FierceWireless

4G: Moving from concept to reality

Sue Marek — Tue, 09 Feb 2010 11:35:48 -0500

In 2009 Clearwire and its wholesale partners paved the way to 4G with the launch of 25 mobile WiMAX markets, and more markets are planned for 2010. The service is now available in key cities such as Atlanta and Las Vegas, and subscribers are accessing the mobile WiMAX network thanks to some interesting devices including Sprint's Overdrive 3G/4G hotspot.

On the LTE front, Verizon Wireless says it's on track to deploy the technology in 2010, and AT&T plans to follow soon thereafter in 2011. Verizon is gearing up for its LTE deployment by working with partners on advanced LTE devices through its LTE Innovation Center. Many of these concept products were on display at last month's Consumer Electronics show in Las Vegas. AT&T has yet to name its LTE vendors, but we are expecting that news to come soon.

Clearly the wireless industry is on the verge of a monumental change and 4G is driving these developments. Not only does 4G mean faster network speeds and bigger bandwidth pipes, it is also becoming synonymous with new business models--open devices, open networks and perhaps a more transparent wireless ecosystem.

But don't just take my word for it. Come and hear about the promise of 4G from the experts. FierceWireless will once again be holding its "Path to 4G" conference co-located at the CTIA Wireless 2010 conference in Las Vegas on Tuesday, March 23. Our conference will kick off with a keynote from Verizon Wireless Senior Vice President and CTO Anthony Melone at 11:00 a.m., followed by a luncheon keynote from Kris Rinne, senior vice president of architecture and planning at AT&T, at 12:30 p.m. Finally, we will close our day-long event with a fireside chat with Michael Sievert, chief commercial officer at Clearwire, at 4:15 p.m. In between those compelling keynote addresses, we will have panel discussions on topics such as 4G devices, backhaul, business strategy and applications. Check out our full agenda here. To register, click here. I hope to see you there. --Sue

ComScore: RIM has weak handset presence, but is smartphone king

Phil Goldstein — Tue, 09 Feb 2010 11:28:11 -0500

According to the latest report from research firm comScore, Research In Motion's BlackBerry platform has the largest U.S. smartphone market share, but the company as a whole is an also-ran compared with larger handset OEMs. ComScore's MobiLENS survey from September to December provides an interesting snapshot of the U.S. mobile handset market. Release

LG, Samsung integrate social networking into latest phones

Phil Goldstein — Tue, 09 Feb 2010 11:15:31 -0500

LG and Samsung have taken a shine to social networking with their latest phones, which they previewed ahead of the phones' official unveilings at the Mobile World Congress trade show in Barcelona, Spain, next week.

Both of the South Korean handset titans said their respective phones have slick, industrial designs, multimedia features, and--at their core--tight social networking integration. The phones each have touchscreens, WiFi and several other features that are becoming standard in most smartphones.

LG's new device, called the Mini GD880, has built-in Facebook and Twitter applications and a social networking feed that provides updates from multiple sources on the phone's home screen. The updates are tied to contacts in the phone's address book. The device has a 3.2-inch screen, HSPA 7.2 connectivity and a 5-megapixel camera with image and video sharing for social networking sites.

Samsung's latest creation, the Monte, has Samsung's updated TouchWiz 2.0 user interface, built-in Facebook and MySpace applications as well as Twitter and Bebo widgets. The phone allows users to chat in real-time with users from multiple social networking services. The Monte's GPS receiver also connects to Google Latitude, allowing users to share their location with friends on a map. The device has a 3-inch touchscreen display, WiFi and a 3.2-megapixel camera.

More handset makers have been making social networking integration the core feature of their phones. INQ became famous for building phones based around Facebook and Twitter, and Motorola has designed an entire user interface, MotoBLUR, on social networking.

For more:
- see the Samsung release and the LG release
- see this IDG News Service article
- see this Infosync post

Report: Microsoft pushes 'Project Pink,' mulls RIM acquisition

Phil Goldstein — Tue, 09 Feb 2010 10:51:52 -0500

Microsoft's mobile ambitions are still bright, even though its Windows Mobile platform has lost momentum to other players such as Research In Motion's BlackBerry and Google's Android OS.

The company is continuing development on its "Project Pink" multimedia touchscreen device. According to the blog AllThingsD, a team that includes some workers from Danger--the Sidekick creator that Microsoft purchased in 2008--is hard at work on the phone's hardware and software. A device will be released later this year--a timeframe that coincides with ZDNet's "Project Pink" report last month.

However, Microsoft may be looking outside the company to help it regain its footing in the mobile market. Citing multiple unnamed sources, the blog said Microsoft CEO Steve Ballmer has repeatedly conveyed his interest in purchasing RIM. The possible marriage, which previously has been floated by various industry watchers, makes sense, considering both companies' strong position in the enterprise market. However, RIM would represent a large bite for Microsoft to swallow; the BlackBerry maker commands a $36 billion market cap.

Interestingly, Ballmer has dismissed the idea of buying Palm. Microsoft has been rumored to be a potential Palm suitor in the past.

A Microsoft spokeswoman did not immediately respond to a request for comment.

In other Microsoft news, the Redmond computing giant teamed with Taiwanese chipset vendor MediaTek to help it position smartphones for China and other emerging markets. MediaTek, which also works with Android phones, has married its hardware with Windows Mobile software, a move the companies said will provide Chinese handset makers with a reference point for new Windows Mobile phones.

"There is a huge thirst for smartphones in emerging markets," Microsoft said in a statement, according to IDG News Service. "For many people, the phone rather than the PC is the main entry point to the Internet, resulting in a high demand for rich communication devices. In order to meet this demand, we have teamed up with MediaTek to facilitate the provision of affordable smartphones."

For more:
- see this AllThingsD post
- see this IDG News Service article

Google reduces Nexus One ETF after FCC inquiry

Phil Goldstein — Tue, 09 Feb 2010 10:24:12 -0500

Google has chopped $200 off of its "equipment recovery fee" for its Nexus One smartphone, a move that comes just two weeks after the FCC questioned Google and other wireless carriers about their early termination fee (ETF) policies.

The company dropped the fee from $350 to $150. The charge is levied against customers who cancel their service within 120 days of buying the phone, which Google offers via its new online store. The Google fee is separate from the $200 ETF charged by T-Mobile USA for customers who buy the phone on contract (T-Mobile so far is the only carrier offering the Nexus One).

"Google's overall financial philosophy with regard to operator service plans remains unchanged: We make no profit from commissions from operators or from equipment recovery fees, and our recovery fees are based on operator charges to Google for early termination of service," the company said in a statement to the Wall Street Journal. Google had been working with T-Mobile to lower the equipment recovery fee, according to the report.

The FCC late last month sent letters to the four major Tier 1 carriers and Google, asking them to explain in detail their ETF policies for handsets. The probe is part of the commission's larger truth-in-billing inquiry.

In other Nexus One news, Google now offers live customer support via phone for Nexus One customers. When Google launched the Nexus One in early January, the search giant was criticized for not having live, on-call customer support services.

For more:
- see this WSJ article (sub. req.)
- see this Google page
- see this Engadget post
- see this Google page

Netgear, Ericsson collaborate on HSPA, WiFi router

Sue Marek — Mon, 08 Feb 2010 12:58:51 -0500

Netgear teamed with Ericsson to make a 3G mobile broadband router, the Netgear MBRN3300E, that incorporates Ericsson broadband HSPA modules. The router lets users connect multiple devices that are WiFi and HSPA-compatible and sends the traffic over an HSPA 3G connection.

According to Mats Norin, vice president of mobile broadband modules at Ericsson, the router can be used as a replacement or complement to fixed connectivity such as DSL. "In many rural areas, copper line performance is bad and HSPA connectivity is faster than DSL," Norin said.

The Netgear modem works in 850 MHz, 950 MHz, 1.9 MHz and 2.1 MHz spectrum, and is interoperable with many different carriers and USB mobile broadband modems. Bob Burke, service provider marketing manager at Netgear, said the company does not currently have an operator deal. However, both companies envision selling the router standalone and bundled with an operator's service contract. Burke said besides selling the device to small businesses or home users as an alternative to DSL or cable modem service, he believes that transportation companies (trains, buses and the like) will be interested in the product because of its mobility aspect.

For more:
- see this release and this release

BlackBerry Curve tops iPhone in Q4 smartphone sales

Phil Goldstein — Mon, 08 Feb 2010 11:55:05 -0500

Research In Motion's BlackBerry Curve was the top-selling smartphone in the fourth quarter, according to research firm IDC, beating out Apple's iPhone 3GS. Although the Curve comes in multiple forms on numerous carriers, the result is still impressive considering that Apple's iPhone sales grew 100 percent in its most recent quarter, to 8.7 million, compared with the year-ago quarter. According to IDC, the Motorola Droid was the No. 3 smartphone in the quarter, benefiting from a full-throated marketing campaign by Verizon Wireless. What other smartphones rounded out the top 10? Special feature

Sony Ericsson names new sales chief

Phil Goldstein — Mon, 08 Feb 2010 11:45:51 -0500

Sony Ericsson named a new head of global sales and marketing, who will take over beginning in April, just as the company's first phone running Google's Android platform hits the market.

The struggling handset maker said Kristian Tear, currently the head of Sony Ericsson's Western Europe region and of global customer accounts, will replace Anders Runevad, effective April 1. Runevad, who has been leading the company's sales team for the past three years, will return to parent company Ericsson.

