FierceWireless

Clearwire trumpets market launches, wholesale relationships

Phil Goldstein — Tue, 10 Nov 2009 17:16:55 -0500

Clearwire boasted about its market launches, including 11 new mobile WiMAX markets in the third quarter, and also trumpeted its relationships with its wholesale partners Sprint Nextel, Comcast and Time Warner Cable. Clearwire CEO Bill Morrow said that company is "ramping up our systems to be able to support even more wholesale customers."

The company reiterated that it expects to cover 30 million POPs in 25 4G WiMAX markets by year-end, and have 120 million POPs covered by the end of 2010. Speaking about Clearwire and its wholesale partners, Morrow said, "We share a common vision of providing a new category of Internet service unmatched by today's standards."

The earnings announcement comes on the same day that Clearwire confirmed it will be receiving more than $1.5 billion in additional funding. Sprint, which holds a majority percent ownership stake in Clearwire, will contribute the most new funding, with equity financing of $1.176 billion. Comcast will contribute $196 million, Time Warner Cable will add in $103 million, Intel will contribute $50 million, Eagle River will chip in $20 million and Bright House Networks will provide $19 million. Clearwire also said that equity investors have committed approximately $240 million in debt funding.

Noticeably absent from the group of investors is Google, which was part of the group of investors that provided Clearwire with $3.2 billion in funding last year. Google said it will not be providing new financing, and that it could best help the company by working with it on products and strategy. Morrow dismissed concerns about Google's lack of funding support. "Google believes in us and they are supporting us from a product management and strategic point of view," he said. "I wouldn't read anything negative into that whatsoever."

Here's a breakdown of Clearwire's key metrics in the third quarter:

Financials: Clearwire posted a loss of $82.42 million, wider than the loss of $7.2 million in the year-ago quarter. Revenue rose 13 percent to $68.8 million in the quarter.

Net subscriber adds: Clearwire had 44,000 net subscriber additions in the quarter, surging up from 8,000 in the year-ago period. The company had a total subscriber base of 555,000, up 18 percent from the year-ago period and up from 511,000 in the second quarter. Clearwire said at the end of September it had 173,000 subscribers in its Clear 4G markets.

ARPU: Clearwire's average revenue per user was $39.71, down from $40.43 in the third quarter of 2008, and up slightly from $39.57 in the second quarter. The company said that the decline in ARPU on a year-over-year basis was due to increased promotional discounts as a result of higher gross subscriber adds.

Churn: Consolidated churn was 3.1 percent, up slightly from 3 percent in the year-ago quarter. The company continues to believe that churn will increase in its pre-WiMAX markets as its transitions the networks to mobile WiMAX.

CPGA: Cost per gross add was $563, up substantially from $404 in the third quarter last year. The company said that selling, general and administrative expenses increased to $145.3 million compared to $112.8 million for the third quarter 2008, due to higher sales expense related to higher gross subscriber additions and higher marketing expense in 4G markets. Clearwire said that CPGA will increase, particularly in the fourth quarter, as new markets are launched.

For more:
- see this release

Yesterday's blockbusters are today's retired phones

Phil Goldstein — Tue, 10 Nov 2009 11:49:41 -0500

The handset industry is developing at an incredibly fast past. New features and operating systems are being introduced at a dizzying clip. In this environment, some handsets are clearly going to be left behind. As the holiday shopping season approaches, it's worth taking a step back in time to evaluate the retired phones of yesteryear (or yesterday, in some cases). Each of the devices detailed herein highlight a specific industry trend or event; they are essentially guideposts in the advancement of the wireless industry and its players. This list is not exhaustive, but it will provide a smattering of wireless history, and maybe a preview of things to come. Slideshow

Lawmaker disapproves of Verizon's ETF changes

Phil Goldstein — Tue, 10 Nov 2009 11:44:38 -0500

Sen. Amy Klobuchar (D-Minn.) said she will likely introduce legislation to prohibit wireless companies from unfairly raising early termination fees (ETFs). That decision was coupled with a letter Klobuchar sent to Verizon Wireless CEO Lowell McAdam expressing her disapproval of Verizon's decision to double its early termination fee to $350 starting Nov. 15 for consumers who purchase so-called "advanced devices."

"I remain concerned that ETFs--especially at these high prices--unfairly penalize consumers, bear little to no relationship to the cost of the handset device, and are anti-consumer and anti-competitive," she wrote in the letter. Verizon will pro-rate the new ETF at $10 per month.

In her letter, Klobuchar noted that in the last Congress, she introduced the Cell Phone Consumer Empowerment Act, which she said "would encourage transparency, competition, and quality service in the wireless market." In an interview with the Washington Post, Klobuchar said she will likely introduce a bill that will require operators to pro-rate ETFs so that a subscriber who cancels a two-year contract after the first year will only pay half the ETF.

Steven Zipperstein, Verizon Wireless' general counsel, said in a statement that consumers can choose to pay the full retail price for a phone and not sign a two-year contract. The "vast majority of our customers have chosen the contract model with subsidized handsets," he said. "This model has contributed to the widespread adoption of mobile devices across all segments of consumers."

For more:
- see this Washington Post article
- see this The Hill article
- see this Minneapolis Star Tribune article

Article updated Nov. 10 to reflect Verizon's comment.

Analyst: Motorola sold 100,000 Droid smartphones

Phil Goldstein — Tue, 10 Nov 2009 11:19:47 -0500

Although anticipation was high, lines outside Verizon Wireless retail stores to purchase the Android-based Droid smartphone were relatively short last Friday when the device went on sale. Nevertheless, one analyst says that Motorola sold around 100,000 Droid units in the first weekend of its release.

According to Mark McKechnie at Broadpoint AmTech, Verizon had around 200,000 units in stock and sold half of them over the weekend. He estimated that Motorola will sell 1 million phones running on Google's Android platform in the fourth quarter and 10 million in 2010, giving new life to the struggling handset maker.

"Although the press is stating the Droid launch was not as successful as the iPhone launch, we don't believe investors expected an iPhone-like launch, but rather a first step in a cadence of products that will help bring Motorola's handsets out of the death spiral experienced during the past three years," Citigroup analyst Jim Suva wrote in a research note.

Verizon has not released any weekend sales figures, but seemed confident about the level of buzz the Droid was generating. On Friday, Verizon also launched another Android phone, the HTC Droid Eris. The collaboration between Verizon and Google has benefited from the close relationship that has developed between Verizon Wireless CEO Lowell McAdam and Google's chief executive, Eric Schmidt, according to a report in the Wall Street Journal.

For more:
- see this Bloomberg article
- see this Dow Jones Newswires article (sub. req.)
- see this WSJ article (sub. req.)

Seybold's take: cell site expansion is necessary for growth

Andrew M. Seybold — Tue, 10 Nov 2009 10:48:56 -0500

We all know by now that we need to have cell sites in order to have cell coverage. As of January 2009, according to CTIA-The Wireless Association, in the United States there were over 245,000 cell sites. This represents coverage of 89 percent of the U.S. population, and wireless customers numbering more than 277 million. Also according to the CTIA, the number of wireless-only households is over 20 percent up from under 8 percent in 2005.

But in the next five years the number of cell sites is going to double. First, the existing network operators need additional cell sites in order to increase capacity (capacity can only be increased two ways in wireless--add more spectrum to sites or build sites closer together), provide better coverage, and stay competitive. New network operators such as Clearwire are building additional sites, and there are a number of spectrum holders that have not started building yet, most notably the cable companies.

Many existing sites will be shared but we are still going to need more, and, of course we are going to see femtocells and hand-offs to WiFi becoming increasingly important in order to provide even more capacity. If the FCC is successful in finding additional spectrum that can be taken out of service and re-purposed for commercial wireless networks, we will have another 50-300 MHz of spectrum available within the five-year time frame as well, and as we move toward building out broadband in rural America. The most economical way to do that is to use wireless.

At issue here is the fact that many news articles are surfacing about harmful radiation and the effects of wireless on humans. Most of the articles are not based on fact but they live on, and community leaders are using them to push back on new cell sites. Of course the federal government pre-empts state and local governments from using health reasons as an excuse to deny new tower sites, but the fact remains that when the citizens raise the issue in protest many of the local agencies are backing down and trying to find other ways to block tower sites.

In a community near where I live they have never permitted cell sites. They are an upscale community and they don't want cell sites destroying their views or causing potential health problems. Last fall a large portion of this area was destroyed by a massive wild fire. More than 200 houses were lost and one of the biggest complaints we heard was that there was no cell coverage so that residents who were fleeing just minutes ahead of the fast moving fire could not get in touch with their family or friends, and could not, therefore, coordinate their escape and make sure that the entire family was safe.

I assumed that after the embers cooled down and the residents started to rebuild the wireless network operators would be welcomed and could get on with planning stealth cell sites to finally cover the area. I was wrong, however. Instead of working with the network operators, the residents are as adamant as ever that they don't want cell sites, or even small picocells in their neighborhood. One contractor is planning to run fiber on the existing poles in this city and install picocells to provide coverage for one or more of the networks. This is a logical plan that has been implemented in many different communities. Meanwhile other network operators are proposing sites that will provide coverage and cannot be seen.

All of these attempts have been met with public outrage--to see it in the newspaper you would think that every resident of the area was opposed instead of the vocal few. But the vocal few are the ones who show up at the planning and Council meetings, not those who want coverage and will accept the fact that this requires cell sites to be built. One of the most controversial picocell sites that has been chosen is about 30 feet from a school. This is unacceptable, according to the vocal few, and will endanger the children at play. No manner of logic, no diagrams of coverage, no engineering reports will satisfy people and therefore, the powers that be are looking at ways to block this project. No one seems concerned that while over two hundred houses burned to the ground last year, there are many more homes in this area which could burn in the next major fire, and there still won't be any wireless coverage.

As an aside, when the network operators all brought COWs into the area during the fire to help the first responders communicate their non-emergency traffic, the residents were thrilled with the fact that they could, finally, use their phones in their neighborhood. The fire was extinguished, the fireman and the COWs went home, the town is still without coverage.

There is nothing that we can do about the vocal few except to continue to try and educate them, however there are some things we can do to help those residents who want the service to voice their support, and there are ways to let local governments know that sites on government property can be a good source of income in these hard economic times. The network operators need to be more pro-active in the community and ask for support from those who want the service. If all that is heard are the nays, then it is going to take a lot longer than five years to double the cell site count, and the networks won't be able to keep up with the demand for video, audio, graphics and the Internet, let alone voice.

