4G, or not 4G? That Is the Question with AT&T's Phony iPhone Marketing

Here's a rare occurrence: Apple (NAS: AAPL) has given in to the demands of a wireless carrier.

AT&T's (NYS: T) willingness to cede unprecedented amounts of control to Cupertino played a large part in how it landed iPhone exclusivity in the early years, while rival Verizon (NAS: VZ) had to wait nearly three long years to get its big red hands on the device.

Such stuff as 4G dreams are made of
Meanwhile, the semantic debate over what technically qualifies as "4G" data technology has continued to rage on unabated within the industry, while AT&T and T-Mobile have kicked up their marketing attempts to mislead the members of broader public who may not be as versed in the technicalities. According to the International Telecommunication Union, the only two technologies that truly qualify as 4G are WiMAX and Long Term Evolution.

Of these two, LTE has emerged as the clear winner: Both of the largest carriers are in the process of rolling out true 4G LTE networks, while smaller Sprint Nextel (NYS: S) is left scrambling with its soon-to-be obsolete WiMAX flavor and floundering partner Clearwire (NAS: CLWR) . That undynamic duo is now rushing to build out LTE. There goes that "first mover" advantage they sought with WiMAX.

A 3G network by any other name would be just as fast (or slow)
T-Mobile doesn't have an LTE network, and AT&T is in the early stages of its LTE rollout, while Verizon is leading the pack in LTE coverage availability. T-Mobile and AT&T market their HSPA+ networks as 4G, but you can really think of them as enhanced or accelerated 3G networks.

They claim that their networks reach "4G speeds" so they proceed with marketing, and even further blur the line by releasing smartphones that literally include 4G in their names, such as the HTC Radar 4G and T-Mobile myTouch 4G on T-Mobile, and the LG Thrill 4G* and Samsung Infuse 4G* on AT&T. Those asterisks are there because AT&T's fine print reads: "*4G speeds delivered by HSPA+ with enhanced backhaul."

Methinks Apple doth protest too much
Handset OEMS like LG, HTC, and Samsung, among others, have all been willing to play along with these marketing games that the carriers set up, but they've also always had less bargaining power than the massive beast that is Apple. The Mac maker has even said it wasn't going to participate in the semantic battle, with marketing chief Phil Schiller stating "We're not going to get into a debate in the industry of what is 4G and what isn't. We leave that to others to talk about" at the iPhone 4S unveiling.

Back in October, there was word that AT&T was pressuring Cupertino to play ball with marketing the AT&T version of the iPhone 4S as a "4G" device, which would seemingly make its version seem more equal than others in an Orwellian sort of way. The device is the same on AT&T, Verizon, and Sprint, but AT&T is the only iPhone carrier that has an HSPA+ network and you can bet it wants to use that as a differentiator.


Well, guess what? It looks like Apple has at long last caved to one of AT&T's demands. In the wake of the new iPad unveiling yesterday, Apple pushed out an iOS software update, quietly sneaking in this change for the AT&T models. The little "3G" indicator has now been replaced with a "4G" one, purely for the benefit of Ma Bell.


Looks like Schiller might need to backtrack on his words a bit, since Apple is now, at least implicity, participating in this debate.

Beware the ads of March
Did my AT&T iPhone get faster overnight? Not even a little bit. Is AT&T's iPhone a 4G device? Not really - it depends on who you ask. Does AT&T's 3G network actually claim a theoretical speed advantage over rivals Verizon and Sprint? Technically, yes. Is AT&T going to kick up its marketing and proclaim itself as the only carrier of a "4G" iPhone 4S? Yes. A million times, yes.

An iPhone with true 4G LTE will likely debut this year, following the new iPad as Apple's first 4G LTE devices. Until then, don't fall for AT&T's phony iPhone "4G" marketing ploys.

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At the time this article was published Fool contributorEvan Niuowns shares of AT&T, Verizon Communications, and Apple, but he holds no other position in any company mentioned.Click hereto see his holdings and a short bio.The Motley Fool owns shares of Apple.Motley Fool newsletter serviceshave recommended buying shares of Apple and creating a bull call spread position in Apple. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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