Tear joined Sony Ericsson in 2005 after coming over from Ericsson. His successor has not yet been named. Tear will have his work cut out for him as he works with Sony Ericsson CEO Bert Nordberg to try and turn the firm's sluggish sales around. In the fourth quarter, Sony Ericsson reported its sixth straight quarterly loss. The company shipped 14.6 million units, down from 24.2 million in the fourth quarter of 2008, and its market share was 5 percent, the same as in the third quarter, but down from 8 percent in the year-ago quarter.

Sony Ericsson also confirmed that its first Android phone, which will begin shipping through NTT DoCoMo and other operators in April, will be upgraded to the latest version of Android sometime after it launches. The phone, which runs on a custom user interface, will have Android 1.6 on it when it ships.

For more:
- see this release
- see this Sony Ericsson blog post

Acer: Android sales exceeding expectations

Phil Goldstein — Mon, 08 Feb 2010 11:26:58 -0500

Acer said its first Android phone, called Liquid, is exceeding sales expectations, and the smartphone greenhorn sounded a bullish note for its prospects in the coming year.

"Liquid is doing much better than our expectation," Acer President Gianfranco Lanci told Bloomberg in an interview. "This is why we're a little bit short of supply." The company released the Liquid in December in Asian markets, and European operators are expected to begin selling the device this quarter. The phone has a 3.5-inch touchscreen, a Qualcomm Snapdragon processor and 5-megapixel camera. The executive said Acer expects to ship 250,000 Liquid units this quarter, up from previous estimates of between 150,000 and 200,000.

Lanci said the company expects to sell between 2 and 3 million smartphones this year running both Microsoft's Windows Mobile OS and Android. Previous repors had pegged Acer's smartphone sales expectations at around 2 million units.

Acer joins Dell and Garmin as a relative newcomer to the smartphone market--a market poised to tighten further as traditional OEMs such as Samsung and LG step up their own smartphone efforts.

For more:
- see this Bloomberg article

Flurry: Google sold 80,000 Nexus Ones in January

Phil Goldstein — Mon, 08 Feb 2010 11:09:57 -0500

Google sold around 80,000 Nexus One units in January, according to mobile analytics firm Flurry, an indication that the online-only sales model for the phone is not generating intense demand--at least not yet.

Flurry said its analysis showed a steady trend in Nexus One sales throughout the month. The company derived its sales estimate from Nexus One owners' mobile application usage. A Google spokeswoman did not immediately respond to a request for comment.

Sales of the phone, which went on sale in early January, have likely been impacted by a number of factors. Google has spent next to nothing to market the device, which it is selling through its online Web store. By comparison, Verizon Wireless and AT&T Mobility have spent heavily to market their high-end devices, such as the Motorola Droid and the iPhone.

Additionally, customers cannot physically touch the device before purchase, which might turn off some potential customers. The phone also is paired with only one carrier now: T-Mobile USA. It retails for $529 unlocked or $179 with a T-Mobile contract, though other operators, including Verizon, will be paired with the device later this year.

In other Android news, a new HTC-made Android device has been spotted on the Web. The so-called HTC Incredible is rumored to be for Verizon's network. It runs Android 2.1, has a Qualcomm Snapdragon processor and has HTC's Sense UI. A Verizon spokeswoman declined to comment.

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

Analysts expect improvement from Sprint in Q4

Phil Goldstein — Mon, 08 Feb 2010 10:43:06 -0500

When it announces its fourth quarter 2009 results later this week, Sprint Nextel is expected to begin recovering from a string of subscriber losses. However, analysts are divided over how strong the comeback will be.

The company may stem or reverse subscriber losses due to the continued success of its Boost Mobile prepaid unit as well as its newly introduced Any Mobile, Anytime calling plan. According to the AP, Sanford Bernstein analyst Craig Moffett said he thinks Sprint will have net subscriber additions of 327,000. However, Deutsche Bank analyst Brett Feldman said he believes Sprint will report 150,000 net wireless subscriber losses.

Either outcome will be a substantial improvement over Sprint's third quarter performance. During that period, Sprint's net retail subscribers declined by 135,000 and its net wireless customers declined by around 545,000--including net losses of 801,000 postpaid customers.

Sprint has been working feverishly to reverse years of declining subscriber additions. The carrier recently made prepaid a priority, and finished its acquisition of prepaid MVNO Virgin Mobile USA late last year. The company also is moving aggressively on its 4G mobile WiMAX plans, and is expected to launch a WiMAX handset later this year.

For more:
- see this AP article
- see complete Q4 coverage

Nokia hits back over fraud allegations

Phil Goldstein — Mon, 08 Feb 2010 10:19:08 -0500

Nokia said it will "vigorously" defend itself against allegations that its top executives committed securities fraud by misleading U.S. investors about product delays and price cuts in 2008.

"Nokia has reviewed the allegations contained in the complaint and believes that they are without merit," the company said in a statement. The class-action complaint, which was filed Feb. 5 in U.S. District Court for the Southern District of New York, alleges that top executives committed securities fraud by making misleading statements between Jan. 24, 2008, and Sept. 5, 2008. The complaint names CEO Olli-Pekka Kallasvuo, former CFO Rick Simonson and Kai Oistamo, the head of Nokia's devices business.

The suit, brought on behalf of the City of Roseville Employees' Retirement System, claims that Nokia became aware of production delays in some of its mid-range phones in 2008. However, the complaint alleges that Nokia "hid this fact from investors and instead highlighted the company's expected launch of several new phones." The complaint also alleges Nokia failed to disclose it was losing market share due to price cuts by its competitors and that it was shaving its own handset prices.

It is unclear how long the legal process for the case could take, but a Nokia spokeswoman told the Wall Street Journal that it might take years.

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

Three firms battle for LTE patent pool

Lynnette Luna — Mon, 08 Feb 2010 08:17:29 -0500

We're likely to see an aggressive campaign begin as three patent pool providers, Via Licensing, Sisvel and MPEG LA, begin positioning themselves as the front-runner in the highly lucrative LTE market.

It's unusual to have three companies step up to form a patent pool. Usually when one makes the call, others back off. But there is a lot of money at stake. Unfortunately, it creates a difficult situation for licensors that have to invest the time and effort to figure out which patent pool will be successful.

John Ehler, director of wireless programs with Via Licensing, the first to announce a patent pool, said many of the same stakeholders have attended meetings of all three patent companies.

Last week Via Licensing announced 14 LTE patent owners from eight countries met in San Francisco to build the framework for the patent pool. The week before, Sisvel announced that more than 20 companies were participating in what it called its "facilitation process" to create a patent pool. In September, MPEG LA said it held its first meeting of essential patent owners in Tokyo, Japan. At the meeting, 12 patent owners discussed the structure and terms of a patent pool for licensing patents.

Of course the main question continues to be: Can a patent pool be successful when major stakeholders continue to favor bilateral agreements? Ehler says yes. While companies like Qualcomm, which is rumored to be seeking a 6 percent royalty on LTE licensing, will always refuse to be a part of a patent pool, there are plenty of other stakeholders willing to participate.

Moreover, the vision for LTE is vastly different from the 3G world, where a handful of companies hold most of the patents. LTE's vision involves a wider ecosystem, including operators, PC makers and other consumer electronics vendors. IP rights licensing for PC and consumer electronics is typically done through a patent pool. Moreover, OFDM/OFDMA technology patents are in the hands of a diverse number of companies.

The benefits of a patent pool for LTE will primarily be two-fold: to create a reference point for LTE technology in the marketplace and drive down the cost of LTE. The reference point will be critical when it comes to litigation and deciding what a fair rate is for a patent. "The fact that you have a well-attended, highly contributed patent pool helps identify what is fair," Ehler said.

In addition, the LTE market can't have dozens of players running around trying to extract even 1 percent, let alone 6 percent. "The mathematics don't work out," said Jason Johnson, vice president for marketing and business development with Via Licensing, which also has patent pools for WiMAX via the Open Patent Alliance and 802.11n.

Today, it's not unusual for royalties to account for 30 percent of a smartphone's cost because of intellectual property associated with camera and video camera technologies along with other features, Johnson said.

Another major question on the minds of those with an interest in LTE is whether there is a magic number of companies with LTE patents that would be needed to create a fair and reasonable pricing scheme. Ehler said that people in the industry are "still focused on the number of companies, but the two metrics that really matter are the quality of companies and the quality of the patent portfolio ... Is there a set of companies willing to litigate and enforce? The licensees believe there is a real merit in the program, and the enforcement is there."

In the end, Johnson said that everyone knows there will be one pool. "It doesn't make sense to have two. By the end of 2010 we will probably see some cooperation or movement toward combining these efforts."

Expect much of 2010 to be a war of announcements over which group has the most momentum. It's clear, however, that LTE licensees need to move the process along. Allen Nogee, analyst with In-Stat, recently declared that a non-established patent and royalty pool is one of LTE's "several glaring issues" that will result in a shift toward the technology on a "gradual and protracted" basis. --Lynnette

LTE stakeholders debate patent pool

Phil Goldstein — Fri, 05 Feb 2010 11:43:14 -0500

The LTE patent pool efforts that started last year picked up in earnest last week, according to Via Licensing. The patent pool facilitator said 14 major LTE patent holders met last week in San Francisco to build the framework for an LTE patent pool. The company did not say which specific patent holders were at the meeting, but it said that they came from China, France, Finland, Germany, Japan, Korea, the Netherlands and the United States. Notably absent from that list is Sweden, so it's unclear if leading LTE vendor Ericsson attended the meeting. As more and more operators deploy LTE, patent holders are looking to create patent pools to establish standard and predictable licensing rates for manufacturers. According to Via, the next meeting of the patent holders will take place in March in Washington, D.C. Release

Huawei upping Android ante for MWC

Phil Goldstein — Fri, 05 Feb 2010 11:12:04 -0500

Huawei said it will unveil Android smartphones and "home-use Internet devices" at the Mobile World Congress trade show in Barcelona, Spain, later this month.

