FierceWireless

Clearwire adds Best Buy as 4G wholesale partner

Sue Marek — Thu, 29 Jul 2010 11:46:27 -0400

Clearwire (NASDAQ:CLWR) added retailer Best Buy, via its recently unveiled Best Buy Connect service, to its list of wholesale partners that will use the company's 4G mobile WiMAX network. This marks Clearwire's first wholesale partnership deal with a company that isn't a strategic investor.

Best Buy launched its Best Buy Connect 3G mobile broadband service July 11, which relies on 3G connectivity from Sprint Nextel's (NYSE:S) CDMA network. The Best Buy offering, which includes Gobi-enabled laptops and netbooks, is being sold at Best Buy's U.S. stores. The retailer will launch its 4G mobile broadband service using Clearwire's mobile WiMAX network in 2011.

Sprint, Comcast and Time Warner Cable--all strategic Clearwire investors--also resell WiMAX services.

In an interview with FierceWireless, Teresa Elder, Clearwire's president of strategic partnerships and wholesale (and a 2010 Women in Wireless honoree), said the company has been in discussions with Best Buy for some time and that Best Buy is a good fit for Clearwire because it is very customer focused and wants to provide great quality of service to its customers. "Best Buy is about offering customers choice. Some customers want to work with Best Buy directly and have that full service capability. We want to have a mix of partners on our network."

Elder downplayed the fact that Clearwire may be facing another competitor in the 4G wholesale network space. Last week, newcomer LightSquared (which is funded by private equity firm Harbinger Capital Partners, a Fierce 15 2010 winner) announced plans for a nationwide wholesale LTE network with commercial launches starting in 2011. The company said it is already talking to 30 potential wholesale partners for its network.

"No, I don't think the LightSquared deal adds pressure. We have an incredible spectrum position and a 4G network in place in the U.S. today," Elder said.

For more:
- see this release

AT&T names IP network suppliers; Top Women in Wireline list released

Mike Dano — Thu, 29 Jul 2010 11:37:46 -0400

Quick news from around the Web

@FierceWireless: RT @engadget: BlackBerry Bold 9780 caught on video running OS 6. Article | Follow @FierceWireless

> 2010 Top Women in Wireline. Special report

> AT&T selected Alcatel-Lucent, Cisco and Juniper Networks as its suppliers for its IP/MPLS/Ethernet/Evolved Packet Core equipment. Release

> Rep. John Dingell (D-Mich.) said the FCC's chairman should quit pushing for broadband regulation. Article

> LG released its new Optimus Z Android phone, article, and promised an Android tablet for the fourth quarter. Article

> Motorola released a lightweight flip phone for Sprint Nextel's Boost Mobile. Article

> Nokia introduced its new Ovi browser for its Series 40 phones. Post

> The brand name of DoCoMo's forthcoming LTE network? Xi, pronounced "crossy." Article

Mobile Content News

> Millions of Android smartphone users have downloaded a malicious wallpaper application that collects their personal data and sends it to a mysterious Chinese website, according to data uncovered by mobile security firm Lookout. Article

> Online retail giant Amazon.com released the latest version of its Kindle ereader device. Article

> Google CEO Eric Schmidt said the company is positioning its Android mobile operating system to drive revenues exceeding $10 billion a year. Article

> NewBay Software announced its LifeCache rich media solutions suite will power AT&T's new Mobile Share media management initiative. Article

> Apple launched iAd for Developers. Article

Broadband Wireless News

> A Sprint Nextel device capable of bringing 3G connectivity to the Apple iPod Touch has passed FCC testing. Article

> Altair Semiconductor announced commercial availability of a new TD-LTE reference design for use in dongles and other gadgets. Article

> TeliaSonera is mulling a new mobile data pricing model that involves bundling LTE network usage charges with the cost of mobile content. Article

European Wireless News

> Vodafone divestitures, including Verizon Wireless, should be pursued at sensible prices. Commentary

> The debacle surrounding the antenna issues with the iPhone 4 has severely dented the handset's U.K. prospects. Article

> A new report from research firm Forrester claims that only a minority of consumers download apps on a monthly basis. Article

> Telit Communications will distribute a complete range of M2M solutions developed by Orange. Article

> Vodafone dropped launch plans for more 360-branded handsets. Article

> BMW, General Motors and Renault selected the Nokia MeeGo operating system. Article

And finally... Motorola slammed Apple's antenna foibles with full-page ad. Article

Paolini: Migrating from WiMAX to LTE is no easy task

Phil Goldstein — Thu, 29 Jul 2010 11:02:45 -0400

The TD-LTE market is picking up momentum, which likely will come at the expense of WiMAX. WiMAX and LTE share most of the RAN and core network, so the transition path from WiMAX to LTE will be smoother than, for instance, the transition path from HSPA to LTE, argued industry analyst Monica Paolini. However, there are a series of complicated decisions that have to be made during any such transition. Operators have to choose whether to overlay LTE on top of WIMAX or to simply swap the networks, and also have to consider whether they will use TDD or FDD spectrum. In all cases, however, WiMAX operators should start their assessment and planning processes now, to minimize possible future costs and challenges in moving to LTE. Commentary

HTC nabs two executives from Sony Ericsson

Phil Goldstein — Thu, 29 Jul 2010 10:52:55 -0400

HTC snagged two senior executives from rival Sony Ericsson, but the Taiwanese smartphone maker also said that one of its own top executives is leaving the firm.

The company said it hired Ron Louks as its chief strategy officer and Kouji Kodera as its chief product officer. Louks, the former CTO of Sony Ericsson, will be responsible for driving new strategic initiatives and technology incubation at HTC. Kodera, formerly Sony Ericsson's head of products, will run HTC's global product portfolio planning and management.

In addition to the hires, HTC said Jason Juang, a senior executive vice president at HTC, has left the company "to pursue other opportunities."

HTC, which said earlier this month that its second-quarter unaudited net profit rose 33 percent amid surging sales, also made some internal changes to its corporate structure. Jason Mackenzie, previously vice president of HTC North America, was promoted to president of HTC North America and Latin America. David Chen, previously HTC's vice president of product development, was promoted to chief engineering officer. And Florian Seiche, who was previously vice president of HTC Europe, Middle East and Africa, was named president of HTC EMEA.

HTC has benefited from its high-profile Android devices, like the Droid Incredible for Verizon Wireless (NYSE:VZ) and the HTC Evo for Sprint Nextel (NYSE:S), but is also going to return to its roots this fall and promote Microsoft's Windows Phone 7 platform.

