Analyst: iPhone in Europe to start out over EDGE, Wi-Fi

The first of Apple Inc.'s iPhones to ship in Europe this fall will function wirelessly over slower EDGE networks as well as in Wi-Fi hot spots, the same as in the U.S., according to an industry analyst based in Italy.

The first version of iPhone in Europe "definitely will be on EDGE," said Gartner Inc. analyst Carolina Milanesi. The first European version could ship as early as October, based on information provided by Apple, she said. Apple has said it will ship there sometime in the fourth quarter.

Milanesi said in a telephone interview that she learned about the EDGE capability of the first European iPhone from "people working on the device in Taiwan," adding later that it was "common knowledge" it would use EDGE before it was capable of handling the faster 3G networks.

Some analysts and users have speculated that Apple would jump directly to a 3G-capable iPhone for its first version in Europe, partly owing to concerns that the Web browsing capability in the U.S. with AT&T Inc.'s EDGE network has been slow and unsatisfactory for some users who bought iPhones in the U.S. after June 29.

AT&T and Apple officials have defended EDGE -- Enhanced Data Rates for GSM Evolution -- even at download speeds of 70Kbit/sec to 135Kbit/sec, because it reaches 270 million people in the U.S., making it the largest network. They have also said EDGE speeds will be fine for most users, and that some will browse via Wi-Fi hot spots that are much faster. It is unclear when Apple will create a 3G phone for use in the U.S., which would conceivably run over AT&T's faster HSDPA (High-Speed Downlink Packet Access) network, which has reached 165 metropolitan areas but is still a smaller footprint than EDGE.

In Europe, 3G networks are further along, and the percentage of cell-phone users is higher than in the U.S., although it recognized that 3G network users find their batteries run down sooner than with 2.5G, Milanesi said. She blamed the faster burning of batteries over 3G on the increased use of 3G phones, including data rich files such as photos and videos, and not because of an issue inherent to 3G networks.

Milanesi said a 3G-ready iPhone for Europe could ship in March 2008, running over WCDMA (Wideband Code Division Multiple Access) networks in the range of 350Kbit/sec. to 700 Kbit/sec. for download speeds. Apple would not comment for this story.

In Europe, as opposed to the U.S., several carriers will market and support the iPhone, Milanesi said, because no one carrier has a footprint that adequately covers all of Europe. In the U.S., AT&T has a "multi-year" contract to be the exclusive provider, according to AT&T. T-Mobile is reported by a German newspaper to be selling the iPhone in Germany on Nov. 1.

Also, in Europe, only half the cell phones are sold by carriers, compared to 94 percent in the U.S. Europeans are more accustomed to buying an unlocked phone and then finding a carrier that has good coverage where they need it, Milanesi said.

The importance of having 3G with the iPhone for better browsing capabilities is unclear because "it depends on how Europeans use it," Milanesi said. "In the beginning, we were saying that using EDGE will limit choices. EDGE is slow and WCDMA would be better for browsing, but iPhone users won't just use it for browsing." Many users will rely on the iPhone as a phone and then download songs and videos from a PC instead of over the air, she said.

In Europe, Apple has committed to providing iPhones in the United Kingdom, Germany and France, so far leaving out large markets of Spain and Italy, she said, even though "Italy would be a very good market for Apple," Milanesi said. "In Italy, people spend money on iconic devices like an iPhone, and I'm Italian so I can say that."

Whether the European iPhone is 2.5G or 3G and the countries in which the device is sold could affect Apple's declarations that it will sell 10 million iPhones globally in fiscal 2008, Milanesi said. "Europe is culturally different than the U.S., and I'm not sure people will queue up for three days to buy an iPhone as in the U.S.," she added.

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