The company, known for its often secretive nature, did not reveal any additional details or what exactly "home-use Internet devices" are, though it could mean tablets or netbooks. The company currently has one Android device on the market, the T-Mobile Pulse, which T-Mobile UK has been selling since the fall. It is the first Android device being sold on a prepaid model.

Last year, Google's mobile platform had a small presence at the European trade show, with Vodafone announcing the HTC Magic and Huawei demonstrating its Android device. This year likely will be a different story; more than 50 Android devices are expected to hit the show floor, according to analyst firm CCS Insight.

As for Huawei's upcoming Internet device: "I think that's code for that murky category that Steve Jobs has recently put some definition to," CCS Insight analyst John Jackson told FierceWireless. "That's code for tablet."

He said Huawei has adopted Android as a way to increase its handset presence in Western markets.

Huawei also is expected to demonstrate its proficiency as an infrastructure vendor at the show with demos of LTE-Advanced and HSPA+ equipment.

For more:
- see this IDG News Service article

Alcatel-Lucent's multi-mode radio may aid refarming efforts

Phil Goldstein — Fri, 05 Feb 2010 10:46:25 -0500

Alcatel-Lucent yesterday released a new software-defined radio module the company said will allow wireless carriers to offer faster mobile broadband technologies such as HSPA and LTE on frequencies that were designed for legacy GSM services.

The module, dubbed MC-TRX, will let operators run multiple wireless technologies on the same frequency band, Alcatel-Lucent said. A prime target is the 900 MHz band, which is currently being "refarmed" in Europe, a process in which carriers are being allowed to push next-generation technologies onto spectrum that was once reserved solely for GSM.

By creating a software module, Alcatel-Lucent is hoping carriers will find it a relatively easy way to increase mobile broadband capacity. Carriers can upgrade their base stations simply by changing the software configuration, the company said.

"It's really sort of extending the software-defined radio concept that's been around for years," Peter Jarich, an analyst at Current Analysis, told FierceWireless. "For years, software-defined radio has really been more about the software-defined baseband, not the radio frequency."

The push toward software-defined radios that can give carriers greater flexibility is something that been gaining support in the mobile vendor community. As operators search for extra capacity to meet the demands of growing mobile data traffic, refarming current spectrum holdings to support faster network technologies can serve as an interim step.

"It's basically just about savings," Jarich said, noting it gives operators more flexibility in switching from GSM legacy systems to HSPA, or from HSPA to LTE.

Jarich said most U.S. carriers have little need to refarm spectrum since most are deploying LTE onto 700 MHz bands that are free of legacy operations. However, he noted that AT&T Mobility is dabbling in refarming with its efforts to move 3G services from 1900 MHz to its more transmission-friendly 850 MHz band. Further, in the future a carrier such as T-Mobile USA might decide to refarm its 2G spectrum for 3G services.

For more:
- see this IDG News Service article
- see this Light Reading article

FCC considers cell booster ban

Sue Marek — Fri, 05 Feb 2010 10:40:35 -0500

Comments are due today on an FCC inquiry into whether cellular signal boosters should be banned because they may interfere with cell networks. Signal boosters, which are made by firms such as Wilson Electronics, can extend the range of a cell phone in areas where signal strength is weak.

Wireless carrier trade group CTIA has asked the FCC to more closely regulate signal boosters. In a filing today, the CTIA said the use of signal boosters comes at the expense of surrounding users, who may suffer from poor wireless connections. The CTIA urged the FCC to rule that an FCC license, or express consent from a licensee, be required to operate a signal booster. The group also urged the agency to make illegal the sale and marketing of such devices to unauthorized parties.

Meanwhile, infrastructure trade organization PCIA asked the FCC to explore ways to resolve interference issues without impeding the sale of boosters.

Manufacturers such as Wilson argue that well-designed boosters benefit consumers and wireless carriers, and that the FCC should require all boosters have certain features such as effective self-oscillation detection and automatic shutdown; effective tower proximity detection and shutdown; and bi-directional signal amplification.

For more:
- see this Twice article
- see this Phone Scoop article
- see this CTIA filing

Analyst: AT&T to retain iPhone exclusivity in 2010

Phil Goldstein — Fri, 05 Feb 2010 10:30:41 -0500

AT&T Mobility has a 75 percent chance of remaining the exclusive U.S. carrier for Apple's iPhone into 2011, according to Credit Suisse analyst Jonathan Chaplin.

Whether and when AT&T loses its hold on the iPhone has been one of the most hotly debated questions in the industry for much of the past year. Chaplin's new analysis cuts against industry consensus that AT&T's exclusive rights to the popular smartphone end in June.

How does Credit Suisse arrive at the 75 percent probability? "First, we try to determine whether the Apple/AT&T agreement expires in 2010. The consensus view is that it does; however, we couldn't find compelling evidence that this is the case," Chaplin wrote in a note to investors. "We conclude that there is only a 50 percent probability that it ends in 2010. Next, we try to determine whether AT&T bids for another year of exclusivity if exclusivity does end in 2010. We conclude that they would and that they can afford to compensate Apple such that Apple would be economically indifferent. Our approach yields a 25 percent probability for this outcome. Taken together, we see a 75 percent probability that AT&T keeps exclusivity for another year."

Verizon Wireless has repeatedly been mentioned as a possible partner for the iPhone, though neither Verizon nor Apple has made any official announcements on the topic.

AT&T, which activated 3.1 million iPhone users in fourth quarter (more than one third of which were new to AT&T), has been relying on growth in its wireless segment to offset weakness in its landline division. And the carrier said it plans to boost investments in its wireless network, which has been criticized as unable to handle iPhone users' penchant for data. The carrier plans to improve wireless backhaul and upgrade to HSPA 7.2 network technology by spending $18 billion to $19 billion on its network this year, up from the $17.3 billion it spent in 2009.

However, AT&T also appears to be broadening its smartphone options; in January, the carrier said it would be launching phones running Google's Android OS and Palm's webOS platform.

For more:
- see this GigaOM post

Report: Deutsche Telekom considering T-Mobile IPO or spinoff

Phil Goldstein — Fri, 05 Feb 2010 08:51:30 -0500

Deutsche Telekom is considering an initial public offering or a spinoff of T-Mobile USA in a bid to turn around its struggling U.S. arm and reassure investors, according to a report in the Wall Street Journal.

The report, which cited unnamed sources familiar with the matter, said Deutsche Telekom has held meetings recently with a number of banks to discuss funding an IPO. One scenario under consideration, according to the report, would be to sell about 20 percent of the unit to investors and keep the rest. The main thinking behind such a move would be get additional funding for T-Mobile's network buildout. The carrier is in the midst of finishing its nationwide 3G network on its AWS spectrum, and is planning to upgrade to HSPA+ technology this year.

Other options for the nation's No. 4 carrier--which lost 77,000 subscribers in the third quarter--include a partial spinoff that would give T-Mobile its own balance sheet, or a merger with other wireless operator, which is considered less likely. However, a merger with the likes of Leap Wireless, MetroPCS or Sprint Nextel--the prime candidates--would be fraught with regulatory and technological hurdles, since T-Mobile runs a GSM-based network and these carriers run CDMA-based operations.

T-Mobile has struggled to keep pace with its larger U.S. wireless rivals, particularly AT&T Mobility and Verizon Wireless, despite intense marketing efforts and a strong emphasis on smartphones using Google's Android platform. The operator controls roughly 14 percent of the U.S. market, and ended the third quarter with 33.4 million subscribers. T-Mobile reported net income of $417 million in its most recent quarter, down from $442 million in the year-ago quarter.The carrier's total revenues in the quarter clocked in at $5.38 billion, weaker than its $5.51 billion in the third quarter of 2008.

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

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

International LTE roaming may take time

Phil Goldstein — Thu, 04 Feb 2010 10:28:00 -0500

Wireless carriers are ramping up their LTE plans this year, with major deployments expected from Verizon Wireless, MetroPCS, NTT DoCoMo and others. However, international LTE roaming likely is a long way off, simply because operators are pushing LTE into a variety of different spectrum bands. Verizon is working in the 700 MHz band for LTE, DoCoMo is in 2.1 GHz and TeliaSonera is operating in the 2.6 GHz band. This variance in airwaves, coupled with device makers' need to support legacy 3G systems (which also cross different bands), could mean that it will be a while before LTE devices can roam across different countries. Article

Cellular South completes deal for Corr Wireless

Phil Goldstein — Thu, 04 Feb 2010 10:20:42 -0500

Cellular South said it received FCC approval to complete its acquisition of Corr Wireless, a small operator based mainly in northeastern Alabama and parts of Georgia. The company said the acquisition would help fuel its expansion and its plans to launch an LTE network in Alabama.

The Corr Wireless assets Cellular South is picking up include a service area that contains 1.3 million people. Cellular South, which is a privately held company, first announced the deal in October. Terms of the deal were not disclosed. The company said that for the time being, Corr customers will continue to receive products and services under the Corr brand name.

Cellular South, which operates mainly in Alabama, Mississippi and Tennessee, made headlines last month when it quit the CTIA, the wireless industry's main trade organization, citing favoritism toward large operators such as AT&T Mobility and Verizon Wireless. Cellular South's Eric Graham argued the CTIA has either been silent on many key issues affecting smaller carriers or has taken stances favoring the nation's larger wireless carriers.

