The first version of the iPhone on the European continent “will certainly run on EDGE,” says Carolina Milanesi, an analyst at Gartner. The device could be in stores in the United Kingdom, Germany and France – the first three markets in which it will be available – at the beginning of October, although the date has not yet been confirmed by Apple, which has only said that it will do so at some point of the fourth quarter.
The terminals will operate on 2.5 generation networks like EDGE before jumping to faster 3G. However, some analysts and users have speculated about the direct launch of an iPhone for 3G in Europe, especially after the experience of Web browsing in the United States with AT & T’s EDGE network, rated as slow and unsatisfactory by some users who bought iPhones as of June 29.
AT&T and Apple have defended EDGE (Enhanced Data Rates for GSM Evolution – Enhanced Data Rates for GSM Evolution), with download speeds of between 70 Kbps to 135 Kbps, because it reaches 270 million people in the United States and is the network of greater coverage. They also ensure that EDGE speeds are adequate for most users and that only some will navigate through faster Wi-Fi hot spots. It is not yet clear when Apple will create a 3G phone for the United States, possibly using AT & T’s HSDPA network, faster but with less presence than EDGE, since it only reaches 165 metropolitan areas.
The scenario changes in Europe, according to the Gartner analyst, where 3G networks are much more established and the percentage of cellular users is higher than in the United States. Milanesi anticipates that the iPhone for 3G in Europe could be launched in March 2008, running on WCDMA networks with download rates of between 350 Kbps to 700 Kbps. Apple has not yet commented on this possibility. However, the importance of having 3G with the iPhone to improve navigation capacity is not clear; “It depends on how Europeans use it,” says Milanesi. “At first, we believed that using EDGE would limit the options. Yes, EDGE is slow and WCDMA would be better for browsing, but iPhone users will not only use it to connect to the Internet. In the analyst’s opinion, many users will use the iPhone as a phone and will download songs and videos from the PC instead of over the airwaves.
Europe is also different from the United States in terms of the distribution of the iPhone. Here, several operators will sell and support the terminal because none have full coverage over the mainland. In the United States, AT&T has a multi-year contract to be the exclusive provider for the entire country. Apple’s strategy for Europe is to start iPhone sales in the UK, Germany and France, leaving out large mobile markets such as Spain and Italy. In Germany, T-Mobile will be in charge of selling the iPhone from November 1 and in the United Kingdom, it is said that O2, owned by Telefónica, will be the only one to sell it in the country for a while. For France, the name Orange is being considered.
Likewise, the terminal acquisition model varies. In Europe, only half of mobile phones are sold by operators, compared to 94% in the United States. For Milanesi, Europeans are more used to buying free terminals and then finding an operator that will give them good coverage where they need it. However, Spain stands out from this trend, since in our country the subsidy of terminals prevails. Perhaps this is the reason why Apple has decided to wait to sell iPhone in our country, although, without a doubt, the signing with O2 in the United Kingdom will ease relations with Telefónica when it comes to starting conversations on the Spanish market.
Apple has declared its intention to reach sales of 10 million iPhones in its 2008 fiscal year. What is not certain is whether or not this objective will be affected by the availability of terminals over 2.5G or 3G in Europe or by countries. where it will sell first. “Europe is culturally different from the United States and I am not sure that people queue for three days to get an iPhone as happened in the United States,” concludes the Gartner analyst.