For more:
- see this release

Apple to investigate iOS 4 upgrade issues for iPhone 3G customers

Phil Goldstein — Thu, 29 Jul 2010 10:35:49 -0400

Apple (NASDAQ:AAPL) will investigate problems that iPhone 3G users have been experiencing since upgrading to iOS 4, a company spokeswoman told the Wall Street Journal. News of the probe comes after Apple said it would issue free cases to iPhone 4 users in a effort to address concerns about the gadget's antenna.

Since the iOS 4 update became widely available in late June, iPhone 3G customers who upgraded their software have been complaining about problems they have had with their user experience, according to user forums. Apparently, the most commonly cited problem is that users have found their iPhone 3G to run slower after the software upgrade. Users have also complained that the iOS update drains the device's battery quickly and makes the phone excessively hot.

The iPhone 3G, released in 2008, has a slower processor than the newer iPhone 3GS and iPhone 4.

The iPhone 3G is supposed to be compatible with most of the features of the new operating system, but does not support the multitasking functions in iOS 4 that are available to iPhone 3GS and iPhone 4 users.

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

Mobile phone recycling: Turning intention into action

Ramon T. Llamas — Thu, 29 Jul 2010 10:26:33 -0400

Earlier this month, I was helping a friend of mine pack up his belongings to move to a new apartment. As it usually goes, packing ends up being a combination of "what to bring to the new place" and "what needs to be thrown out," and if the process is not done carefully, everything could fall into the former category and nothing into the latter. After convincing him that he could part with his old VHS and audio tapes (including, among others, a used copy of Steve Perry's solo album on tape), we went through his drawer of gadgets he didn't use any more: Walkmans, headphones, chargers and about a dozen mobile phones. Without thinking twice, he grabbed everything inside and dumped them into a trashcan.

"What do you think you're doing?" I asked, a bit perturbed.

"Throwing out what I don't use anymore," he responded, reaching for another old, unused phone.

"You can recycle those," I told him.

"You mean with the soda cans and newspaper?"

Good question. Recycling phones isn't anything like recycling soda cans or newspaper, and most, if not all, recycling centers are not equipped to handle some of the potentially hazardous material, nor strip out some of the valuable and re-usable materials within. But most users would not know this and even consider it once they've finished with a phone. In the end, I took his old phones to be recycled. I left the Steve Perry tape behind.

Consider the following

From the very beginning of the mobile phone market, we've all had our eyes on how many mobile phones would sell each year. With the exception of the economic downturn of 2009, that number has steadily climbed ever higher. But frequently overlooked in this analysis is what happens to old mobile phones once they have reached the end of their usage lives. Consider the following:

Every year since 2007, vendors have shipped more than one billion phones worldwide. In the United States alone, that number came to 180 million units last year. Even if just ten percent (currently considered a good benchmark) are recycled, there is still plenty left out there.
Earlier mobile phones contained one or several toxic materials, including PVC, phthalates, TBT, cadmium, beryllium, lead and chlorinated flame retardants, brominated compounds, antimony trioxide, arsenic. Most recycling centers are not equipped to handle them.
Within emerging markets, old phones are re-purposed among friends and family, thereby extending a phone's useful life. In mature markets, like the United States, constant upgrades have led to less usage of older phones.
According to an IDC survey taken in 2008, 35.3 percent of our respondents intended to recycle their mobile phone. But very few of those respondents knew how.
In that same survey, 20.8 percent of our respondents said that they would donate their phone to a charity. Again, few of those respondents knew how.
Finally, 5.5 percent of our respondents in that survey indicated that they would simply throw away their old phones.

Going just by these figures and trends alone, there is ample opportunity for the mobile phone market to bring mobile phone recycling to the forefront.

The first is to make recycling mobile phones part of the sales process. Carriers and retailers are in the perfect position to make mobile phone recycling a more accepted practice today. Moreover, since the United States mobile phone market has reached subscriber saturation, practically every person walking into a store should, theoretically, have a mobile phone that he or she will no longer be using. Rather than simply ending the selling process by ringing up the sale and showing how to use the phone, a carrier or retailer could collect the old phone to be recycled. And as an incentive to bring in old phones, a customer could be provided with a discount to be used towards another product or monthly service bill. At the same time, those customers who do not purchase a phone should still be able to drop off a phone at a carrier or retailer to be recycled.

The second is for vendors to make mobile phone recycling a goal for the public to see. At this year's Consumer Electronics Show in Las Vegas, Samsung announced an ambitious goal to recycle one million mobile phones this year. Dubbed "March to a Million," the program aims to teach teens on the importance and ease of mobile phone recycling, with cash and other prizes available to schools that recycle the most phones. LG hosted its own ecoMobilization High School Cell Phone Recycling program this past spring, collecting thousands of phones in the course of 30 days. A similar competition is expected for this fall. Such programs as these bring the recycling movement out in front and build goodwill between the company and community.

Finally, carriers can tap into their subscriber bases to recycle their phones once they reach the end of a contract. As carriers are eager to provide a deep discount or even a free phone in exchange for renewing another two years, providing the means to recycle the old phone would not hurt either.

Recycling is just one piece of the puzzle

I did not touch upon many other facets of the green mobile phone effort, such as mobile phone design, manufacturing, packaging, and energy efficiency, among others. Each of those could take up their own column. Last month, IDC published a report examining what the leading handset vendors are doing in this space, and which ones excel in areas mentioned above. Much work has been done in each of these categories, and certainly many of the vendors have set examples for others to follow.

Like many of you, I've held on to many of my old phones, mostly due to nostalgia. Someday I will get around to giving them up for good. I don't plan on using any of them ever again as they lack many of the features and functionalities I've become accustomed to. Chances are I'll recycle it or give it a second life by passing it on to a friend of family member.

But you still won't find me picking up my friend's old Steve Perry tape.

Ramon Llamas is a senior research analyst with IDC's Mobile Devices Technology and Trends team. In his role, Llamas tracks the quarterly results of the leading and emerging mobile device vendors, and uses the data to forecast the short-term and long-term direction of the mobile device market, and how it affects handset vendors, carriers and customers. He recently released his worldwide mobile phone and smartphone 2010 - 2014 forecasts, as well as a worldwide forecast of the mobile phone touchscreen market. In addition to being featured in FierceWireless, Llamas has been featured on Bloomberg Radio, National Public Radio, and quoted in Investors Business Daily, the New York Times, and the Wall Street Journal. Llamas can be reached at RLlamas@idc.com.

Motorola's Q2 profit jumps along with smartphone sales

Phil Goldstein — Thu, 29 Jul 2010 09:03:17 -0400

Motorola (NYSE:MOT) posted a stronger net profit in the second quarter that beat Wall Street expectations, and the company's smartphone shipments rose primarily from its devices running Google's Android platform. The company reiterated plans to separate into two publicly traded companies in the first quarter of 2011.

