Beyond 3G, Part 1: What the iPhone Needs

iPhone supplies have been running low of late, both online and at Apple retail stores, and Apple's annual Worldwide Developers Conference (WWDC) is set for June 9 though 13 -- and it's sold out. Apple has already said it will showcase the already announced iPhone 2.0 software, including the iPhone software development kit (SDK) and the App Store. CEO Steve Jobs will take the stage, so there's a decent chance that he'll reveal an all-new iPhone -- but Apple may not start shipping it in volume until late June. At least, that's the mostly likely guess on the timetable, and that's all it is -- a guess. Apple is notoriously tight-lipped about all upcoming products.

The 3G Elephant in the Room

What features might the next iPhone bring? What better way to examine what might come than by taking a look at what's missing now? What features is the current iPhone really, truly lacking?

Obviously, the iPhone is missing 3G network capabilities. AT&T's (NYSE: T) EDGE (Enhanced Data Rates for GSM Evolution) network speeds, while adequate, are getting trounced by other smartphones that can take advantage of 3G's much faster Internet delivery capabilities. It's bad enough in the U.S., but in other parts of the world that have been enjoying dominant 3G-based networks longer than the U.S., a 3G phone is critical to the next generation of iPhone sales success.

Enough said about that. Even Jobs himself would have a hard time explaining a second-generation iPhone that's not 3G-capable. Count on it coming this summer.

Apple's iPhone SDK, 2.0 and the App Store

"The three things that people bring up most often about limitations of the iPhone are all being addressed by the 2.0 release -- those being true Microsoft Exchange integration, the ability to run native applications via the App Store, and a native VPN (virtual private network) client," Raven Zachary, a research director with The 451 Group, told MacNewsWorld.

"A lot of corporate customers have mail servers behind VPN, and they can use the VPN client that's coming with 2.0 to do IPsec connectivity to talk to mail or Web servers behind corporate firewalls," he added.

To fix enterprise e-mail limitations, Apple licensed Exchange ActiveSync from Microsoft, which brings secure over-the-air push e-mail, contacts, calendars and global address lists. The support for the Cisco (Nasdaq: CSCO) IPsec VPN for IP-based encryption will protect the transmission of sensitive data, removing some enterprise IT concerns. Plus, corporate IT staff will be able to remotely wipe the iPhone in the event that it's stolen or lost.

As for native applications, jailbroken iPhones have been running lots of cool applications for months. However, straight and narrow customers that don't want to risk bricking their iPhones have been waiting for something officially supported by Apple.

The upcoming iPhone App Store will be built into the iPhone 2.0 software release, and it will let users browse, search, purchase and wirelessly download third-party applications directly onto their iPhones. The 2.0 software will run on existing iPhones.

One more thing about the App Store -- games. Judging by what was shown at last March's iPhone 2.0 presentation, the new software could bring on some great time-killing games.

So, What's Left?

There are at least two categories of missing features -- the truly important and the nice-to-have.

On the important list, Ken Dulaney, a vice president and analyst for Gartner's (NYSE: IT) mobile and wireless practice, told MacNewsWorld that iPhone could use a global positioning system (GPS), more functionally rich e-mail and calendar applications, additional storage, better switching between WiFi and cellular, a better keyboard, a cut-and-paste feature and a contact manager application that's easier to scroll through. Plus, "haptics or something to tell you what keys you are pressing while driving," he noted.

Apple already has a GPS-like cellular and WiFi triangulation feature that locates the iPhone within miles or yards depending on the availability of WiFi hotspots and cell towers within reach. However, it's not true GPS , which is a feature found in some competing smartphones. For the iPhone not to have true GPS leaves one more opening for the iPhone's rivals.

The lack of a cut-and-paste feature has been on the hit list for a long time, and while it would be handy enough for consumers, cut-and-paste is darn near critical for business use. Some have speculated that Apple has had a hard time figuring out an intuitive and easy way to use multi-touch on the touch-sensitive screen to select, copy and then paste.

iPhone users with lots of contacts have been perplexed with the inability to search their own contact lists. Even a Little League coach can run into a trouble here. Say the coach remembers a child's first name but not the parent's last name. A simple search can find the right contact information -- provided the child's name is associated with the parents, of course -- but there's no way to search contacts on iPhone. If a user knows part of a contact but not all of the contact, it can be a maddening limitation.

