What Does Apple Have Up Its Sleeve For The iPhone 5?


All those new Android devices, jumped up with NFC and LTE capabilities, are getting Apple (NSDQ: AAPL) fans very hungry for news about what the next iPhone might contain. To be clear, Apple has not made any official announcements — and in truth we’ll probably see further launches of the iPhone 4 on CDMA networks and a white edition before we see a totally new device — but that’s not stopping a flood of speculation about what features that new device might have.

NFC: Bloomberg ran a report this week, citing “engineers” working on Apple hardware, saying that both the next iPhone and iPad would be embedded with NFC chips. These devices are due out later this year, said the report.

NFC chips, which allow a user to transfer data in an encrypted and secure way between two devices, can be used for a number of applications, but one of the most revolutionary may be mobile payments — this is the NFC application that has gotten the mobile industry so excited of late, and this is the main reason why Google (NSDQ: GOOG) has incorporated NFC functionality into its latest Nexus handset.

NFC may well become a ubiquitous part of the mobile world — although it’s been talked about for years already and still has yet to gain much ground. What’s interesting about the Bloomberg report is how it highlights Apple’s interest in linking up NFC to its own wider mobile ecoysystem. Namely, mobile payments would get directly linked to a user’s iTunes account, which could also get enhanced with loyalty options to encourage further transactions.

Tying in mobile payments with loyalty programmes has been something a lot of retailers (such as the supermarket giant Tesco) have been trying to do as well; but having a third party like Apple do it makes the proposition significantly more powerful. And of course lends more weight to buying an iPhone in the first place — Apple’s primary goal.

LTE: Given Verizon’s new LTE network and the plethora of Android devices it had announced for it just the week before, a lot of people thought LTE capability might be part of the Verizon iPhone launch. No chance. As Tim Cook explained during the event, “the LTE chipsets forced some design concepts” that Apple was not willing to make.

Now we hear from China Mobile’s chairman Wang Jianzhou, by way of his Davos speech, that Apple is already working on LTE, specifically TD-LTE (a version of LTE that works in the same spectrum that WiMax operates). In fact, China Mobile’s hope at this point is that the LTE work Apple is doing will extend to China’s own flavor of 3G, TD-SCDMA.

LTE, pushed along by Verizon and other operators, has, at this point, made more headway in the U.S. market than it has anywhere else in the world. But it’s never been Apple’s strategy to be at the leading edge of the basic technology, just cutting edge in how it’s ultimately used. Apple has missed the boat on being the first mover in LTE devices, but the field is still wide open for who will make the device that will utilize the network best.


Timothy Tripp

The only way I will move to iPhone 5 from iPhone 4 is if it has LTE. The reason is simple. We’re on AT&T and very much used to using our data connections while we’re on the phone. We look at maps, find restaurants, etc. WHILE TALKING and although we WANT to switch to Verizon right now, we can’t because their crappy 3G network won’t let us talk and use data at the same time. BUT when they have an iPhone that will work with LTE on Verizon then it WILL let us talk and use the (blazingly fast) data at the same time. That’s a game changer and it’s the ONLY feature they can add to the iPhone 5 worth upgrading from the already excellent iPhone 4.

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