For more:
- see this release
- see this AL.com article

Samsung details aggressive smartphone plans

Phil Goldstein — Thu, 04 Feb 2010 10:06:25 -0500

Samsung said it plans to triple its smartphone sales this year as part of its effort to increase its overall handset sales by 19 percent. The company also boasted that this will put it into direct competition with smartphone leaders such as Apple, HTC and Research in Motion.

The company, the world's No. 2 handset maker by unit shipments, said it will increase its smartphone sales in 2010 to around 18 million units, up from 6 million in 2009, by focusing its efforts on Google's Android platform, Microsoft's Windows Mobile and its own bada OS.

"There'll be a big change in our smartphone strategy this year," J.K. Shin, the president of Samsung's telecommunications division, told reporters in Seoul. "We plan to strengthen our smartphone business this year by not just improving hardware offerings but also beefing up content, applications, services."

The focus on smartphones, where Samsung has been a relative laggard compared with some of its competitors, is part of a broader effort to outpace the wider handset market. In late January, Samsung predicted the overall handset market would rise 10 percent in 2010 compared with last year. While Samsung enjoys 20 percent of the overall global handset market, it only has around 3 percent of the global smartphone market. According to research firm IDC, Nokia commanded the lead in the smartphone market in the fourth quarter of last year with 38.2 percent share, followed by RIM with 19.6 percent, Apple with 16 percent, Motorola with 4.6 percent and HTC with 4.4 percent.

Interestingly, Samsung's South Korean rival LG recently proclaimed similar smartphone ambitions, and also plans to rely on Windows Mobile and Android.

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

Is usage-based pricing inevitable? Page 2

Phil Goldstein — Thu, 04 Feb 2010 06:35:17 -0500

According to Kretchmer, such upgrades involve installing new software and transferring data models and subscriber information into a new system. Then, carriers must integrate the new system into existing back office systems such as customer management and financial management. Finally, the new system must be linked to the core network, so it is aware of how subscribers are using mobile data.

Installing such a system may take roughly four to six months, depending on how many subscribers a carrier has on its network.

Dynamic subscriber engagement

Aside from installing new billing systems, the real issue is what carriers will do with them. "Integrating business analytics with the billing environment is important in order to be able to segment the subscriber base and then offer the right packages to the right subscribers at the right time," Kretchmer said.

And there are a variety of options available to carriers.

Convergys' Hanlon said tiered pricing--small, medium, large and extra large--based on different data usage thresholds could be one solution. And Kretchmer said carriers could go a step further by dynamically engaging with subscribers via usage notifications. Carriers could then analyze the usage patterns of mobile data subscribers and offer tailored and personalized pricing plans that fit their needs--and charge accordingly.

"I think the issue here with mobile data is that subscribers have less intuition and less gut feeling into their consumption levels when it comes to data," Kretchmer said, adding that, "this is where real-time charging capabilities are so crucial in the sense of the customer experience. Customers are in risk of bill shock."

Declan Lonergan, an analyst at the Yankee Group, said this "dynamic" approach would need to factor in elements including a user's physical location, the level of network congestion and the type of application running. He acknowledged that doing so would likely instigate fierce opposition from net neutrality proponents who do not think carriers should modify the network experience for different use cases.

But he likened it to the airline industry, where travelers pay based on real-time demand and the type of accommodations they want.

Looking at the situation from the carriers' perspective provides some clarity, said Akil Chomoko, product marketing manager for Volubill, which offers charging, control and policy services to telecom and Internet providers. "If I change the way my network manages my subscriber usage, I can increase revenue, keep valued customers and reduce capex spend."

A business decision

When and if carriers decide to implement usage-based pricing is still up for debate. However, most agree it is a necessary evil.

"To go to a usage-based model is conceptually very good. And I can see the need to do it," said Frank Dickson, an analyst at In-Stat. "But you can't do it in a vacuum."

Dickson believes that Verizon may have the wherewithal to launch usage-based pricing when it rolls out LTE--but the carrier will have to remain flexible.

"If there's some resistance from customers on usage-based plans for LTE, Verizon is going to change," he said. "Verizon has got to monetize that spectrum. They've got to."

Joel Espelien, chief business officer at PacketVideo, said it will be very difficult for carriers to explain to subscribers why they should switch from all-you-can-eat plans to usage-based pricing. People have gotten used to flat-rate plans, he said, and don't want to give it up. Indeed, Espelien is deep into the issue: PacketVideo offers technology to more efficiently stream video over wireless networks.

Others are convinced it's simply a matter of properly advertising the new pricing structure to users--though that is no small task. "I won't deny it's a very difficult communication and marketing challenge for the carriers," Hanlon said.

Lonergan agreed that tiered pricing would be a tough sell with users, but described it as "a one-off challenge the industry has to take on." He said the only way it will work is if carriers' marketing departments are tightly aligned with users' usage patterns and preferences. "You've got to have that end-to-end solution," he said. "But it's not rocket science to do that."

Carriers have the tools to make usage-based pricing a reality, and it appears there is enthusiasm for the idea. Ultimately, though, operators will have to decide if usage-based pricing makes sense for them from a business perspective.

"This is more a matter of realizing this is a business challenge here," Kretchmer said. "And something needs to happen."

Is usage-based pricing inevitable?

Phil Goldstein — Thu, 04 Feb 2010 06:28:14 -0500

Wireless carriers are facing a conundrum: They have invested billions of dollars into improving network capacity, but only a small number of users are responsible for the majority of the network's total data traffic. And while there has been some discussion about usage-based pricing as a solution, there are a range of roadblocks facing operators that chose to travel down that path.

Metered pricing is a simple-sounding solution that has many complex parts. It's technically possible, but how carriers implement the service will depend on their individual business situations.

"I think that it is inevitable for the industry to move toward this, otherwise the business model is not sustainable," said Rafi Kretchmer product marketing manager for revenue management at billing systems vendor Amdocs. He noted that low-volume data users are essentially subsidizing heavy data customers. "In order to address this conflict, they realize that to not leave money on the table, they must differentiate the pricing."

Others agree. "It's a necessary consequence of rising usage of mobile data," said Alastair Hanlon, director of product management at Convergys, another billing vendor. "As usage grows to a level where you're filling all of the available capacity, you're going to see a need to somehow control that usage. And price is a good way of doing that."

Momentum is growing

The introduction of 3G networks in the United States coincided with the widespread use of flat rates for unlimited data use. Carriers sought to entice users by removing the often-confusing per-megabyte pricing of second-generation networks. Today, most wireless carriers offer unlimited data access for around $30 per month for smartphones or $60 per month for laptops.

(Most carriers also impose a usage cap--typically 5 GB per month--in the fine print in order to prevent network overloading, though Sprint Nextel pointed out that its mobile WiMAX service, branded Sprint 4G, currently does not carry a cap.)

However, due to recent, skyrocketing interest in apps and smartphones, carriers' move to simplify the world of data pricing has turned into a liability, rekindling discussions about metered, usage-based pricing.

And carriers seem to be warming to the idea. In January, Verizon Communications CTO Richard Lynch hinted that when Verizon Wireless launches its LTE network later this year, it will introduce a usage-based pricing model, charging customers by how much bandwidth they use.

"The problem we have today with flat-based usage is that you are trying to encourage customers to be efficient in use and applications, but you are getting some people who are bandwidth hogs using gigabytes a month and they are paying something like megabytes a month," Lynch said in an interview with the Washington Post. "That isn't long-term sustainable. Why should customers using an average amount of bandwidth be subsidizing bandwidth hogs?"

In December, AT&T Mobility President and CEO Ralph de la Vega confirmed at an analyst conference that about 3 percent of AT&T's smartphone users generate about 40 percent of its data traffic. De la Vega said the carrier would consider ways to educate users on their data usage, with the intention of preventing excessive use. However, AT&T has not come out explicitly in favor of usage-based pricing.

"Given the dramatic increase in mobile broadband data usage, there needs to be a long-term model that best balances the finite amount of available frequency, the disparity in usage patterns among customers, and the investment and innovation required to make it all happen," AT&T spokeswoman Jenny Bridges said. "There are many ways to address this explosion in data usage to ensure that everyone is able to share the benefits delivered by mobile broadband. We'll continue to explore the best path forward."

T-Mobile USA declined to comment on its pricing plans.

Technically possible

Convergys' Hanlon said there are no technical reasons carriers cannot move from a flat-rate pricing model to a usage-based one, explaining that carriers have been metering voice for a long time and are currently charging customers when they exceed soft data caps--usually 5 GB per month. One challenge, he said, is migrating carriers' older legacy billing systems to ones that are more flexible...Continued

VC money still flowing to wireless

Sue Marek — Wed, 03 Feb 2010 22:38:25 -0500

2009 was a tough year for many wireless startups. The economic downturn caused venture capitalists to shy away from investing in new technology firms. According to the National Venture Capital Association, venture capital funding in the telecommunications sector declined to just $558.7 million last year, down from $1.67 billion in 2008.

But some VCs say the tide is turning, and many predict a bright future for enterprising mobile startups in 2010. In particular, if your firm is looking to solve some of the big challenges facing the wireless industry (like overcoming network capacity constraints or building a more intuitive user interface for devices), you may be able to score some funding.

Earlier this week, newcomer SpiderCloud Wireless, which makes an indoor wireless system for operators to help solve indoor capacity and coverage issues, closed on a $25 million round of Series B financing led by Opus Capital with investments from Shasta Ventures. And in December, text input firm Swype secured $5.6 million in Series B financing led by Nokia Growth Partners, Samsung Ventures and returning investor Benaroya Capital.