If you work in wireless and you know that there are new sites being proposed in your city or county then you should get your neighbors to do something very simple: Send the planning commission an email supporting the new cell sites. This is all that is required, and it will make a difference.

Andrew Seybold is an authority on technology and trends shaping the world of wireless mobility. A respected analyst, consultant, commentator, author and active participant in industry trade organizations, his views have influenced strategies and shaped initiatives for telecom, mobile computing and wireless industry leaders worldwide. For more, see www.andrewseybold.com

Samsung enters open mobile OS market

Phil Goldstein — Tue, 10 Nov 2009 10:46:24 -0500

Samsung Electronics, better known for its mobile phones, has decided to launch its own open mobile operating system, called "bada," which can be used to develop applications for Samsung phones. Samsung said that bada--which means "ocean" in Korean--will build on Samsung's work in proprietary mobile phone operating systems, and will be simple for developers to use. Samsung said that operators will be able to integrate the platform easily and be able to "provide unique and differentiated services to their customers."

Many details about the operating system are vague. According to IDG News Service, bada will be able to run on top of Linux. There will also be a central application store. Samsung said that the OS will have a next-generation user interface, and will support service-oriented features. The OS will encourage common experiences and functions across applications and developers will be able to incorporate a phone's dialer, messaging capabilities and address book into applications.

The introduction of bada adds yet another player in the crowded operating system market, which already includes smartphone operating systems from Apple, Google, Microsoft, Palm, Research In Motion and the Symbian Foundation.

The first bada-powered phone will be released in the first half of next year, with more phones to follow in the second half of the year. The application store will open in the first half of 2010, and will launch in around 30 countries, including France, Italy and the U.K., in the second half of next year. Samsung will host a developer event in Seoul in December, and events in London and San Francisco in January.

Samsung's foray into the smartphone market comes well after other players have established application stores. "We are in a market which values software differentiation. And Samsung historically has been a hardware-oriented company," Current Analysis analyst Avi Greengart told FierceWireless. "User interface and consumer experience are key. And in this area Samsung has been lacking."

Greengart said he had not seen a demonstration of the OS, however he added that the success of Samsung's bada would depend upon how well the company executes on the OS and whether it can deliver a unique experience. "You never want to write off the world's second largest handset vendor," he said. "It's hard to see whether it's too late, but its is definitely late to the game."

Pete Cunningham, a senior analyst at Canalys, said that bada may be used to replace some proprietary platforms Samsung is using. He said going forward Samsung will likely use Google's Android platform and maybe Windows Mobile for its mid- and high-tier smartphones, and that bada will be used for lower-end smartphones.

"What that brings with it is mass-market volume," he told FierceWireless. "They hope that economies of scale will encourage developers to develop applications for this."

He added that because Samsung is launching its own platform, it will have a certain level of control over what features and applications are important. "If a vendor is in control of the platform itself, it can dictate the roadmap," he said.

For more:
- see this release
- see this Samsung website
- see this Reuters article
- see this IDG News Service article
- see this Electronista article

Touring the wireless industry's roster of retired devices

Mike Dano — Tue, 10 Nov 2009 10:00:48 -0500

It's clear that the mobile handset industry is developing at a breakneck pace. Vendors are introducing new devices, technologies, functions and features at a seemingly daily clip, in an effort to generate buzz and entice users to what they hope will be the vaunted next best thing.

Of course, this relentless pace means that the devices of yesterday are immediately considered obsolete, having been superseded by newer and seemingly better offerings. In some industries, this evolution happens over the course of years or even decades (think automobiles). But in wireless, today's flashy new phone can be rendered outmoded in a matter of weeks--at least, for those who follow the ins and outs of megapixels and application processors. (The shrinking crowd of voice-only users likely remain happily above the fray, content to chat on their three-year-old Razrs.)

Thus, as the industry leans into the critical fourth-quarter holiday shopping season--and carriers and handset vendors pull out all the stops in efforts to shock and awe consumers with their latest gizmos--it's worth taking a step back in time to evaluate the retired phones of yesteryear (or yesterday, in some cases).

Each of the devices detailed herein highlight a specific industry trend or event; they are essentially guideposts in the advancement of the wireless industry and its players. And simply because these devices have been retired does not necessarily make them failures (though some are)--instead, they stand as testaments to what has come before and signal where things may be headed.

Further, some of the gadgets in this list likely are for sale somewhere today, be it eBay or elsewhere, so the term "retired" is intended to reflect their status as having put in their time and done their job. Now they can be put out to pasture.

A final caveat: This is by no means a complete list. Such an undertaking is beyond our means and the means of just about any publication with finite resources. The devices listed here are simply intended as a smattering of wireless history--and possibly an indication of the history of things to come. And with that:

Click here to get started

Sprint may slash up to 2,500 jobs

Phil Goldstein — Mon, 09 Nov 2009 16:49:21 -0500

Sprint Nextel said it may cut between 2,000 and 2,500 jobs in an effort to save $350 million annually. The job cuts represent as much as 6 percent of the 42,000 employees Sprint had at the end of the third quarter. The news is the latest blow to the struggling carrier, which despite improvements in customer service and growth in its prepaid business, has continued to lose postpaid subscribers.

The company said that the job cuts will be company-wide and many will be made before year-end. Sprint said it expects to take a charge of between $60 million and $80 million in the fourth quarter because of the severance and other costs of the job cuts. The news also comes the same day that reports said Sprint was planning on making a new, $1 billion investment in Clearwire, the mobile WiMAX operator in which it owns a majority stake.

Sprint said that the changes would not impact customer service, and noted that because of customer service improvements during the past seven quarters, it has been able to close 27 call centers. This is the most significant round of job cuts at Sprint since January, when the company slashed 8,000 jobs. Sprint is also shifting 6,000 employees to Ericsson, which has taken over day-to-day operations of its network.

Sprint had a net loss of $478 million in the third quarter, up from $326 million in the year-ago quarter.

For more:
- see this release

T-Mobile phasing out myFaves

Phil Goldstein — Mon, 09 Nov 2009 13:35:08 -0500

T-Mobile USA is quietly phasing out the use of its myFaves calling feature in the wake of the introduction of its new unlimited plans, the company said in a statement provided to FierceWireless. While it is not dropping support for customers who already use the calling feature--which allows unlimited calling to any five numbers regardless of what network they are on--the carrier said it was simply time to replace the feature.

"Our new Even More plans, which feature options for unlimited calling, text and data service, have taken the place of our myFaves unlimited calling feature," T-Mobile said in a statement. "We continue to offer the myFaves home screen, at no additional charge, across our broad portfolio of phones as a way for customers to easily connect with their Fave Five through voice, text and email. And customers currently subscribing to the myFaves unlimited calling feature can choose to continue to benefit from that plan."

The calling feature was introduced in 2006 and mimicked Alltel's My Circle plan. Verizon Wireless and AT&T Mobility have followed suit with their own calling circles, and Sprint Nextel recently introduced a new feature called "Any Mobile, Anytime," which allows unlimited mobile-to-mobile calling on any network at any time. In July, T-Mobile CTO Cole Brodman seemed to suggest that the myFaves feature would be expanded into a social networking experience for subscribers.

T-Mobile, which has been struggling to maintain subscriber growth, introduced its new unlimited plans in October as a way to boost its value proposition. One plan, the Even More Plus, is a no-contract plan that offers unlimited voice, text and browsing for $79.99 per month. The other plan, Even More, requires a two-year contract and subsidizes the cost of a phone. The top plan under this option offers unlimited voice for $59.99. The carrier recently launched a new marketing campaign highlighting the plans. In the third quarter, T-Mobile reported a net loss of 77,000 subscribers, which sharply contrasts with the 670,000 net subscriber additions it had in the third quarter last year--and the 325,000 net adds it had in the second quarter.

Article updated Nov. 10 to reflect information about T-Mobile's new rate plans.

Take a tour of South Korea's WiMAX service

Phil Goldstein — Mon, 09 Nov 2009 11:57:40 -0500

Clearwire often dominates news about mobile WiMAX here in the United States. However, in South Korea, where operators KT and SK Telecom are three years into their mobile WiMAX deployments, there is a different story. Launched in 2006, WiBro (the South Korean brand for WiMAX) now covers around 50 percent of South Korea's population, and the nation's two WiMAX operators expect to cover the vast majority of South Koreans by 2011. FierceWireless Managing Editor Mike Dano is in South Korea, and he got a first-hand look at the country's mobile WiMAX service. Slideshow

Rumor Mill: Apple making mini iPhone for Verizon's network

Phil Goldstein — Mon, 09 Nov 2009 11:40:41 -0500

Apple will release a new, smaller iPhone next year that will be capable of running on all global wireless networks, including Verizon Wireless' network, according to a report from OTR Global. The report cited unnamed sources in the Taiwanese supply chain, and said that the new phone will be able to access both CDMA2000 networks and UMTS 3G networks, by using a hybrid chip made by Qualcomm.

The OTR report also said that Pegatron, a subsidiary of Asustek, will build the new device for Apple instead of Hon Hai, the iPhone's current manufacturer. The new hybrid phone is also said to have a 2.8-inch screen--much smaller than the iPhone's 3.5-inch display.

This is hardly the first time that Apple has been rumored to be making an iPhone that could run on Verizon's network. The conventional wisdom has been that Apple would not go through the expense of making a CDMA version of the iPhone because it would cost too much and not produce a large enough return on the investment. However, Peek CEO Amol Sarva estimates that the cost could be less less than $5 million, according to Silicon Alley Insider. Analysts have said in the past that if Apple inked a deal with Verizon, it could double its iPhone sales.

AT&T Mobility is currently the exclusive U.S. provider of the iPhone, and the company has hinted that its exclusive contract may end soon. Verizon has also recently attacked the iPhone in a series of advertisements, leading some analysts to speculate that a Verizon iPhone is not coming any time soon. However, Verizon Communications CEO Ivan Seidenberg has said that the two companies may work together when Verizon launches its LTE network.

A Verizon spokesman declined to comment. An Apple spokeswoman did not immediately respond to a request for comment.

For more:
- see this Silicon Alley Insider article
- see this Apple Insider article

Video: Verizon Misfit Toys

Mike Dolan — Mon, 09 Nov 2009 11:28:26 -0500

Check out this video:

UPDATED: HTC expects decline in Q4 revenue

Phil Goldstein — Mon, 09 Nov 2009 11:14:30 -0500

HTC said it expects to see its revenue in the fourth quarter decline by as much as 15 percent, as competition in the smartphone market intensifies. The drop is not entirely unexpected; earlier this year the Taiwanese company made a drastic about-face in its 2009 forecast and said it expected revenue for the year to fall by a low to mid-single digit percent, a forecast it reiterated today.

