Does hardware trump network speed? 1M T-Mobile iPhones say yes.

Image of T-Mobile lanyards courtesy of Flickr user Stefan Evertz.

Will there be an LTE iPhone this year? Reports generally suggest that Apple won’t make the leap to true 4G mobile broadband in 2011. But we’ve argued in the past that a lack of LTE compatibility probably won’t be much of an issue in terms of the iPhone 5’s appeal, and a new report Thursday from T-Mobile (via 9t05Mac) backs that up.

A T-Mobile spokesman told 9t05Mac that there are currently more than a million active iPhones using T-Mobile’s network. T-Mobile’s network uses a different frequency for 3G connectivity, so even though it’s a GSM network, which the iPhone supports, anyone using an iPhone on T-Mobile in the U.S. will only get 2G EDGE speeds.

Most of these iPhones are pre-iPhone 4 models, the spokesman said, but the iPhone 4 was also fairly well represented, which means customers had to physically alter their SIM cards to get the phone working on the network. The iPhone 4 uses a micro-SIM, smaller than the standard SIM card, and T-Mobile doesn’t carry the micro-SIM variant. T-Mobile iPhone users would also have had to unlock their devices via jailbreak, or purchased them factory unlocked in order to get them working on the carrier’s network, which those considering an iPhone 4 can now do in the U.S.

For a technically unsupported device, 1 million is a big number. Consider that estimates for Windows Phone 7 total sales so far puts its reach at about 3.6 million globally (combining estimates from late last year and the first quarter of 2011), and that T-Mobile’s total subscriber count is somewhere around 33 million, and the number is even more impressive. If and when the T-Mobile / AT&T merger goes through, iPhone customers may be legitimized, but for now, that’s 3 percent of T-Mobile’s overall network that’s going rogue for the love of the iPhone.

Does Apple need to bring 4G to the iPhone 5? Not if customers are already bending over backwards to use legacy devices on a previous generation network. The iPhone’s popularity when it was only available on AT&T, which by almost all accounts provides dismal service in certain locations, including major urban centers like New York and San Francisco, is another indication that people are prioritizing the hardware when buying an Apple smartphone.

The increased availability of Wi-Fi hotspots, and offloading efforts by carriers also make mobile cellular network speed less of a priority, especially since mobile data plans now come with caps that can seriously restrict their usefulness anyway. So while the competition tries to dangle the carrot of 4G speeds, which may or may not be relevant to users, Apple can focus on hardware and software, which apparently draw in customers even when just getting any kind of cellular service can be a bit of a hassle.

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