mobiletrax.com
404-406-5309
Disclosure Statement: From time to time, I may have a direct or indirect equity position in a company that is mentioned in this column. If that situation happens, then I’ll disclose it at that time.