The smartphone maker, which recently began a multi-million dollar advertising campaign to raise its brand awareness, said it now expects revenue in the fourth quarter to be between $1.23 billion and $1.3 billion, down from $1.45 billion in the year ago quarter.

The new forecast comes as HTC is trying to recover from a weak third quarter, in which revenue declined 10 percent. The company said that its gross profit margin will likely be 32.5 percent, up slightly from the third quarter, and that operating expenses are likely to eat up 17 percent of its total revenue.

In the third quarter, the smartphone market had its best quarter ever, according to research firms IDC and Canalys. However, intense competition from Nokia, Apple and Research In Motion has hampered HTC's growth.

For more:
- see this IntoMobile article
- see this IDG News Service article
- see this Reuters article
- see this Reuters article

Article updated Nov. 9 to correct revenue figures.

Nokia may recall 14 million chargers

Phil Goldstein — Mon, 09 Nov 2009 10:34:46 -0500

Nokia said it may replace up to 14 million phone chargers for free. The chargers, which were made by a third-party manufacturer, can come apart and cause electric shock. The company said it is not aware of any incidents or injuries related to the chargers.

The Nokia-branded chargers are made by Chinese manufacturer BYD, which will assume the cost of the recall, according to Nokia. The handset maker said it was too early to estimate how much the recall would cost.

The chargers affected are the AC-3E and AC-3U models, manufactured between June 15 and Aug. 9, 2009, and the AC-4U model, made between April 13 and Oct. 25, 2009. Nokia said that the plastic covers on the chargers could come loose and separate, exposing the charger's internal components and potentially causing an electric shock if the components are touched while the charger is plugged into a live socket.

This is not the first time Nokia has had to deal with a large recall of components made by a third party. In 2007, Nokia recalled 46 million defective batteries made by Japanese company Matsushita that overheated because of a short circuit.

For more:
- see this release
- see this Reuters article
- see this WSJ article (sub. req.)

UPDATED: Clearwire confirms $1.5B in new funding

Phil Goldstein — Mon, 09 Nov 2009 09:15:47 -0500

Clearwire confirmed that it will receive more than $1.5 billion in additional new funding from its investment partners, a day after reports first indicated that the new funding would be forthcoming. The new funds will help Clearwire continue with its aggressive buildout of its mobile WiMAX network. The company, which currently has its mobile WiMAX network operational in 16 markets, expects to extend its coverage to 80 markets by the end of 2010.

Sprint Nextel, which holds a majority stake in Clearwire, will contribute the most new funding, with equity financing of $1.176 billion. Comcast will contribute $196 million, Time Warner Cable will add in $103 million, Intel will contribute $50 million, Eagle River will chip in $20 million and Bright House Networks will provide $19 million. Noticeably absent from that group is Google, which was part of a group of investors that provided Clearwire with $3.2 billion in funding last year.

Google said it will not be providing new financing, and that it could best help the company by working with it on products and strategy. "We have already made a significant financial investment, and at this point we think the best way we can continue to add value is through continued product and strategic cooperation," Google spokesman Andrew Pederson told Reuters.

It's not surprising that Sprint will provide additional funding for Clearwire. In a recent interview with FierceWireless, Sprint CEO Dan Hesse said that even in the wake of its acquisitions of iPCS and Virgin Mobile USA, Sprint would be able to give Clearwire more funding. Clearwire CEO Bill Morrow has said that the company wants to find new sources of funding by year-end.

Clearwire is scheduled to report its quarterly earnings Tuesday after the market closes.

For more:
- see this release
- see this Reuters article
- see this slideshow on Korean WiMAX deployments

Article updated Nov. 10 with new information about the funding.

In pictures: Clearwire's prospects through Korean eyes

Mike Dano — Mon, 09 Nov 2009 09:13:16 -0500

SEOUL--As Clearwire prepares to digest another $1.5 billion in funding (Sprint Nextel, Intel, Time Warner Cable and others are ponying up the cash, -read our article), investors likely are wondering what the future holds for the country's largest mobile WiMAX operator. One possible answer may lie across the Pacific, in South Korea, where operators KT and SK Telecom are three years into their own WiMAX deployments.

Launched in 2006, WiBro (the South Korean brand for WiMAX) now covers around 50 percent of South Korea's population, and the nation's two WiMAX operators expect to cover the vast majority of South Koreans by 2011. The mobile service supports real-world speeds of around 4 Mbps on the downlink and around 1 Mbps on the uplink, and costs around $17 per month for 30 GB of data. So far, there are around 250,000 WiMAX subscribers in Korea.

A recent press junket sponsored by Samsung afforded a first-hand look at the country's mobile WiMAX service, stretching from the retail outlets where shoppers can buy the latest WiMAX gizmos to the on-the-ground locations where the service would be used.

As Clearwire lights up larger and larger markets with mobile WiMAX services--the carrier plans to cover 120 million Americans in 80 markets by the end of 2010--the situation in South Korea could foreshadow the Clearwire's gameplan.

Click here for a photo tour of South Korea's WiMAX

Is it time for MetroPCS and Leap to finally merge?

Lynnette Luna — Mon, 09 Nov 2009 02:29:31 -0500

The bonanza we saw in the prepaid segment during the first quarter has now fizzled in the third quarter as MetroPCS and Leap Wireless reported lower-than-expected subscriber additions and T-Mobile saw a major slowdown in prepaid subscribers. The economy and competition are taking their toll on those companies that were just a few quarters ago the darlings of the industry in a struggling economy.

MetroPCS saw a dramatic slowdown in subscriber additions--66,000 compared with 249,000 the previous year and 206,000 in the second quarter. Leap Wireless saw its net customer additions fall 25 percent, adding 116,000 in the quarter, compared with 156,000 the previous year and 203,000 in the second quarter.

While seasonality is partly to blame, consumers now have a plethora of prepaid offerings to choose from.

"We were disappointed with this quarter subscriber growth," said CEO Roger Linquist, during the company's third-quarter conference call, according to transcripts from Seeking Alpha. "Our gross additions and particularly our net additions were below our expectations... Going forward, additional adjustments will be required... While we believe we're best dealer in town, the competitive landscape has changed since the beginning of the year. The consumer now has more competitively priced unlimited no contract service options."

Linquist also stressed the necessity of being able to provide nationwide service. He described it as a "basic requirement," meaning the operator will have to continue adding roaming partners.

Indeed, Sprint and its prepaid offering from Boost Unlimited appears to be the only prepaid wireless provider that reported any traction. At the beginning of the year, Boost Mobile launched a $50 per month unlimited voice and data plan on the iDEN network that includes voice, text messaging, mobile web access and PTT on a nationwide basis. Both MetroPCS and Leap offer similar plans but they don't have nationwide offerings.

Wal-Mart's Straight Talk, introduced in October, could do some major damage too now that it is nationwide. The no-contract services, available exclusively via Wal-Mart stores and online, include a $30 "All You Need" option featuring 1,000 minutes, 1,000 texts and 30MB of mobile web access per month--unlimited monthly minutes, text and web access cost $45.

We can also fully expect T-Mobile to come out with a better offering after its poor third quarter results that saw a loss of 77,000 subscribers. It's prepaid offering recently introduced was largely disappointing to analysts because it was a premium to other nationwide offerings out there. AT&T's GoPhone offering at $60 is higher but it has better distribution and footprint than MetroPCS and Leap. In short, nationwide postpaid providers will continue to encroach on the turf of MetroPCS and Leap.

So I guess you can see where I'm going. The pressure is on for MetroPCS and Leap to merge. But MetroPCS insists it's not on the horizon. Adding roaming partners appears to be the company's route.

"We personally have no, shall we say, interest in pursuing the transaction you are talking about," Linquist said in response to a question from an analyst about whether it might consider a union with Leap. "And the primary reason right now is that if on some circumstances in the future, there could be an opportunity, obviously we would be open to that, but we have the footprint. The key from our standpoint is we have the coverage, we feel we are beyond the critical mass of a nationwide footprint that is important to our customers, so that to us is the key element."

Clearly investors have been worried about the saturated market as both stocks have taken beatings since the second quarter. Obviously the combination of MetroPCS and Leap would create an entity with significant financial and coverage leverage against postpaid players becoming more aggressive in the space.

But there's never been any love lost between the two companies. Leap Wireless rejected a takeover bid from MetroPCS in 2007, while Leap has claimed in the past that MetroPCS has rebuffed any merger discussions. The two companies have a bitter history that dates back more than 10 years.

MetroPCS executives have always told me through the years that Leap stole the original idea of unlimited local pricing service from MetroPCS. MetroPCS just couldn't come to market first because it filed for bankruptcy after spending too much at the C-Block PCS auction in the mid-1990s. In 2006, Leap filed suit against MetroPCS in a Texas court claiming MetroPCS violated patents over the unlimited pricing plans. However, the two have managed over the years to create reciprocal roaming agreements.

Many commentators, including me, have been arguing for a combo since 2007, but now it appears the market may be finally reaching the point that makes a merger a necessity. The next few quarters, especially the critical fourth quarter, will likely bring that reality home to both companies--at which time they'll have to deal with that major culture issue of control.--Lynnette

Comparing the top 10 U.S. carriers in Q3

Phil Goldstein — Fri, 06 Nov 2009 11:17:18 -0500

The third quarter earnings season is coming to a close, and the major U.S. wireless carriers have reported their earnings. AT&T Mobility and Verizon Wireless gained customers, while Sprint Nextel and T-Mobile USA lost subscribers. Subscriber growth at flat-rate carriers Leap Wireless and MetroPCS slowed in the quarter. Research firm Strategy Analytics compared the top 10 U.S. carriers, and looked at the major metrics--including churn, ARPU and revenue--of each carrier. How do they stack up? Special feature

FCC moves closer to special access fee regulation

Phil Goldstein — Fri, 06 Nov 2009 11:10:28 -0500

As expected, the FCC issued a public notice seeking comment on how to look at the special access market, formally opening a debate that likely will pit AT&T and Verizon against Sprint Nextel, T-Mobile USA and other companies. Those companies, which don't have wireline divisions, pay the big telcos fees to backhaul their wireless traffic over their competitors' wireline networks, and have been arguing that AT&T and Verizon hold a monopoly on the lines and are charging too much for access.

The FCC notice will seek comments on how the agency should look at the market data to determine, among other things, whether the commission's current pricing flexibility rules ensure "just and reasonable rates." The FCC said commenters will have 45 days to submit comments, and that there will be a 30-day period for reply comments.

