The iPhone in Europe: To 3G or not 3G?

With Apple holding a press event in London next Tuesday, expectations are running high that the iPhone will make its long-awaited European debut. But if the iPhone is unveiled next week, will it be in its current form or as a 3G handset? The answer to that question could go a long way toward determining whether the mobile device enjoys as much initial success overseas as it has in the U.S.

Telecom industry analysts say that having a 3G iPhone in Europe is an important step for Apple if it wants to compete in a market that is used to high-end mobile features. Unlike the United States where Wi-Fi is ubiquitous, Europeans rely on the telecoms high-end networks for data transfers.

“I would be very surprised to see the first iPhones in Europe not be 3G,” Mark Donovan, senior analyst at mobile industry research firm M:Metrics, told Macworld . “Having 3G will be very important for them [Apple] out of the gate.”

But a report published on rumor-site Think Secret Friday says that the iPhone expected to be announced in London next week will feature 2G networking, not the faster 3G version.

A 3G network is the third generation of mobile phone standards and technology. One of the main benefits of 3G networks over 2G is the faster data speeds. Unlike Wi-Fi networks that require close proximity to connect, 3G networks are also on in areas where cellular service is available.

There are about 200 million people connected to 3G around the world, with Asia and Europe making up the majority of users, according to the GSM Association trade group.

When Apple released the iPhone domestically in June on AT&T’s network, the two companies used Enhanced Data rates for GSM Evolution (EDGE) or Enhanced GPRS (EGPRS). The decision to use the slower 2G standard caused complaints among users, but U.S. customers have the option to use Wi-Fi where available.

However, Wi-Fi networks are not as plentiful in Europe and those customers will be less forgiving of a 2G phone, according to Donovan. According to M:Metrics research, 80 to 90 percent of Europeans use smartphones for things like text messaging on a regular basis.

“Countries outside the U.S. have had advanced capabilities for some time,” Donovan said. “[Apple has] their work cut out for them.”

While the U.S. market may be ahead in some areas of the cellular market, analysts place the 3G networks in this country about middle of the pack. Functionality like wireless wallets that are just being introduced in the U.S. have been around for quite some time in other parts of the world, according to independent telecom analyst Jeff Kagan.

“The wireless networks are far more advanced in Europe,” Kagan said. “In the U.S. we think we’re on the cutting edge but we’re not.”

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