This was published 5 years ago
Opinion
Apple left behind in race for super-fast 5G networks
By James Titcomb and Matthew Field
When Steve Jobs strode across a stage to unveil the world's first iPhone back in 2007, he boasted that it would put the internet into the pockets of millions of people.
These days, that launch event is viewed as both a pivotal moment in the history of Apple and the birth of a global smartphone boom it unleashed.
Apple again faces being late to the party.Credit: Bloomberg
But an often forgotten fact about the first iPhone is that it was almost impossible to access the internet while on the move. The device did not support the third-generation mobile networks, 3G, meaning iPhone users were stuck with domestic Wi-Fi signals.
Now, over a decade later, Apple again faces being late to the party. So-called 5G services, due to come online this year, promise download speeds up to 100 times faster than existing networks. Mobile operators are scrambling to get their own 5G networks running. EE, the UK's largest operator, has said it will be in 16 cities. America's Verizon will launch in 30.
Smartphone manufacturers are in their own arms race. Samsung recently announced that a version of its new flagship phone will support 5G, and last week companies including Huawei, Oppo and Xiaomi followed, unveiling their own 5G handsets at Barcelona's Mobile World Congress.
Apple tends to ignore such shows, preferring its own carefully crafted events. But last week's announcements mean it is alone among the world's four biggest manufacturers in not releasing plans for a 5G device. What's more, industry watchers do not expect a 5G iPhone to arrive until late 2020, giving its rivals an 18-month head start.
"We're fairly confident that we won't see a 5G iPhone this year," says Chris Caso, telecoms analyst at Raymond James.
Apple's tardiness to 5G comes as much out of necessity as design. The company has been locked in a series of legal battles with Qualcomm, the world's leading maker of the cellular modems that smartphones rely on to connect to mobile networks. Qualcomm, based down the California coast from Apple's Silicon Valley headquarters in San Diego, has been a fixture of the mobile industry for three decades and its wireless networking patents means it can extract a commission on every mobile phone sold around the world.
In Apple's case, that has amounted to around $US7.50 ($10.55) for every iPhone it sells. In 2017, Apple directed its suppliers to cease payments to Qualcomm and sued the company, arguing its royalty demands were extortionate.
In response, Qualcomm has sued Apple around the world, winning concessions in China and Germany. The company has even requested that authorities ban the import of iPhones into the US. That is unlikely. But the bad blood means that Apple has ceased using Qualcomm's own modems in its iPhone, ending a seven-year partnership in favour of rival versions from Intel.
That battle is likely to come at the expense of Apple, and its cutting edge. Intel, now Apple's sole modem supplier, admitted its first 5G chipsets would not be available until next year. As if to twist the knife, Qualcomm has already launched its second generation of chips. Apple has begun to work on its own modems, but they are not expected to make it into the next iPhone.
According to Ben Timmons, a Qualcomm executive, 5G is moving forward a lot faster than was expected a few months ago. Mobile networks were afraid of committing to the technology, fearing that showing their hand would force them to overpay in national auctions for 5G spectrum, but now the industry has taken major steps forward.
"Everyone believes it is possible now," he says. "A year ago you had people saying 5G would have terrible battery life [and other problems] ... we have comprehensively demonstrated that none of those [fears] were true."
If Apple is late to 5G, the question is whether it matters. The company could certainly do with a sales boost: at the end of last year, iPhone sales fell 15 per cent. On the other hand, the company is rarely the first to a new technology.
At the end of last year, iPhone sales fell 15 per cent.Credit: AP
The iPhone was not the first smartphone. Features such as bigger screens, wireless charging and contactless payments were on rivals' smartphones for years before Apple embraced them.
"Apple has never been a leading adopter of the latest technologies," says Mark Hung, an analyst at Gartner. Hung says that 5G is unlikely to register with most consumers until at least next year, when it moves beyond a handful of cities.
Even if consumers have access to 5G, it is unclear how much they will notice. Networks say the technology will largely be used to add extra capacity at busy locations where existing 4G bandwidth is stretched, at least at first. This means 5G will ease the "capacity crunch" that frustrates consumers, but will hardly be a killer feature. Gene Munster, a former Wall Street Apple analyst turned tech investor, says it will not be until the end of 2022 that three quarters of the US population will have a 5G service.
But China is putting billions into 5G deployment and is likely to account for almost half the 5G subscribers by 2025, according to EY. If Apple is seen as being behind the curve in China, it could damage the company's position in the market further: its sales in the country were down by a quarter at the end of last year. Caso, of Raymond James, says that iPhone users are unlikely to abandon them merely to get access to 5G, but the absence of the feature could mean consumers delaying upgrades, something that will cost Apple billions.
The Daily Telegraph, London