"Some parties assert that the commission's current rules are working as intended and contend that there is extensive actual and potential competition in the market for special access," the FCC said in the notice. "Other parties assert that there is little or no competition for special access services."

The No Choke Points coalition, whose members include Sprint, T-Mobile, U.S. Cellular, Clearwire and small, independent LECs, has said that the interconnection fees are a big barrier to broadband access. The praised the FCC's move to open debate on the topic. "This public notice is an important next step towards releasing the captive special access market from AT&T and Verizon's long-standing choke hold," No Choke Points spokeswoman Maura Corbett said in a statement. "The data will show that AT&T, Verizon and other large incumbents are exploiting their control over high-capacity facilities to reap outrageous profits at the expense of the broadband economy."

Earlier this summer, Jim Cicconi, a senior vice president at AT&T, said in a letter sent to Congress that looking at all of the data for access lines and prices would show "an abundance of facilities and well-functioning market-based pricing."

For more:
- see this Reuters article

Waiting in line for the Droid? The launch in pictures

Mike Dano — Fri, 06 Nov 2009 10:58:12 -0500

With the Motorola Droid and the HTC Droid Eris finally commercially available, we're covering the launch from coast to, well, Mountain West (Washington, D.C., and Denver, to be specific).

Is the Verizon Wireless-supported, Motorola-built Droid drawing crowds of shoppers like the iPhone 3GS did? What about the Eris? Check out our live coverage.

Click here to get started on Droid launch coverage

And click here, here, here and here for coverage on the launch by other outlets.

Also: Want to see how this launch compares with Palm Pre and Apple iPhone 3GS launches earlier this year? Check out our Palm Pre launch coverage and our iPhone 3GS launch coverage.

<--Back to the story

Verizon launches Droid to few lines, but much excitement

Phil Goldstein — Fri, 06 Nov 2009 10:45:11 -0500

Verizon Wireless launches its first two Android phones this morning, and though the launch was not greeted with the same crowds and lines that accompanied previous iPhone launches, customers said they were excited about the devices, especially the Motorola Droid.

The carrier, which also launched the HTC Droid Eris, has made no secret in its marketing campaign that it intends for the Motorola Droid to compete with Apple's iPhone, which is offered exclusively through AT&T Mobility. Customers said that they thought the Droid was the first phone Verizon had launched that could truly compete with the iPhone, which has been a key growth driver for AT&T.

More than 100 people lined up at a Verizon store in Manhattan at midnight launch event, according to CNET, but lines were sparse at other locations this morning, including in Denver and Washington, D.C. Verizon customers in Washington said they were glad they had a phone that could compete with the iPhone.

Michael Maiorana, Verizon's regional president for Washington, D.C., Baltimore and Virginia, said the launch of the Android phones would help Verizon attract customers who want an iconic phone. "This Google phone, I think, will help catapult Verizon into a niche market that ... we haven't necessarily had a leading contender in," he told FierceWireless.

Without mentioning the iPhone by name, he said that there were existing Verizon customers who continually ask when the carrier is getting the iPhone, and say they do not want to switch from Verizon but want a different kind of smartphone. He also said there were subscribers on other networks that might want to switch to Verizon but are attached to their other devices.

"I think over the years the wireless device has become more of a primary reason why customers procure services," he said. "It's very iconic, the device. I think in many cases it's a status symbol."

Webster Brehm, 26, from Washington, D.C., said he has been a Verizon customer for eight years and was excited to get the Motorola Droid. "I think this is the first phone they've had that's attractive and has all of the capabilities that people are looking for that are like the iPhone, like with Google's apps," he said. "They don't have as many as Apple does right now, but I think that's going to change. As people come to Verizon and buy these phones, I think the popularity is going to increase, and they're going to be releasing a lot more."

Jeff Robins, 30, from Falls Church, Va., said he was buying the Motorola Droid and had read a lot about the phone on blogs and Internet forums.

"I think it has the opportunity compete. I don't know if it's like the iPhone killer that some people want it to be," he said. "But it's the only phone Verizon has that can really handle most of the capabilities, some of them not quite as well just yet from what I've read. But it has the opportunity to grow through the open development and the Android 2.0 platform, and that's the exciting thing."

For more:
- see these pictures
- see this CNET article
- see this Electronista article
- see this Dow Jones Newswires article (sub. req.)

AT&T's Donovan defends network, touts connected devices

Sue Marek — Fri, 06 Nov 2009 10:23:58 -0500

SAN FRANCISCO--At the Open Mobile Summit conference here AT&T CTO John Donovan once again defended his company's wireless network, arguing AT&T is spending more money this year than any other company to improve its coverage and capacity. However, he admitted that the task is enormous because customers' appetite for bandwidth is keeping pace with the carrier's investments in capacity.

Donovan said AT&T is constantly improving its network usage modeling and that no two cities have similar usage demands, so the carrier looks at every U.S. city individually to prepare for consumer data usage. He added that the company is in the midst of its 850 MHz overlay and then it will re-optimize the network.

During his keynote address, Donovan said that as the industry simplifies the wireless experience for the consumer, the more complexity is added to the infrastructure. "This is requiring us to rethink the network," Donovan said. He added that AT&T estimates it has 1 billion devices connected to its wireless and wireline network and that in 10 years it expects to connect the next billion devices. Much of that growth will come from emerging devices such as ereaders, navigation devices, netbooks and more. "Since 2005 we have certified more than 1,000 non-stock devices," Donovan said. "This year we certified 400 non-stock devices. We think that is six times our nearest competitor."

Donovan later joined several other industry executives, including Google's Chief Internet Evangelist Vint Cerf, in a panel discussion about the open mobile landscape. AT&T and Google are currently in the midst of a battle over the Google Voice application. AT&T has asked the FCC to investigate the application, arguing the service is improperly blocking calls to rural areas and should be regulated like a traditional telephone service. Google has countered that it blocks calls to fewer than 100 specific phone numbers due to what Google said were high-cost "traffic pumping schemes."

However, Donovan and Cerf nimbly avoided discussing Google Voice and instead talked with the other panelists about how to define open mobile. Cerf said he was uncomfortable with assigning any definition to it. Donovan, meanwhile, said that customers don't care about open, all they care about is their experience. He added that he believes there has to be some boundaries around openness because consumers want mobile to be open and convenient but they also want their privacy respected. "Customers want mobile to make their lives easier, but they expect you to take care of their security," he said.

AT&T completes acquisition of Centennial

Phil Goldstein — Fri, 06 Nov 2009 08:17:48 -0500

The FCC approved AT&T's $944 million acquisition of Centennial Communications, clearing the way for the deal to close and giving the nation's No. 2 wireless carrier around 893,000 new customers.

The commission voted 5-0 to approve the deal, but placed several conditions on it. The FCC, like the Justice Department, is requiring AT&T to divest some of Centennial's assets in parts of Louisiana and Mississippi. AT&T will gain subscribers in primarily rural areas of Indiana, Louisiana, Michigan, Ohio and Texas, and will enhance its coverage in Puerto Rico and the U.S. Virgin Islands.

The FCC is proposing that AT&T divest from seven markets, while the Justice Department is requiring eight market divestitures. Five of the eight service areas AT&T is required to divest are heading to Verizon Wireless. The carriers announced in May a divested asset swap--AT&T got assets Verizon was required to divest as part of Verizon's acquisition of Alltel.

Additionally, the FCC said AT&T would have to honor roaming agreements Centennial made with other wireless carriers, and continue to maintain Centennial's CDMA network in Puerto Rico and the U.S. Virgin Islands for 18 months, which is something Sprint Nextel was concerned about. AT&T also is required to limit its contact with America Movil, which is a competitor to AT&T and Centennial in Puerto Rico.

AT&T said that by late January, its products and services will be available at more than 100 Centennial retail locations. Former Centennial wireless customers can keep their existing rate plans, but they also will have the option to choose AT&T rate plans without activation or upgrade fees. In Puerto Rico, the Centennial brand will continue through mid-2010, and AT&T expects its products and services to be available in Centennial locations in Puerto Rico in the third quarter of 2010.

For more:
- see this AT&T release
- see this Bloomberg article
- see this Reuters article

Leap's subscriber growth slows in Q3

Phil Goldstein — Thu, 05 Nov 2009 16:51:47 -0500

Leap Wireless reported a wider net loss in the third quarter and weaker subscriber growth, but the company saw a boost in revenues. Like its rival MetroPCS, which reported earnings Thursday morning, Leap's subscriber additions slowed in the quarter when compared with its results from earlier quarters this year.

The news comes as Leap works to broaden its distribution channels; the carrier recently inked agreements with Best Buy, Target, Dollar General and Wal-Mart for its Cricket PAYGo monthly voice product.

Here's a breakdown of Leap's key quarterly metrics:

Financials: Leap's net loss swelled to $65.4 million, up from $47.3 million in the year-ago quarter. The company reported total revenues of $599.5 million, up nearly 21 percent from the $496.7 million it had in the year-ago period. Service revenues totalled $541.3 million, up 25 percent from $434.5 million in the third quarter last year. Leap said that the boost in service revenue reflected the success of its recent market launches and its broadband service.

Subscriber additions: The carrier had net customer additions of a little over 116,000, down 25 percent from the approximately 156,000 it had in the third quarter last year and down from its 203,000 additions in the second quarter. Leap ended the quarter with 4.65 million total customers, up 35 percent from the year-ago quarter.

Churn: Leap's churn rose to 5.4 percent in the quarter, up from 4.2 percent in the year-ago quarter and 4.4 percent in the second quarter. The company said that year-over-year increase reflected several factors, including newer customers in some of the company's new markets, competitive pressures and "the significant effect of rising unemployment in our key customer segments, which decreased available discretionary income and resulted in increased deactivations."

ARPU: Third quarter average revenue per user declined 8 percent, from $42.95 in the year-ago quarter to $39.60 in the third quarter this year. Leap said the successes of its new, lower-priced Cricket Wireless service plans and its Cricket Broadband pulled on the numbers. The carrier said it expects ARPU in the fourth quarter to continue to decline.

Walter Piecyk, an analyst at Pali Research, said Leap's results confirmed that the company was feeling the effects of intense competitive pressure. "The prepaid space has effectively been taken over by Sprint and TracFone, which added 666,000 and 712,000 customers, respectively, in the fourth quarter," he wrote in a research note. "Clearly customers flocked to lower-end rate plans and Leap potentially lost the higher value customers to Sprint's nationwide service," he said later in the note.

Leap's stock was down 45 cents to $12.58 per share in late-morning trading.

