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Apple launches first 5G iPhone — but will it be useful?

Yahoo Finance’s Dan Howley joins Akiko Fujita to break down his thoughts on the new lineup of 5G iPhones.

Video Transcript

AKIKO FUJITA: Shares of Apple, off about 3/10 of a percent in this session, continuing to trade lower on the back of those big announcements yesterday on the iPhone 12. Ultrafast 5G speed's the big selling point, but how real is the promise of low latency and increased capacity? Dan Howley is here to break that down for us. And Dan, this was the question going into the event yesterday, and we saw Verizon CEO, which of course, Verizon, the parent company of Yahoo Finance, come out there on stage with Tim Cook to unveil their 5G rollout as well. I mean, did that do enough to alleviate some of the concerns maybe consumers had about just how real 5G is right now?

DAN HOWLEY: I don't think it necessarily did. You know, it was a big coming out party for Verizon. Obviously, T-Mobile already has the largest 5G network out there. A lot of that isn't the kind of, you know, groundbreaking speeds that you're going to get or are promised as far as 5G goes. You know, Apple touted that in ideal situations, you would get as much as four gigabits per second of download speeds. Your average smartphone right now, I mean, you know, mine on 4G LTE gets 100 something megabits per second. So it's a huge difference, but those speeds really don't exist unless you're talking about millimeter wave 5G, and that really is limited to literally city blocks.

I mean, you can go on to Verizon's map right now, coverage map, and you'll see the individual blocks in cities that actually have that kind of broadband. Now, they've expanded. They have a nationwide network, but it's smattering throughout each state. T-Mobile has a larger presence, but there are still large swaths of the country that don't have 5G. AT&T, the same thing. Now, all these carriers have 4G blanketing the country, and that's because it took years to build that out, and we're still going to wait to get that kind of ubiquity with 5G. Now, outside of the networks themselves though, the idea that apps that use 5G are available, it's just not there, right?

Right now, all of the apps we have are optimized for 4G LTE because of that ubiquity I was talking about. So I can download albums in seconds on Spotify already. I can stream at, you know, HD or 4K from Netflix on my smartphone already. And don't forget, we also have Wi-Fi, so there's not really any apps that are available that are taking advantage of 5G quite yet, but that doesn't mean that they're not going to appear in the next one to three years or so. We just don't have them at the moment. Don't forget, it took a while for 4G to really take off and then give us apps like Spotify, like streaming movies, like Grubhub. Dating apps didn't explode until we had 4G and that ubiquity.

So I think once we finally get there, 5G will be everything that's being promised. But in the, you know, the realest sense, I think what people need to recognize when it comes to 5G is that it's more about the industrial applications. So think networks of self-driving cars, you know, real time robotic surgery from remote locations, things like that. So the apps will be interesting, the use on smartphones will be very interesting, the different sectors of the economy it will impact will be important, but I think it's the grander picture of 5G that really will matter.

AKIKO FUJITA: And Dan, while we're talking about 5G here in the US, obviously, Apple looking to make a big splash with this phone globally. You look at China, they've been much more aggressive in the build out for 5G. How do you think Apple is likely to compete with this new iPhone, again, some of the other brands there, like a Huawei or a Samsung, that have been far ahead, at least in the devices being offered for 5G?

DAN HOWLEY: Yeah, I think really, you know, as far as the 5G offering goes in China, this is, you know, it was a must do for Apple, right? You mentioned how Huawei has 5G devices. Samsung has had 5G devices for more than a year now. So I think really for Apple that this was the phone that needed to have 5G, and I think they're going to do incredibly well in China because of that. There were probably pent up-- there's probably pent up demand there from consumers who wanted the next device to have 5G. Now that it does and China has its larger 5G networks, I think that's really where it's going to do the best is over there,