FierceWireless

Looking at the hot trends in handset design

Phil Goldstein — Fri, 20 Nov 2009 11:37:58 -0500

The holiday shopping season is just around the corner, and wireless carriers are offering a seemingly endless parade of new phones to entice customers. Thanks to a recent partnership between Strategy Analytics and FierceWireless, we'll bring you some key metrics related to these new handset launches. During September, another 106 new handsets were announced globally by 26 vendors. For the 59 new handsets where detailed specifications were available, 59 percent incorporated a touchscreen, the highest monthly figure on record, and 95 percent incorporated a memory card slot, another all-time high. Check out our Special feature.

Verizon cuts more former Alltel employees

Phil Goldstein — Fri, 20 Nov 2009 11:33:04 -0500

Verizon Wireless confirmed it laid off more former Alltel employees as it works to complete its assimilation of the carrier. Verizon spokeswoman Lucie Pathmann declined to put a number on the cuts, but told ArkansasBusiness.com that the effort was part of the carrier's plan to eliminate redundant jobs following its $28.1 billion acquisition of Alltel, which closed early this year.

The majority of the job cuts were in Little Rock, Ark., the site of Alltel's headquarters and now a Verizon regional office. The job cuts were in marketing, finance, legal and other areas.

In July, Verizon laid off 80 workers, and the majority of those workers--50--were former Alltel employees in Arkansas.

Throughout much of the year, Verizon has been digesting Alltel's operations: switching over billing systems, upgrading wireless broadband service and re-merchandising stores. Verizon's blockbuster acquisition of Alltel made it the nation's largest wireless carrier with 89 million total subscribers.

For more:
- see this ArkansasBusiness.com article

Nokia cutting 330 R&D jobs

Phil Goldstein — Fri, 20 Nov 2009 11:14:02 -0500

Nokia said it would cut 330 research and development jobs at sites in Finland and Denmark. The company has been eliminating jobs across the board this year to rein in costs, but a company spokesman told Reuters that the handset maker also is moving toward launching fewer phone models in favor or more iconic phones.

The company said 230 positions will be eliminated at its Oulu site in Finland, and 100 will be cut at its site in Copenhagen. Nokia said it will try to find new jobs within the company for as many of the affected employees as possible. The company said the cuts affect 2 percent of its global R&D workforce, which numbers around 17,000 people.

So far this year, Nokia has announced 3,700 job cuts, including 1,300 voluntary separation packages. The handset maker instituted a cost-cutting program earlier this year to shave around $1 billion in expenses at its handset unit. Further, in October Nokia appointed its CFO as head of its low-end phones business one day after the company reported its worst quarterly results since it began quarterly reporting in 1996.

For more:
- see this AFP article
- see this Reuters article
- see this release

Is mobile broadband pricing finally starting to decline?

Sue Marek — Fri, 20 Nov 2009 11:13:42 -0500

As the holiday buying season looms, it looks like some U.S. wireless carriers are starting to see the light when it comes to mobile broadband pricing. Earlier this week, AT&T dropped the price of its 200 MB data plan to $35 per month from $40 per month, but kept its 5 GB plan at $60 per month. Likewise, T-Mobile USA announced last week two new data rate plans--a 200 MB data plan for $30 per month and a 5 GB data plan for $50 per month.

While the 200 MB data plans offer consumers a less-expensive option, analysts at CCS Insight say that these smaller bandwidth plans are useless for all but the very casual user. Anyone who uploads pictures (even occasionally) will run the risk of costly overage charges. And most users who invest the time and research into buying a wireless dongle or embedded laptop or netbook are likely to want the higher bandwidth plans.

It looks like $50 per month for 5 GB of data is the new competitive price point that other Tier 1 operators will have to match if they want to stay competitive in this space. According to recent rate comparisons by Current Analysis, most U.S. carriers are offering 5 GB for $60 per month, a rate that most have been resistant to reducing. Earlier this year, the FierceWireless editorial team predicted that in 2009 we would finally start to see mobile broadband pricing decline. Until now that prediction has not come true--at least not from the Tier 1 operators. We have seen flat-rate carrier Cricket Communications challenge this model with its $40 per month unlimited data plan, but Cricket clearly doesn't have the nationwide reach that the Tier 1 carriers enjoy and so its lower priced offering hasn't effectively challenged the other operators--at least not yet.

But is $50 per month for 5 GB of data the right price point to drive more growth? CCS Insight analysts don't think so. In fact, they believe that carriers need to reduce the price another $10 to $40 per month for 5 GB of data if they really want to create significant growth in mobile broadband. Of course, the real question is whether carriers want (or can support) a substantial uptick in this area. Some (like AT&T) are already suffering from the burden of excessive data demand, and other carriers are fearful of the same backlash from consumers if they open the floodgates.

I think we are on the cusp of a big change in mobile broadband pricing. With some operators starting to inch downward to the $50 per month price for 5 GB of data, I think it's only a matter of time before one Tier 1 operator breaks rank and goes with a $40 per month, 5 GB data plan. Of course, the carrier that makes this type of bold move will have to ensure its network can handle potentially dramatic increases in traffic. It may not happen in 2009, but I'm hoping we see some dramatic price movement in the first half of 2010. --Sue

P.S. Earlier this week FierceWireless published its list of the Top Turkeys (bad ideas, bad products or just plain bad business decisions) of 2009. Now our sister publication, FierceMobileContent, has published its Top Mobile Apps Turkeys of 2009. Be sure to check out the mobile apps that editor Jason Ankeny thinks missed their mark.

U.S. Cellular debuts overage fee protection feature

Phil Goldstein — Fri, 20 Nov 2009 10:55:14 -0500

U.S. Cellular launched a new service that it says will help customers keep better track of their monthly usage of voice minutes and text messages, and thus protect them more from overage charges.

The service, called Overage Protection, will send a free text message to subscribers when they reach the 75 percent threshold of their total anytime minutes or available text messages in a given billing cycle, as well as inform them of when their billing cycle ends. Users also will receive a text message when they reach 100 percent of their allotted minutes or text messages. Existing and new postpaid subscribers can sign up for the service at retail stores, by contacting customer service or via their account online.

Overage charges have long been a sticking point in the relationship between carriers and customers. Indeed, the issue has carried over into the data revolution; earlier this year, AT&T Mobility and RadioShack were hit with a lawsuit from a customer who said that she was charged exorbitant fees for exceeding her data cap after she purchased a netbook with AT&T service.

Interestingly, this is not the first attempt by U.S. Cellular to improve its relationship with its customers. Earlier this spring, the carrier announced a battery exchange program that allows customers to come into any of its retail stores and change out a dead or dying battery for free.

For more:
- see this release

Analysts: Nokia unlikely to snap up Palm

Phil Goldstein — Fri, 20 Nov 2009 10:35:14 -0500

Speculation has increased recently that Nokia may be looking to acquire Palm to boost its smartphone presence, particularly in the United States. However, analysts are saying that such an acquisition is unlikely to happen for several reasons, including Palm's current market value and Nokia's own smartphone roadmap.

Palm's stock has shot up this year, thanks to the launch of the company's webOS operating system, giving the company a market value of around $2 billion. If Nokia were to try and snap up Palm, it likely would have to pay a premium.

Another reason analysts discount the deal is Palm's close relationship with Sprint Nextel, which has been steadily losing postpaid subscribers. Sprint is, for now, the sole U.S. carrier supporting Palm's webOS smartphones (Verizon Wireless has promised to sell the Pre next year).

"Is a relationship with Sprint worth $2 billion?" Frost & Sullivan analyst James Brehm told Dow Jones Newswires. "If I were in Nokia's position, I would put that money into branding and advertising."

It's worth noting, though, that Palm has relationships with a variety of carriers, and is rolling out the Pre in international markets.

In addition to such factors, analysts also noted Nokia's own smartphone plans. The company heavily supports the Symbian platform, and just released its first Maemo-based phone, the N900. According to a report on The Really Mobile Project blog, Nokia plans to stop using the Symbian platform by 2012 in its entire N-Series line of devices in favor of Maemo. A deal for Palm could unnecessarily complicate those plans, analysts said. Nokia representatives have reiterated the company's support of Symbian.

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

Report: Deutsche Telekom searching for U.S. partners

Phil Goldstein — Fri, 20 Nov 2009 10:16:54 -0500

Deutsche Telekom is seeking out partners for its U.S. subsidiary, T-Mobile USA, according to a report in the German newspaper Handelsblatt. The report named AT&T, Clearwire and MetroPCS as possible partners, as well as unnamed financial investors outside the wireless industry.

The report, citing unnamed sources from the German telecom giant, said that the company is looking for a partner to help finance T-Mobile's network expansion. If Deutsche Telekom were to partner with a financial firm, the paper reported, that company might take a minority stake in T-Mobile. The carrier, the nation's fourth largest, is in the midst of building out its 3G network, and plans to upgrade its network to HSPA+ beginning next year to capitalize on the growing demand for mobile data.