Motorola reported a net profit of $162 million, up from its $26 million profit in the year-ago period. On a company-wide basis, Motorola's sales were $5.4 billion in the quarter, down slightly from the year-ago period.

Motorola's handset unit notched a non-GAAP operating loss of $109 million in the quarter, narrowing on the operating loss of $239 million it recorded in the year-ago quarter. The division rang up sales of $1.7 billion in the quarter, down 6 percent from the second quarter of 2009; 34 percent of Motorola's handset sales were outside of North America. Motorola shipped 8.7 million devices in the quarter, down from 14.8 million in the year-ago quarter. However, Motorola's smartphone shipments rose to 2.7 million, up from 2.3 million in the first quarter of this year.

Motorola co-CEO Sanjay Jha, who will lead Motorola's handset and set-top box units when the firm splits, said during the company's earnings conference call that Motorola's average selling price for handsets increased to $207, up from $192 in the first quarter. Jha said the company now expects to ship more than 20 smartphone models this year. He said Motorola continues to expect to ship 12-14 million smartphone units this year, and reach profitability in handsets by the fourth quarter.

Jha also touched on an issue plaguing Motorola and others this quarter: supply constraints affecting smartphone sales. He said that sales of the Droid X, which launched earlier this month with Verizon Wireless (NYSE:VZ), have exceeded expectations. Verizon has scheduled weekly shipments of the device, and reported earlier this month that the device is either sold out or inventory is very low in some parts of the country.

"We believe that we will catch up with demand sometime throughout the course of this quarter," Jha said, adding that investments in the semiconductor industry for smartphones have been below par, but that Motorola will overcome supply constraints.

"Our shipments are still relatively healthy, it's just that demand is outstripping those supplies, and Verizon has been very understanding of our position," he added.

Motorola co-CEO Greg Brown also touched on the company's $1.2 billion sale of its networks business to Nokia Siemens Networks, which was announced earlier this month. He called NSN the "right partner for our customers and employees." He also said that Motorola won the first phase of a private, public-safety LTE network in the 700 MHz band in the San Francisco area. Brown said that the NSN sale will not affect that network.

Motorola's stock was up slightly in trading this morning on the news, to around $7.77 per share.

For more:
- see this release
- see this Bloomberg article
- see this FierceWireless Q2 earnings page

What is Sprint's trump card?

Phil Goldstein — Wed, 28 Jul 2010 22:05:33 -0400

Sprint Nextel (NYSE:S) has a lot to smile about after its second-quarter earnings announcement. The carrier posted a net subscriber gain of 111,000 customers--its first venture into net subscriber gains in three years. Sprint also had its best postpaid churn ever, at 1.85 percent. The folks over in Overland Park, Kan., should pat themselves on the back for a job well done. My question is: What's next?

Of course, it's worth taking a moment to recognize how far Sprint has come in the span of a few years, and what kind of company Sprint CEO Dan Hesse inherited from Gary Forsee at the end of 2007. Sprint's brand and reputation were in tatters: Subscribers were leaving in droves, customer service was rated terribly, activist investors like Ralph Whitworth were rattling management, and the company's relationship with and plans for Clearwire (NASDAQ:CLWR) were anything but clear. Everything seemed to hit a low in the first quarter of 2008, when Sprint lost a whopping 1.09 million subscribers and customer satisfaction hit an all-time low on the American Customer Satisfaction Index.

However, for ten consecutive quarters, Sprint's customer service ratings have improved and, according to Hesse, the ACSI ranked Sprint as the company that has improved the most over the past two years. Sprint said it now expects to have positive total net wireless subscriber additions during the remainder of 2010.

Sprint's trump card for the past year and a half has been its relationship with and majority stake in Clearwire and its mobile WiMAX network. Sprint has been pushing 4G as both a strategic imperative and as a key part of its brand--a way to set itself apart from the competition. And the launch of the HTC Evo in the second quarter, Sprint's first 3G/4G smartphone, provided a clear boost to the carrier's second quarter results.

But Sprint has been relentlessly promoting the fact that is has the "first and only" 4G network, and that will soon change. Both Verizon Wireless (NYSE:VZ) and MetroPCS (NASDAQ:PCS) plan LTE launches this year, while AT&T (NYSE:T) plans LTE for next year. Even T-Mobile USA is putting pressure on Sprint by arguing its HSPA+ network provides "4G speeds." Sprint's first-mover advantage appears to be fading. What to do?

My bet is on a prepaid 4G service offering, which Sprint has hinted about and which Hesse has told me is still being discussed internally. Such a plan would combine two elements of Sprint's core philosophy: the flexibility and growing strength of prepaid and the advantages of mobile WiMAX. And if such an offer were provided with unlimited data, it would stand in stark contrast to Verizon's LTE offerings, which are likely to be priced around a postpaid, usage-based model.

Sprint has made progress, but its fortunes could get roughed up by any number of factors: for example, if Verizon gets Apple's (NASDAQ:AAPL) iPhone. To truly succeed, Sprint may need to do something more--something dynamic.

On the company's earnings conference call Hesse said that in a recent interview with NPR he likened Sprint's turnaround to a baseball game. The first three innings have been about achieving stability; the second three will be about growth and the last three will be about delivering best-in-class services. If Sprint were a team and I were one of its fans, I'd be hoping that its manager had an ace closer like Mariano Rivera warming up in the bullpen. --Phil

Satellite backhaul is on the rise; T-Mobile's G1 is no longer for sale

Sue Marek — Wed, 28 Jul 2010 11:47:09 -0400

Quick news from around the Web

@FierceWireless: AT&T to be "premier" Windows Phone 7 carrier? Take that #Verizon. Article. | Follow @FierceWireless

> Research firm NSR said the satellite backhaul market made tremendous gains from wireless subscriber growth in 2009 and the first half of 2010. Release

> The blog Engadget did a quick stock check at T-Mobile USA, Amazon and a few other retailers, and confirmed that the T-Mobile G1--the world's first Android handset--is no longer for sale, marking the end of an era. Article

> Nokia said the C6, E5 and C3 devices will soon be available. The handset maker has added the devices to its U.S. website, and all three will be sold unlocked. Article

> Cricket launched a website touting the unreleased, Ancroid-based Zio M6000 from Kyocera, a tri-band CDMA EVDO Rev. A handset with WiFi, Bluetooth and GPS. Article

> A small Florida company called Augen debuted a WiFi Android tablet, which will be sold for $149.99 at Kmart starting this weekend. Article

> Juniper Network acquired SMobile Systems for $70 million. SMobile provides security and enterprise products for iPhones, iPads, BlackBerry, Symbian, Windows Mobile and Android devices. Article