For more:
- see FierceWireless' Q3 earnings page
- see this release

Droid Eris headlines Verizon's holiday handset blitz

Phil Goldstein — Thu, 05 Nov 2009 11:50:26 -0500

Verizon Wireless launched a slew of new phones today including the HTC Droid Eris, the carrier's second phone based on Google's Android platform. Research In Motion's BlackBerry Curve 8530, a new LG Chocolate phone and a rugged push-to-talk handset from Samsung were also on tap.

However, the Droid Eris is clearly the marquee announcement. When Verizon announced the Motorola Droid, its first Android phone, rumors were already swirling that Verzion would launch the Droid Eris, a phone similar to the HTC Hero, as well. The Droid Eris runs on Android 1.5, and also features HTC's custom Sense user interface. It has a 3.2-inch capacitive touchscreen, a trackball, 5-megapixel camera, 3.5 mm headset jack and expandable memory with pre-installed 8 GB microSD card. Verizon will launch the Droid Eris Nov. 6, the same day as the Droid, for $99.99 with a two-year contract and after a $100 mail-in rebate.

An HTC spokeswoman told FierceWireless that it's possible that the Droid Eris will be upgraded to Android 2.0 in the future (the Moto Droid runs Android 2.0), but that the company had nothing official to announce right now.

Separately, Verizon launched the BlackBerry Curve 8530, which has a 528 MHz "next generation" processor, GPS, WiFi and a 2-megapixel camera. The Curve will launch Nov. 20 for $99.99 with a two-year contract and after a $100 mail-in rebate. The carrier also launched the LG Chocolate Touch, a music-oriented phone with an integrated FM radio, stereo Bluetooth, a dedicated music key and Dolby Mobile features. The phone retails for $79.99 with a two-year contract and after a $50 mail-in rebate. Finally, Verizon launched the rugged Samsung Convoy, which features a 2-megapixel camera and Bluetooth 2.1 technology. The phone will go on sale Nov. 15 for $49.99 with a two year-contract and after a $50 mail-in rebate.

In other Verizon news, the company confirmed that, beginning Nov.15, it is doubling its early termination fee to $350 for so-called "advanced devices." The company said that it is doing so because its high-end phones and netbooks are becoming more expensive.

For more:
- see these photos and specs
- see this Droid Eris release
- see this Curve release
- see this LG Chocolate Touch release
- see this Samsung Convoy release
- see this Washington Post article

Pictures and specs: Verizon's Droid Eris, Samsung Convoy, BlackBerry Curve 8530 and LG Chocolate Touch

Mike Dano — Thu, 05 Nov 2009 11:28:47 -0500

A day ahead of the release of Verizon Wireless' Droid phone from Motorola, the carrier announced a bevy of new gadgets just in time for the holiday shopping season, including its second Android phone, an LG touchscreen phone and a new BlackBerry. Check out pictures and specifications for each of Verizon's newest handsets.

Click here to get started

<--Back to the story

MetroPCS posts larger profit, weaker subscriber growth

Phil Goldstein — Thu, 05 Nov 2009 10:57:53 -0500

MetroPCS reported weaker subscriber growth in the third quarter amid intensifying competition in the flat-rate prepaid market, and though it also posted higher profit, the company cut its outlook for 2009. The carrier had net income of $73.55 million, up 64 percent from $44.88 million in the year-ago quarter, mainly on cost cuts. The company's quarterly profit and revenue topped market expectations, but subscriber additions were weaker than expected. Of late, MetroPCS has come under even more competition from the likes of Sprint Nextel's Boost Mobile unit, Leap Wireless and TracFone Wireless, which recently launched its flat-rate Straight Talk plans at Wal-Mart stores nationwide.

"In a seasonally slow quarter, we reported net additions that were below our expectations, due primarily to elevated churn and a deceleration in gross additions," MetroPCS CEO Roger Linquist said in a statement. "We believe this was the result of continued U.S. macro-economic weakness, an increasingly competitive environment, and upward adjustments we made to the price of certain handsets."

Here's a breakdown of MetroPCS' key quarterly metrics:

Revenue: Total revenues were $896 million, up 30 percent from $687 million in the year-ago quarter. Service revenues jumped 33 percent to $812 million, up from $611 million in the third quarter last year.

Subscribers: The company had net subscriber additions of around 66,000 in the quarter, down significantly from the 249,000 it had in the year-ago quarter and the 206,000 it had in the second quarter. The company ended the quarter with 6.32 million total subscribers.

Churn: Churn rose to 5.8 percent, up from 4.8 percent in the third quarter last year and flat from the second quarter.

ARPU: ARPU was $41.08 in the quarter, up from $40.73 in the year-ago quarter $40.52 in the second quarter. The company said the increase was primarily due to a favorable rate plan sales mix and its unlimited international calling plan, which it launched in June.

The company's performance on subscriber additions drew disappointment from analysts. "It's hard to argue that competition increased significantly to Q3 from Q2 to justify these weak results as today T-Mobile USA reported a decline in its postpaid customer base and a dramatic slowdown in its prepaid subscriber growth, and we estimate that Straight Talk added only 50,000 customers across all its markets in Q3," Pali Research analyst Walter Piecyk wrote in a research note. "Sprint and its prepaid offering by Boost Unlimited seemed to be the only low-end wireless provider that reported any traction. We expect Straight Talk and other new competitors to have a larger impact on results in Q4."

MetroPCS' stock was down more than 7 percent on the news to around $6.12 per share.

For more:
- see FierceWireless' Q3 earnings page
- see this release
- see this Dow Jones Newswires article (sub. req.)

With cloud mania in full swing, what is mobile's role?

Stephen Drake — Thu, 05 Nov 2009 10:53:47 -0500

The emergence of cloud-based infrastructure offerings, and the myriad "as a service" intersection points emerging for delivering service-enabled software to business users, provides numerous strategic and tactical benefits for user firms, including IT de-capitalization, easy access to applications, business agility, and scalability. But with SaaS (software as a service)--the most mature and prominent of these IT cloud services are finding that because the compute resources, application logic, and data all live in the cloud, along with other structured data sources (e.g., GPS data), they can serve their customers' need to get mobile access to this data; extend the mobile platform as a driver for enhanced partner growth, new revenue streams, and more service time; and drive an overall better experience for customers. IDC believes that the mobile device clients, cloud-based mobility platforms, and services now emerging from SaaS applications vendors provides a template for what customers will, in a growing number of cases, choose when it comes to building, consuming, and paying for mobility applications.

Recent IDC demand-side research conducted in the U.S. and the U.K. suggests that mobile SaaS based offerings are key future deliverables for organizations seeking to role out solutions to its mobile worker base. Almost 40 percent of organizations plan to deploy a SaaS-based solution in the next 12-18 months. This is in addition to another 19.7 percent that have already done a pilot and plan to roll out a larger deployment in the next 12-18 months. This is in stark contrast to current deployments for mobile SaaS in the enterprise, as today only 9.1 percent of organizations have already embarked on a large-scale deployment of mobile SaaS-based solutions. Of course, this does not mean that all on-premise solutions will be displaced, as many organizations will likely run on-premise solutions for certain applications and on-demand, hosted solutions for others. Furthermore, 15.5 percent of organizations have no plans to roll out any aspect of mobile SaaS-based solutions in the next 12-18 months, with another 8.4 percent that did run a pilot but have no plans to roll out the solution to other employees.

At the same time, many organizations see mobile operators as trusted providers for providing mobile solutions. The largest percentage of respondents from the same survey said that 38 percent selected the mobile operator as their prime supplier for mobile solutions. Although, this is somewhat unexpected as mobile operators have not had the greatest track record for selling mobile software designed to meet the unique requirements of enterprises environments mobile operators are uniquely positioned to offer up mobile SaaS-based solutions.

Beyond operators there are also a number of services-enabled application companies and those that provide key platform offerings that deliver mobile-SaaS based solutions providing customers not only access to data but to a growing number of new services that may be based on location, availability and other requirements based on a workers' situation. A multitenant, SaaS-delivered mobile platform, for example is designed for access to and consumption of software and application functionality built specifically for network delivery, and which is hosted, provisioned, and accessed by users over the Internet, and as such provides significant architectural advantages over premises-installed packaged software applications.

So when does the mobile SaaS model make sense for business customers? When the vendor business model is already a SaaS-based model the mobile client would naturally be SaaS based. Key advantages of SaaS-based models are the ability to quickly scale up or scale down users and the ability to rely on the vendor for management and timely updates and address multiple mobile OS environments.

The downsides of the SaaS-based model are the potential for a significantly higher total cost of ownership, security and compliance concerns related to having sensitive corporate data stored with a third-party provider, and limitations pertaining to customization and integration with back-end solutions. SaaS-based vendors do address security with federated data, encryption, antimalware and monitoring tools. Regardless, there are certain types of applications and data that enterprises prefer to have on premise, behind the corporate firewall. Such downsides do not make an overarching black-and-white case in favor of one model or the other, but rather validate the case for the existence of both SaaS-based mobile applications in some instances and on premise in others.

There is a tendency to equate mobile SaaS-based offerings with browser-based clients, or with thin mobile clients that do not store data locally and cannot be referenced or updated by the user when wireless service is not available. No direct correlation exists. Antenna's AMP platform, Concur Mobile, and salesforce.com Mobile are all examples of SaaS-based mobile platforms that have native clients that store data locally and allow the user to interact with that data in isolation. In other cases, a hybrid client is the best approach, as is the case with the Cisco WebEx Meeting Center client and LogMeIn Rescue+Mobile.

The promise of cloud computing to deliver additional value to its customers and offer cost savings and viable application development environments also holds true for the mobile environment. As customers evaluate mobile cloud offerings, it's important to consider mobile workers' roles and needs within the organization, mobile platform capabilities and key security requirements to weigh the decision of on-premise vs. SaaS-based solutions.

For further information on mobile cloud computing please see IDC's study "Enterprise Mobility in the Cloud" (IDC # 220192, Oct 2009). Stephen Drake is the program vice president for Mobility & Telecom research at IDC. In this position, he has responsibility for the Mobile Enterprise, Mobile SMB, Mobile Device coverage, IP Communication Services and also contributes to IDC's Unified Communication research. Visit IDC.com.

Amazon stops selling Sprint-powered Kindles

Sue Marek — Thu, 05 Nov 2009 10:42:36 -0500

SAN FRANCISCO--At the Open Mobile Summit here yesterday Amazon Kindle Director Russell Baker confirmed that the company is no longer selling the Sprint Nextel-powered Kindle. Though Amazon will support those Sprint-powered devices already in service, the company plans to focus its efforts on its GSM-based Kindle ereader that uses the AT&T network and is able to roam internationally. However, Amazon is still selling the Kindle DX that uses Sprint's network.

