Tech.view | Apple pipped | Economist.com

THE mobile-phone industry’s recent jamboree in Florida was a brutal reminder of how fast innovations come and go these days. A bare three months ago we were drooling over Apple’s forthcoming iPhone, with its ingenious touch screen that responds to pinches, pokes and other pawings. But though not available until June, the $500 iPhone is as mouth-watering today as yesterday’s cold pizza. The phone that stole the show at CTIA Wireless 2007 was the “Ocean” from Helio, a youth-oriented newcomer to the cellular business.



In many ways Helio has out-Appled Apple. The start-up—launched less than a year ago as a joint venture between SK Telecom of South Korea and Earthlink, an American internet-service provider—caters to young trendsetters who appreciate ease of use and cutting-edge design.

Whereas the iPhone encapsulated a ho-hum smart phone in an exquisite package, the $295 Helio Ocean has been winning plaudits for its ingenious user interface that neatly integrates all the disparate functions of a modern multi-media mobile, such as dialling phone calls, texting messages, listening to music, taking pictures, recording videos, playing games and surfing the web.

To make a call, the Helio Ocean’s screen slides vertically to reveal a phone keypad. To type an e-mail, do some texting or send an instant message, turning the device horizontally and sliding the screen upwards reveals a full keyboard. With a separate microprocessor to run the media player, the Helio Ocean gets 15 hours of playing time from a single charge. Little wonder it was hailed as the rock star of the industry’s show.

But it is the Helio Ocean’s EV-DO (Evolution-Data Optimised) wireless technology that renders Apple’s iPhone an also-ran. Mobile experts have been mystified by Apple’s decision to use Cingular’s EDGE (Enhanced Data rates for GSM Evolution) network when far better wireless communications methods abound. EDGE is a marginally enhanced version of the old GSM (Global System for Mobile Communications) cellular technology introduced in Europe in the early 1990s. Cingular’s version of it provides data speeds of between 75 kilobits per second (kbps) and 135 kbps—not that much better than a dial-up internet connection, and often much worse.

By contrast, the EV-DO networks used by Helio (as well as Verizon and Sprint in America and KDDI in Japan) offer 450 kbps to 800 kbps, rates similar to those of DSL broadband connections. EDGE’s slower data speeds mean that iPhone users must rely on Wi-Fi to do anything more than make phone calls or send the odd e-mail: the iPhone has a Wi-Fi radio embedded in its circuitry so users can access internet “hotspots” using the popular 802.11 form of wireless broadband.

Wi-Fi may be handy for networking wirelessly around the home or in hotel lobbies, coffee shops or airports. But it is hardly the most efficient way to download videos or play multi-user games—tricks that multi-media mobile phones are supposed to perform flawlessly.

Mobile-phone companies have their own ideas about how to meet these new demands. Most are working feverishly on upgrades for their existing 3G (third-generation) networks. Qualcomm, the company behind the CDMA family of cellular technologies, has shown in trials that its EV-DO enhancements can deliver data rates of over three megabits per second (mbps). Cingular and other GSM-based networks are pushing a rival technology called High-Speed Downlink Packet Access (HSDPA) in a bid to close the performance gap. In real-world trials HSDPA has clocked speeds of up to 1 mbps.

But even EV-DO, let alone the slower HSDPA, might prove too little too late. The mobile-phone companies are about to be overwhelmed by a tsunami called WiMAX, a souped-up successor of Wi-Fi with a range of 30 miles or more instead of 100 yards or less.

Whereas 3G cellular networks might get 3 mbps and Wi-Fi around 30 mbps, mobile WiMAX is a 4G technology promising speeds of up to 100 mbps. Comparable 4G networks from the cellular industry, such as the proposed Ultra Mobile Broadband from the CDMA camp or the Long-Term Evolution effort among GSM’s descendants, are still in the laboratory. And that’s where they might well remain.

WiMAX (or 802.16, its technical name) was conceived as a way to deliver broadband to remote areas beyond the reach of DSL or cable TV. The mobile version of this form of wireless networking was supposed to be a more advanced sibling called 802.20. But with Intel, Sprint and the European Union throwing their weight behind the interim 802.16 mobile solution, the WiMAX bandwagon has become unstoppable.

In addition to being able to transfer at least twice the amount of data per second achieved by the best technologies of the cellular industry, mobile WiMAX is relatively cheap. During the spectrum auctions of the heady dotcom era, cell-phone companies scrambled to outbid one another for 3G frequency allocations, paying typically $5 per megahertz for every member of the population covered. In today’s more chastened times, mobile WiMAX licences can be had for less than one cent per megahertz per person—a whopping 500 times less.

This has tipped the tables in mobile WiMAX’s favour. And with it, the writing on the wall is looming ever larger for most of the 3G phone operators. Why Apple should have hitched its wagon to so fading a star shows how quickly even the most talented of companies can be blinded by today’s blistering pace of wireless innovation.


Tech.view Apple pipped Economist.com