> CTIA released an updated version of its "Consumer Code for Wireless Service. " Release

Mobile Content News

> Google-owned video service YouTube now represents 36 percent of total video traffic on wireless networks worldwide, according to mobile Web platform provider Bytemobile's second-quarter 2010 Mobile Minute Metrics report. Article

> Discovery Communications launched the new Discovery Mobile Channel via Qualcomm's FLO TV mobile broadcast network. Article

> CloudMade completed a Series B investment round totaling $12.3 million and led by new investor Greylock Partners, along with participation from existing investor Sunstone Capital. Article

And finally... A New York restaurant is selling a hot dog gussied up with black truffles and foie gras for $69. Article

Report: 4G to fuel infrastructure spending in 2011

Phil Goldstein — Wed, 28 Jul 2010 11:41:58 -0400

Global wireless infrastructure spending is expected to pick up in 2011 after two years of declines, according to a new report from research firm iSuppli. Increased 4G deployments will drive that growth, as more carriers deploy LTE networks. iSuppli predicts infrastructure spending will reach $40.3 billion in 2011, up 6.7 percent from $37.8 billion in 2009. According to iSuppli, capital spending decreased 5.9 percent in 2009 and will fall an additional 2.3 percent in 2010. Release

Rumor Mill: AT&T will sell Dell Streak for $300

Phil Goldstein — Wed, 28 Jul 2010 11:22:27 -0400

Dell continued to leak more details about its Streak tablet, and reports are circulating that the device will be sold for $300 with a two-year contract from AT&T Mobility (NYSE:T). What remains elusive, however, is when the Android-powered device will go on sale.

Dell is taking preorders for the 5-inch device, but has not said when it will be available in retail stores. Dell spokesman Matthew Parretta told Computerworld that the computer maker had mistakenly posted a message on its website that said customers could return to the site Wednesday to buy the device.

"It was a mistake, and we took that information down this morning," he said. "I can say definitely that the Dell Streak won't go on sale in July." Dell did not confirm the $300 price tag, but the company did say that the device is a GSM device and ruled out T-Mobile USA as a possible partner. The device is being sold unlocked for $500.

The Streak runs on Android 1.6, but Dell said it will be upgraded to Android 2.2 later this year. The device has a 1 GHz Qualcomm (NSYE:QCOM) Snapdragon processor, support for 3G and WiFi, and 2 GB of internal memory. AT&T is also supposed to release a Dell smartphone, the Aero, but has not provided pricing or release date details.

For more:
- see this Wired article
- see this Computerworld article

Will LightSquared succeed with its LTE ambitions?

Sue Marek — Wed, 28 Jul 2010 10:54:32 -0400

In the nearly two decades that I've been writing about the wireless industry, I've witnessed some very high-profile business failures (Iridium and Metricom, to name a few). Many of these flameouts had a few things in common. First, they thought they could build a network from scratch and--despite fierce competition from existing players--attract enough customers to offset the billions in infrastructure costs they would incur.

Secondly, they thought they could beat the existing service providers at their own game by offering consumers a better alternative. Iridium's plan was to launch a constellation of low-Earth orbit satellites that would blanket the earth with coverage and provide global voice and data services to globe-trotting executives that needed global coverage. Metricom's plan was to offer wireless data service using small repeaters installed on light poles and compete with the wireline DSL and cable modem companies.

So you can imagine my skepticism when I first learned of private-equity firm Harbinger Capital Partners and its plans to launch a nationwide wholesale LTE network (dubbed LightSquared) that some estimate will cost between $6 billion and $10 billion to build. Like the examples above, LightSquared believes it can build out this costly network from scratch and attract wholesale customers, which will then resell mobile broadband services using the LightSquared network. And company executives believe LightSquared can attract enough wholesale customers (they have said they're talking to at least 30 possible wholesale clients) to justify the company's buildout expenses. And like the examples above, LightSquared also believes it can beat existing service providers (like Clearwire (NASDAQ:CLWR), AT&T (NYSE:T) and Verizon (NYSE:VZ)) at their game by providing better coverage and better quality of service.

But LightSquared likely will be a bit late to the game--it plans to cover 100 million people by year-end 2012 as opposed to competitor Clearwire, which plans to cover 120 million people by year-end 2010.

Will LightSquared succeed? I spoke with Chief Marketing Officer Frank Boulben and I have to admit, he talks a good game. He knows the industry, he knows the technology and he understand the importance of building an ecosystem to support LightSquared's ambitious plans.

For more on LightSquared's plans (and the industry's reaction), check out my feature article here. I've talked to various players in the industry about this 4G upstart and I think you may find their responses interesting.

I remain skeptical--but also hopeful. I'd like to see a new upstart make it in the 4G space. But if history is any indication of the future, LightSquared has a tough road ahead. --Sue

Motorola's 'Family Room' trademark hints at media sharing

Phil Goldstein — Wed, 28 Jul 2010 10:48:38 -0400

Motorola (NYSE:MOT) is dropping clues about what kind of products it might produce from the combination of its handset unit and its set-top box division. The company filed a trademark application for something called "Family Room" with the U.S. Patent and Trademark Office that strongly hints at media sharing products.

Little is known about the proposed product, but according to the filing it is described as cellular phone software that will allow users to share digital content, including calendars, photo albums and music, and might be cloud-based. A Motorola spokeswoman did not immediately respond to a request for comment.

Motorola co-CEO Sanjay Jha, who will lead the company's handset and set-top box units when the firm splits up early next year, has hinted at such kinds of products in the past. Speaking at a recent Fortune conference, he said he expects to release products that combine elements from both units next fall.

Jha has also hinted that Motorola may introduce some kind of tablet product that will allow users to walk around the house and watch TV, and has said Google's Android platform might be a suitable operating system for such a "companion" product. "We're very focused on participating in this convergence between mobility and home, and I actually think you will see some products from us in a very short period of time," he said at an investor conference in May.

For more:
- see this Electronista article
- see this Ubergizmo post

Related Articles:
Motorola jazzed by continued Droid demand
Motorola gives more breakup details ahead of split
Motorola plans tablet, follow-up to Droid
Report: Motorola priming the pump for handset division post-split

LG's smartphone struggles continue in Q2

Phil Goldstein — Wed, 28 Jul 2010 10:34:31 -0400

LG Electronics posted weak second-quarter results, with its handset unit unable to produce smartphone hits. The South Korean electronics conglomerate's handset division suffered its first loss in four years.

On a company-wide basis, LG's net profit fell to $724 million, down from $1.08 billion in the year-ago period. However, its handset unit posted an operating loss of $101 million in the quarter, a dramatic reversal of the $524 million profit it recorded in the year-ago period. The loss was triple the size projected by five analysts surveyed by Bloomberg.