In September, both Clearwire and MetroPCS were named as possible partners for T-Mobile USA in a Bloomberg report. That report said Deutsche Telekom was considering partnering with the companies to gain access to their spectrum holdings.

The Handelsblatt report said the discussions about a partner were in early stages, and also said that a possible acquisition of Sprint Nextel is off the table. Rumors swirled in September that Deutsche Telekom was considering making a bid for Sprint.

Representatives from AT&T, Clearwire and Deutsche Telekom declined to comment, while a representative from MetroPCS did not immediately respond to a request for comment.

The news comes as T-Mobile begins to seriously struggle in the U.S. wireless market. The company's subscriber growth has slowed, and in the third quarter the carrier lost 77,000 net wireless subscribers. Perhaps in response, T-Mobile recently unveiled several low-cost, unlimited service plans.

For more:
- see this Reuters article

Counting down the top-selling smartphones from Q3

Phil Goldstein — Thu, 19 Nov 2009 11:50:29 -0500

Many wireless operators are aggressively hawking smartphones this holiday season, hoping to get more data-capable devices into consumers' hands. The smartphone craze has been picking up steadily this year, and the third quarter was no exception. The following is a list of the top-selling smartphone models in the United States in the third quarter of this year, according to research and consulting firm IDC. This list counts vendor sales to carriers and channels (sell-in) rather than sales to end users (sell-through). Further, these numbers are based on preliminary data; IDC has not yet finalized its numbers. Which phone unseated Research In Motion's BlackBerry Curve for the top spot? Slideshow

Nokia seeing corporate demand for first netbook

Phil Goldstein — Thu, 19 Nov 2009 11:37:36 -0500

Nokia said it has so far seen strong interest from corporations and enterprise users for its first netbook, the Booklet 3G, according to a company executive. The device was first unveiled in August and is set to go on sale in the United States through Best Buy.

"When we launched the Booklet 3G ... we thought it to be primarily a consumer device, but after the launch a big, growing interest is coming from companies," said Heikki Norta, head of Nokia corporate strategy, according to Reuters. "No one knows yet if a booklet kind of device is the next device that will be used by millions, or hundreds of millions, of people, but right now it looks like, if not for mass market, there is clear demand."

In October, AT&T Mobility said it would sell the Booklet 3G for $299.99 to customers who sign up for a two-year AT&T mobile data contract. The device will cost $599 for customers who do not opt to go with the AT&T plan, and will be sold exclusively at Best Buy locations as well as Best Buy Mobile stores. Nokia said the device was supposed to go on sale by mid-November, but a check of Best Buy's website shows the device is on back order.

The netbook sports HSPA and WiFi connectivity and features a 10-inch glass HD-ready screen, up to 12 hours of battery life and support for Microsoft's Windows 7 operating system with a 1.6 GHz Intel Atom processor.

For more:
- see this Reuters article

Vodafone CEO: We need to resolve VZW issues

Phil Goldstein — Thu, 19 Nov 2009 11:08:21 -0500

Vodafone CEO Vittorio Colao said that his company needs to work with Verizon Communications to resolve issues related to their joint venture, Verizon Wireless, in order to boost Vodafone's share price.

"We need to solve the U.S. situation," he said at the Morgan Stanley TMT conference in Barcelona, without elaborating. Vodafone holds a 45 percent stake in Verizon Wireless, which has not paid dividends to Vodafone since 2005. According to the Financial Times, Verizon has urged Verizon Wireless to use its profits to pay down its roughly $32 billion of debt--$10 billion of which is owed directly to Verizon--instead of paying dividends. The action, according to the FT, could help Verizon pay less if it were to eventually acquire Verizon Wireless outright.

Colao has said in the past that he is happy with the relationship Vodafone has with Verizon regarding the wireless company, but that Vodafone's board is always reviewing it.

In April, Verizon CEO Ivan Seidenberg said that his company likely would not increase its 55 percent stake in Verizon Wireless. "I would like to own the whole thing, but we don't have to," Seidenberg told the Wall Street Journal during a wide-ranging interview. He said said he thinks Vodafone may eventually sell its Verizon Wireless stake as wireless growth slows.

Verizon Wireless spokesman Jim Gerace said that the partnership is still strong, but did not provide any specific response to Colao's comments. "I think you need to talk to them by what they meant by 'solve the issue,'" he told FierceWireless. "The partnership continues to be very strong and is working well."

A Vodafone spokesman also handed off the issue.

"I don't think it really requires much clarification," Bobby Leach, director of communications for Vodafone, told FierceWireless. "The situation with Verizon and Wireless has not changed. We have a very good relationship with Verizon. Quite clearly, from our point of view, it would be advantageous if it were possible to monetize our investment. However, we fully recognize that the priority right now is to pay down debt and that [is something] we have always recognized."

For more:
- see this Financial Times article
- see this Reuters article
- see this Dow Jones Newswires article

T-Mobile offering prepaid BlackBerry

Phil Goldstein — Thu, 19 Nov 2009 10:50:39 -0500

Ahead of the holiday shopping season T-Mobile USA unveiled a pay-in-advance, no-contract BlackBerry offering, a move that dovetails with the No. 4 carrier's recent push into unlimited, prepaid calling plans.

The package, called T-Mobile Complete, gives subscribers a choice of handsets starting at $59.99, which includes the first month of service. Customers also can choose from a range of unlimited plans starting at $50 per month. The BlackBerry Curve 8520 is one of the phones in the plan, and according to a T-Mobile spokesman, the other phones in the plan are the Samsung Gravity, Samsung t229 and Samsung t239.

The different packages have different prices, reflecting the price of the handsets. The Blackberry Curve 8520 costs $299, the Samsung Gravity costs $149, the Samsung t229 will be $79 and the Samsung t239 costs $59, according to a T-Mobile fact sheet. The non-contract rate plans start at $50 and range up to $79.99 per month.

In October, T-Mobile debuted two new monthly unlimited plans, including a prepaid option. The plan, called Even More Plus, gives subscribers unlimited voice, texting and Web browsing for $79.99 per month. Sliding down the scale offers unlimited voice and texting for $59.99 per month or unlimited voice for $49.99 per month. T-Mobile has been advertising the plans as a key part of the carrier's value proposition.

The T-Mobile Complete package is currently available at Best Buy and Wal-Mart stores.

For more:
- see this Chicago Tribune article
- see this Engadget post

Top-selling smartphones in the U.S. in the third quarter

Mike Dano — Thu, 19 Nov 2009 09:38:43 -0500

The following is a list of the top-selling smartphone models in the United States in the third quarter of this year, according to research and consulting firm IDC.

This list counts vendor sales to carriers and channels (sell-in) rather than sales to end users (sell-through). Further, these numbers are based on preliminary data; IDC has not yet finalized its numbers.

Click here to get started

Manufacturers and carriers do not disclose sales information for specific handset models. Therefore, IDC derives sales information from a variety of sources, including interviews with vendors, operators, component and software suppliers and resellers, as well as press releases, marketing and technical literature, white papers, filings with the Securities and Exchange Commission, quarterly conference calls, reports published in trade and business journals, end-user surveys and other sources. The firm also conducts cross-checks with ODMs and supply chain players.

Finally, for those sticklers in the readership, IDC defines smartphones--"converged mobile devices" in IDC parlance--as those devices that "are either voice or data centric and are capable of synchronizing personal information and/or email with server, desktop or laptop computers. Positioned to solve the ‘multiple device question' and replace the need to carry a mobile phone and a pen-based handheld or a mobile phone and a pager, for example, these devices may also include an expanding list of features such as multimedia or email. These devices must match wireless telephony capability to evolved operating systems or application environments such as the BlackBerry OS, Palm OS, Mac OS X, Microsoft operating systems, Linux, and the Symbian platform. These devices must include the ability to download data to local storage, run applications, and store user data beyond their required PIM capabilities. Converged handheld devices must also offer the full extent of their application processing capability to the user, regardless of network availability."

And click here for second quarter numbers.

Unions push to organize T-Mobile USA employees

Phil Goldstein — Wed, 18 Nov 2009 15:23:34 -0500

The Communications Workers of America and a German union called ver.di have forged an alliance to persuade Deutsche Telekom to allow unionizing at its U.S. subsidiary, T-Mobile USA. The two unions have formed a new organization called TUnion, which CWA President Larry Cohn said will try and end the "double standard" of Deutsche Telekom supporting unionized workers in Germany but not in the United States.

Ver.di will represent T-Mobile USA workers and the CWA in negotiations with Deutsche Telekom in Germany. At the same time, the CWA said it would renew its efforts to organize at the nation's fourth largest carrier. The CWA, which for most of the year waged battles with AT&T's wireline division over new contracts, said T-Mobile has persistently tried to stop unions since the company began operating in the U.S. market.

