Bloomberg predicts that Apple will release a faster iPhone 5, in September augmented with a faster processor, and a upgraded camera. While they go into detail on how this will help Apple compete against Android phones, they make no mention of LTE being part of this upgrade. Simply put, if Apple releases an iPhone 5 without LTE, customers may migrate over to the faster Android phones. Despite AT&T’s upgraded 3G network capable of faster speeds, rarely have I ever gotten anything better than what Verizon offers today with CDMA. Also the LTE phone makers are already hitting the iPhone with ad’s showing the speeds that the iPhone is simply not capable of in it’s current form. This would be problematic for Verizon Wireless as they would have to defend a phone that can not take advantage of the large LTE network they have been pouring billions of dollars into over the last few years.
Apple stock holders should be worried as well, the lack of a clear succession plan for Steve Jobs and the non-announcement of an iPhone 5 has dragged Apple’s stock lower over the last few weeks. Failure to keep up with market demands of a LTE equipped iPhone may trigger a consumer backlash which would further hurt Apple’s earnings and directly impact the value of Apple’s stock which may not recover appreciably if Apple delivers later a LTE iPhone and consumers still ignore it. The only deterrent for iPhone customers at this point is any heavy investments in media or apps which would make it expensive to switch over to an Android phone.