Apple’s 2017 iPhones Won’t Have Gigabit Download Speeds, and it Won’t Matter to Most Customers

3 minute read
| The Back Page

Apple’s best-in-class supply chain management is having an unfortunate side effect. According to Bloomberg, Apple’s practice of avoiding single-source components means the 2017 crop of iPhones won’t include Qualcomm’s gigabit-download modem chips.

It’s being seen as a setback for Apple, but will be little more than a blip in iPhone’s overall trajectory.

Meh

Apple and Qualcomm

Qualcomm has a wireless modem for smartphones today that offers theoretical download speeds up to 1Gb per second on some networks. We’ll get to that theoretical maximum below the fold, but the story starts with Apple and Qualcomm.

The two companies are in a bitter fight over how the smartphone industry pays royalties. Qualcomm would like to continue long-standing industry-practice of basing royalty rates for patented technology on the retail price of consumer electronics devices.

That practice works fairly well in the race-to-the-bottom world of open licensing and craptacularly mediocre products. Apple, however, makes premium products it sells for premium prices, and the company wants to pay royalty rates based on the overall value a patent is bringing the product, not its retail price.

Put another way, Apple’s 0.05% royalty rate on an $800 iPhone is significantly higher than the 0.05% Samsung pays for some piece of crap $89 Android device. And they’re both paying for the same component. Apple wants to change this, Qualcomm doesn’t. And the two companies are engaged in a major court fight over the issue.

While Apple and Qualcomm continue to do business—just like Apple and Samsung continue to do business despite their epic patent fight—Apple may be loathe to make itself beholden to Qualcomm for such a critical component as its modem chip.

Two Companies, One Component

The reality, though, is that Apple seldom allows itself to be beholden to any one company for a critical component. That’s been a big part of Apple’s strategy since Tim Cook took over Apple’s operations in 1998.

There are a couple of reasons for that, both key. The first is that Apple plays one company against another to extract the best possible price. The second is that Apple has a fall back in case one supplier has quality or logistics problems.

Bloomberg noted that Intel has its own gigabit download speed modem in the works, but it won’t be ready in time for Apple’s 2017 iPhone product line. Because Apple’s production numbers are massive, iPhones announced in September are being ramped up even now.

Half-Baked Technologies

There is no doubt that carriers and hardware makers first to market with Gigabit download speeds will bray the news far, wide, and loudly. There is even less doubt that the tech blogosophere and echo chamber will masticate the fact that iPhones can’t do what Samsung or HTC or whomever can. Apple haters will cackle with glee that this or that destined-for-malware Android device is markedly faster than iPhone.

But it won’t matter to the general public for several reasons.

1.) Outside the echo chamber, few will know or care about gigabit download speeds.

2.) Apple haters gonna hate. They’ve been doing it forever, yet Apple is Apple.

3.) Initially, gigabit download speeds will be theoretical, not real. As Bloomberg put it, “Achieving 1 gigabit data speeds requires almost lab-like optimal signal conditions that seldom occur in the real world.”

Apple seldom (if ever) supports half-baked carrier technologies for iPhone. Apple was later than the rest of the market with 3G network support and LTE/4G support. Apple’s competitors (and its haters) tried to make hay about that, too, and we know how that story ended.

I bet you, dear reader, had completely forgotten about the Apple-is-dead-because-iPhone-doesn’t-do-LTE narrative permeating the echo chamber a few years ago.

iPhone Will Cruise Along

Certainly Apple will be hammered for not doing gigabit speeds for a few month, but “hammered” is relative. As much as many of us in the echo chamber thinks the echo chamber matters, it’s still an echo chamber.

Apple will introduce gigabit download speeds to iPhone when it’s ready, and the world will quickly forget it ever cared. It is known.

Shares of $AAPL dropped 3.88% on Friday to close at US$148.98, down $6.01, on almost triple the normal volume. That drop was part of a broader tech selloff.

*In the interest of full disclosure, the author holds a tiny, almost insignificant share in AAPL stock that was not an influence in the creation of this article.

5 Comments Add a comment

  1. Shares of $AAPL dropped 3.88% on Friday to close at US$148.98, down $6.01, on almost triple the normal volume. That drop was part of a broader tech selloff.

    Concerns about the political weather? Not just here, but the election in Britain, the situation with Qatar and more?

  2. So Bryan:

    It sounds as if gigabit download speeds, at least in 2017, are a bit like owning a Maserati or a McLaren in a country in which the speed limit is 65 mph; one has the potential, just not the opportunity to exploit it.

    One might also muse, if one is prone to musings or even the occasional critical thought, that in this day of platform proliferation and competition, in which consumer loyalty is sustained by ecosystem richness at whose heart lies the user experience, about the role of tech specs, and conclude that the day when tech specs reigned supreme and drove consumer migration are long dead. Right alongside Julius Ceasar and the floppy disc.

    That a consumer heavily invested in a given platform, with deep roots in its ecosystem of products and services, is going to suddenly divest of that system because one – and only one – of its products or services has inferior specs in just one metric of product performance, is ludicrous; rendered even more so by the knowledge that such relative disadvantage is temporary and correctable with the next iteration.

    Granted, there are issues and insults that can move consumers between platforms, but an isolated tech spec, however much a pundit may protest it, is not one of them. Rather, such movement these days is driven far more by the fit between consumer need and platform capability, and the relative ease with which the consumer can exploit that capability compared to their colleagues and competitors.

    As you’ve rightly indicated with gigabit download speeds on smartphones; these are bragging and bagging rights for the fan boys locked in perpetual prepubescence.

  3. Server bottlenecks, carrier restrictions, and network load all mean we don’t get the theoretical upload or download speeds advertised for our current devices. And those are for network standards that have been out for a few years. This lack of GB speeds on the next iPhone won’t make a tinker’s damn bit of difference, except for people wanting to yell at each other on the internet.

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