LG said handset shipments rose 13 percent from the first quarter. The company shipped 30.6 million units in the second quarter, up from 27.1 million in the first quarter and up 2 percent from the 29.82 million it shipped in the year-ago period. However, LG's handset unit had an operating loss margin of 3.5 percent, compared with a 0.9 percent profit margin in the first quarter. The share of LG's handset sales in North America rose from 28 percent in the first quarter to 32 percent in the second quarter.

The company blamed the declines in profits on a falling average selling price for its phones--which it did not disclose--in developed markets, as well as continued investment in research and development and marketing.

"We believe the smartphone market will become a mass market and our strategy is to boost market share first with mid-end models such as the Optimus series we are planning to launch this quarter," LG CFO David Jung told analysts. "Our handset business will continue to experience difficulties in the third quarter, and would start recover from the late fourth quarter," he added.

According to Forbes, LG will continue to focus on developing handsets running on Google's Android platform (Verizon Wireless (NYSE:VZ) launched LG's Ally, the manufacturer's first Android phone for the U.S. market, in May). However, LG also plans to support Microsoft's forthcoming Windows Phone 7 platform.

For more:
- see this WSJ article (sub. req.)
- see this Reuters article
- see this Bloomberg article
- see this Forbes article
- see this FierceWireless Q2 earnings page

Sprint gets back to positive subscriber growth in Q2

Phil Goldstein — Wed, 28 Jul 2010 09:27:44 -0400

Sprint Nextel (NYSE:S) reported its first net wireless subscriber growth in three years in the second quarter. Nevertheless, the carrier posted a wider net loss and still lost 228,000 postpaid subscribers in the quarter.

For the quarter, Sprint posted a net loss of $760 million, wider than a $384 million net loss in the year-ago period. The company was hit with a $302 million tax-related charge.

Sprint now expects to have positive total net wireless subscriber additions during the remainder of 2010, and fewer postpaid subscriber losses in the second half of the year than in the first half. "We still have a lot of hard work," Sprint CEO Dan Hesse said.

In an interview with FierceWireless, Hesse said the company continues to make progress on a number of fronts, including in its postpaid business. "I'd say we're turning a corner," he said. "I don't want to make definitive statement that we've turned the corner."

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

Subscribers: Sprint added a net total of 111,000 wireless subscribers in the quarter. The company had net retail subscriber declines of 55,000 and net additions of 166,000 wholesale and affiliate subscribers. Sprint's postpaid losses, while still significant, are a sharp improvement from the 991,000 postpaid subscriber losses it had in the second quarter of 2009 and its 578,000 in the first quarter.

Hesse said the carrier actually had 285,000 Sprint-branded CDMA net adds in the quarter, but that the company's numbers were hurt by Helio deactivations as well as Nextel PowerSource subscriber losses that are counted as CDMA customers.

Sprint noted its CDMA network added almost 136,000 postpaid customers while iDEN lost almost 364,000 customers. The company gained a net 173,000 prepaid subscribers, much weaker than in the second quarter of 2009. The prepaid numbers include net additions of 638,000 CDMA customers, offset by net losses of 465,000 iDEN customers. Additionally, around 9 percent of postpaid customers upgraded their handsets during the quarter. The carrier had 48.2 million total subscribers at the end of the quarter.

Revenue: Total revenue fell 1 percent to $8.03 billion. Sprint said retail wireless service revenues clocked in at $6.4 billion, essentially flat from the second quarter of 2009 and the first quarter of 2010.

ARPU: Wireless postpaid average revenue per user was around $55 for the quarter, down from $56 in the second quarter 2009 but flat sequentially. Prepaid ARPU in the quarter was around $28, down from $34 in the year-ago period and $27 in the first quarter of 2010. Sprint attributed the decline to the inclusion of Virgin Mobile and Assurance Wireless customers, who have lower ARPUs than Boost Mobile customers.

Churn: Sprint said it notched its best-ever postpaid churn of 1.85 percent in the quarter, compared with 2.05 percent in the year-ago period and 2.15 percent in the first quarter of 2010. The carrier attributed the gains to customer experience improvements. Prepaid churn in the second quarter was 5.61 percent, lower than Sprint's 6.38 percent in the year-ago period and 5.74 percent in the first quarter of 2010. Sprint said the rise was due to Virgin Mobile customers who have lower churn on average than Boost Mobile customers.

"The better-than-expected postpaid churn represents less than 100,000 customers who decided not to churn," BTIG analyst Walter Piecyk wrote in a research note. "We believe this was likely driven by the success of the Evo launch during the quarter."

Prepaid: Sprint launched multiple prepaid brands in the quarter, including the re-launched Virgin Mobile and the pay-per-minute Common Cents plan. Interestingly, Dan Schulman, Sprint's outgoing prepaid chief, said the carrier couldn't get enough Boost handsets, but that "toward the end of June we were fully in stock with Boost handsets." Hesse declined to say what specifically hampered Boost's phone inventory. "We just didn't have the inventory that we might have," he said.

Sprint expects to see continued improvement in postpaid churn and net adds as the year continues.

Evo 4G: Sprint debuted the 3G/4G HTC Evo smartphone that runs on Clearwire's (NASDAQ:CLWR) mobile WiMAX network during the quarter. Hesse said sales of the device have been "fantastic," and that the carrier had trouble meeting demand for the gadget. "Peter Chou has heard from me probably more often than he has liked," Hesse said, referring to HTC's chief executive. Hesse also said Evo subscribers are using 3 times as much data as other Sprint smartphone users, a figure he said justified the $10 data premium charged to Evo subscribers, a fee that is applied even if those subscribers are not in a 4G service area. Hesse also said that even without Evo sales, Sprint would have achieved positive subscriber growth.

LTE and WiMAX: Hesse declined to comment on speculation that Sprint might buy Clearwire. He said the company is committed to helping Clearwire meet its 2010 goal of covering 120 million POPs, and that any decisions about network technology beyond that will be made collectively with other strategic investors and Clearwire's board. Sprint is in the early stages of a multi-mode network technology RFP, Hesse said, which might include LTE--but he said no decisions have been made. "We haven't reached any conclusions," he said in the interview. "It gives the flexibility, so that we can change or add new capabilities if we so choose."

Interestingly, Hesse also said Sprint is still considering launching a prepaid 4G service plan. "It's something we're evalutating right now," he said. "It's premature to say anything more."

