Why is the iPhone GSM and not 3G?
Here's a clear and informative breakdown of GSM/EDGE vs CDMA/EvDo and why the iPhone is not 3G.
The article points out the high-speed EvDo support will most likely increase the price of the iPhone, which is already too pricey even for a high-end smartphone.
EDGE is about .25Mbps fast, while EvDo with REV .O is 3.1 Mb/s. Cingular, however, will never support EvDo. The article also notes that EvDo has several classes and so does EDGE, in which case some EDGE class qualify as 3G.
WiFi better than EvDo and HSDPA
Future users of iPhone need not worry about data speeds when using some of the phone's Internet capabilities. At transfer speeds between 6.5 Mb/sec and 20 Mb/sec, the iPhone's onboard WiFi can handle web browsing better than EvDo, HSUPA and HSDPA.
WiFi is also much cheaper than using alternative services from wireless networks. In effect, Cingular loses revenue in its deal with Apple because of the iPhone's WiFi capabilities, which of course translates to lower cellphone bills.
Update: The iPhone got 3G but the price actually dropped.
Qualcomm is apparently the only manufacturer of 3g (EVDO CDMA and WCDMA) cpu's for cell phones. I read that the EDGE chips made by Intel are much faster and physically smaller (for OS applications, not bandwidth). GSM has its own version of 3G using WCDMA (a CDMA technology used with royalty payments to qualcomm that is incompatible with Verizon and Sprint CDMA) Cingular has rolled out some use of WCDMA 3g with some phones. WCDMA may be in Iphone's future. Hopefully other companies will be able to make 3g chips in the future besides qualcomm, or hopefully qualcomm starts making faster 3g chips. Apparently WCDMA supports simultaneous voice and data while EVDO does not. Also, although CDMA can use sim cards, (or R-UIM cards) the FCC does not seem to want to allow this. Also verizon seems to always want to lock their downloads and computer transfers requring everything to go through get it now or vcast (I may be wrong about this or anything else). In any case, the original cdma technology is superior to gsm tdma technology. GSM knows it has to use CDMA (WCDMA) I'm sure CDMA has advantages over WCDMA, but a WCDMA phone should be able to be unlocked for use on any GSM network and depending on the supported bands (quad-band) will work throughout the world with a respective local network sim card. On the other hand Verizon did make at least one phone with Gsm bands as well. But only the international bands so you probably can't take it to a domestic GSM provider. Again I may be wrong or innacurate about any of this or specific terminology, so I hope nerds don't get their panties in a bunch over this post(not that I am not a nerd).