But these are just two recent examples. Rich Wong, a partner with Accel Partners--a venture capital firm that has invested in some high-profile mobile companies such as Admob, Medio Systems, SurfKitchen and GetJar--says he believes VCs are bullish about wireless because the industry is finally starting to open up. "The rise of open mobile is expanding the market for venture capitalists and startup companies to be players in the mobile industry," Wong says. In the past, entrepreneurs had to compete to get the attention of key people at the Tier 1 wireless carriers to get traction in the market, but that's no longer the case. Wong says Admob, which was acquired by Google in November for $750 million, never had a deal with a carrier. "You can work in the off-deck or open mobile world, prove yourself and then get a deal with Verizon or AT&T," he says. "You have more leverage."

Wong says there are lots of opportunities for VC investment in the mobile industry--whether it's on the application side or in network infrastructure. Accel Partners has typically focused on firms that make applications but recently invested in NextG, a startup that makes distributed antenna systems to help carriers with their network capacity. "Going forward we are going to look at everything--applications, application enablement, IMS, backhaul and infrastructure," Wong says.

Wong isn't alone in his bullish views on mobile. Newcomer Javinian Venture Fund is a $150 million fund that is focusing its investments exclusively on wireless startups that solve capacity and quality-of-service issues. John Dooley, managing director, says the firm believes there is a looming spectrum crisis and technologies (whether components, software or infrastructure) that have a solution to capacity issues will succeed.

Javinian has not made any investments yet, but Dooley says the company is looking at some very compelling firms. "We are looking closely at different types of technologies, how valuable they are and how their intellectual property is protected," Dooley says.

But be warned. Dooley says his firm is looking for companies with smart engineers who know more about the ins and outs of wireless technology. What he's not looking for are serial entrepreneurs who are more skilled in securing VC funding than in understanding wireless technology.

Wireless entrepreneurs take note: 2010 may just be the right year to finally launch that mobile startup you've been dreaming about. --Sue

Report: Netbook market grew 79% last year

Phil Goldstein — Wed, 03 Feb 2010 16:48:44 -0500

Netbook shipments jumped 79 percent last year to 30.2 million units, according to research firm Strategy Analytics--and the market is poised to continue growing this year.

The research firm said North America and Western Europe propelled the market's growth. In the U.S., carriers including AT&T Mobility, Verizon Wireless and Sprint Nextel have begun subsidizing netbooks (with the purchase of a two-year mobile data plan) and carrying the devices in their retail outlets. Thus, along with smartphones and data cards, netbooks with built-in wide area wireless have helped fuel mobile data traffic growth. The carriers have been selling netbooks for between $150 and $200 when paired with a two-year data plan contract.

According to Strategy Analytics, the top netbook vendors were Acer, Asus, HP, and Dell. "This category is poised for further growth in 2010, as chipset makers battle for dominance in the portable device segment," Strategy Analytics analyst Peter King said in a statement. "Intel, Qualcomm, Nvidia and others will continue to push new processors that promise to do more, while taking up less space and consuming less power."

In light of such growth, it's no surprise that the netbook market has become crowded. Late last year, the world's top handset maker Nokia entered the market with its Booklet 3G, which AT&T launched for $300 and a two-year contract. Apple is also aiming to upend the netbook market with its iPad tablet, which it will start selling in the coming months beginning at $500. At the iPad's unveiling, Apple CEO Steve Jobs disparaged netbooks as insufficient to do Web browsing, email, and handle photos, video and music. "Netbooks aren't better at anything," Jobs said. "They are just cheap laptops."

For more:
- see this release

Strategy Analytics: Smartphone sales charged back in Q4

Phil Goldstein — Wed, 03 Feb 2010 11:36:42 -0500

According to research firm Strategy Analytics, smartphone sales jumped 30 percent year-over-year in the fourth quarter to 53 million units--a boom that corresponds with a wider acceleration of the global handset market during the period. Nokia had a remarkably strong quarter in terms of smartphones, and easily outpaced Research In Motion and Apple for the global smartphones sales and market share lead. However, the analyst firm warned of heating competition due to the stepped-up smartphone efforts of Samsung and LG. Release

Analyst confident about Palm-Verizon partnership

Phil Goldstein — Wed, 03 Feb 2010 11:30:20 -0500

Palm got another shot in the arm after an analyst said he thinks Palm can ship 600,000 webOS-based devices through Verizon Wireless in the current quarter. He also said it is possible that Palm will eclipse Research in Motion's BlackBerry platform and Google's Android OS in developer support by the end of this year.

The analyst, Jonathan Goldberg of Deutsche Bank, raised his price target on Palm's stock, which was recently trading up 5.4 percent to $11.11 per share. Calling webOS a "scarce resource," Goldberg said in a research note that Palm's App Catalog already has 1,300 apps, more than in app stores by Nokia and Microsoft. "We think Palm has created a valuable asset in its webOS. If they can grow their installed base of users and keep the carrier momentum going, this value should become more apparent," he said.

While he was confident that the partnership with Verizon would produce dividends, he noted that the market was looking to see if Palm would show strong sequential growth in smartphone sell-through. In its last quarter, Palm's smartphone sell-through--how many phones customers actually bought--dropped 29 percent from the previous quarter and 4 percent year-over-year. That figure underscored Palm's predicament, considering that it was the quarter in which the Palm Pre received wider carrier support and in which Sprint Nextel launched the Palm Pixi.

Palm is hoping its fortunes will soon pick up. Verizon recently began a new marketing campaign for the Pre Plus, which it has been selling for just over a week alongside the Pixi Plus. Additionally, AT&T Mobility has said it will launch two exclusive Palm devices later this year.

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

Google issues patch for Nexus One

Phil Goldstein — Wed, 03 Feb 2010 11:13:25 -0500

Google issued an over-the-air software update for its Nexus One smartphone that adds features including multi-touch support--and also corrects some bugs that customers have complained about.

Multi-touch, which will affect the phone's browser, picture gallery and mapping applications, is probably the most high-profile software change. The technology allows users to zoom into images using a pinch motion, a feature pioneered by Apple's iPhone. Google said the Nexus One, which it has been selling online through its own Web store, also will get a new version of Google Maps, Google's visual search application and, importantly, improved connections to T-Mobile USA's 3G network.

The company had promised late last month that it would issue such a fix. T-Mobile is so far the only carrier subsidizing the Nexus One, though Verizon Wireless has promised to offer it later this spring.

In other Nexus One news, it appears Google is looking to boost its Nexus One customer service efforts; the company has been criticized for not offering phone-based customer support for the device. Google posted a job listing for "Phone Support Program Manager, Android/Nexus One," based at the company's Mountain View, Calif., headquarters. "As Phone Support Program Manager for Android and the Nexus One, you are responsible for ramping up and managing operations of Google's telephone support for our direct-to-consumer Android/Nexus One customers," the company explained.

Google confirmed the job posting was legitimate, according to CNet. "We're working quickly to solve any customer support issues as they come up, and we are trying to be as open and transparent as possible through our online customer help forums," the company said in a statement. "We continue to address all issues in as timely of a manner as possible, and we're flexible and prepared to make changes to our processes and tools, as necessary, for an optimal customer support experience."

For more:
- see this Google blog post
- see NYT blog post
- see this Engadget post
- see this CNet post

Related Articles:
Google, HTC try to calm Nexus One concerns
Google admits issues with Nexus One
Fine print on Nexus One raises questions

Alca-Lu exec: WiMAX has lost to LTE

Phil Goldstein — Wed, 03 Feb 2010 11:01:27 -0500

An Alcatel-Lucent executive sought to put more distance between the company and mobile WiMAX, arguing the wireless industry has clearly chosen LTE as the technology of choice for next-generation networks.

Patrick Plas, Alcatel-Lucent's COO for wireless, said the company is "not putting a lot of effort into this technology [WiMax] any longer," nothing that operators' LTE plans--such as those by Verizon Wireless and MetroPCS--mark "a clear direction taken by the industry towards LTE," according to ZDNet. Plas said LTE handsets will begin hitting the market this year, but the focus for now remains squarely on data connectivity.

Plas is not the first executive to trumpet LTE over WiMAX, but his comments are notable considering Alca-Lu remains a major WiMAX equipment vendor. Indeed, a recent Infonetics Research report found that WiMAX operators gave Alcatel-Lucent high marks, and research from Dell'Oro Group put Alcatel-Lucent as the world's second largest WiMAX vendor in the second quarter of last year--just behind Motorola--with close to 20 percent of the market.

However, Alcatel-Lucent has been heavily promoting its LTE efforts as it seeks to compete with Ericsson, Huawei and Nokia Siemens Networks for the world's growing number of LTE contracts. Recently, Cox Communications said it was working with Alca-LU and Huawei on LTE trials.

In other LTE news, Japan has certified its first LTE modem, made by LG Electronics. LG said NTT DoCoMo will use the modem when it begins testing LTE later this year.

For more:
- see this ZDNet post
- see this release
- see this IDG News Service article

Rumor Mill: RIM working on new touch-based OS

Phil Goldstein — Wed, 03 Feb 2010 10:41:22 -0500

Research In Motion is said to be hard at work developing a refreshed touch-based OS update for its popular BlackBerry smartphones, and a touch-based Qwerty BlackBerry device has been spotted on the Web, according to multiple reports.

According to a report on TheStreet.com, RIM has been developing a reworked, Web-friendly BlackBerry operating system, though details remain unclear. Additionally, a post on ZDNet identified a new BlackBerry, code-named Magnum, that sports a touchscreen user interface alongside a full, physical Qwerty keyboard.