"We're really here to say to multinational companies, in this case Deutsche Telekom, we're tired of the face of cooperation in Germany ... and then the stick in the United States, the club of intolerance," Cohn said at a news conference in Washington, D.C., according to Reuters.

In a statement, T-Mobile defended the workplace environment at the company, and pointed out that "multiple anonymous, third party employee satisfaction surveys taken over the last several years" have shown that more than 70 percent of T-Mobile‘s 40,000 employees are very satisfied with their employment.

"Despite the Communication Workers of America's periodic organizing efforts for more than nine years, no group of T-Mobile employees has ever chosen to be represented by a union," the statement said. "While our company is always striving to find ways to improve, year after year, employees continue to view T-Mobile as a good place to work where they have no need for, or interest in, a union."

For more:
- see this AP article
- see this Reuters article

RIM execs confident despite analysts' worries

Phil Goldstein — Wed, 18 Nov 2009 12:27:16 -0500

Longtime smartphone stalwart Research In Motion has come under increasing pressure from the likes of Android, Apple and other upstarts. As a result, analysts have grown increasingly worried that the Canadian BlackBerry maker will suffer declines in revenues and market share; indeed, BMO recently downgraded the company's stock. However, none of this appears to have dented the confidence of the company's two chief executives: Jim Balsillie and Mike Lazaridis. "When we went public everyone was saying, 'Oh my God, you're going to get crushed by Motorola, Ericsson and paging and this emerging Nokia,'" Balsillie told Reuters. "I'm not trying to be dismissive, and I'm not trying to be glib, but this has played before, several times. All that's different is there's a couple more zeros on everything." Article

FCC approves tower siting 'shot clock' rules

Phil Goldstein — Wed, 18 Nov 2009 12:22:16 -0500

The FCC voted unanimously to approve new rules for tower siting that will speed up the application process for new and existing cell towers, fulfilling a pledge FCC Chairman Julius Genachowski made to the wireless industry in October.

The commission voted, 5-0, to give states and localities a so-called "shot clock" for tower siting applications. The new rules mean there will be a deadline of 90 days to process applications for co-located facilities, where two or more providers share the tower, and 150 days for new towers. However, if the applications are not approved, operators must still take the issue into court.

The action is key for an industry keen to build out new cell sites as quickly as possible. Indeed, wireless lobby group CTIA told the FCC that it knows of 760 applications for new tower sites that have been waiting for responses by state and local governments for over a year, according to The Hill. The group said 180 applications have been waiting for more than three years.

"This sounds like a win, win, win to me," commissioner Michael Copps said at the FCC's monthly meeting. During a keynote speech at the CTIA Wireless IT & Entertainment show in San Diego in October, Genachowski said the issue was on that was "ripe for action."

For more:
- see this The Hill article
- see this Broadcasting & Cable article
- see this FCC blog

Related Articles:
CTIA keynote: Genachowski promises to address spectrum shortage, tower siting
FCC will revise cell tower backup power rules
White House rejects FCC proposal on cell towers

Rumor Mill: Nokia replacing Symbian with Maemo in N-Series devices

Phil Goldstein — Wed, 18 Nov 2009 12:02:37 -0500

Nokia plans to stop using the Symbian platform by 2012 in its entire N-Series line of devices in favor of Maemo, according to a report on The Really Mobile Project blog.

The blog, citing comments from Nokia's Maemo marketing team at an event in London, said that the transition will be gradual. Nokia's first Maemo-based smartphone, the N900, has been intended as a "bridge" device aimed at developers and tech enthusiasts, the blog said, but the company will gradually release more mass-market Maemo devices in the coming years.

Nokia declined to comment on the specific claims in the report, but said it remains committed to Symbian. "While it is our policy not to disclose details of our product roadmap, we'd like to explicitly communicate that we remain firmly committed to Symbian as our smartphone platform of choice," the company said in a statement. "Any speculation on what our 2012 roadmap, including operating systems and product branding, are completely premature."

In the statement, Nokia said that it has multiple platforms to serve different purposes and address different markets. "Symbian is more successful than ever in bringing smartphones to the masses," Nokia said. "Maemo is our software of choice for devices based on technology that you'd typically find inside a desktop computer. It delivers a different user experience and enables us to widen the market we can address."

Nokia's N-Series typically denotes high-end smartphones that run the Symbian operating system, though Symbian has been trickling down into Nokia's mid-range line of phones.

The N900 went on sale in the United States today for $649, and will be sold online and in Nokia's flagship stores. Notably, the device did not attract support from any of the major U.S. carriers. Amazon.com is selling the device unlocked for $510.

For more:
- see this The Really Mobile Project blog post
- see this N900 release

Key iPCS investor opposed to Sprint deal

Phil Goldstein — Wed, 18 Nov 2009 11:43:31 -0500

Greywolf Capital Management, one of the main investors of iPCS, expressed its deep opposition to Sprint Nextel's proposed $831 million acquisition of the affiliate, and said Sprint's offer undervalues the company.

Sprint's $24 per share offer "reflects neither the fundamental business value of iPCS nor the value of iPCS's breach of contract claims against Sprint," the firm said. Greywolf, which has been an investor in iPCS since 2004 and has a 8.2 percent stake, said in a letter to fellow shareholders that an offer of $34 to $47 per share would be more reasonable.

"IPCS shareholders will receive a significant and immediate premium for their shares. We look forward to working with the Sprint Nextel team to ensure a smooth completion of the transaction," said an iPCS spokesman. Sprint spokesman Scott Sloat declined to comment.

When Sprint announced the iPCS acquisition, the carrier said that all litigation between the two companies would be settled. In early February, the Circuit Court of Cook County, Ill., ruled that Sprint had violated agreements with iPCS by operating its iDEN networks in territory in which iPCS had affiliate exclusivity rights. The court ordered Sprint stop owning, operating and managing the offending portion of the Nextel network by Jan. 25, 2010. Sprint said it will now no longer be divesting the operations.

In a somewhat related move, iPCS said it settled shareholder lawsuits related to the Sprint acquisition. As part of the settlement, iPCS will provide new details in a Securities and Exchange Commission filing to be submitted later today about why it supports the acquisition.

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

Related Articles:
Sprint to buy iPCS for $831M
Sprint seeking buyer for Midwest iDEN assets
Sprint reassures iDEN subscribers in wake of legal battle
Sprint given one year to shut down offending Nextel networks

ZTE in smartphone discussions with Verizon, others

Phil Goldstein — Wed, 18 Nov 2009 11:13:39 -0500

ZTE is going to release a smartphone next year based on Google's Android platform, and is in talks with a wide range of carriers worldwide, including Verizon Wireless, to partner with for smartphones, according to a company executive.

Dale Ying, ZTE's managing director of handset business marketing, told Dow Jones Newswires that the company is in talks with Verizon, Vodafone, France Telecom Orange and T-Mobile International on smartphones. As for regular handsets and data cards, he said that the company is in talks--and is conducting tests--with all four of the Tier 1 operators in the United States: AT&T Mobility, Sprint Nextel, T-Mobile USA and Verizon.

Previously, ZTE had disclosed that it was in talks with Sprint and Verizon.

"We hope to sell our smartphone to these operators next year," Ying said. "We see big potential in the smartphone market. We are targeting to ship more smartphones in the coming few years, which will help to improve our gross margin." He added that ZTE is targeting combined shipments of 60 million handsets and data cards this year, up from 45 million in 2008.

The company has made no secret of its desire to build stronger relationships with U.S. operators as it expands its global presence. ZTE had previously disclosed it was working on an Android phone for Asian markets, but did not provide details.

In other ZTE news, another executive told Reuters that the company, which also operates in the network infrastructure market, aims to capture a fifth of the global market for GSM equipment by the end of the year.

"Our market share is now around 18 percent," Zhao Yizhe, vice president in charge of GSM equipment, told Reuters. "We could pass the 20-percent share mark by the end of this year."

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

Related Articles:
ZTE builds U.S. relationships, plans Android phone
ZTE outlines U.S. handset strategy in detail
ZTE sees 40% handset growth in 2008
ZTE profits jump 32 percent
ZTE plans major smartphone push in U.S. market

Sony Ericsson to shutter North American HQ amid cost cutting

Phil Goldstein — Wed, 18 Nov 2009 10:57:18 -0500

Sony Ericsson will close its current North American headquarters as part of a broader effort to eliminate 2,000 jobs and cut costs.

Karen Morris, Sony Ericsson's vice president of marketing for North America, told FierceWireless that the company will be closing facilities in Research Triangle Park, N.C., the company's Latin America regional headquarters in Miami, and sites in Kista, Sweden and Chennai, India. She said employees will either be relocated or offered severance packages, and that the move was "part of the business transformation project that we announced in April 2009 to cut costs globally." In April, Sony Ericsson announced plans to cut 2,000 jobs in a bid to return to profitability, but did not provide details at the time.

