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WiFi is more important than HSDPA for early iPhone success

January 12, 2007

iPhone wireless technologies

Reuters is reporting that Nokia’s media head, Anssi Vanjoki, has described iPhone as “quite interesting” but said in effect that the lack of 3G will cripple it in the marketplace.

Nokia, or at least Mr. Vanjoki, doesn’t get it. And a lot of other people are falling prey to this too.

In a perfect device (updating my wishlist from way back in 2004), there would be HSDPA along with the included GSM+EDGE, WiFi, and Bluetooth. But the truth is, at least in the US a lot more people use WiFi in their office, their home, the coffee shop, and quite a few other places than pay for 3G on their cell. And in the two key places, home and work, WiFi is essentially free. Again this is especially true in the US, Apple’s launch geo for iPhone.

Let’s repeat that: WiFi at home and work is essentially free.

Free is hard to compete with. It’s going to be a long time before my mother pays extra for HSDPA, but she already has 802.11g. If Apple makes the use of WiFi truly seamless, a lot of people will buy. 3G or no.

And besides, who knows what features Apple will have in future versions of iPhone? Jobs has already mentioned 3G for upcoming iPhone models. Perhaps it’ll even be in place before the European and Asian launches.

If you accept that WiFi+EDGE is “good enough” for a lot of people, then why haven’t previous smartphones or mobile computers or whatever you want to call them crossed the chasm into mainstream adoption? In a word, interface. In three words, aesthetics and interface.

Just about everybody hates the interface on his or her phone. Free model or multi-hundred dollar smartphone, doesn’t matter, same dislike. And doesn’t every other phone on Earth look ugly now that we’ve glimpsed an iPhone? The promise of iPhone is that Apple, just maybe, has gotten the beauty of the design and the simplicity of the interface right.

You know, now that I type this I wonder if it’s not so much that Mr. Vanjoki doesn’t get it, as that he doesn’t want to get it. How this chart appears in several months may be the best measure of who’s right, Apple or Nokia:

Apple versus Nokia stock price during the week of iPhone's announcement

PS I’m a NOK shareholder and use a Nokia mobile every day, all day. I don’t own any AAPL stock and have never owned an Apple product until my recent Nano. I’m just calling things as I see them.


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  1. I presume that Mr Vanjoki comment on the iPhone should be read with european eyes.
    If we look at the diffusion of WiFi in Europe we see that it’s much less pervasive than 3G technology all across Europe.

    From this point of view Mr Vanjoki is quite right.

    I agree on the fact that HSDPA is the way to go to for this kind of device. All major 3G operator are rolling out HSDPA and are having a close look at HSUPA that will eventually be made available in the near future.

    From an end user perspective I am waiting to understand how the interaction between WiFi and GSM/Edge is goin to happen. Steve Jobs said that the iPhone will automaticall switch from GSM to WiFi… This does not really mean a lot… I think he was taling about data connection and also in this situation it is not a simple thing to implement.

  2. Tom permalink

    I certainly agree that it’s good to have WiFi in the iPhone although I don’t think that it should really have been an either / or choice. A number of the high end (i.e. similarly priced) Nokia, SE and HTC phones already feature both UMTS _and_ WiFi. My main point would be that the two places where you’re most likely to have WiFi coverage (the home and the office) are the two places you’re most likely to use a laptop or workstation for data access. The main times I use my phone to access the web are when I’m in town, traveling home, at the pub or watching the game. When I’m at home or the office I’ve got a nice widescreen monitor for checking my mail, surfing the web or finding our the sports score.

  3. Hi Bill,

    I thought a great deal about the WiFi vs. EDGE vs. HSDPA question and I think that you might be somewhat mistaken, and that the commenter Tom was more on the mark.

    The two places you note where WiFi is free — home and office — are the two places you are least likely to use your cellular phone. This is especially true in the U.S. where cellular is much more of a secondary device rather than in many other countries where it’s often a person’s primary phone.

    In both home and office you’ll typically use your landline (or VoIP) phone for calls and your computer for data access.

    It’s when you’re ** away ** from your home and office that you are mostly likely to use your cellular phone and willing to rack up per-minute and data charges.

    Having WiFi is certainly better than not having it. And when I’m at a hotspot, where it’s free (I love Panera!) or I’m paying for it, I’ll gladly use WiFi rather than EDGE.

    But for a (1) high-end phone that’s (2) designed for multimedia, including downloading graphics-laden Web pages, I’d be very interested to know why Apple decided it wasn’t worth incorporating HSDPA in the first U.S. version.

    By not including HSDPA — and Cingular already offers it in many major markets — the iPhone is somewhat obsolete right out of the box.

    I assume Apple will offer HSDPA for Europe in late 2007 — or it would be shooting itself in the foot (if not in a more sensitive area) — and will eventually offer HSDPA for the U.S. in 2008.

    Of course, I want an iPhone, now, anyway!

    I completely agree with you regarding cellular phone interfaces. Although they are getting better, they are much, much too difficult to use.

    If Apple’s software can truly be as elegant, beautiful-looking and easy-to-use in the iPhone as in its computers — and NOT crash (you hear that, Treo?!) — the iPhone might indeed create a new standard.

  4. Thanks for your comment, Alan.

    Excerpting from it:

    The two places you note where WiFi is free — home and office — are the two places you are least likely to use your cellular phone. This is especially true in the U.S. where cellular is much more of a secondary device rather than in many other countries where it’s often a person’s primary phone.

    Part of the reason that I noted free WiFi at home and office is that for me, my cell phone is my primary phone. In fact, it’s my only phone, for both work and personal use. So perhaps that magnifies its importance for me in the two places that I spend the most time, home and office (for me one and the same since I telecommute).

    The other reason I noted WiFi support in general is that while I would love to use a device such as the Nokia N800 when I don’t feel like dragging out my laptop (reading news feeds on the couch in the evening, for instance), I simply am not interested in a non-cellular capable Internet tablet. iPhone’s 3.5 inch screen and Web browsing interface hold the possibility of solving my needs while maintaining my Nano’s music chops and my phone’s call and data access capabilities.

    It will be interesting to see how many others agree with me.

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