RIM is still the most dominant smartphone vendor in the U.S. market--October figures from comScore show the company with a U.S. user base of fully 15 million, far outstripping its nearest competitor--but critics argue the firm's offerings have fallen behind the curve set by touch innovators including Apple, Google and Palm. Though BlackBerry has dabbled in touch with its Storm and Storm 2, the devices essentially rely on a touch-based version of RIM's existing OS platform.

The news builds on recent indications that RIM is working to update its platform. The company filed patents aiming to accelerate network browsing speeds on BlackBerry devices, according to a recent report in the Wall Street Journal. And last year RIM acquired WebKit solutions developer Torch Mobile (WebKit powers mobile browsers on numerous mobile platforms, including the iPhone and Android). Thus, it appears RIM may be gearing for an overhaul of its operating system.

A RIM spokeswoman declined to comment on the reports.

For more:
- see this The Street.com article
- see this ZDNet post

Pictures and specs: Motorola Devour for Verizon Wireless

Mike Dano — Wed, 03 Feb 2010 10:32:48 -0500

Motorola released its first Android phone for Verizon Wireless that sports the company's MotoBLUR user interface. Check out pictures and specifications for Verizon's third Android phone, set to go on sale sometime in the first quarter of this year.

Click here to get started

<--Back to the story

Verizon launching new Motorola Android phone, the Devour

Phil Goldstein — Wed, 03 Feb 2010 10:22:07 -0500

Verizon Wireless is hoping its customers will keep on devouring Android phones.

The carrier announced it will launch Motorola's latest smartphone based on Google's Android platform, called the Devour, in March. This is Verizon's first Motorola device to carry MotoBLUR, the handset maker's custom Android user interface. The phone also is Verizon's first Android device not to carry the "Droid" moniker.

For Motorola, the Devour represents its latest effort to return to prominence and profitability on the back of Google's Android. This is the vendor's third Android device with U.S. carriers--Verizon sells the Moto Droid and T-Mobile USA offers the Cliq, which has MotoBLUR. And AT&T Mobility plans to launch at least one Motorola Android device later this year. When Motorola reported its fourth quarter earnings in late January, co-CEO Sanjay Jha said Motorola plans to ship 20 different smartphones this year, with the majority of them running MotoBLUR.

The Devour appears to be a lower-end version of the Droid, with a slide-out Qwerty keyboard. The device runs Android 1.6, has a 3.1-inch capacitive touchscreen display, 3-megapixel camera and an 8 GB microSD card. The MotoBLUR UI has a strong focus on social networking integration and centers on push notifications.

Verizon did not disclose pricing or a specific release date.

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

Obama defends net neutrality as legal challenges loom

Phil Goldstein — Tue, 02 Feb 2010 11:39:57 -0500

During a question-and-answer session on YouTube, President Obama reiterated his support of net neutrality regulations--one of the major tech themes of his campaign--but also moved a step further on the issue by hinting that he might be against metered broadband or tiered pricing. "We're getting push-back, obviously, from some of the bigger carriers who would like to be able to charge more fees and extract more money from wealthier customers," he said. "But we think that runs counter to the whole spirit of openness that has made the Internet such a powerful engine for not only economic growth, but also for the generation of ideas and creativity." It's unclear though how the president's positions could eventually worm their way into policy; the FCC is in the midst of implementing net neutrality guidelines. The president's comments come in the wake of statements made last week by Robert McDowell, one of the two Republican commissioners at the FCC. McDowell said that if the commission adopts broad new net neutrality rules for wireless and wireline networks, the agency's authority to do so will likely be challenged in the courts. Article, article, video

Rumor Mill: Verizon will still get the iPad

Sue Marek — Tue, 02 Feb 2010 10:52:26 -0500

Some industry watchers were surprised last week when Apple announced that its latest innovation, the iPad tablet, will launch on AT&T Mobility's wireless network--instead of Verizon Wireless' (Verizon long had been rumored as an Apple partner for the gadget). However, a report from Silicon Alley Insider, citing an unnamed Verizon source, said a Verizon/Apple iPad deal is still in the works and that Apple will announce the partnership later this year.

At least two analysts are backing up the Insider's claims, arguing the Verizon/Apple deal might be unveiled at Apple's Worldwide Developers Conference in June. The event has historically served as a launching pad for Apple's new iPhone iterations.

Verizon Wireless declined to comment on the report.

Rumors of an Apple-Verizon tie-up are by no means new. However, despite widespread reporting on the topic, neither company has announced anything concrete. A deal with Verizon could significantly increase Apple's sales in the U.S. market, but would require the manufacturer to incorporate CDMA technology into its products.

For more:
- see this Silicon Alley Insider article
- see this AppleInsider article
- see these photos

ABI: iPhone market share dipped in Q4

Phil Goldstein — Tue, 02 Feb 2010 10:52:25 -0500

Apple's position in the smartphone market has become enviable, with swollen margins and strong sales. However, according to ABI Research, Apple stumbled slightly in the fourth quarter.

According to the research firm, Apple's global smartphone market share dipped to 16.6 percent, down from 18.1 percent in the third quarter. The company had record iPhone sales of 8.7 million, up 100 percent from the year-ago quarter and up 18 percent from the third quarter. However, though sales grew, Apple was outpaced by the wider smartphone market, which grew 26 percent from the third quarter to the fourth quarter of 2009.

The attention on Apple, of course, obscures the fact that the company is still a relative lightweight in the global smartphone market. Nokia, which some analysts had feared was losing smartphone traction, managed to boost its share of the smartphone market to 40 percent in the fourth quarter, from 35 percent in the third quarter.

Nonetheless, Apple has enjoyed tremendous momentum during the past year. Apple's iPhone shipments have risen steadily for the past four quarters, and the the company's total revenue surged to $15.68 billion in the fourth quarter, up 32 percent from $11.88 billion in the year-ago period.

For more:
- see this WSJ blog post (sub. req.)

Related Articles:
Apple unveils tablet, dubbed iPad, starting at $500
Apple doubles iPhone sales in another record quarter
AT&T nears record with 2.7M net adds in Q4
AT&T activates 3.2M iPhones in Q3, hints at end to exclusivity

Obama budget foreshadows spectrum auctions

Phil Goldstein — Tue, 02 Feb 2010 10:35:58 -0500

President Obama's new budget for fiscal 2011 anticipates the FCC will raise $1.6 billion through spectrum auctions through 2020. The budget proposal, like last year, also seeks to give the FCC new authority to establish fees on unauctioned spectrum, which could generate another $4.8 billion.

The administration, which has made net neutrality a centerpiece of its technology policy, seemed to underscore the importance of wireless broadband going forward. In addition to the details about spectrum fees, the proposal seeks to make permanent the FCC's power to auction off spectrum licenses. The FCC's existing authority to auction spectrum is set to expire Sept. 30, 2012.

"This proposal supports the administration's efforts to foster new wireless broadband technologies by making new spectrum available," the budget proposal stated. Obama's budget must be approved by Congress.

Interestingly, the revenue anticipated from future auctions pales in comparison with the FCC's 700 MHz spectrum, completed in 2008, that raised close to $20 billion--a reflection of the relative dearth of unused spectrum.

Obama's new proposal comes as the FCC hashes out the final details of its national broadband plan, which it is expected to deliver to Congress next month (one month later than originally anticipated). As part of the plan, the FCC is looking for ways to increase spectrum for wireless broadband services. Throughout the process of developing the plan, the CTIA has argued tirelessly for the wireless industry to receive additional licensed spectrum. Recently, the commission backed away from a plan that required broadcasters to give up some of their spectrum holdings for wireless broadband use.

However, the FCC took care to note yesterday that it still felt a spectrum shortage was an urgent priority that needed to be addressed. Phil Bellaria, the director of scenario planning for the FCC's broadband task force, wrote in an FCC blog post that the unveiling of Apple's iPad tablet rekindled worries that wireless networks would soon become overloaded.

"With the iPad pointing to even greater demand for mobile broadband on the horizon, we must ensure that network congestion doesn't choke off a service that consumers clearly find so appealing or frustrate mobile broadband's ability to keep us competitive in the global broadband economy," he wrote.

For more:
- see this Reuters article
- see this Broadcasting & Cable article
- see this FCC blog post

Report: Leap looking for a buyer

Phil Goldstein — Mon, 01 Feb 2010 16:27:57 -0500

Leap Wireless has hired outside advisers and formed a special committee of its board to consider different strategic options, including selling the company or merging with another carrier, according to a report in the Wall Street Journal.

The report, citing unnamed sources familiar with the issue, said the flat-rate carrier hired Goldman Sachs to advise the company while it "reassesses its alternatives and checks its options out there right now," according to a source. In January, DealReporter.com reported that Leap was considering such a move.

In recent weeks, according to the report, the advisers have been talking with other wireless carriers, including AT&T Mobility and Verizon Wireless, about possibly buying Leap, but the talks have not led to any kind of deal. Additionally, Leap has formed a three-person committee on its board to look at other strategic options.

Rival prepaid carrier MetroPCS has often been mentioned as a potential merger partner with Leap, and merger speculation has picked up from time to time since Leap rejected a $4.7 billion takeover bid from MetroPCS back in 2007. However, some analysts have discounted the likelihood of that marriage ever coming to pass, given the companies' reciprocal roaming agreement, inked in the fall of 2008, and their sometimes contentious relationship. Both operators have been stung by increased competition in the prepaid unlimited market from Sprint Nextel's Boost Mobile unit as well as TracFone's Straight Talk service.