Morris said that Sony Ericsson's headquarters in Research Triangle Park will be shuttered, and that the struggling handset maker will combine its Latin America and North America regions into a single Americas region, which will be headquartered in Atlanta. She also said that the company would now have four R&D sites around the world: one in Redwood Shores, Calif., and others in Beijing, Tokyo and Lund, Sweden. Research and development employees affected by the closure of the facility in Research Triangle Park will either relocate to Redwood Shores, which is near San Francisco, or be given severance packages, Morris said.

Sony Ericsson, the world's fifth largest handset maker by volume, is reeling from five straight quarterly losses, though it expects to return to profitability next year, according to CEO Bert Nordberg. The company expects to launch a revamped smartphone strategy and new cost-cutting measures to attain the goal.

For more:
- see this Triangle Business Journal article

Lowenstein: Should spectrum be free?

Mark Lowenstein — Wed, 18 Nov 2009 09:55:51 -0500

It has become a sacred cow that a company has to pay billions of dollars for the privilege of using licensed radio spectrum to build a wireless network. Why?

The federal government has raised north of $50 billion in revenues from spectrum auctions, dating back to the original PCS auctions in 1995. Where has that money gone? Not back into the wireless industry. Except for some small amounts being set aside to pay for the cost of running the auction and relocating government users, the majority of the funds have been handed over to the Department of the Treasury, and used as part of the agency's general operating budget. There is no distinction between proceeds from individual or corporate tax revenues and proceeds from wireless auctions. On top of this, wireless operators have paid another several billion dollars, over the years, to relocate users to other frequencies--a wireless version of eminent domain.

What's wrong with this picture? Well, we're at this moment where we are seeing enormous demands on network capacity while at the same time, the government is pushing network neutrality, which would mandate free and unfettered access to wireline and wireless networks, irrespective of economics. As part of his negotiating ploy, FCC Chairman Julius Genachowski has publicly acknowledged the need for more additional wireless spectrum. More spectrum might be freed up soon, but it won't be free. In addition to the usual auction scenario--already, folks are predicting how much money the government will raise--the most readily available spectrum will force another expensive relocation, paid by, you guessed it, the auction winners.

Wide area wireless networks are the weakest link in the chain of exciting new portable computing devices, from iPhones and Droids to netbooks and tablets. People love their iPhones on WiFi, but love them a lot less on AT&T's unevenly available, already overburdened 3G network.

Now, let's look at the fixed broadband side of the world. The average household has a choice of two broadband networks, one cable and one telco (DSL or fiber). About 5 percent of households have no access to broadband and another 5 percent are "underserved" (defined by me as getting less than 1 Mbps downlink). We are actually behind several countries in broadband, both in terms of availability (percentage of homes covered) and capability (speed and other performance metrics).

Against this backdrop is what is happening in price. Wireless voice and data pricing has been continually dropping, and many, including me, foresee a data price war in 2010, particularly for today's $60 monthly "mobile broadband" service (for laptops and other "PC" devices). At the same time, broadband pricing hasn't changed much from the average of $45-50 per month if bought a la carte. ...Continued

Should spectrum be free? - page 2

Mark Lowenstein — Wed, 18 Nov 2009 09:14:42 -0500

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Enter the government's $7.2 billion broadband stimulus plan. This is essentially the modern-day equivalent of the Universal Service Fund, which was conceived in the 1930s to subsidize the disproportionately high cost of providing telephone service to those living in sparsely populated areas. I support the objective of ensuring every household having access to broadband. It is a modern-day necessity, key to our country's economic competitiveness, educational infrastructure and national defense. Broadband, circa 2010, is arguably more important than TV or even phone service (although broadband guarantees the availability of phone service too).

But where is the money from the stimulus plan coming from? U.S. taxpayers. None of the money raised from wireless spectrum auctions, ongoing USF fees (which have become a rural telco boondoggle), or other taxes on your cable, phone, or wireless bill is being used to help directly fund the broadband stimulus.

So while the broadband stimulus is, for the most part a "giveaway" as part of the broader economic stimulus package signed into law in February, any additional spectrum for conventional wireless services will go to the highest bidder. When that happens, we will inevitably hear a chorus of complaints that all the spectrum went to wireless incumbents such as Verizon and AT&T.

Remember that there was a broader number of parties initially interested in the 700 MHz spectrum: cable companies, Google and other Internet heavyweights. But, like has happened in previous spectrum auctions, new players and other entrepreneurs got out when the bidding reached the stratosphere. They also determined that they could ride on telco networks ostensibly for free, and push for network neutrality to ensure unfettered YouTubing, Huluing, and Slingboxing on someone else's dime. On top of this, the FCC questions the wireless industry's "competitiveness" and criticizes the oligopolistic structure of the market, while at the same time seeking to maximize revenues from facilitating more network capacity. This approach is guaranteed to keep prices artificially high, quash new, entrepreneurial entrants, and slow the buildout of advanced networks. Paying a several billion dollar "ante" before the first base station is built puts any business plan on tenterhooks, particularly in a fragile economy and in an industry where a couple of bad quarters could cause big cuts to cap-ex budgets.

So, what should be done? I think it's time for the FCC to take a fresh look at how it awards spectrum, as part of a broader look at our economic and industrial policy. Wireless represents one of the fastest growing and most promising industries, alongside life sciences and green technology. It is key to our global competitiveness--and one where we have an important head start (thanks to Intel, TI, Qualcomm, Cisco, Apple, billions of VC dollars). I don't believe maximizing revenue should be the lynchpin of our spectrum policy, especially if the dollars raised through auctions end up in some random government department's general kitty. If the spectrum is "there,"--and it is--we should be thinking: "How do we put it to maximal use, as quickly as possible?"

I would encourage the FCC to think differently this time. Perhaps this is idealistic, but instead of charging for spectrum, use free or reduced-priced spectrum as an incentive to encourage the construction of the most ubiquitous, highest performing wireless networks, as quickly as possible. Figure out how much might have been spent on buying the spectrum, and have that be diverted, instead, to build more networks and more quickly. Also recognize that our population density is a fraction of many countries whose broadband capabilities we covet, and, if we must charge for spectrum, use it to help networks get built in areas where the conventional business case might not pass muster.

If the FCC insists on raising money from spectrum auctions, let's at least make sure that the dollars are somehow plowed back into the industry to:

Encourage new entrants
Facilitate network buildout in areas that might not necessarily make the economic cut, given that our population density is a fraction of many countries whose broadband reach we covet
Subsidize mobile broadband service to economically challenged individuals and households
Pay for spectrum relocation, on an expedited basis
Encourage new and innovative uses of wireless networks, from M2M for the national grid to tele-medicine and education.

Ultimately, this is an industrial policy decision. Instead of seeking to maximize revenues, let's consider what it would take to have the highest performing, most broadly available broadband networks, wired and wireless. Let's also consider how to balance the affordability of such services while ensuring a healthy and competitive marketplace. Achieving this could be a source of great competitive advantage in the 21st century global economy.

Mark Lowenstein, a leading industry analyst, consultant, and commentator, is Managing Director of Mobile Ecosystem. Click here to subscribe to his free Lens on Wireless monthly newsletter. Also: Join Mark and a distinguished panel for a provocative FierceLive! Webcast, The Great Disruptors: Key Technologies That Will Rock the Wireless World, December 16 at 2 p.m. EDT. Click here to learn more.

Boost Mobile Holiday Video

Mike Dolan — Tue, 17 Nov 2009 12:12:17 -0500

Check out this video:

MetroPCS CEO confident about move toward open access

Phil Goldstein — Tue, 17 Nov 2009 12:03:37 -0500

The move toward open access, where cell phones can access numerous networks outside of a carrier's traditional cellular network, does not bother industry veteran and MetroPCS CEO Roger Linquist. In fact, he sees it as inevitable. "You just can't argue with open access," he told Forbes. "Consumers are going to get devices that do what they want them to do." As more and more phones are able to make calls and run applications over VoIP, WiFi and 4G networks, the industry will see a new round of price-cutting, he said. Article

T-Mobile resumes Sidekick sales after data loss

Phil Goldstein — Tue, 17 Nov 2009 11:56:50 -0500

T-Mobile USA said that it has resumed selling Sidekick devices, a little more than a month after a Microsoft server glitch caused some Sidekick users to lose their personal data. The carrier announced new, lower prices for the devices: the Sidekick LX 2009 will be $149.99 with a two-year contract and the Sidekick 2008 will be $49.99 with a two-year contract.

Microsoft has been able to restore many users' data, but the entire event was a black eye for Microsoft and T-Mobile. In the wake of the debacle, T-Mobile said that in addition to crediting customers who had Sidekick data plans with a free month of data services, it would give a $100 credit to customers who experienced a "significant and permanent" loss of data.

Microsoft said the outage was caused by "a system failure that created data loss in the core database and the back-up." The company said it has now taken steps to improve the stability of the Sidekick service and has a more "resilient" back-up service.