Haptics, Anyone?

It seems entirely unlikely that Apple will forego its mult-touch touch-screen in favor of a keyboard, but a better keyboard may be needed to convince some users. Heavy text-message users and e-mail writers often prefer the two-thumbs-on-the-buttons method employed by users of QWERTY keypad smartphones.

The most likely solution for improving the keyboard is to use some sort of tactile touch feedback based on vibration, called "haptics." Apple has reportedly been looking into it. It's hard to say if haptic technology has progressed so that it's close to being useful, though, especially when it comes to typing on the touchscreen.

Missing Biz Features

"With regard to business, there are many vital things missing -- even with Active Sync/Exchange Push support [and the] Enterprise SDK, there is no mobile device management and subsequent IT policy control, FOTA (firmware over-the-air), security and encryption, unsatisfactory battery life, lack of keyboard, and no SIP support, etc," Andy Brown, director of wireless enterprise strategies for Strategy Analytics's global wireless practice, told MacNewsWorld.

"Nevertheless, in verticals like media, Apple is set to make inroads -- our research shows that Apple is the third most popular choice behind Nokia (NYSE: NOK) and RIM (Research In Motion) in business among heavy wireless spending companies, so there is hope for Apple," he added, noting that Apple may experiment with new form factors, such as clamshell and slider, along with possible new keyboard options alternate form factors might bring.

A Better Camera

While handy, the iPhone's camera has room for improvement. It doesn't work well in anything but great light, it has to be keep astoundingly still to avoid blur, and there's no built-in camcorder or ability to record video and audio. A good camera/camcorder skirts the line between important and nice-to-have, and once the SDK ships, iPhone 2.0 users will likely have several third party options for video recording.

Some business users have also called for a front video camera lens that would let them participate in video conferencing while on the go.

Real Instant Messaging

"The other thing people have really been hoping for is an instant messaging client," Zachary said. "We already saw a demo from AOL at Apple's press announcement in March showing off an AOL instant messaging client, so for those depending on IM, I think they are going to get that from the App Store."

Along the same line, there's no current way to snap a photo and then send it to another cell phone without attaching the photo in an e-mail and sending it -- so there's no real MMS (multimedia messaging service) messaging, either.

Bluetooth Tethering

"People would love to be able to use their iPhones as a Bluetooth tether for Internet connectivity to their laptops, but you only have a small percentage of the population that understands how to use that," Zachary said.

"I think Apple could really simplify the process of going online from your MacBook using the iPhone, but it's not a high-demand request -- it tends to be the power users," he added.

A Handful of Others

While iPhone users can open Microsoft Word and Excel documents, they can't yet edit or create them or easily store and use them directly on the iPhone. Then there's Flash. Apple has said that Adobe (Nasdaq: ADBE) Flash support has either been too slow or not good enough for the iPhone. Still, lots of Web pages use Flash, and as long as the iPhone lacks Flash, it can't use some Web sites' features.

And what about voice dialing? Since a numeral key is represented by an image on a flat touch-screen rather than buttons the user can feel with the fingertips, voice dialing would go a long way to solve the dialing-while-driving problem (not that anyone thinks dialing while driving is a great idea).

There's also a slim hope that non-AT&T customers could use iPhone officially with other carriers in the U.S., though that's not likely to happen anytime soon. Still, a chance remains. So does hope for a removable battery, which would stave off many complaints of poor battery life -- not to mention the service fees customers will pick up once their existing batteries fail.

Wireless syncing via Bluetooth of a user's WiFi network would also be handy, as would over-the-air downloads of movies and video from the iTunes store, though it's hard to say how well that could be supported in real life.

There are tons of other little tweaks and wishes, of course -- and a few things Apple may deliver as surprises. Only a handful of people inside Apple know for now. We'll see what (probably) happens next month.

Stay tuned for "Beyond 3G, Part 2: What's Next?"