Apple Inc.s iPhone 5, only able to access the fastest available mobile networks on specific airwaves, is prompting disadvantaged carriers in Europe to cut prices for handsets from rivals such as Samsung Electronics Co.
The iPhone 5, which goes on sale Friday, will connect to fourth-generation wireless networks in Europe that run on a 1,800 megahertz band, favoring carriers who do have a network attuned to that frequency, including Germanys Deutsche Telekom AG and its British EE venture with France Telecom SA. Vodafone Group Plc and Telefonica SAs O2 unit will only be able to offer the iPhone 5 on their slower 3G networks.
The restrictions of the iPhone 5 will push Vodafone and many other European operators harder into the arms of Samsung, especially as the South Korean companys popular Galaxy line of phones includes a 4G version that is compatible with their networks, said Robin Bienenstock, a London-based analyst for Sanford C Bernstein.
With the iPhone 5 predicted by analysts to become the fastest selling technology gadget in history, subsidies and promotions will help operators that only offer the device on slower networks to keep customers. Vodafone lost its top spot in the U.K.
Samsung vaulted to the top of the global smartphone market by introducing a variety of Galaxy models using Google Inc.s Android software. While the iPhone is the most popular smartphone, Android is more widely used, showing up in devices from Samsung to HTC Corp.
Samsung said this month that sales of its latest Galaxy S III, which has a bigger screen than the iPhone 5 and also works with 4G networks based on different frequencies, topped 20 million units. Nokia Oyj unveiled a lineup of Lumia models this month with the most recent Microsoft Corp. Windows Phone software, aiming to win back market share with better camera and mapping technology.
O2 plans to offer iPhone 5 customers with a long-term contract the chance to upgrade to a 4G phone once the operators own 4G service is available, according to Telefonica spokesman Simon Lloyd. The carrier will chip in 10 percent of the cost of buying out the contract and pay the taxes, he said.
The new networks, based on long-term evolution technology, allow users to watch videos, stream music or perform other data- intensive tasks at a faster speed. EE, the largest mobile-phone operator in the U.K., said this week that the new 4G service is five times faster than is currently available.