Russell said that Amazon decided it was too confusing to consumers to sell one version of the Kindle that can be used internationally and one version that can't (Sprint's network uses CDMA technology, while AT&T's uses the much more widespread GSM technology). He added that the company values Sprint as a partner and hopes to work with the carrier again on other, future devices.

When asked whether Amazon would consider having Kindle devices use the Qualcomm Gobi chipset that allows users to switch seamlessly between 3G networks around the world, including GSM, EDGE, HSPA, HSDPA and EV-DO, Baker said that Amazon had considered the Gobi chipset. However, he said that when the Kindle was in its development stage, the Gobi chip was primarily being made for netbooks and laptops. He added that Amazon may use Gobi in the future.

Amazon's decision to drop the CDMA Kindle is a blow to Sprint, which in the first quarter of the year touted its sales of the Amazon Kindle ereader device as driving the majority of its 394,000 wholesale additions.

Article updated Nov. 5 to correct information about the Kindle DX.

T-Mobile loses 77,000 subs in Q3

Phil Goldstein — Thu, 05 Nov 2009 09:34:59 -0500

T-Mobile USA reported a net loss of 77,000 subscribers in the third quarter, relatively weak financials and subscriber metrics showing increasing churn and declining ARPU--all indications that the nation's No. 4 carrier is losing share to market heavyweights Verizon Wireless and AT&T Mobility, which both posted notable subscriber gains during the period, as well as Tier 2 flat-rate carriers.

Perhaps in an effort to stem the receding tide, T-Mobile in October unveiled new unlimited service plans aimed at boosting its value proposition. The carrier also touted the growth of its 3G network, which it said now reaches 167 million people. Nonetheless, it's clear the carrier is facing a range of challenges. Here's a breakdown of some of T-Mobile's key quarterly metrics:

Financials: The carrier reported net income of $417 million, down from $425 million in the second quarter and $442 million in the year-ago quarter. However, T-Mobile's parent company, Deutsche Telekom, posted a rise in net income to $1.42 billion, up from $1.33 billion in the third quarter last year. T-Mobile's total revenues in the quarter clocked in at $5.38 billion, up from $5.34 billion in the second quarter but down from $5.51 billion in the year-ago quarter. The carrier said that the higher revenues were driven by higher equipment sales, partially from an expanded data device lineup. However, service revenues were $4.73 billion, down from $4.77 billion in the second quarter and $4.491 billion in the third quarter last year.

Subscribers: The carrier's net subscriber loss of 77,000 sharply contrasts with the 670,000 net subscriber additions it had in the third quarter last year--and the 325,000 net adds it had in the second quarter. T-Mobile lost 140,000 contract customers in the quarter, and even its prepaid net adds were only 63,000 in the third quarter, down from 268,000 in the second quarter and 377,000 in the third quarter of 2008. The company blamed fewer gross adds and higher churn from Flex Pay customers for the overall loss in subscribers. T-Mobile ended the quarter with 33.4 million customers.

Churn: Contract churn was 2.4 percent, up from 2.2 percent in the second quarter and flat compared with the third quarter last year.

ARPU: Blended ARPU was $47 in the third quarter, down from around $48 in the second quarter of 2009 and $52 in the year-ago quarter.

Data: T-Mobile's data services revenue reached $1 billion in the third quarter, representing 21.1 percent of blended ARPU, or $10.00 per customer--an increase from 20.8 percent/$9.90 per customer in the previous quarter and up from 17.3 percent/$8.90 per customer a year ago, translating to 18 percent year-over-year data services revenue growth.

For more:
- see FierceWireless' Q3 earnings page
- see this release
- see this Bloomberg article
- see this WSJ article (sub. req.)

After a quarter of declines, Qualcomm promises growth

Mike Dano — Wed, 04 Nov 2009 17:52:40 -0500

Qualcomm posted slowing profits and revenues in its fiscal fourth quarter, and its outlook fell short of some analysts expectations. However, the company's stock rose slightly following the report, possibly reflecting investor relief over the chipmaker's expectations of growth in the coming year and the announcement of a new licensing deal with Samsung.

The chipmaker reported revenues in the quarter of $2.69 billion, down 19 percent year-over-year and 2 percent sequentially. The company's net income clocked in at $803 million, down 9 percent year-over-year and up 9 percent sequentially.

Interestingly, Qualcomm's figures were buffeted but a number of high-profile expenses and transactions:

The company recorded a $230 million charge in the quarter related to an "estimated fine expected to be levied by the Korea Fair Trade Commission."
The company's 2009 results included a $783 million charge due to Qualcomm's settlement with rival Broadcom.
The company's expenses were offset by $560 million in revenues in the quarter from Nokia, which Qualcomm inked a settlement with earlier this year.

But perhaps the most notable element in Qualcomm's earnings announcement was the disclosure of a new agreement with Samsung: "I am also pleased to announce that we recently extended our license agreement with Samsung, covering both 3G and 4G," said CEO Paul Jacobs.

In a conference call with analysts Qualcomm executives provided details on the Samsung transaction. Qualcomm's Derek Aberle said the deal includes a 15-year license and payments from Samsung totaling $1.3 billion. The agreement covers CDMA2000, WCDMA, TD-SCDMA and OFDMA-based standards including LTEs and WiMAX, he said.

While Qualcomm's financial metrics for the quarter showed mostly declines on a sequential and year-over-year basis, the company's outlook for the fiscal first quarter of 2010--and the fiscal year 2010--showed expectations of growth. Qualcomm said it expects to grow revenues in the coming quarter by between 1 and 9 percent. The company expects similar growth figures for the fiscal year 2010.

According to Reuters, those forecasts fell below Wall Street expectations. Nonetheless, Qualcomm's stock enjoyed a bounce following the earnings news--notable in that the company's share price has declined from around $47 to around $41 during the past few months. Qualcomm's stock was up slightly in after-hours trading following its earnings announcement, to around $42.01 per share.

For more:
- see FierceWireless' Q3 earnings page
- see this release
- see this conference call transcript
- see this MarketWatch article
- see this Reuters article

T-Mobile CTO: 40% of Q4 sales will be smartphones

Sue Marek — Wed, 04 Nov 2009 13:31:10 -0500

SAN FRANCISCO--During a keynote address at the Open Mobile Summit 2009 conference here, T-Mobile USA CTO Cole Brodman touted his company's "belief in the power of open," and argued the carrier had supported the concept long before some of its competitors. Specifically, Brodman noted T-Mobile was the first carrier to launch an Android handset in the U.S. with its debut of the G1 device a year ago. And that push will continue: He said the company will have four Android handsets available this holiday season, with that number doubling to eight in the first six months of 2010.

Brodman also said that T-Mobile believes that 2009 is the "year of the smartphone," and expects that 40 percent of its sales in the fourth quarter will be smartphones, the majority of which will be devices with Android and BlackBerry operating systems.

Android clearly plays a big role in T-Mobile's future. Brodman said Android users consume 50 times the data of others, which is both a challenge (from a network capacity standpoint) and a huge benefit. "It's great to make products that people want to consume," he said.

Brodman provided some other interesting Android tidbits:

Half the customers using Android devices visit the Android Marketplace once a day
80 percent of Android users browse at least once a day, with two-thirds browsing numerous times per day
Nearly half of the carrier's HTC myTouch 3G users customize their phone with applications
More than 40 percent of Android users access social networking sites multiple times per day

T-Mobile plans to continue to work closely with Google on the Android Marketplace. Brodman said that on Nov. 17 T-Mobile will debut a channel in the Marketplace that will feature and recommend certain apps to T-Mobile customers. Brodman also said that T-Mobile customers will be able to download a paid app from this T-Mobile channel and it will be posted to their T-Mobile bill.

"We think the carrier billing platform is a great way to collect payment for paid apps on behalf of our partners," Brodman said.

Video: Verizon's new Droid commercial

Mike Dano — Wed, 04 Nov 2009 12:08:16 -0500

Source: Boy Genius Report

Looking back at the top mobile apps of 2006

Phil Goldstein — Wed, 04 Nov 2009 11:50:01 -0500

For the past four years, FierceMobileContent has been honoring top mobile applications that we think are standouts among their peers. We recently decided to take a look back at some of those award winners from the past and see how they are faring today. In this first part of a series, we checked out the companies and applications that won the award in 2006. Much has changed, but some of the applications have stood the test of time. Check out how the winners fared. Special feature

Rumor Mill: Verizon to double ETF to $350 on 'advanced devices'

Phil Goldstein — Wed, 04 Nov 2009 11:42:53 -0500

Verizon Wireless is going to double its early termination fee (ETF) later this month from $175 to $350 for users who purchase an "advanced device," according to the Boy Genius Report blog.

According to the blog, which posted a leaked slide of the policy change, Verizon will institute the new policy Nov. 15. The ETF will go down by $10 per month for each month of service. It is unclear what exactly an "advanced device" is, but it likely refers to smartphones.

If true, the move represents a reasoned measure aimed at protecting the subsidy Verizon Wireless doles out for each of its high-cost smartphones, and likely would deter customers from opening a new line of service, paying for a subsidized device, canceling the line and then selling the device for a profit. Verizon is in the midst of launching several high-profile gadgets, including Research In Motion's BlackBerry Storm2 and Motorola's Droid. Such devices typically sell to consumers for around $200, a price that includes in some cases a subsidy from Verizon of as much as $300.

Verizon spokesman Tom Pica declined to comment.

For more:
- see this Boy Genius Report post
- see this InformationWeek article

LG forecasts 20% growth in handset sales

Phil Goldstein — Wed, 04 Nov 2009 11:25:02 -0500

LG Electronics is predicting a 20 percent rise in its handset sales in both 2009 and for 2010, a bullish estimate that contrasts with relatively tepid expectations for overall growth in the handset market.

Skott Ahn, the head of LG's handset division, made the forecasts in an interview with the Wall Street Journal. He also said the company would look to boost its presence in emerging markets in China, India and other parts of Asia.

Whereas LG sounded a confident tone, research group Strategy Analytics recently predicted a 3 percent rise in the overall handset market in the fourth quarter. The market is expected to gradually recover next year, according to the firm, following an average decline of 11 percent during the past three quarters.

LG appears to be at least partially basing its forecasts on strong smartphone performance. The South Korean company is planning a big push with Windows Mobile smartphones, and Ahn's comments come in the wake of remarks earlier this week from LG CEO Yong Nam, who said he no longer sees the likes of Nokia and Sony Ericsson as its main competitors, and instead views Apple, Palm and Research In Motion as the main competition.

