Guesses on iPhone 4th-Generation

We’re about one week away from the official debut of the fourth generation iPhone. While much of the specifications have been made known via Gizmodo and their $5,000 scoop, its still interesting to speculate on what the phone will be capable of.

Whats Known

We know of the new design, the rear and front-facing cameras. Of the slightly larger battery. The possibly radio-transparent back of the case. The internals powered by the A4 CPU that Apple has worked on for a while now. The higher resolution screen was recently confirmed.

What It Means

We’re certainly in for video conferencing. What remains to be seen is how it is structured. Does it work over WiFi only, or will it work on 3G? Does it go over the cellular phone network or the internet? Does AT&T heap another $20/mo per phone to actually use it? How does it work with non-iPhone devices? Or is it just there for use in non-phone  applications like Skype or iChat?

The radio-transparent glass back of the case is one of the more intriguing pieces for me (the sort-of electrical engineer). If Apple has devised a material which is radio transparent, they’re looking to improve battery life. Since Infineon hasn’t progressed much in their 3G baseband chip (still fabricated on a somewhat old RFCMOS 130nm platform), Apple has to step up and figure out ways to reduce the battery usage of the rest of the device. Reducing radio transmission power will help battery life (the RF transmission is usually between 50-100mW depending on the strength of the signal needed to get to the nearest tower). Likewise, the ultra power efficient A4 chip will help in consuming power of the device. All these enhancements combined with the larger 1400 mAh battery (5Wh) its possible we see 3G call times and 3G internet usage approach 10 hours, WiFi internet usage up to 12 hours and video playback times reach 15 hours. The sales of Mophie Juice Packs has probably convinced Apple they need better battery life – to go all day at work and all night out having fun.

But What Else?

I haven’t seen anyone talk about the Infineon 3G baseband chip. The chip currently used is presumably the same Infineon Smarti UE chip, Infineon hasn’t released a new one since 2007. It supports up to 14.4Mb/s HSDPA (downstream) and 5Mb/s HSUPA (upstream). This is twice as fast as the current iPhone supports (7.2Mb/s, real world speeds around 1.5-2Mb/s on adequate networks – not AT&T, 14.4Mb/s would probably provide real world speeds of 3Mb/s).

Other networks are possible. Just like how Apple announced their original iPhone in 2007 six month ahead of time (for several reasons), Apple would likely pre-announce the phone coming to other networks. I would expect that any pre-announcement would be about 4 months ahead of time, and Apple would try to get the phones out in October or November in time for Christmas (were this to take place, I’d put AAPL at around $350 by the end of 2010). The two main reasons to pre-announce are to prime subscribers of those networks (to keep them from upgrading their current phone to a new one) and to avoid it being announced through either the FCC or through leaks of phone company employees due to the necessary engineering work that would need to go in to supporting the iPhone (visual voicemail, possible video chat, etc). I expect Apple will need to support all four major US cell phone carriers within the next 9 month because of the gains the Andriod platform is making on them because the iPhone isn’t available through every carrier. In the desktop model Apple is happy to keep their margins at 40-50%, the phone however has much larger margins – an iPhone 3GS cost around $190 to manufacture (in mid-2009) and probably more for licensing costs but sells to AT&T for $599, a $400 subsidy. Would carriers be willing to subsidize the phone as much if its available on all four networks? Verizon sells the HTC Incredible for $200 (with $325 ETF) subsidized and $599 unsubsidized. We’ll see…

I certainly do not see support for LTE or WiMax in this generation of phones, mostly due to the fact that there are no networks ready. Apple held off on 3G for a year because the AT&T network wasn’t sufficient. I can see them holding off until 2012 when LTE for voice and data are fully supported on the 3 main LTE networks (AT&T, Verizon, T-Mobile). What I do see happening, coupled with the unveiling of iPhones for other carriers is AT&T going live with 7.2Mb/s or even 14.4Mb/s data networks before the end of the year in select cities (top 25 markets, plus select smaller ones). By providing the user with faster data access, AT&T looks to set themselves apart from Verizon. T-Mobile can also offer this, but their status as a “mid-major” carrier probably doesn’t threaten AT&T.

We’ll find out in just about a week. It’ll be a long seven days.