[Infowarrior] - Economist: The iPhone may already be outdated

[Richard Forno]

Apple pipped

Apr 13th 2007
>From Economist.com
The iPhone may already be outdated
http://www.economist.com/daily/columns/techview/displaystory.cfm?story_id=90
22169

THE mobile-phone industry¹s recent jamboree in Florida was a brutal reminder
of how fast innovations come and go these days. A bare three months ago we
were drooling over Apple¹s forthcoming iPhone, with its ingenious touch
screen that responds to pinches, pokes and other pawings. But though not
available until June, the $500 iPhone is as mouth-watering today as
yesterday¹s cold pizza. The phone that stole the show at CTIA Wireless 2007
was the ³Ocean² from Helio, a youth-oriented newcomer to the cellular
business.

In many ways Helio has out-Appled Apple. The start-up‹launched less than a
year ago as a joint venture between SK Telecom of South Korea and Earthlink,
an American internet-service provider‹caters to young trendsetters who
appreciate ease of use and cutting-edge design.

Whereas the iPhone encapsulated a ho-hum smart phone in an exquisite
package, the $295 Helio Ocean has been winning plaudits for its ingenious
user interface that neatly integrates all the disparate functions of a
modern multi-media mobile, such as dialling phone calls, texting messages,
listening to music, taking pictures, recording videos, playing games and
surfing the web.

To make a call, the Helio Ocean¹s screen slides vertically to reveal a phone
keypad. To type an e-mail, do some texting or send an instant message,
turning the device horizontally and sliding the screen upwards reveals a
full keyboard. With a separate microprocessor to run the media player, the
Helio Ocean gets 15 hours of playing time from a single charge. Little
wonder it was hailed as the rock star of the industry¹s show.
Apple/Helio

But it is the Helio Ocean¹s EV-DO (Evolution-Data Optimised) wireless
technology that renders Apple¹s iPhone an also-ran. Mobile experts have been
mystified by Apple¹s decision to use Cingular¹s EDGE (Enhanced Data rates
for GSM Evolution) network when far better wireless communications methods
abound. EDGE is a marginally enhanced version of the old GSM (Global System
for Mobile Communications) cellular technology introduced in Europe in the
early 1990s. Cingular¹s version of it provides data speeds of between 75
kilobits per second (kbps) and 135 kbps‹not that much better than a dial-up
internet connection, and often much worse.

By contrast, the EV-DO networks used by Helio (as well as Verizon and Sprint
in America and KDDI in Japan) offer 450 kbps to 800 kbps, rates similar to
those of DSL broadband connections. EDGE¹s slower data speeds mean that
iPhone users must rely on Wi-Fi to do anything more than make phone calls or
send the odd e-mail: the iPhone has a Wi-Fi radio embedded in its circuitry
so users can access internet ³hotspots² using the popular 802.11 form of
wireless broadband.

Wi-Fi may be handy for networking wirelessly around the home or in hotel
lobbies, coffee shops or airports. But it is hardly the most efficient way
to download videos or play multi-user games‹tricks that multi-media mobile
phones are supposed to perform flawlessly.

Mobile-phone companies have their own ideas about how to meet these new
demands. Most are working feverishly on upgrades for their existing 3G
(third-generation) networks. Qualcomm, the company behind the CDMA family of
cellular technologies, has shown in trials that its EV-DO enhancements can
deliver data rates of over three megabits per second (mbps). Cingular and
other GSM-based networks are pushing a rival technology called High-Speed
Downlink Packet Access (HSDPA) in a bid to close the performance gap. In
real-world trials HSDPA has clocked speeds of up to 1 mbps.

But even EV-DO, let alone the slower HSDPA, might prove too little too late.
The mobile-phone companies are about to be overwhelmed by a tsunami called
WiMAX, a souped-up successor of Wi-Fi with a range of 30 miles or more
instead of 100 yards or less.

Whereas 3G cellular networks might get 3 mbps and Wi-Fi around 30 mbps,
mobile WiMAX is a 4G technology promising speeds of up to 100 mbps.
Comparable 4G networks from the cellular industry, such as the proposed
Ultra Mobile Broadband from the CDMA camp or the Long-Term Evolution effort
among GSM¹s descendants, are still in the laboratory. And that¹s where they
might well remain.

WiMAX (or 802.16, its technical name) was conceived as a way to deliver
broadband to remote areas beyond the reach of DSL or cable TV. The mobile
version of this form of wireless networking was supposed to be a more
advanced sibling called 802.20. But with Intel, Sprint and the European
Union throwing their weight behind the interim 802.16 mobile solution, the
WiMAX bandwagon has become unstoppable.

In addition to being able to transfer at least twice the amount of data per
second achieved by the best technologies of the cellular industry, mobile
WiMAX is relatively cheap. During the spectrum auctions of the heady dotcom
era, cell-phone companies scrambled to outbid one another for 3G frequency
allocations, paying typically $5 per megahertz for every member of the
population covered. In today¹s more chastened times, mobile WiMAX licences
can be had for less than one cent per megahertz per person‹a whopping 500
times less.

This has tipped the tables in mobile WiMAX¹s favour. And with it, the
writing on the wall is looming ever larger for most of the 3G phone
operators. Why Apple should have hitched its wagon to so fading a star shows
how quickly even the most talented of companies can be blinded by today¹s
blistering pace of wireless innovation.