LG said handset sales totalled $3.53 billion in the third quarter, up nearly 25 percent from the year-ago quarter. The company said it shipped 31.6 million handsets in the quarter, up 37 percent from the year-ago quarter, and up 6 percent from the 29.82 million it shipped in the second quarter.

For more:
- see this WSJ article (sub. req.)
- see this Reuters article
- see this WSJ article (sub. req.)

UPDATED: T-Mobile service outage affects 1.7M customers

Mike Dano — Wed, 04 Nov 2009 11:24:11 -0500

T-Mobile USA said "service disruptions" last night rendered inoperable voice and data access for roughly 1.7 million of the carrier's customers in locations across the country.

In a series of posts to its support website, T-Mobile detailed its reactions to the dramatic outage that, according to user complaints collected by CNET and other outlets, apparently stretched from coast to coast. "T-Mobile customers may be experiencing service disruptions impacting voice and data," the company said in a statement yesterday afternoon. "Our rapid response teams have been mobilized to restore service as quickly as possible. We will provide updates as more information is available."

As the evening wore on, T-Mobile issued a series of updates on the situation: "We're making good progress restoring voice and messaging service to affected customers," a T-Mobile representative told CNET at around 9:30 p.m. EST last night.

Finally, at around 1:30 a.m. EST this morning, T-Mobile said it had restored service to affected customers. "About five percent of our customers across various geographies were affected for much of Tuesday evening, and by late Tuesday PST their service was restored," the carrier said.

Later, the carrier provided a brief explanation: "After investigating the cause, we have determined that a backend system software error had generated abnormal congestion on the network. T-Mobile has since implemented additional measures to help prevent this from happening in the future. We again apologize to those customers who were affected and may have been inconvenienced."

T-Mobile is not the first company to suffer service problems. For example, users of Research In Motion's BlackBerry devices have been hit with several outages over the year, AT&T reported brief EDGE disruptions in 2007 and Verizon's wireline business was fined $250,000 by the Ohio Public Utilities Commission for what the PUC described as slow repairs following service disruptions caused by severe weather in at least two Ohio communities last year.

However, yesterday's incident represents yet another black eye for T-Mobile, the nation's fourth largest wireless carrier with around 33.5 million customers; the operator is still reeling from the public relations fallout from prolonged troubles with its Sidekick data service. Last month, T-Mobile reported that glitches with its Microsoft-powered Sidekick data service erased information from a select group of users' devices, though Microsoft said it likely will be able to recover most of the data.

For more:
- see this T-Mobile support page
- see this CNET article
- see this Bloomberg article

Article updated Nov. 5 to include T-Mobile's statement on the reason behind the outage.

Verizon, AT&T, others rally on IMS approach to voice over LTE

Phil Goldstein — Wed, 04 Nov 2009 11:10:45 -0500

Verizon Wireless, AT&T and several major international carriers and vendors threw their support behind an IMS-based approach to delivering voice and SMS services over LTE networks. The level of operator support--the approach also is supported by Orange, Telefonica, TeliaSonera and Vodafone--sits in sharp contrast to another approach, called Voice over LTE via Generic Access, or VoLGA, which is supported by T-Mobile International.

Vendors including Alcatel-Lucent, Ericsson, Nokia Siemens Networks, Nokia, Samsung Electronics and Sony Ericsson also voiced their support for the initiative, dubbed One Voice. The companies said they concluded that an IMS-based approach "is the most applicable approach to meeting the consumers' expectations for service quality, reliability and availability when moving from existing circuit-switched telephony services to IP-based LTE services. This approach will also open the path to service convergence, as IMS is able to simultaneously serve broadband wireline and LTE wireless networks."

The companies said that the purpose of the initiative is to create the largest LTE ecosystem possible, and to avoid fragmentation of technical solutions.

Interestingly, both Alcatel-Lucent and Ericsson also support the VoLGA approach, and Nokia Siemens has supported its own solution, called Fast Track Voice, which proposes having mobile switching center servers handle VoIP traffic over LTE networks. VoLGA proponents argue that their approach should be used as an interim solution. All three vendors said they do not see a conflict in supporting the different approaches.

"We have been supporting the IMS approach from the beginning," Nokia Siemens spokesman Kent Tankersley told FierceWireless. "We look at an all-IP-based architecture as the ultimate goal for LTE. The Fast Track is a way the intermediate step, a bridge to that IMS."

Ed Elkin, director of IMS marketing at Alcatel-Lucent, said the company supports One Voice, VoLGA and circuit-switch fallback approaches for delivering voice over LTE. However, he said that One Voice is attractive for several reasons. "Once Voice, by giving the handset the handset manufacturers a common target to aim at, increases the likelihood that they can create a variety of handsets for the subscriber to choose from," he said.

He said that VoLGA will continue, but noted the broad support for One Voice likely would increase the possibility of global roaming. "Other methods have a narrow operator base," he said.

Peter Linder, director for network solutions at Ericsson, said that the One Voice approach was a "lightweight collaboration model" aimed at accelerating market adoption of LTE.

"We felt that the industry was a little bit unclear about the timing for when voice over LTE would happen for 3GPP standards," he said. "If we could take that uncertainty out of the marketplace and create clarity," he said, that could help drive momentum in the LTE ecosystem.

For more:
- see this release

AT&T suing Verizon over 'There's a map for that' ads

Phil Goldstein — Tue, 03 Nov 2009 15:58:57 -0500

Let the ad wars continue.

AT&T sued Verizon Wireless, claiming Verizon's latest campaign targeting AT&T's 3G coverage is misleading. AT&T is seeking a cease and desist order through a federal court in Georgia, and said the ads are causing it to lose "incalculable market share."

Last month, Verizon began widely pushing an ad campaign, "There's a map for that," that was a swipe at Apple's "There's an app for that" spots touting the iPhone, which AT&T Mobility exclusively offers. AT&T claims the ads don't accurately represent AT&T's coverage. The ads show maps of the two companies' 3G wireless coverage, and AT&T claims that the blank spots on the map for AT&T in the ads mislead viewers into thinking that AT&T has no service in those areas.

"By communicating that AT&T customers have no coverage in large parts of the country, Verizon is misleading the public about an essential component of the services AT&T offers," the lawsuit said. AT&T argues in the lawsuit that customers can "fully use their wireless devices outside of a '3G' coverage area and undisputedly have coverage in areas depicted by white or blank spaces on the maps used in Verizon's advertisements."

A Verizon spokesman did not immediately respond to a request for comment.

The "map" ads from Verizon are just a part of the No. 1 carrier's ad blitz. The company in recent weeks launched a related campaign for its Android-based Droid phone from Motorola that stabs directly at the capabilities of Apple's iPhone.

Interestingly, this is not the first time that the nation's top two carriers have tussled over advertisements. In July, Verizon asked a U.S. judge to determine whether its "America's Most Reliable 3G Network" ads are truthful, a claim AT&T said was misleading.

For more:
- see this WSJ article (sub. req.)
- see this Reuters article

What were Americans' top 10 favorite phones in August?

Phil Goldstein — Tue, 03 Nov 2009 11:36:07 -0500

Smartphones are seen as a major growth engine for wireless. According to recent research from comScore, they are also becoming some of the most-favored phones of U.S. consumers. The following is a countdown of the top 10 most satisfying cell phones in the United States in August. The information comes from an August survey of 15,000 U.S. mobile subscribers over the age of 13, and includes devices that have installed user bases of more than 100,000. ComScore asked respondents to rank their satisfaction with their device on a scale of 1 to 10, with 10 being the highest. Slideshow

Target outsourcing mobile retailing biz to RadioShack

Phil Goldstein — Tue, 03 Nov 2009 11:05:55 -0500

RadioShack is taking over Target's mobile retailing business, according to reports, in another sign that the company is looking to grow its position as a cell phone retailer.

RadioShack, through its subsidiary Kiosk Operations, took over the mobile retailing operations at 100 Target stores in Minnesota, California, Georgia, Illinois, New Jersey, Texas and Washington last month, according to the Minneapolis-St. Paul Business Journal. Additionally, the report said that Target plans to expand the outsourcing effort to all of its roughly 1,700 stores next year.

In recent months, RadioShack has moved aggressively to expand its presence in the mobile retail space, likely in an effort to counter increasing pressure from competitors Best Buy and Wal-Mart. During the summer, RadioShack inked a deal with T-Mobile USA to offer the carrier's wares in its company-owned stores, and in late September RadioShack added Verizon Wireless products to around 450 Sam's Club kiosks it operates. RadioShack sells service from AT&T Mobility, Sprint Nextel and Virgin Mobile USA.

Representatives from RadioShack and Target did not immediately respond to requests for comment.

For more:
- see this Minneapolis-St. Paul Business Journal article
- see this Dow Jones Newswires article

Report: FCC staff recommend approval of AT&T-Centennial deal

Phil Goldstein — Tue, 03 Nov 2009 10:32:21 -0500

FCC staffers have recommended that the commission approve AT&T's $944 million acquisition of Centennial Communications, according to a Bloomberg report. The companies have been urging the FCC to approve the deal, which received regulatory approval from the U.S. Department of Justice last month.

AT&T's purchase of Centennial will give the nation's No. 2 carrier around 1.1 million of Centennial's customers in Puerto Rico, the U.S. Virgin Islands, the Great Lakes region and in the Gulf Coast.

The Bloomberg report, citing unnamed sources familiar with the matter, said the agency's staff sent the recommendation to the FCC's five commissioners Oct. 30. Conditions to be imposed on AT&T are likely going to be similar to the ones AT&T itself laid out in an Oct. 22 letter to the FCC, according to the report.

In the letter, AT&T said it would honor Centennial's existing roaming agreements with other carriers. The company also said it would operate and maintain a CDMA network in Puerto Rico and the U.S. Virgin Islands for 18 months after the deal closes, which was a concern that Sprint Nextel had brought up with the FCC regarding the deal. Further, AT&T promised to limit its contact with America Movil (which operates in Centennial areas and owns reseller TracFone) if it received approval to purchase Centennial--presumably to avoid conflicts of interest.

FCC spokeswoman Jen Howard declined to comment on the report and on when the commissioners might consider the deal. The commissioners can approve, reject or change the staff's recommendation.

For more:
- see this Bloomberg article
- see this FCC filing

Americans' top 10 favorite cell phones in August

Mike Dano — Tue, 03 Nov 2009 10:25:02 -0500

The following is a countdown of the top 10 most satisfying cell phones in the United States in August, according to research firm comScore.

