What if Apple Divorces the Carriers Today?

September 12, 2012

The title should actually have been “What if Apple Could Divorce the Carriers Today”. It won’t happen of course, but what if they could? I believe they would if they could and “could” is a lot closer than it was 4 years ago when the acquiescence to the US Carrier subsidy model the launch of the iPhone 3G represented occurred.

The most import number to be revealed today is not the number 5 in the naming of the new iPhone, but the number of LTE bands Apple has managed to cram into 6th generation iPhone. Assuming they have support for both Verizon and AT&T’s diverging utilization of the 700 MHZ band in the US, as well as the nascent (for LTE) AWS frequency (and more on that in a bit regarding T-Mobile USA), it is now easy to guess of support for 1800 in the UK for the newly branded EE, or Everything Everywhere partnership between Orange and T-Mobile. Australia carriers Telstra and Optus also use 1800 MHZ, as do a smattering of other carriers across Europe. The 900 MHZ band the other UK carriers will bid for in next year seems unlikely to be included, and China Mobile’s eventual implementation of TD-LTE 800 MHZ also seems unlikely to make the cut as my guess would be they get their own special SKUs? I didn’t forget Sprint and their refarming of 1900 MHZ which I also think misses inclusion, but Sprint still owns much of Clearwire and its wide swaths of 2600 MHZ spectrum and this band (in addition to AWS) is also being utilized across Canada, Europe, and South America.

So that’s 5 bands I think we’ll see support for in the iPhone 5/the New iPhone: 700 (band 17) for AT&T, 700 (band 13) for Verizon, 1800, 2600, and AWS. Which brings me back to T-Mobile USA and their seemingly sad predicament.

Apple surely must have stumbled upon an engineering challenge they couldn’t (or wouldn’t) solve: how do you make the antenna(s?) for the AWS band serve both DC-HSPA+ and LTE? If you can’t or you shan’t, then you likely warn T-Mobile – if your Apple and you’re interested in a highly competitive set of US carriers so as to prevent the onslaught of the 2 headed beast: AT&T and Verizon. You might suggest to T-Mobile they begin the process of refarming their 1900 MHZ spectrum for DC-HSPA+ (42mbps) and when you see T-Mobile miracuously acquire enough AWS frequency to launch a fledgling LTE network in 2013, you nod your head in satisfied agreement and silently plan accordingly.

T-Mobile has already announced they intend to service unlocked iPhones in their stores and it isn’t hard to imagine Apple themselves promoting the usage of unlocked iPhones on T-Mobile’s network which means they must consider price points and that is where I’ll bring this all together. An unlocked iPhone 5 at $599.99 that I could move between all 4 major US carriers would be very compelling and therefore, a huge shot across the bow of the aforementioned 2 headed beast. Verizon and AT&T smartly have no avenue by which you can get prepaid access to their LTE networks, but when there is enough demand they will. If then the LTE capable iPhone 5 (I’ve obviously given in) is under $600, then might the iPhone 4S be under $400, and might it also have new support for DC-HSPA+? (Does this also mean the iPhone 3GS and the iPhone 4 will be put out to pasture?)

Would these two price points – $599.99 for the 5 and $399.99 for the 4S – make it possible for Apple to ditch the subsidy model and be effectively the sole distributor of the iPhone in the US? Are American consumers ready to have a conversation about the iPhone’s Total Cost of Ownership? If indeed they are then Apple is without a doubt the best teaching institution to begin that training session, and I can’t wait for the first class to begin!

Update: Instead we get an LTE Band/Carrier Specific clusterf… and this portends inherent carrier lock in with subsidy and no need on the part of the carrier to actually SIM lock, or nano SIM lock I should say.  The dream of moving an unlocked iPhone from one LTE network to another couldn’t feel farther away now……


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