Apple iPhone Won’t Be Barred Under Ruling

Apple should be breathing a sigh of relief right now that they didn’t include third-generation (3G) cellular data networking technology in the iPhone. A highly unusual U.S. International Trade Commission (ITC) ruling last week prevents the importation of any new 3G phone that uses silicon chips from Qualcomm. Bloomberg News confirmed that the iPhone doesn’t use any Qualcomm chips.

The ITC ruled in October 2006 that Qualcomm had infringed patents owned by Broadcom, a rival maker of cellular chips as well as a major Wi-Fi chip maker. However, until last week’s ruling, it was unclear what action might be taken. The ban affects all 3G chips sold by Qualcomm; most handsets are manufactured overseas and then imported. Any handset model imported by 07-Jun-07 can continue to be imported in future shipments, according to the ruling.

The iPhone uses Wi-Fi for local networks and EDGE for cell networks. EDGE fits into the 2.5G cell technology category, a peculiar name – “second and a half generation” – assigned to interim standards released mostly in the United States to bridge the gap between 2G (slow modem speed) and 3G (low-end broadband speed) offerings during a long period that 3G wasn’t ready to deploy. EDGE offers as much as three times the bandwidth of a dial-up analog modem, or roughly 150 Kbps in ideal cases.

Many pundits and journalists opined that by charging $500 or $600 for the iPhone (depending on capacity) and by including a slower-than-3G cell data connection, Apple had missed the boat – forgetting, of course, that smartphones are only gradually adding 3G networking, that few offer 3G and Wi-Fi in a single offering (and none allow seamless network handoffs), and that other smartphones cost in the hundreds of dollars. With new Qualcomm-based 3G phones banned, Apple may get the last laugh.

The decision went into effect immediately, and Qualcomm, Verizon, and others are already attempting to have the ruling reversed. The ruling becomes final within 60 days unless overturned by the U.S. president; the White House said that it would delegate the decision to the U.S. Trade Representative, as it has since 2005. If there’s no decision from U.S. Trade Representative Susan Schwab, Qualcomm can file an appeal in federal court.