For more:
- see this release
- see these key Sprint Q2 stats
- see this WSJ article (sub. req.)
- see this BTIG research note (sub. req.)
- see this FierceWireless Q2 earnings page

AT&T debuts new Sharp phone; Verizon suffers outage in Manhattan

Mike Dano — Tue, 27 Jul 2010 11:34:37 -0400

Quick news from around the Web

@FierceWireless: Rambus Sees ITC Ruling Helping Sway Other Potential Licensees (sub. req.) Article #Nvidia. | Follow @FierceWireless

> AT&T Mobility announced the Sharp FX from Personal Communications Devices, a $99 feature phone with a touchscreen and slide-out Qwerty keyboard that features Qualcomm's FLO TV service. Release

> HTC plans to push its brand in mainland China. Article (sub. req.)

> Chip technology vendor ARM beat its revenue forecasts. Article

> Canadian carrier Rogers enjoyed a rise in quarterly earnings. Article

> The "Qi" wireless power specification is now ready. Article

> Verizon Wireless suffered a service outage in parts of Manhattan yesterday. Article (sub. req.)

Mobile Content News

> Global financial services provider Citigroup warned customers its free mobile banking application for Apple's iPhone contains a security flaw. Article

> Google appears to be eying the launch of a digital music store later this year. Article

> Google introduced Google Maps for mobile 4.4, promising more efficient access to information on nearby locations. Article

> According to a new survey, no one would pay for Twitter. Article

European Wireless News

> Ireland's Imagine acquired Clearwire's operations in the country. Release

And finally... An app from Cloud Music leverages Google's Docs storage service to stream music to Android rival Apple's iPhone. Article

WAC develops app business model, joins with JIL

Phil Goldstein — Tue, 27 Jul 2010 11:09:39 -0400

The Wholesale Applications Community sharpened its strategic focus by joining forces with another industry group, the Joint Innovation Lab. The WAC, which was first announced at Mobile World Congress and counts all four Tier 1 U.S. operators as members, said that it will allow operators to distribute applications through their own application storefronts and charge subscribers via their existing phone bill. Additionally, the WAC joined joined with the JIL, a joint venture among China Mobile, Softbank, Verizon Wireless (NYSE:VZ) and Vodafone to create applications that can work across various carriers' networks. Article

Rumor Mill: Motorola will launch Android tablet in November

Phil Goldstein — Tue, 27 Jul 2010 11:00:14 -0400

Motorola (NYSE:MOT) will release a 10-inch tablet in November running version 3.0 of Google's Android platform, according to a report on The Street.com. The report, citing Rodman & Renshaw analyst Ashok Kumar, did not provide any specifications.

The handset vendor has hinted in the past that it plans to jump into the tablet market. In May, Moto co-CEO Sanjay Jha said at an investor conference sponsored by Barclays Capital that Motorola is thinking about a "companion product" to a TV that would sport a 7-10 inch screen and that would allow users to walk around their house and watch TV. Motorola also showed off a prototype Android tablet earlier this year as part of a demonstration of Verizon Wireless' (NYSE:VZ) forthcoming LTE network.

"We're very focused on participating in this convergence between mobility and home, and I actually think you will see some products from us in a very short period of time," Jha said during the investor conference. Jha will lead Motorola's handset division and its set-top box unit in a new company called Motorola Mobility once the company splits early next year.

A Motorola spokeswoman declined to comment.

Details about Android 3.0, which is code-named Gingerbread, have been spreading across the Web. The Android blog Phandroid posted what it said was a picture of an Android phone running 3.0.

For more:
- see this The Street.com video
- see this Slashgear post
- see this Phandroid post

RIM's BlackBerry grip on the enterprise may be slipping

Phil Goldstein — Tue, 27 Jul 2010 10:47:50 -0400

Research In Motion's (NASDAQ:RIMM) Blackberry, long a mainstay of enterprises across the globe, may be losing its grip on the enterprise market as Apple's (NASDAQ:AAPL) iPhone and a slew of devices running Google's Android platform continue to migrate into businesses. Not surprisingly, RIM is hoping to stem the rise of those platforms with a refresh of its own.

Apple COO Tim Cook crowed last week during the company's earnings conference call that 80 percent of Fortune 100 companies are deploying or testing the iPhone. While RIM made its name by delivering push email to corporate smartphone users, the iPhone and many Android phones have support for Microsoft Exchange corporate email, as well as advanced features and large application storefronts.

According to research firm Gartner, RIM's American smartphone market share dropped to 41 percent in the first quarter, down from 55 percent in the year-ago period. Meanwhile, iPhone and Android handsets grew their share to a combined 49 percent, up from 23 percent in the year-ago period.

Nevertheless, RIM remains a global smartphone powerhouse, and is not going away any time soon. According to research firm Strategy Analytics, RIM had 18.8 percent of the global smartphone market in the second quarter, down slightly from 19.1 percent in the first quarter and 19.3 percent in the year-ago quarter.

RIM also has a chance to improve its fortunes with the release of Blackberry OS 6.0, which it plans to push sometime in the third quarter. RIM has been touting the multimedia features of the new operating system, as well as its updated user interface and home screen. In its fiscal first quarter, RIM posted revenue of around $4.2 billion, up from the company's year-ago revenue of $3.4 billion, and above its $4.1 billion revenue in its previous quarter.

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

AT&T issues software patch for data upload glitch

Phil Goldstein — Tue, 27 Jul 2010 10:26:44 -0400

AT&T Mobility (NYSE:T) said that over the next two to three weeks it will filter out a patch to fix an Alcatel-Lucent (NASDAQ:ALU) software bug that affected some users' data upload speeds. AT&T first identified the problem earlier this month along with the equipment maker.

The carrier said that the issue affects around 2 percent of its subscriber base, a figure that includes iPhone users and others--which works out to 1.8 million subscribers out of AT&T's 90.1 million total customer base. The problem, which slowed some users' data uplink speeds to around 100 Kbps, only affected HSUPA service and only in markets served by Alcatel-Lucent equipment.

AT&T declined to comment on how much the software fix will cost.

The glitch is the one of a series of technical snafus suffered by AT&T and iPhone vendor Apple (NASDAQ:AAPL). Apple came under fire for antenna problems related to its iPhone 4, and offered customers free bumper cases to mitigate the issue. Apple also said it had been incorrectly calculating the number of bars available for cellular service on the iPhone, and issued a software patch to fix that.

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

AT&T will support Straight Talk prepaid service

Phil Goldstein — Tue, 27 Jul 2010 10:10:07 -0400

Wal-Mart will sell TracFone's Straight Talk service with phones that run on AT&T Mobility's (NYSE:T) network, a sign that AT&T is getting further enmeshed in the prepaid wireless business. This means that Straight Talk, which so far has only be available over Verizon's CDMA network, will now be offered on AT&T's GSM network and Straight Talk consumers will have a choice of two GSM handsets when they purchase the service.

