With iPhone out, attention turns to second-gen model

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The first generation iPhone is barely on the streets, but some users and analysts are already talking about when a second-generation model will be launched to take advantage of faster 3G wireless network speeds for speedier Internet browsing.

The first version of iPhone supports AT&T’s EDGE -- Enhanced Data Rates for GSM Evolution -- network, a 2.5G network advertised as providing download speeds of 70Kbit/sec to 135Kbit/sec. AT&T and Apple chose that network because it is the largest network, reaching 270 million people, last week.

However, several analysts and reviewers believe that the next-generation iPhone, which could ship early next year in the U.S., will be provisioned to handle a faster 3G network, such as AT&T’s High Speed Downlink Packet Access (HSDPA), to support download speeds of 400Kbit/sec to 700Kbit/sec. However, AT&T and Apple would not comment Thursday on their plans or a timetable for iPhone 2.0 or AT&T’s HSDPA.

AT&T spokesman Mark Siegel stressed that “HSDPA is available in 160 metro areas and AT&T will continue to build it out through the rest of the year, so obviously we’re continuing to build 3G.”

But Siegel also repeated comments made last week that iPhone users will accept the slower EDGE speeds, especially since the iPhone can access faster WiFi networks when a hot spot is available at home or a coffee shop. “We haven’t had many complaints about EDGE,” he said. “What really matters for a real human being using the iPhone who doesn’t know anything about EDGE is that this is going to be a great experience in totality, whether searching for a stock quote or a map or many other things. We think overwhelmingly that people will be thrilled using this device. The experience they have on EDGE will be a really good one.”

Siegel’s comments, however, don’t match user consternation about EDGE speeds registered at the MacRumors forums, or concerns raised by some reviewers, including one who said it took two minutes to download the Yahoo Web site home page.

The discussion thread at MacRumors asked people to post their EDGE speeds over iPhone using a network measuring tool. Some reported speeds were higher than those advertised by AT&T, but most were slower, with 64Kbit/sec on July 3 in San Diego and 71Kbit/sec in Los Angeles that same day. “Boooooo!” is the only comment from the San Diego user identified as FreeState. GnarleyMarley87 in Atlanta reported 126Kbit/sec in Atlanta on EDGE, but 1,245 Kbit/sec over WiFi at home. Other uses weighing in on Macrumors about the differences between 3G and EDGE and why Apple is waiting indicate that iPhone users are aware that AT&T’s 3G network is not widely available in the U.S. Users also noted that 3G-capable phones consistently run down batteries faster than those on slower networks. One analyst, Ken Dulaney at Gartner recently confirmed that a 3G phone can use up a battery at a rate 30-percent faster than a 2.5G phone.

Apple officials would not comment on a timetable for the next iPhone release, or even whether it will support 3G.

Two analysts tended to support the decision to release the first iPhone over EDGE in order to get the broadest network reach over higher bandwidth. “EDGE is not a show-stopper for iPhone, and I think the next version will likely have 3G,” said Michael King, an analyst at Gartner.

King said some industry experts believe Apple can have a second-generation device ready by October, but that Apple won’t unveil them so closely behind the first version’s June 29 release. King believes AT&T’s HSDPA network will be more widely available for U.S. users in late 2008. “It’s a pretty usable network now,” he said.

With a second-generation iPhone, Apple is also likely to support QuickTime, giving access to streaming video that will also use more bandwidth that will tend to require a 3G network, King said.

Shiv Bakhshi, an analyst at IDC, said that Apple was “wise to have chosen ubiquitous network reach over bandwidth… a culture of mobile data consumption in the U.S. is only beginning to set in. By the time it takes hold, Apple will be out with 3G iPhones and AT&T will likely roll a 3G HSDPA network across its national footprint."”

Asked when both will happen, Bakhshi said “in under a year.”

But Bakhshi said that it is not clear how much current iPhone users will be downloading from the Web. Songs and video can be imported from a computer, so EDGE speeds might not be an impediment for the average user.

“Every network falls short as your expectations rise higher,” he said. “Some people will always be high-end users and will find EDGE really frustrating, but for the average Joe Blow like you and me, it will suffice.”

Bakhshi said that data usage may not be the biggest driver of iPhone sales. “Instead, it might be just its ability to invoke envy in your friends,” he said.

This story, "With iPhone out, attention turns to second-gen model" was originally published by PCWorld.

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