For more:
- see this CNET article

CTIA, broadcasters wrangle over spectrum

Phil Goldstein — Tue, 17 Nov 2009 11:33:13 -0500

The CTIA renewed its call for the FCC to allocate more spectrum for wireless broadband, and criticized TV broadcasters, making it clear that it considers the spectrum broadcasters currently hold as a prime target for reallocation.

"Any spectrum usage below 3GHz that has not been licensed in an exclusive, flexible fashion for commercial wireless service should be investigated for potential broadband usage," CTIA wrote in reply comments to the FCC about the agency's national broadband plan. Previously, CTIA asked the FCC to make up to 800 MHz of additional licensed spectrum available for wireless companies.

CTIA also said the FCC should look to reallocate spectrum bands that are adjacent to those used for mobile data services today, and that to take advantage of LTE and WiMAX technologies these bands should be bigger than the 5 MHz to 10 MHz blocks that are currently used.

The trade group also criticized TV broadcasters, which it said can do a better job of managing spectrum more efficiently. "Recent media reports make clear that broadcasters must hold on to unused and underutilized spectrum only to profit from mobile TV and multicasting--not to ensure the public receives free over the air programming," CTIA said in its comments.

Meanwhile, the broadcasting lobby has defended itself, telling the FCC that it is efficiently using its spectrum. A group of local broadcasters sent their own comments to the FCC, and said that arguments for reallocating spectrum from broadcasters to wireless are "anti-competitive or otherwise meritless."

"Consumers value video programming more highly than any other content, and a reallocation of broadcast spectrum could conveniently eliminate the wireless industry's most serious competitive threat--Mobile DTV," the broadcasters wrote. "Indeed, a spectrum reallocation from television to wireless broadband would amount to the commission picking industry winners and losers, denying the public the "triple play" of HD, multicast, and mobile while permanently locking broadcasters into a 20th century service."

For more:
- see this IDG News Service article
- see this Multichannel News article

Sprint settles Minnesota lawsuit over contract extensions

Phil Goldstein — Tue, 17 Nov 2009 10:58:22 -0500

Sprint Nextel agreed to settle a lawsuit with the Minnesota attorney general over contract extensions and early termination fees (ETFs).

The settlement, technically called a consent judgment, ends a lawsuit that Minnesota Attorney General Lori Swanson brought against Sprint in 2007. The suit alleged that Sprint extended subscribers' contracts for as much as two years without their consent when they made small changes to their wireless services. The lawsuit also alleged that the operator charged ETFs of as much as $200 per line when the extended contracts were canceled.

The settlement will allow customers to file claims for reimbursement if they believe that Sprint extended their contract without their permission or knowledge, or if Sprint did not adequately disclose the length of the contract, contract extension or the ETFs that applied.

Sprint spokesman Matt Sullivan told FierceWireless that there is no monetary award attached to the settlement right now because it is impossible to know how many claims will be filed and how many refunds will be awarded. Sullivan said that Sprint settled the lawsuit without acknowledging any wrongdoing, and noted that Swanson's own release trumpeting the settlement does not provide any proof of the claims in the lawsuit.

Swanson spokesman Ben Wogsland told the AP that about 400,000 Minnesota customers who have signed contracts with Sprint since Sept. 26, 2001 will potentially be able to file claims. Claims are due into the attorney general's office by March 15, 2010.

For more:
- see this AP article
- see this Kansas City Business Journal article

Related Articles:
Sprint settling class-action ETF lawsuit for $17.5M
Judge orders new trial in Sprint class-action ETF case
Sprint to pay $17.5M ETF settlement
California judge says Sprint must pay $73M in ETF case

Best Buy offering Sprint Android phones for $100

Phil Goldstein — Tue, 17 Nov 2009 10:26:21 -0500

Best Buy Mobile is offering Sprint Nextel's two Android-powered smartphones at a large discount, cutting the price to $99.99 with a two-year contract through December. The two phones, the Samsung Moment and the HTC Hero, normally retail for $179.99 with a two-year contract and after a $50 mail-in rebate.

The new offer is the latest by Best Buy to increase its prominence in mobile retail, and comes just ahead of the holiday shopping season, when other retailers are offering similar discounts. In announcing the price cuts to Sprint's Android phones, Best Buy touted the wide array of smartphones and high-end mobile products it is offering, including Nokia's Booklet 3G, the company's first netbook.

Best Buy is not the only retailer to entice customers to buy smartphones though. This week, Wal-Mart is offering a $100 gift card to customers who buy select BlackBerry devices from Research In Motion.

For more:
- see this release

Verizon stings AT&T in response to lawsuit over ads

Phil Goldstein — Tue, 17 Nov 2009 10:09:11 -0500

Verizon says that pulling its advertisements that claim that AT&T Mobility's 3G wireless coverage is inferior will cause greater hardship to the public than it will to AT&T.

"AT&T did not file this lawsuit because Verizon's 'There's A Map For That' advertisements are untrue; AT&T sued because Verizon's ads are true and the truth hurts," Verizon said in a 53-page document that the carrier filed Monday in federal court in Georgia. In the filing, Verizon said the ads are truthful and there is no emergency reason for the court to issue an immediate restraining order pulling the ads until Verizon can present evidence that the ads are not misleading. In addition, the company claims that the harm to the public in pulling the ads is greater than the alleged harm being inflicted upon AT&T.

However, AT&T claims the ads do not 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 showing AT&T's 3G coverage mislead viewers into thinking that AT&T has no service in those areas.

The filing goes even further by implying that AT&T failed to invest in the necessary infrastructure to support the data growth it has experienced thanks to the popularity of the Apple iPhone.

"AT&T seeks emergency relief because Verizon's side-by-side, apples-to-apples comparison of its own 3G coverage with AT&T's confirms what the marketplace has been saying for months: AT&T failed to invest adequately in the necessary infrastructure to expand its 3G coverage to support its growth in the smartphone business, and the usefulness of its service to smartphone users has suffered accordingly," Verizon said. "AT&T may not like the message that the ads send, but this Court should reject its efforts to silence the messenger."

An AT&T spokeswoman did not immediately respond to a request for comment.

For more:
- see this PC Magazine article
- see this Fortune post
- see this ZDNet post

They're Cooked: The top wireless turkeys of 2009

Phil Goldstein — Mon, 16 Nov 2009 14:03:33 -0500

As Thanksgiving approaches and families prepare to gather around the table to share turkey and stuffing, the Fierce editorial team decided it was time to look back at the products and companies that made news this past year for all of the wrong reasons.

This is our list of the top wireless turkeys of 2009--the products, ideas and business strategies that either didn't live up to expectations or were so poorly executed that they flopped with the consumer.

It was a tough year for many in the wireless industry, as companies coped with the effects of the economic recession. In the beginning of the year, many companies laid off workers, and industry observers lowered their expectations. For example, it became general wisdom early on this year that handset sales would be down, and the network infrastructure market would shrink.

In the face of this adversity, some companies, like Motorola and Palm, decided to completely revamp their mobile offerings, simply because they had to. It's unclear how those gambles will pay off, but both companies' futures appear brighter than they were this time last year.

Other companies, however, made some pretty large missteps. They ranged from products that simply did not take off, to entire business plans that went awry. Clearly, some 2009 turkeys are bigger than others, which is why we have ranked them on a scale of 1 to 5, with 5 being the biggest disaster.

We know it's never nice to point out the faults and failures of others, but we believe that the wireless industry might learn from these struggles. While this list is by no means exhaustive, it does include some of what we believe are the bigger flops from 2009. As always, we welcome your comments and criticisms. --Phil

Click here to see the top wireless turkeys of 2009

ABI: Qualcomm leads in 4G patent race

Phil Goldstein — Mon, 16 Nov 2009 11:52:25 -0500

In the race to secure patents on 4G wireless technologies--including those for LTE and WiMAX--Qualcomm has emerged as the clear winner so far, according to ABI Research. Qualcomm holds 24 percent of all of the European Telecommunications Standards Institute patent declarations related to LTE, according to ABI. Additionally, Qualcomm has 16 percent of the 26,000 patents related to 4G technologies generally, including WiMAX. In terms of LTE patents, Qualcomm leads all of its potential patent rivals, including Interdigital (18 percent), Huawei (10 percent), LG (9 percent), Nokia (9 percent) and Samsung (7 percent). Release

Airvana getting $40M payment after close of Ericsson-Nortel deal

Phil Goldstein — Mon, 16 Nov 2009 11:35:02 -0500

Airvana will receive $39.6 million in payments related to outstanding invoices it had with Nortel Networks, following the close of Ericsson's $1.13 billion deal to acquire Nortel's CDMA and LTE assets.

The invoices are for products and services that Airvana sold to Nortel before it filed for bankruptcy in January. Airvana said that as part of Ericsson's acquisition of the Nortel assets, which closed on Friday, the contract it had with Nortel has now been assigned to Ericsson.

The close of the deal was expected for some time, but it allows Ericsson to tie up all of the loose ends related to the acquisition and assume a greater presence in the North American market. Indeed, Ericsson said that in terms of sales, North America will now be Ericsson's largest region.