AT&T spokesman Mark Siegel confirmed the carrier will support Straight Talk service. A Wal-Mart spokesman did not immediately respond to a request for comment. The news that Wal-Mart will sell AT&T Straight Talk phones was first reported by BTIG analyst Walter Piecyk.

The move further underscores both the growth of the prepaid sector and AT&T's rivalry with Verizon Wireless (NYSE:VZ); Verizon was the first carrier to provide service for TracFone's Straight Talk service. Straight Talk offers a range of prepaid unlimited plans, including a $45 plan with unlimited voice, texting and data.

Piecyk said in a research note that the expansion of Straight Talk to AT&T "could be bad news for Verizon, which has been relying on the growth in Straight Talk revenue to offset accelerating declines in their prepaid business." In the second quarter Verizon added 896,000 reseller subscribers, a large part of its 1.4 million net subscriber gains.

Indeed, perhaps in a nod to the growing importance of prepaid, last week Verizon confirmed it is testing a $50 prepaid monthly unlimited plan across the Southeast.

As Piecyk noted, AT&T has a long-standing relationship with America Movil, the parent company of TracFone. AT&T owns a $7.5 billion stake in the company, which is owned by billionaire Carlos Slim. AT&T also provides the network for TracFone's traditional prepaid business, which is sold under brands including Net10. In addition, by offering Straight Talk over AT&T's GSM network, TracFone will be able to offer GSM handsets, which are typically less costly than CDMA handsets.

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

U.S. regulators declare iPhone jailbreaking legal

Phil Goldstein — Mon, 26 Jul 2010 14:59:11 -0400

Federal regulators said in a ruling that consumers can jailbreak their mobile devices without fear of legal repercussions from handset makers over violating copyright protections.

The Register of Copyrights (which is part of the Library of Congress), ruled that jailbreaking a phone does not violate the Digital Millennium Copyright Act--over the objections of iPhone maker Apple (NASDAQ:AAPL). The relevant exemption states that "computer programs that enable wireless telephone handsets to execute software applications, where circumvention is accomplished for the sole purpose of enabling interoperability of such applications, when they have been lawfully obtained, with computer programs on the telephone handset," are exempted from violating copyright laws.

Jailbreaking is the process of modifying a phone or operating system to run applications not approved by the initial vendor or carrier.

However, analysts said the ruling likely will not have many practical implications for the wireless industry. The ruling--which applies to all handsets and not just the iPhone--does not require Apple or other handset makers to allow jailbreaking, but instead does not penalize people who circumvent controls designed to stop jailbreaking.

"There's no real practical implications here, except for the fact that what is not a particularly common or widespread practice is now legal," Michael Gartenberg, analyst with the Altimeter Group, told FierceWireless. "The risk versus reward is still too great for most folks. The people who were going to do it are probably going to do it anyway."

Additionally, noted Tim Bajarin, an analyst at Creative Strategies, Apple has not taken legal action against people who have publicized the fact that they have jailbroken their iPhone. "What this ruling says is that Apple can't sue you," he told FierceWireless. "It also doesn't say Apple can't find ways to try to prevent you from doing this." Apple, meanwhile, can still void the warranty of users who jailbreak their iPhone.

Apple has argued that the DMCA protects the encryption Apple put in the software that starts up the iOS platform. Apple has argued that unauthorized modification of its platform "has been a major source of instability, disruption of services and other issues."Apple indicated that it is not changing its policies due to the new ruling.

"Apple's goal has always been to insure that our customers have a great experience with their iPhone and we know that jailbreaking can severely degrade the experience," Apple said in a statement provided to Cult of Mac. "As we've said before, the vast majority of customers do not jailbreak their iPhones as this can violate the warranty and can cause the iPhone to become unstable and not work reliably."

Avi Greengart, an analyst at Current Analysis, told FierceWireless that he does not think the ruling will have many practical implications, but might allow more reputable sources to publish jailbreaking how-tos. Nevertheless, he called it a "symbolic slap" to Apple.

"I think it's an important step forward from the perspective of that it clarifies things a bit on ownership. If you buy a device, what are you allowed to do with it?" Greengart said. "It doesn't change the economic incentives to lock it down. And for that matter, it doesn't change the economic invectives for a consumer to seek locked down devices."

In a statement, the CTIA urged consumers to use caution if they decide to jailbreak their devices. "Wireless carriers and handset makers go to great lengths to protect their customer's privacy by blocking spam, filtering for viruses, and testing software that is sold through their portals," Michael Altschul, CTIA's general counsel, said in the statement. "Unfortunately, 'jailbreaking,' or other modifications to a wireless phone's operating system, increases a consumer's risk for malware, spyware and other vulnerabilities."

One area where the ruling could have an effect is in the legal battle between Virgin Mobile USA and MetroPCS (NYSE:PCS). MetroPCS in the summer of 2008 began a program to flash competitors' CDMA handsets so that they can work on MetroPCS' network. Virgin Mobile, which subsidizes some of the cost of its handsets and then recoups those expenses through monthly fees, asked MetroPCS to stop selling the service. In response, MetroPCS filed a claim seeking to show that it does not violate any trademarks or interfere with Virgin Mobile's contracts. Virgin Mobile then counter-sued with trademark infringement and contract interference claims. In September, a federal judge threw out Virgin Mobile USA's claim that MetroPCS was meddling with its contracts by using its MetroFlash service. However, the judge did not dismiss some trademark infringement claims that Virgin Mobile brought against MetroPCS.

According to the Register of Copyrights' recent ruling: "Computer programs, in the form of firmware or software, that enable used wireless telephone handsets to connect to a wireless telecommunications network, when circumvention is initiated by the owner of the copy of the computer program solely in order to connect to a wireless telecommunications network and access to the network is authorized by the operator of the network."

The current status of the Virgin/MetroPCS case is unclear: Virgin Mobile and MetroPCS representatives did not return calls for comment.

For more:
- see this Wired article
- see this Cult of Mac article
- see this Ars Technica article
- see this PCMag.com article

AT&T expands WiFi offload project

Phil Goldstein — Mon, 26 Jul 2010 12:03:03 -0400

AT&T Mobility (NYSE:T) is expanding its WiFi Hotzone project in hopes it will ease the burden on its 3G mobile broadband network. The company has launched a WiFi Hotzone pilot in Charlotte, N.C., and will also bring the program to Chicago in the coming weeks. AT&T has already deployed the project in Times Square in New York City, and said it is adding the additional WiFi capacity in areas with consistently high 3G traffic and mobile data use. Release

iPhone 4 hits more countries; HTC moves to 'Super LCD' screens

Mike Dano — Mon, 26 Jul 2010 11:35:09 -0400

Quick news from around the Web

@FierceWireless: The reality of augmented reality in #mobile. Article A look at a technology that hasn't taken off yet, but has potential. | Follow @FierceWireless

> AT&T completed the sale of Wayport to Swisscom. Article

> MagicJack's planned GSM femtocell has been delayed. Article

> Apple's iPhone 4 arrived in 17 more countries. Release

> HTC said it will switch to "Super LCD" screens in its forthcoming devices, a move that comes after the company has suffered shortages of AMOLED screens. Article

> The LiMo Foundation and GNOME Foundation announced they will partner on Linux. Article

> Koreans are upset the country is not among those getting the iPhone 4 this week. Article (sub. req.)