At least one group appeared cheered by Leap's efforts though; investors sent the company's stock up from around $13.68 per share before the WSJ report to a high of $15.24 per share shortly thereafter, though the company's share price has since fallen back to around $14.50 per share.

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

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

Tracking the latest handset design trends

Phil Goldstein — Mon, 01 Feb 2010 11:24:26 -0500

As the handset market regains some of its momentum, what handsets and phone functions are leading the charge? Every month, research firm Strategy Analytics issues a report on the new handsets released during that month, and provides rankings based on the specifications of those handsets. Thanks to a partnership between the firm and FierceWireless, we'll bring you some of these key figures. In November, another 101 new handsets and seven new USB dongles were announced globally by 33 vendors. One of the highlights from the report is that NTT DoCoMo launched 13 high-devices from various Japanese handset OEMs, all with 7.2 Mbps HSDPA capability. Check out the other trends: Special feature

NTT DoCoMo to demo LTE handset

Phil Goldstein — Mon, 01 Feb 2010 11:14:02 -0500

NTT DoCoMo will demonstrate a prototype LTE handset later this month at the Mobile World Congress trade show in Barcelona, Spain, according to NEC, one of the operator's LTE development partners. The prototype marks a significant step forward for the industry, which has thus far focused its attention on LTE modems for computers and other non-phone gadgets.

The Japanese carrier is one of a handful of wireless operators around the world making aggressive strides to deploy LTE this year. TeliaSonera has the world's first commercial LTE network online in Oslo and Stockholm, and Verizon Wireless plans to deploy LTE in the United States this year in 25-30 commercial markets, covering 100 million POPs.

Much of the industry's LTE rhetoric to date has been spent on network buildouts and technical specifications, rather than bringing commercial phones to market. LTE handsets are not expected to be widespread until 2011, and likely won't reach mass market appeal until sometime after that.

NTT DoCoMo has been working with Fujitsu, NEC and Panasonic on prototype LTE handsets and other terminals, and plans to spend between $3.3 billion and $4.4 billion to deploy LTE over the next five years. In a release, NEC said that concept device will demonstrate the "transmission of high resolution video through its 'LTE-PF' equipped communications platform and showcases the advantage of high-speed LTE communications."

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

Related Articles:
Chip vendor predicts 'millions' of LTE handsets by 2012
In-Stat: 30% of subscribers will be 3G or 4G by 2013
Report: 56 million LTE phones in 2013
LTE network growth will outpace phone availability

Qualcomm to open R&D center in South Korea

Phil Goldstein — Mon, 01 Feb 2010 10:55:46 -0500

Qualcomm will launch a research and development facility in South Korea to work on next generation mobile chip technology, striving to forge ahead in a country where it was stung by antitrust regulators last year. The company also is going invest around $4 million in local chip maker Pulsus Technologies.

Qualcomm said it will open the R&D center with the cooperation of the South Korean government, researchers and academics, but it did not provide details on the amount it would invest in the facility. The company will be working on new mobile communication technologies, including mobile applications and multimedia, at the facility. The chip maker has a similar R&D plant in China.

The investment in the country is not entirely a surprise. Last spring, Qualcomm CEO Paul Jacobs said the company was looking at potential investments in South Korean wireless and health care companies. However, the investment is a visible signal that the company is looking to continue to expand its presence in the country months after antitrust regulators at the South Korean Fair Trade Commission fined Qualcomm $208 million for engaging in "unfair" business practices related to its chipset sales.

Last week, Qualcomm posted revenues of $2.67 billion for its fiscal first quarter, up 6 percent year-over-year and down 1 percent sequentially. The company's stock took a hit though after Qualcomm lowered it fiscal year revenue expectations due to what it said was tightened competition and economic struggles in Europe and Japan.

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

Report: Nokia shaves prices on handsets

Phil Goldstein — Mon, 01 Feb 2010 10:39:42 -0500

Nokia reduced the price on phones across its handset portfolio in late January, according to Reuters, citing industry sources who said the world's largest handset maker cut prices by as much as 10 percent. The effort brings the company's handset pricing more in-line with offerings from Nokia rivals, such as Samsung and Sony Ericsson.

Nokia spokesman Joseph Gallo told FierceWireless that "price adjustments are a normal part of our business" and that any recent changes to prices across the portfolio are not out of the norm. Beyond that, he said, the company does not comment on pricing for specific models.

Nokia reported strong earnings for the fourth quarter, with shipments of 126.9 million units up 12 percent from the year-ago quarter and up 17 percent sequentially. The company also made strides in the smartphone market--its global market share shot up to 40 percent in the period, an upswing of the 35 percent it reported in the third quarter. Nokia shipped 20.8 million smartphone units in the fourth quarter of 2009, up from 15.1 million in the fourth quarter of 2008.

The drop in Nokia's handset prices could help spur sales of high-end smartphones, but also might hurt margins on mid-tier and low-end devices.

Last week, Nokia reiterated expectations of 10 percent growth this year over last year in the overall handset market, though it said it expects its share of the market to remain flat.

For more:
- see this Reuters article

Apple's Jobs dismisses Google's mobile advances

Phil Goldstein — Mon, 01 Feb 2010 10:21:59 -0500

Apple CEO Steve Jobs discounted the progress Google had made with its Android mobile platform, and said Apple will outstrip the company with its own aggressive updates to the iPhone, according to reports from Wired.com and Macrumors.com. Both reports are based on accounts of an internal Apple company meeting Jobs held after the unveiling of the company's iPad tablet last week.

According to the reports, Jobs said Google entered the mobile phone business and that Apple has not entered the search business, and noted there are elements within Google, most likely those working on Android, that are seeking to "kill" the iPhone. Jobs also disparaged Google's "don't be evil" motto, though the reports conflict as to exactly what he said on the topic.

Google has significantly increased its investments in the smartphone industry of late, most recently with the launch of the HTC-made Nexus One, which it is selling through its own online store. Jobs, however, has reason to be confident in his approach: In its most recent quarter, Apple's iPhone sales doubled, to 8.7 million.

According to Macrumors.com, Jobs said Apple would continue to make aggressive changes to the iPhone that Google would not be able to keep up with, and said the next iPhone update will be an "A+." Apple has released an update to the iPhone every summer since the first iPhone launched in 2007.

The chief executive also took aim at Adobe. Jobs reportedly said Flash is buggy and that the world is moving toward HTML5 technology, which will help render Flash obsolete. Apple and Adobe have had a rough relationship--Adobe's Flash technology is not available on the iPhone or iPad.

An Apple spokeswoman did not immediately respond to a request for comment.

For more:
- see this Wired article
- see this Macrumors.com post
- see this Daring Fireball post

CTIA's Largent on wireless: Responsive and reliable in disasters

Steve Largent — Mon, 01 Feb 2010 10:12:25 -0500

On Tuesday, Jan. 12, at 4:53 p.m. EST, a 7.0 earthquake struck 10 miles southwest of Port-au-Prince, Haiti, and directly impacted more than 3 million people, or one-third of its population. The toll on human life and property damage is extensive, and the challenges to providing aid are many.

In the aftermath of such a natural disaster, communications are critical as people try to find their loved ones to ensure their safety. With more than 3 million wireless subscribers in Haiti, and just 125,000 landline phones, it is a powerful reminder to all of us that mobile devices are public safety tools. We give them to our loved ones to provide that invaluable connection at a time of need.

Within 24 hours of the devastating quake, wireless service was partially re-activated. There was understandable spotty coverage and bottlenecked coverage, but the benefits wireless provided were beyond phone calls.

It allowed relief workers to best coordinate their needed efforts. Wireless helped rescue workers find individuals who were underneath collapsed buildings. In some cases those trapped in rubble used their devices to summon help. The Centers for Disease Control also used mobile devices to track the spread of diseases.

Text messaging was encouraged by the U.S. government because it's one of the easiest tools to use in a crisis. It does not require both parties to have their devices "on" to send or receive communications. It also consumes very little bandwidth, which helps public safety officials communicate with each other in times of congestion or other challenges.

The disaster in Haiti highlighted another very powerful use for texting: financial donations. When CTIA initiated mobile giving through our Text 2HELP program with the American Red Cross in 2005, we believed that smaller donations would lead to a greater adoption rate. We thought that consumers would appreciate the simplicity of sending a text message to donate money on-the-go and having it appear on their billing statements. While I'd like to say that we anticipated the $25 million that was donated within seven days to the campaign the American Red Cross instituted in Haiti, we were actually overwhelmed. The industry is honored to provide texting as a way for consumers to lend their support and we are proud to have such philanthropic customers.

As usual, we were also impressed with the wireless industry's response. Many of our members offered the services of their disaster response teams, and while many of them have seen terrible tragedies, we heard from some that this was "utter devastation" and unlike anything they had seen before. CTIA members immediately stepped up with aid, whether it was through matching employee donations or direct financial and product contributions.

While the initial rush of donations and aid was astounding, please remember the devastation for Haitians continues as they try to re-build their homes, their country and their lives.

To learn more about the industry's efforts in Haiti, please visit our blog at www.ctia.org/blog.

Steve Largent is president and CEO of CTIA, the wireless industry's main trade group.