In addition to the LTE assets, the vendor is also gaining CDMA contracts with numerous operators, including Verizon Wireless, Sprint Nextel, Leap Wireless, U.S. Cellular, Bell Canada and Telus. The company will have 14,000 employees in North America, making it its second largest region in terms of employees.

For more:
- see this Airvana release
- see this Ericsson release

Report: RIM to benefit most from move toward smartphones

Phil Goldstein — Mon, 16 Nov 2009 11:15:34 -0500

Market research firm Pyramid Research says that BlackBerry maker Research In Motion is poised to take advantage of the growth in smartphones in the U.S. market. According to Pyramid, in 2014 RIM will be the U.S. handset marketshare leader, with 22 percent marketshare, outpacing Samsung, LG and Apple.

According to the research firm, smartphones will account for 31 percent of new U.S. handset sales in 2009, up from 15 percent in 2007. In 2014, the firm predicts 60 percent of all new U.S. handset sales will be smartphones.

By then, market competition from Samsung, LG and Motorola, coupled with the likely end of AT&T Mobility's exclusive rights to Apple's iPhone, will squeeze RIM's smartphone marketshare down from about 50 percent to 37 percent, according to Pyramid. However, RIM will still lead the U.S. handset market in 2014, with Samsung, LG and Apple following, with 19 percent, 18 percent and 15 percent, respectively.

RIM has made a concerted effort to broaden its appeal in the consumer market, and wireless carriers are releasing a slew of new BlackBerry devices this holiday season, including the Storm2 from Verizon Wireless and the Bold 9700 from both AT&T and T-Mobile USA.

For more:
- see this Pyramid Research release
- see these charts comparing handset marketshare in 2009 vs. 2014

Palm CEO defends webOS, criticizes Android

Phil Goldstein — Mon, 16 Nov 2009 11:02:03 -0500

Palm CEO Jon Rubinstein defended his company's strategy and its webOS operating system, while chatter continues to swirl about whether the smartphone maker is a potential acquisition target for Nokia.

In an interview with the New York Times, Rubinstein said Palm's webOS has a leg up on Android because Google's operating system has not attracted mass appeal yet.

"Android, and the Droid in particular, are designed for the techie audience," he said, referring to the Motorola Droid, which Verizon Wireless launched earlier this month. "We are doing a more general product that helps people live their lives seamlessly," Rubinstein said. Nevertheless, Android has attracted support from a number of handset makers, including HTC, Motorola, Samsung and Sony Ericsson, as well as wireless carriers, including Verizon Wireless, Sprint Nextel and T-Mobile USA in the United States.

Rubinstein said that companies like Palm and Apple, which work on both smartphone hardware and software in-house, will have a distinct advantage over those that have to rely on third parties for software. "The companies that will deliver the best products are the ones that integrate the whole experience--the hardware, the software and the services--and aren't getting one piece from here and one piece from there and trying to bolt it all together," he said.

A key piece of Palm's comeback will be gaining more carrier support for its devices and how well its two webOS devices fare in a crowded smartphone market. Sprint, which is the sole U.S. carrier supporting the Palm Pre right now, just launched the lower-priced Palm Pixi this weekend for $99 with a two-year contract.

For more:
- see this NYT article
- see this Barron's blog post

AT&T launching new netbooks, cheaper data plan

Phil Goldstein — Mon, 16 Nov 2009 10:34:10 -0500

AT&T Mobility is adding two new netbooks to its growing array of non-smartphone data devices, and is reducing the price of its low-end monthly data plan by $5.

The carrier said that later this month it will launch the Samsung Go netbook as well as the Acer Aspire One. Both devices will run on Windows 7 and will be $199 with a two-year data plan from AT&T and after a mail-in rebate. AT&T is also cutting the price of its monthly 200 MB data plan to $35 down from $40 per month. However, it is maintaining the price of its $60 per month plan, which offers users 5 GB of data.

The two netbooks are similar in terms of features. The Samsung Go has a 160 GB hard drive, 1GB of memory, high definition audio, a 1.3-megapixel webcam and an LED backlit display. The Acer Aspire One has a 160 GB hard drive, 1GB of memory, high definition audio support, two built-in speakers, a video conferencing feature and a built-in webcam.

AT&T's decision to reduce the price on its lower-tier data plan comes in the wake of T-Mobile USA's announcement last week of a new laptop stick and two new data rate plans that offer subscribers 200 MB of data for $29.99 per month or 5GB of data for $49.99 per month. AT&T has steadily been branching out its support for netbooks, e-readers and other data-driven devices. Last week, Qualcomm announced that AT&T would provide wireless connectivity to the first smartbook, which will be made by Lenovo and use Qualcomm's Snapdragon processor.

For more:
- see this release

Dell'Oro: Huawei grabs No. 2 spot in gear market

Phil Goldstein — Mon, 16 Nov 2009 10:14:59 -0500

Huawei passed Nokia Siemens Networks for the No. 2 position in the global mobile infrastructure equipment market in the third quarter, according to research firm Dell'Oro--a sign of the changing fortunes of the two vendors.

According to Dell'Oro, Huawei's marketshare nearly doubled to 20 percent, up from 11 percent in the year-ago quarter. Nokia Siemens saw its marketshare slip from 24 percent to around 20 percent, just below Huawei. Swedish vendor Ericsson is still the world's leading infrastructure vendor with 32 percent marketshare, flat from the year-ago quarter.

The charge by Huawei reflects not only the intense competition in the infrastructure market, but also the struggles that Nokia Siemens has experienced. Last month, Nokia said that it now expects Nokia Siemens' marketshare to decline by more than previously expected in 2009, compared with 2008. NSN also said earlier this month it may cut as many as 5,760 jobs as part of a broad restructuring and cost-cutting program in which it will reduce the number of its business units from five to three.

Meanwhile, Huawei is enjoying some of the benefits that come along with growing market dominance. Norway's Telenor gave Huawei Europe's biggest LTE contract to date, a striking announcement considering that both Ericsson and Nokia Siemens provided the legacy infrastructure for Telenor's network.

For more:
- see this Reuters article

In search of the femtocell market

Lynnette Luna — Mon, 16 Nov 2009 01:07:38 -0500

ABI Research last week revised downward its target for femtocell shipments in 2009 by 55 percent. It now predicts that about 350,000 femtocells will ship by year-end, down from its April prediction of 790,000.

ABI said it is changing its prediction based on slow uptake of the home base stations. The firm speculates the slow uptake is due to a few factors, including a weak economy, which may discourage customers from splurging on a femtocell; concerns at carriers over how to devise pricing plans; and a fear that a rapid increase in the number of femtocells could disrupt the macro network.

Talk to many femtocell vendors, and they'll most likely tell you that marketing is the biggest hurdle at this point. Mainly, how do operators entice their customers to pay $100 or more (Verizon charges $250) for a device that is supposed to make their coverage better. Shouldn't carriers already be providing better coverage?

There is no doubt that femtocells have value in extending coverage and bolstering capacity for mobile networks, many of which are beginning to experience a flood of data traffic. Moreover, femtocells are seen as an important element in rolling out LTE and WiMAX because smaller cells will be required in more dense urban environments in the long run. LTE is approaching the theoretical maximum information transfer rate (otherwise known as Shannon's Law) and further improvements will only be possible by rolling out smaller cells. But that's down the road.

How do carriers prime the market? I believe carriers will never be successful with a marketing message that touts the coverage extension advantages of femtocells unless they are willing to offer these devices for free, or at least significantly subsidize them. Clearly, carriers need another hook. The Femto Forum recognizes this and established a Special Interest Group this past summer to promote and develop a wide range of femtocell apps.

The objective of this new SIG is to develop a framework to speed the development and deployment of femto applications that provide services other than simply improving indoor coverage. Earlier this year, vendors showed off applications that leveraged presence information to trigger activities. For instance, a text message could be sent to a parent when his teenager returns home. Or podcasts can be automatically downloaded to a user's phone when she walks through the door. TVs and other appliances can be controlled with a mobile device.

Obviously, it will take time for a volume of applications to ramp up, but carriers could easily coalesce around a couple key applications from the start by working with their femtocell vendors.

There's also another market many carriers are ignoring in the present: the enterprise market, which values in-building coverage and isn't as price sensitive as the consumer market. Vendors have begun rolling out products for this segment.

In a recent research note, Peter Jarich, research director with Current Analysis, correctly highlights the reasons why an enterprise femtocell is more important than ever. In addition to helping carriers dig deeper into the enterprise, an enterprise femtocell has the power to drive femtocell volumes up and costs down. Moreover, adoption should cross over into the consumer market.