This information derives from an August survey of 15,000 U.S. mobile subscribers over the age of 13, and includes devices that have installed user bases of more than 100,000. ComScore asked respondents to rank their satisfaction with their device on a scale of 1 to 10, with 10 being the highest.

This countdown, starting at No. 10, ranks the top U.S. handsets in August by satisfaction.

Click here to get started

And click here to see April's list.

Pictures and specs: Sony Ericsson's Xperia X10 Android phone

Mike Dano — Tue, 03 Nov 2009 09:27:26 -0500

Sony Ericsson unvield its new Xperia X10 Android phone, which the company said "introduces a new UX platform that will evolve across the product portfolio and expand over time continuously introducing new features and capabilities." Check out pictures and specifications for this new gadget.

Click here to get started

<--Back to the story

NSN may cut nearly 6,000 jobs

Phil Goldstein — Tue, 03 Nov 2009 09:08:22 -0500

Nokia Siemens Networks, reeling from weaker sales and declining market share, said it may cut as many as 5,760 jobs as part of a broad restructuring and cost-cutting program. The program includes reducing the number of its business units from five to three and lowering its procurement costs.

The company said it aims to reduce expenses by $733 million annually by the end of 2011 compared with the end of 2009. Additionally, the cuts in procurement costs will be "substantially larger" than other cuts, and are being made to "meet ongoing customer requirements for competitive pricing." That could bring the total cost cuts to nearly $1.46 billion. Nokia Siemens said it may cut 7 percent to 9 percent of its 64,000 employees, and that some countries may see job losses higher or lower than that range.

Just as Nokia reshuffled its front office and reorganized its handset business in the wake of its $834 million net loss in the third quarter, it now appears that Nokia Siemens--Nokia's joint venture with Germany's Siemens--is restructuring after a period of weak performance. In the third quarter, NSN's sales slumped 21 percent to $4.16 billion. The company had an operating loss of $1.64 billion in the quarter, compared with an operating loss of $1.48 million in the year-ago quarter. The company's market share also is expected to decline more in 2009 than Nokia and Nokia Siemens had previously anticipated.

In addition to the cost cuts, Nokia Siemens said it would streamline its business structure, actions scheduled to go into effect Jan. 1. The company plans to reorganize into three business units: business solutions, network systems and global services. Jürgen Walter, currently head of the company's converged core unit, will run business solutions; Marc Rouanne, currently head of the vendor's radio access unit, will run the network systems business; and Ashish Chowdhary, currently the company's services chief, will run the global services business.

NSN also said it is open to making acquisitions when "assets are available and the associated purchase price of those assets provides the appropriate value."

For more:
- see this release

Sony Ericsson debuts Xperia X10, first Android phone

Phil Goldstein — Tue, 03 Nov 2009 08:28:40 -0500

Sony Ericsson unveiled its first Android phone, and said the device will be the flagship for a family of phones that the struggling handset maker will release in the first half of next year. The device, called the Xperia X10, features a new user interface called UX, which was previously known by the codename "Rachael." The user interface appears to build on many of the advances HTC and Motorola have made with their own custom Android user interfaces.

With the release of the X10, Sony Ericsson becomes the third handset maker of the world's top five OEMs to release a phone based on Google's Android operating system. The phone runs Android 1.6.

Sony Ericsson's UX user interface features two signature applications: Timescape and Mediascape. Timescape allows users to browse all of their communications with a contact--via photos, emails, texts, Facebook and Twitter--in one view. Mediscape allows users to manage all kinds of content, from their phones, YouTube or Sony Ericsson's PlayNow media portal. Additionally, both of these features can automatically recognize connections among contacts, content and media, Sony Ericsson said. The phone also has an "infinite button," which the company said allows users to see all of their connections with a contact. Further, face recognition software can recognize up to five faces in a picture, and then automatically connects them with the user's social phonebook and all other related communications.

The device runs on a 1GHz Qualcomm Snapdragon processor, has an 8.1-megapixel camera, a 4-inch WVGA touchscreen, WiFi, GPS, 3.5 mm headset jack and comes with an 8 GB microSD card. Sony Ericsson said the Xperia X10 would be available in select markets in the first quarter, but did not specify which markets. The company also did not reveal pricing information.

For more:
- see this release
- see these pictures and specs

Tarver Games attacks App Store with 'Ghosts Attack'

Phil Goldstein — Mon, 02 Nov 2009 12:05:30 -0500

Apple's App Store is teeming with games, so what sets Tarver Games apart from the slew of firms launching games for the application storefront? Its pedigree. FierceDeveloper's latest Developer Workshop profiles Tarver Games, whose president, Chris Cross, is a 16-year videogame industry veteran who previously served as game design director for Electronic Arts' landmark "Medal of Honor." Tarver Games recently introduced its flagship iPhone title, "Ghosts Attack," which updates the first-person shooter genre via the integration of Google Maps technology. FierceDeveloper researches the mobile gaming experience, management philosophies and the value of original intellectual property. Special feature

UPDATED: Nokia, AT&T working toward Ovi Store launch

Phil Goldstein — Mon, 02 Nov 2009 11:57:49 -0500

Nokia and AT&T Mobility have developed a close relationship this year, with the carrier launching several high-profile Nokia devices. Yet one area of the relationship remains uncertain: when AT&T will launch support for Nokia's Ovi Store. Niklas Savander, Nokia's executive vice president of services, suggested that the companies were still finessing the details of the deal.

In an interview with CNET, Savander discussed Nokia's Ovi situation at AT&T, the nation's second largest carrier. He said that each relationship Nokia has with its various carrier partners is unique, and that the revenue cut that carriers get via Ovi varies depending upon the situation. Savander was asked if Nokia had been able to come to an agreement with AT&T on the revenue distribution of the deal.

"You might be able to look at this and say that perhaps the business conditions have not been attractive enough to AT&T," he said. "It's hard to dispute that. You can't say it's because the device is not good enough or the service is not good enough."

An AT&T spokeswoman did not immediately respond to a request for comment. AT&T said in May that it would launch Nokia's Ovi Store later this year, but has not given any specific timetable. The companies are currently working toward the launch of the Ovi Store.

In the interview, Savander said that when AT&T launches Ovi, it will be a co-branded service. "The brands are not in any way conflicting, but they're complimentary," he said. "They will be visible on the devices, so we can create a setup where both parties' assets are being valued and there is a fair exchange. But you never know how it will eventually turn out until you have the ink on the paper." He also said that unlocked phones will not be able to access the AT&T co-branded store.

U.S. operators have employed a variety of strategies on the application storefront landscape. Verizon Wireless earlier this year unveiled plans to operate its own app store, while T-Mobile USA has pushed its own applications through Google's Android Marketplace.

For more:
- see this CNET article

Related Articles:
Nokia confirms redownloads for Ovi Store purchase
Sizing up the Ovi Store five months on
Ovi Store finally opens for business

Article updated Nov. 2 to clarify Nokia's relationship with AT&T.

Palm faces challenges as competition heats up

Phil Goldstein — Mon, 02 Nov 2009 11:38:15 -0500

As Palm heads into the critical holiday shopping season, analysts are starting to worry the company will be outshined by the competition.

Specifically, Motorola seems to have stolen some of the smartphone thunder from Palm and its webOS platform with the introduction of its first two Android phones. Citi analyst Jim Suva downgraded Palm and Research In Motion while upgrading Motorola.

"Motorola is launching of one of the most compelling offerings at [a] time when many investors have given up on the company's handsets," Suva wrote in a research note. "The revolution of product and application service offerings is going to start to crack open the enterprise door and could pose a risk for BlackBerry. Major shifts in promotion support creating a promotion commotion in the months ahead [that favor] Motorola and post a challenge for RIM and Palm."

Indeed, Motorola will have Verizon Wireless backing its Droid smartphone and T-Mobile USA touting the Cliq during the holiday season. And Sprint Nextel, the only U.S. carrier currently offering the Palm Pre, is likely to emphasize its new Android offerings, the HTC Hero and the Samsung Moment, via its holiday marketing, possibly at the expense of the Pre. Further, Sprint is set to launch Palm's second webOS phone, the Pixi, later this month for $99, which could potentially cannibalize Pre sales. (In its most recent quarterly report, Palm disclosed sales of around 800,000 smartphones, the vast majority of which were the Pre.)

And it appears investors have noticed the warnings signs. During the past few weeks, Palm's stock has dropped precipitously, from around $17 per share at the end of September to around $12 per share today.

However, Palm likely is hoping to boost its standings in the coming months with expanded distribution; the company has rolled out the Pre in international markets, and Verizon Wireless has said it will sell the device sometime next year.

For more:
- see this Barron's blog post
- see this TheStreet.com article

Google Voice has more than 1.4M users

Phil Goldstein — Mon, 02 Nov 2009 11:20:18 -0500

Google Voice has more than 1.4 million users, and of those, 570,000, or 40 percent, use the service every day, according to a confidential part of a letter Google sent to the FCC, which was disclosed by BusinessWeek. Additionally, according to the letter, Google may expand the service internationally. The figures on the growth and popularity of the service give some greater context to a fierce debate over the service between Google and AT&T.

Last week, Google sent a letter to the FCC about Google Voice in response to a series of questions that the FCC had posed to Google about the nature of the service. Several portions of the letter were redacted and marked as confidential. A formatting error led to the accidental publication of the confidential material. The FCC has since replaced Google's response with the version that has the material redacted.

"We had intended to keep sensitive information regarding our partners and the number of Google Voice users confidential," Google said in a statement to BusinessWeek. "Unfortunately, the PDF submitted to the FCC was formatted improperly." The confidential portions of the letter also state that Google has inked contracts with a number of "international service providers for inputs to Google Voice," but that the services had not yet been launched.

Until now the extent of Google Voice's popularity wasn't known. The service started in 2005 and remains invitation-only, yet has been the subject of an intense debate in recent weeks. AT&T has argued that the service is improperly blocking calls to rural areas and should be regulated like a traditional telephone service. Google has countered that it blocks calls to fewer than 100 specific phone numbers due to what Google said were high-cost "traffic pumping schemes." Google also said that the service not be regulated like a traditional telephone service because it is a "Web-based software application" that is "completely distinct from the user's telephone access lines/services."

In other Google news, Andy Rubin, director of mobile platforms at Google, quashed a rumor that the company was planning to release its own phone based on its Android platform. In October, TheStreet.com reported that Google was planning to release its own branded, unlocked, Android-based phone this year. Rubin said the company was not going to "compete with its customers."

"We're not making hardware," Rubin told CNET in an interview. "We're enabling other people to build hardware."

For more:
- see this BusinessWeek article
- see this CNET article