Handset market bounces back in Q4

Phil Goldstein — Fri, 29 Jan 2010 11:53:23 -0500

The "year-long recession" in the handset industry is over--at least according to research firm Strategy Analytics. The firm found that handset shipments rose by 10 percent in the fourth quarter to 324.4 million units, up from 293.8 million in the year-ago quarter. The future looks bright as well: Both Nokia and Samsung have forecast 10 percent market growth for 2010 compared with 2009. However, not all of the major players have benefited from the comeback: Both Motorola and Sony Ericsson continue to struggle with falling market share. FierceWireless breaks down the handset industry's fourth quarter with commentary from Strategy Analytics and research company IDC. Special feature

AT&T requiring data plan for 'Quick Messaging' phones

Phil Goldstein — Fri, 29 Jan 2010 11:47:30 -0500

AT&T Mobility has followed Verizon Wireless' lead and is now requiring customers to add a $20 per month data plan to their service when they purchase certain classes of non-smartphone devices. The changes apply to "Quick Messaging" devices such as the Samsung Solstice and LG Neon.

Under the new requirement, AT&T "Quick Messaging" phone customers must purchase a $20 per monthly minimum plan for messaging and/or data for individual lines. Family plans will be required to have a minimum $30 per month per line plan for texting and/or data.

"Nearly all of these devices now have full Web browsing capabilities, and as such, customers are more likely than ever to surf the Web on them," AT&T spokeswoman Jenny Bridges told FierceWireless in explaining the move. "In light of this increased usage, a data and/or text plan will enable customers to enjoy a plan that does not involve paying as-you-go charges."

The changes apply to new customers who purchase these devices as well as subscribers who upgrade to them, Bridges said, noting the changes went into effect Jan. 18.

The move mirrors a similar action by Verizon Wireless. When Verizon unveiled its new unlimited calling and messaging plans earlier this month, the carrier said shoppers who purchase certain devices--which it classified as "3G Multimedia" phones--will be required to add a minimum $10 data plan to their service. (It's worth noting that AT&T lowered the price of its own unlimited calling service hours after Verizon did--and to the same price as Verizon).

For more:
- see this release
- see this Boy Genius Report post

Time Warner open to idea of WiMAX voice service

Phil Goldstein — Fri, 29 Jan 2010 11:05:10 -0500

Time Warner Cable left the door open for a possible voice service running over Clearwire's mobile WiMAX network, but said that it was still in the early stages of using WiMAX in its products.

As one of Clearwire's wholesale partners--along with Sprint Nextel and Comcast--Time Warner has been offering its own branded WiMAX service, called Road Runner Mobile. Time Warner CEO Glenn Britt said on the company's fourth-quarter earnings conference that he believes the networks of the future will combine wireless and wireline components.

"This will develop in exciting ways we really can't imagine today, but I think there is going to be a whole array of products using these hybrid networks in the future," he said. "So this is the very early beginning and I don't know how to size the opportunity because I don't think any of us really and fully imagine what the products are going to be--but it is an exciting opportunity."

Britt said Time Warner currently has the capability to create a wireless voice product, but that its future is uncertain. "We are working with both Clearwire and Sprint on that," he said. "Having said that, I think there are plenty of voice providers out there today in the cellular business and there doesn't appear to be a crying demand for another one, nor does it appear that we really need that in our product portfolio. We have the capability if we actually need it. Right now I don't think we do."

That stance sits in sharp contrast to Cox Communications, which is actively building out its own CDMA voice network in its AWS spectrum. This week, the company also announced that it had begun LTE voice and video trials on its 700 MHz spectrum.

For more:
- see this Seeking Alpha transcript

ZTE beginning LTE trial networks out West

Phil Goldstein — Fri, 29 Jan 2010 10:46:42 -0500

ZTE, better known in the U.S. market as a handset vendor, said it is working with a small regional operator to deploy LTE trial networks in parts of Arizona, New Mexico and Utah.

The Chinese vendor is working with Commnet Wireless, a subsidiary almost wholly owned by Atlantic Tele-Network (which is separately in the process of buying former Alltel assets from Verizon Wireless). The carrier has sparse GSM and CDMA coverage in parts of Arizona, Colorado, Kansas, New Mexico and Utah, and other parts of the Western United States.

ZTE, which so far has made few inroads as an infrastructure vendor in the North American market, is using its core dual-mode CDMA/LTE platform for the networks. Xiangyang Jiang, executive president of ZTE North America, said in a statement that the company is committed to working with carriers for LTE deployments.

ZTE so far has managed to ship phones to the likes of MetroPCS in the United States.

John Champagne, Commnet's vice president of planning and development, did not immediately respond to a request for comment.

For more:
- see this Cellular News article

Samsung's handset shipments soar in Q4

Phil Goldstein — Fri, 29 Jan 2010 10:31:26 -0500

Samsung Electronics bounced back from a year-ago loss partially due to a sharp uptick in handset shipments in the fourth quarter, a rising tide that aided many of the rest of the firm's rivals in the mobile phone market.

The electronics conglomerate reported a $2.6 billion profit for the quarter, a strong showing after a $14.4 million loss in the fourth quarter of 2008, which was its first quarterly loss since it started reporting quarterly earnings in 2000.

Samsung's handset unit reported a record number of handset shipments in the quarter--68.8 million. That was up 31 percent from the fourth quarter of 2008, when it shipped 53 million units, and up from the record 60.2 million units it reported in the third quarter. The handset unit had an operating profit margin of 8.3 percent, up from 7.7 percent in the third quarter and 2 percent in the fourth quarter last year. The average selling price of Samsung's handsets fell to $115, down 4 percent from the year-ago period.

According to IDC, Samsung's global handset market share in the fourth quarter reached 21.1 percent, up from the 18.1 percent the research firm recorded for Samsung in the year-ago period. Samsung is a distant second to Nokia in terms of global handset market share (Nokia commanded 39 percent of the market in the period), though it sits far ahead of No. 3 handset player--and South Korean rival--LG. IDC said LG's market share in the fourth quarter clocked in at 10.4 percent.

"The company capitalized on growing interest in converged mobile devices with its Omnia2 while addressing end-user demand for touchscreen and quick-messaging devices within developed markets," IDC wrote of Samsung's performance in the quarter. "In emerging markets, Samsung's attention to local market tastes and extended distribution channels helped build its presence. Despite its heady growth, the company fell further behind market leader Nokia while distancing itself ahead of LG Electronics."

For the coming year, Samsung said it would continue to try to diversify its smartphone lineup by introducing more Android devices and those running its own OS, bada. Samsung said it expects its market share to continue to rise, and forecast its handset margins to hit double-digit figures. Like Nokia, Samsung predicted that the overall handset market would rise 10 percent in 2010 compared with last year, but said first quarter demand would decline due to seasonal factors.

For more:
- see this WSJ article (sub. req.)
- see this Bloomberg article
- see how Samsung ranked in the fourth quarter
- see this Q4 earnings page

AT&T nears record with 2.7M net adds in Q4

Sue Marek — Thu, 28 Jan 2010 11:50:16 -0500

Verizon Wireless' aggressive holiday ad campaign slamming the quality of AT&T Mobility's 3G network didn't stop customers from signing up for AT&T wireless service. The carrier rounded up 2.7 million net new wireless subscribers during the fourth quarter--the second highest quarterly gain in the company's history.

However, issues surrounding AT&T's wireless network continue to be a sore spot for the carrier, and executives spent much of their quarterly conference call discussing what AT&T is doing to improve it. Specifically, AT&T will spend $18 billion to $19 billion on its network this year, notably above the $17.3 billion it spent in 2009. This includes an increase of $2 billion for improving backhaul capacity.

On the revenue side, AT&T posted fourth-quarter wireless service revenues of $12.6 billion, up 9.2 percent from the same quarter in 2008. The carrier's operating income clocked in at $3.4 billion, up 24.7 percent over the year prior. Here's a breakdown of the rest of AT&T's key metrics:

Subscribers: AT&T added 2.7 million net new subscribers in fourth quarter, for a total of 7.3 million net new subscribers in 2009. The company's total subscriber base reached 85.1 million (still behind No. 1 carrier Verizon's 91.2 million). AT&T's net new postpaid subscribers totaled 930,000 in the fourth quarter and 4.3 million for the full year.

iPhone and iPad: Apple's iPhone continued to drive consumers to AT&T. The company activated 3.1 million iPhone users in fourth quarter, and more than a third were new to AT&T. During the conference call with analysts, AT&T executives said the new Apple iPad is a different model for AT&T because the company is not subsidizing the device and because customers will activate it online--thus, AT&T won't have the typical activation and billing costs. However, executives also said they believe iPad users will rely predominantly on WiFi, and therefore it won't drain AT&T's 3G network. "We will monitor the usage as the device gets out there," said Rick Lindner, senior executive vice president and CFO at AT&T. "If it turns out substantially different, we will adapt."

Emerging devices: AT&T's new emerging devices division also posted a strong quarter, adding more than 1 million new devices onto the network. AT&T executives said that, despite smaller ARPU than standard phones, such devices typically carry low churn numbers and high margins.

Data: AT&T's wireless data revenues hit $3.9 billion in fourth quarter, an increase of 26.3 percent over the year prior. Text messages increased 70 percent to 135 billion and multimedia messages doubled to more than 2 billion in the period.

ARPU: Postpaid average revenue per user was $61.13, an increase of 2.6 percent over the year-earlier quarter. Postpaid data ARPU was $19.16.

Churn: Postpaid churn was 1.19 percent, down from 1.2 percent a year ago. Total churn was 1.44 percent, lower than the 1.64 percent AT&T recorded in the fourth quarter of 2008.

AT&T's stock remained relatively unchanged on the news, hovering at $25.74 in mid-afternoon trading.

For more:
- see this release
- see these metrics on AT&T's quarter
- see how AT&T compares with other wireless companies in Q4 earnings