The onus primarily lies with carriers to get this market moving. It's just not clear how aggressive they are willing to move beyond the consumer coverage game in the near term. That, of course, creates a dangerous situation for all of those start-up femtocell vendors.--Lynnette

AT&T won't give up on battle over ads

Phil Goldstein — Fri, 13 Nov 2009 11:54:38 -0500

AT&T won't give up. The company continues its legal battle with Verizon over what it says are misleading advertisements that Verizon Wireless has produced regarding the carrier's 3G coverage. AT&T issued a letter to customers so it can "set the record straight" on Verizon's ad campaign. In the letter AT&T notes that its 3G coverage covers 75 percent of the U.S. population, and that 96 percent is covered by its EDGE data network. Article (sub. req.)

Virgin Mobile expands Broadband2Go retail outlets

Phil Goldstein — Fri, 13 Nov 2009 11:47:56 -0500

Virgin Mobile USA said it was expanding the number and type of retail locations that offer its prepaid mobile broadband service, called Broadband2Go. The service uses Sprint Nextel's EVDO Rev. A network. Virgin, which is in the process of being acquired by Sprint Nextel, said that as of Dec. 1, Broadband2Go will be available at Best Buy Mobile, RadioShack stores, Sam's Club kiosks via RadioShack, Walmart.com and Target.com.

The MVNO also is reducing the price of the USB modem by $50, down to $99.99. When Virgin Mobile first debuted the service in June the Novatel MC760 USB device cost $149.99.

Virgin's Broadband2Go price plans have remained the same and break down as follows:

--$10 for 100 MB of data usage
--$20 for 250 MB
--$40 for 600 MB
--$60 for 1 GB

Since Virgin Mobile announced the plan, Verizon Wireless has followed it into the prepaid mobile broadband market. Earlier this month, Verizon unveiled its own plans, and is offering a daily plan for $15 with a cap at 75 MB of usage, a weekly plan for $30 with a cap at 250 MB and a monthly plan at $50 with a 500 MB cap. Leap Wireless also provides prepaid mobile broadband services.

For more:
- see this release

Analysts divided over Palm's prospects

Phil Goldstein — Fri, 13 Nov 2009 11:27:14 -0500

This weekend, Sprint Nextel is set to debut Palm's second phone based on its webOS platform--the Pixi. But analysts are still divided over Palm's potential going forward.

Northeast Securities analyst Ashok Kumar is pessimistic about Palm's chances. In a research note to clients, he said that sell-through checks indicate "substantial decline" in recent sales of the Pre, Palm's first webOS device. He added that prospects for Palm look bleak. "As a fading brand, carriers are likely to see better returns on their promotional and advertising dollars with other vendors," he said in the note. "WebOS has negligible smartphone OS share, 0.2 percent per Gartner estimates, and is unlikely to attract any meaningful third-party application support. Palm has bet the farm on webOS and there is a real possibility that they may not achieve critical mass."

Others think the situation is far less dire. Bank of America/Merrill Lynch analyst Vivek Arya is bullish about the company's prospects after meeting with Palm's management, including CEO Jon Rubinstein. "Our key takeaway: despite increasing smartphone competition, Palm can maintain differentiation and remains well-positioned to launch its products with multiple new Tier-1 carriers in early 2010 by which time it should have a robust apps catalog," Arya said in a research note. "While we expect the stock to remain volatile, the recent sell-off creates an interesting buying opportunity, in our opinion, for a company with an attractive platform, selling into a high-growth market, and at a compelling valuation."

The Pre was first launched by Sprint in June, and went on sale in Europe through the carrier O2 just last month. Verizon Wireless is also going to launch the Pre in the beginning of next year.

For more:
- see this GigaOM post
- see this Barron's blog post

Nortel to have J.P. Morgan hold cash from asset sales

Phil Goldstein — Fri, 13 Nov 2009 11:08:37 -0500

Nortel Networks received court approval to have J.P. Morgan Chase & Co. hang on to the money generated by the sale of the bankrupt vendor's units, after Canadian regulators warned that Canadian creditors might not have access to the proceeds.

Ontario Superior Court Judge Herman Wilton-Siegel approved Nortel's request ahead of the close of its deal with Ericsson today. Nortel is expected to receive $1.13 billion for its CDMA and LTE assets from Ericsson, which bid on them in an auction in July. J.P. Morgan will hold the proceeds until Nortel's units in Canada, the United States, the U.K., Middle East and Africa work with creditors on how the money should be distributed.

The company is still devising the method for how the proceeds should be allocated. Canadian regulators argued that a proportional share of money from the asset sales should be held by Canadian banks.

Nortel is still in the process of breaking itself apart. The company has delayed the auction of its GSM/GSM-R units until Nov. 20, citing the current status of its divestitures and other asset sales.

For more:
- see this Bloomberg article

T-Mobile launching Samsung Behold II for $230

Phil Goldstein — Fri, 13 Nov 2009 10:51:27 -0500

T-Mobile USA will launch the Samsung Behold II, its fourth phone based on Google's Android platform, Nov. 18 for $229.99 with a two-year contract. The carrier had previously announced it would launch the device, but had not provided pricing and availability information.

The Behold II is Samsung's second Android phone in the U.S. market (Sprint Nextel has launched the Moment). It is also T-Mobile's most expensive Android phone to date. T-Mobile sells the Motorola Cliq for $199.99 with a two-year contract, and its other two Android phones, the myTouch3G and G1, retail for $150 or below.

The launch of the Behold II also solidifies T-Mobile's position as the most Android-friendly U.S. carrier, though both Verizon Wireless and Sprint now support two Android phones each. T-Mobile's partnership with Samsung also fulfills the carrier's promise that it would launch Android phones with two new handset partners besides HTC, which makes both the G1 and myTouch3G.

The Behold II combines both the Android and Samsung's proprietary TouchWiz user interfaces. The phone has three different home screens to drag and drop widgets and also features a cube menu to get access to music, photos, videos, the Web, YouTube and Amazon's MP3 music download service. The phone will have a 3.2-inch AMOLED touchscreen, WiFi, a 5-megapixel camera, Bluetooth 2.1 and support for both personal email and corporate email with Exchange ActiveSync.

For more:
- see this release

Smartphone or personal computing device?

Sue Marek — Fri, 13 Nov 2009 10:39:49 -0500

Last week at the Open Mobile Summit in San Francisco, Walt Mossberg, personal technology columnist at the Wall Street Journal and a moderator at the event, said he didn't think that the current generation of smartphones (the Droid, the iPhone 3GS, the Palm Pre and others) should be called smartphones and grouped with devices that he considers the real smartphones like the Palm Treo. Instead, he suggested they be categorized separately as something akin to a personal computing device because they have the operating system and processing power similar to a small computer.

Several other speakers at the two-day conference drew upon that theme--implying that this current generation of smartphones are so much more advanced than earlier smartphones that they should be in a different category and judged separately from devices with lower processing power.

I understand the differences between today's advanced smartphones and the less sophisticated smartphones of yesterday, but I'm not convinced we need another term and another device category. Just yesterday Qualcomm announced that AT&T Mobility would launch the first smartbook, a new device that Qualcomm has been pushing that combines the always-on connectivity of smartphones with the larger display of a netbook.

The lines between a feature phone, a smartphone, a smartbook and a netbook are already a little blurry--do we really need another category to describe the advanced smartphones that are currently being released?

The wireless industry certainly loves to categorize its products and services. About five years ago device makers were focused on making devices for different niche markets--there were the enterprise devices that featured keyboards for email, the teen/young adult phones with easier text messaging capabilities, the phones for music lovers with high-quality sound and sideloading capability and the standard voice phones for the rest of the population.

It seems to me that the industry is now taking this device categorization to the next level with the feature phone, smartphone, smartbook products. But does the consumer really care? For the average buyer these different terms are confusing. Let's focus instead on making devices that are sleek and easy to use. Let's make them powerful but still affordable and most of all, let's make devices that consumers will want and use. --Sue

GSMA predicts 87M LTE subs by 2014, long life for HSPA

Phil Goldstein — Fri, 13 Nov 2009 10:31:59 -0500

LTE deployments will pick up over the next few years and lead to 87 million LTE subscribers by 2014, according to the trade group, the GSMA. However, the GSMA also thinks that HSPA technology will have a long shelf life and will keep on growing even as more operators begin adopting LTE.

"HSPA is becoming comparable to GSM and W-CDMA," Dan Warren, the GSMA's director of technology, said in an interview with Unstrung. "Its commercial lifespan is very long." He said that the number of HSPA connections worldwide will grow from around 167 million to around a billion by 2012 and 1.5 billion in 2014. By that time, LTE will have taken off, the GSMA predicts, but Warren said expects HSPA to still be widely used.

As more operators and vendors transition to an IMS-based approach for voice and SMS over LTE, carriers will still need to use legacy 2G and 3G networks for voice coverage and as "fall back" mobile broadband networks, Warren said.

There are more than a dozen operators worldwide that have made commitments to deploy LTE between 2010 and 2012, including Verizon Wireless, AT&T Mobility and MetroPCS in the United States. Yet carriers--including AT&T and T-Mobile USA--are still in the process of filling out and upgrading their HSPA networks to handle faster data speeds. AT&T is currently beginning to upgrade its network to HSPA 7.2 technology, and next year T-Mobile will begin deploying HSPA+ technology.

For more:
- see this Unstrung article

ABI: Femtocell shipments weaker than expected in 2009

Phil Goldstein — Thu, 12 Nov 2009 11:53:45 -0500

The market for femtocells did not materialize as strongly as predicted, according to ABI Research. The research firm revised its April target of 790,000 unit shipments in 2009 down 55 percent. The outfit now thinks that only about 350,000 femtocells will have shipped by year-end. Many operators currently use femtocells--including AT&T Mobility, Sprint Nextel and Verizon Wireless in the United States--yet the uptake has been slow. ABI speculates that this is due to a couple of factors, including a weak economy, which may discourage customers from splurging on a femtocell; concerns at carriers over how to devise pricing plans; and a fear that a rapid increase in the number of femtocells could disrupt the macro network. Release

Qualcomm CEO: AT&T will launch first smartbook

Phil Goldstein — Thu, 12 Nov 2009 11:34:09 -0500

AT&T Mobility will launch the first smartbook, a new device that Qualcomm has been pushing that will combine the always-on connection smartphones have with the larger display of a netbook. The device will be made by Lenovo and will run on Qualcomm's Snapdragon chipset.

Qualcomm announced the device at its investor meeting in New York this morning, however the company did not provide any more details, including its price and availability, since the smartbook will be officially announced at the Consumer Electronics Show next year. The announcement also is another indication that AT&T is looking to expand beyond mobile phones, as it has already established itself as a strong supporter of wireless e-readers.

Qualcomm also said it is testing new multi-mode high-speed wireless chips, as it prepares to make further inroads in next-generation wireless technologies. In addition, company CEO Paul Jacobs said that the chip maker was aware that competition next year would be intense.

The company is currently testing the new chipsets with a wide range of companies, including Huawei, LG Electronics, Novatel Wireless, Sierra Wireless and ZTE. The chipsets are a dual-carrier HSPA+ and a multi-mode 3G/LTE chipset. Qualcomm said that the first commercial devices based on the new solutions will likely hit the market in the second half of 2010.

The creation and testing of next-generation chipsets is critical for operators that are looking to launch devices on HSPA+ and LTE networks. Verizon Wireless and other operators will begin deploying LTE next year, and T-Mobile USA is going to aggressively upgrade its network to HSPA+ technology.

Jacobs said he was aware that there will be intense competition both for chipsets for smartphones and for low-end phones. "We see 2010 as a battleground for marketshare," he said during a meeting with Wall Street Journal editors. "We're expecting price competition on the chipset side."

For more:
- see this Dow Jones Newswires article
- see this release
- see this other Dow Jones Newswires article (sub. req.)

AT&T continues battling Verizon over ads

Phil Goldstein — Thu, 12 Nov 2009 11:14:35 -0500

AT&T has taken its legal fight with Verizon Wireless to a new level. The two carriers have been battling over Verizon's advertising about the two companies' 3G coverage, and AT&T has filed an amended complaint in federal court in Atlanta demanding that Verizon pull all of the ads immediately. AT&T contends that Verizon, in a series of commercials, has made misleading claims about AT&T's coverage.

AT&T said that the ads, which compare the two carriers' wireless 3G coverage in the United States, are misleading because viewers might be led to believe that AT&T does not have any coverage in the white spots on AT&T's map. AT&T first filed suit about the issue last week, and since then, Verizon has released more TV commercials that hit on the same theme. One of the ads labels Apple's iPhone, which is exclusively offered through AT&T Mobility, a "Misfit Toy" because of AT&T's 3G coverage.

"We are entering into the critical (holiday) quarter for the industry," when wireless carriers typically sell the most, says AT&T spokesman Mark Siegel. "If customers think they can't make calls in the vast majority of the country...that could do us irreparable harm."

Verizon, for its part, is standing firm about its claims that it has the more robust 3G network. "What we are saying doesn't change," Verizon spokesman Jim Gerace told USA Today.

For more:
- see this USA Today article

Sprint faces possible credit downgrade

Phil Goldstein — Thu, 12 Nov 2009 10:57:38 -0500

Sprint Nextel was warned by Standard & Poor's Ratings Service that its junk credit rating is at risk of being downgraded because of deteriorating market performance. The move is the latest blow to the struggling carrier and an indication that pressure is mounting for the company to turn around its performance next year.

The ratings agency said that Sprint's credit rating of BB could fall if the company does not show potential for a turnaround in 2010. "While Sprint Nextel has made progress on growing its prepaid customer base and postpaid subscriber trends have shown some modest improvement from previous quarters, we remain concerned that the company may have difficulty in improving operating trends as industry conditions mature and competition intensifies," S&P analyst Allyn Arden said in a release.

Sprint had a net loss of $478 million in the third quarter, up from $326 million in the year-ago quarter. The company continues to lose postpaid subscribers. In addition, earlier this week Sprint said that it may cut between 2,000 and 2,500 jobs to save $350 million annually.

S&P said Sprint's liquidity was not an issue, despite the carrier's decision to give majority-owned Clearwire $1.176 billion in new financing, and its acquisitions of Virgin Mobile USA and iPCS. Nevertheless, the ratings agency said it would be looking at Sprint's ability to improve credit measures in 2010, its strategy to improve postpaid subscriber trends and decrease churn and its plans to continue to roll out mobile WiMAX as a wholesale partner of Clearwire.

For more:
- see this Kansas City Business Journal article
- see this Dow Jones Newswires article (sub. req.)

Sale of Motorola unit could have implications for handset division

Phil Goldstein — Thu, 12 Nov 2009 10:36:17 -0500

Several new organizations, led by a report in the Wall Street Journal, have said that Motorola is considering selling its Home and Networks Mobility unit for about $4.5 billion. The sale of the unit could have implications for the company's handset division, which it hopes to turn around by aggressively releasing smartphones based on Google's Android platform.

According to the reports, J.P. Morgan Chase & Co., Goldman Sachs and Centerview Partners are advising Motorola. The idea of selling the Home and Networks Division came about after two private-equity funds, TPG and Silver Lake Partners, approached Motorola and said they might be interested in buying the unit.

Motorola declined to comment on the sale of the unit, which makes set-top boxes and networking equipment, and accounted for about a third of the company's revenue in the third quarter. The company did say that it intends to continue with plans to spin off the handset division, which reported a 46 percent decline in year-over-year sales in the third quarter.

The timing of the news has perplexed analysts, especially given the continued weakness of Motorola's handset unit. "The mobile devices business still needs the rest of the businesses to fund its operations," RBC analyst Mark Sue told Reuters. "It hasn't really recovered fully yet so it would be a little too early to cut off the lifeline."

Indeed, Motorola is just beginning to ramp up its Android phone production. It has two Android phones on the market--the Droid from Verizon Wireless and the Cliq from T-Mobile USA--but plans to release at least 20 smartphones next year, most running on Android.

"The timing is surprising," Tero Kuittinen, an analyst at MKM Partners LP, told Bloomberg. "Most people would have expected the Motorola handset division to stabilize before the company made any major moves."

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

What happened to the top mobile apps of 2007?

Phil Goldstein — Wed, 11 Nov 2009 11:32:18 -0500

For the past four years, FierceMobileContent has been honoring top mobile applications that we think are standouts among their peers. In the second part of a series, we look back at the award winners from 2007. It was the year that the original iPhone launched, and marked significant growth in mobile Internet traffic, particularly of the social networking kind. Some of the apps we picked floundered while others flourished. Check out how the winners fared. Special feature

T-Mobile launches new laptop stick, promotional data plans

Phil Goldstein — Wed, 11 Nov 2009 11:26:34 -0500

T-Mobile USA is offering a new USB laptop dongle that doubles as a USB hard drive for those who want to access the company's 3G UMTS network via their laptop. The carrier also launched two new promotional rate plans to go with the device.

The laptop stick, called the webConnect Jet, has up to 8GB of installable microSD memory storage, and is free with a two-year contact. If customers buy the device before Jan. 13, they'll be able to access 200MB of data for $29.99 per month or 5GB of data for $49.99 per month. Customers also will be able to get unlimited T-Mobile WiFi access with the device.

Additionally, the carrier launched a new 3G phone, the Tap. The small, rounded phone has a touchscreen display, 2-megapixel camera with video capture and playback, a music player, GPS and stereo Bluetooth. T-Mobile is selling the Tap for $79.99 with a two-year contract and after a mail-in rebate.

The carrier, which lost 77,000 subscribers last quarter, is feverishly working to build out its 3G network, which is the smallest among the four Tier 1 operators. However, T-Mobile plans to boost the speed of its network by deploying HSPA+ next year, which has theoretical downlink speeds of 21 Mbps.

For more:
- see this PC Magazine article
- see this Gearlog post
- see a photo of the Tap phone