Mobile Content News

> Android appears to be gearing for the inclusion of operator billing technologies. Article

> Marketing software and services provider Aprimo launched Aprimo Mobile. Article

> Apple introduced the iPhone 4 Case Program application. Article

> NBC Universal Digital Studio announced an agreement with Samsung Electronics to launch "FCU: Fact Checkers Unit." Article

Broadband Wireless News

> Nokia Siemens Networks ended its TDD technology cooperation with Chinese vendor Huawei. Article

> Reliance Industries now plans to deploy WiMAX in the 2.3 GHz band instead of TD-LTE technology. Article

European Wireless News

> The war between WiMAX and LTE is over, according to one analyst. Article

> Industry chatter indicates that there is something going on between the giant Russian operator, MTS, and Telekom Austria. Article

> Vodafone's CEO announced that the company achieved its first quarterly service revenue growth since the recession started 18 months ago. Article

> Ericsson CEO Hans Vestberg attempted to put a positive spin on the company's prospects. Article

> Vodafone Greece launched 3G femtocell services. Article

> Nokia needs a Steve Jobs doppelganger. Commentary

And finally... Kings of Leon were peppered with bird poop at the Verizon Wireless Amphitheatre. Article

MagicJack's femtocell hits a snag

Phil Goldstein — Mon, 26 Jul 2010 11:25:07 -0400

MagicJack, the company behind the Internet calling device that works with analog desk phones, announced a femtocell product earlier this year that quickly drew scrutiny and criticism from CTIA for potentially interfering with spectrum held by licensed spectrum owners like wireless carriers. Now it appears that product has been delayed. A MagicJack spokeswoman told IDG News Service that it has taken longer than expected to finalize the software and patents for the femtocell product, which essentially acts as a GSM femtocell that bypasses carriers, letting users make VoIP calls with their mobile phones. The company, which had promised to release the device in the second quarter, expects to have everything completed in two weeks so that it can file an application for the device with the FCC. Article

Analysts: Sprint improving, but subscribers continue to search for exits

Phil Goldstein — Mon, 26 Jul 2010 11:12:45 -0400

Sprint Nextel (NYSE:S) is likely to show improving subscriber trends when its reports second-quarter earnings Wednesday, but analysts predict the carrier will still post a net subscriber loss.

According to Wall Street analysts surveyed by Dow Jones Newswires, Sprint is going to post total net subscriber losses of between 50,000 and 150,000 customers in the second quarter.

Sprint has made strides in adding both prepaid and wholesale customers, analysts said, but is struggling with postpaid subscriber losses. Analysts predict Sprint is going to lose 425,000 postpaid subscribers in the second quarter, a marked improvement from the loss of 991,000 in the year-ago period.

Sprint likely will crow about its HTC Evo, its first 4G smartphone running on Clearwire's (NASDAQ:CLWR) mobile WiMAX network, which analysts said was a hit during the quarter despite the fact that Clearwire's network is still expanding. According to a research note from Deutsche Bank analyst Brett Feldman, Sprint's postpaid losses might have been as much as 100,000 higher without the Evo. Sprint is poised to release its second 4G smartphone, the Samsung Epic 4G, later this year.

Sprint's earnings come in a bit of a topsy-turvy time for the carrier. Sprint announced last week that Dan Schulman, the head of its growing prepaid unit, will be leaving the company. Sprint CEO Dan Hesse has also indicated that the company, along with Clearwire, might deploy LTE technology on top of the existing WiMAX network.

For more:
- see this Dow Jones Newswires article (sub. req.)
- see this FierceWireless Q2 earnings page

Article updated July 27 to reflect the date of Sprint's earnings announcement.

Motorola's Jha: Android will eclipse Apple's iPhone

Phil Goldstein — Mon, 26 Jul 2010 10:56:58 -0400

Motorola (NYSE:MOT) co-CEO Sanjay Jha bet his company's fortunes on the success of Google's Android platform, so it should come as no surprise that he predicted the vast majority of mobile device shipments over the next five years will be running Android.

Jha, who made his comments at the Fortune Brainstorm Tech conference, also said Apple's (NASDAQ:AAPL) position in the mobile market may erode, just as Apple led early in the PC business but then fell behind as Microsoft's Windows became more popular.

Motorola has been releasing Android phones at a dizzying pace, and Verizon Wireless (NYSE:VZ) is busy promoting Motorola's latest high-end device, the Droid X. Jha praised the partnerships Motorola has struck with both Verizon and Google, and noted his long-time relationship with Andy Rubin, Google's senior vice president of engineering and Android guru.

He also said Motorola's desire to differentiate its devices with its MotoBLUR user interface and Google's push to make Android more standardized has not hampered the companies' relationship. Jha said there will be "more than three and less than seven" mobile operating systems in the long term and that Motorola will not develop its own OS unless it can create a large enough ecosystem. Motorola sparked speculation in May that it might go that route after reports surfaced that it purchased Azingo, which offered a Linux-based OS.

Jha also touched on Motorola's impending split in the first quarter of next year; he will lead the firm's handset division and set-top box unit in a company called Motorola Mobility. The new firm will have no debt, he said, and expects to release products that combine elements from both units next fall. Motorola reports its second-quarter earnings July 29.

For more:
- see this PCMag.com article

CTIA sues San Francisco over cell phone radiation law

Sue Marek — Mon, 26 Jul 2010 10:46:14 -0400

CTIA's battle against the city of San Francisco over cell phone radiation policy just escalated into a lawsuit. On Friday CTIA filed a lawsuit in the U.S. District Court of San Francisco seeking to block enforcement of the city's "Cell Phone Right-to-Know" ordinance. The trade association said the ordinance is at odds with FCC standards that are used to ensure cell phone safety.

Specifically, CTIA said the ordinance, which requires retailers to display a phone's specific absorption rate (SAR) at the point of sale, causes confusion and misleads consumers into thinking some phones are safer than others. "The FCC has determined that all wireless phones legally sold in the United States are 'safe,'" CTIA spokesman John Walls said in a press release.

Nevertheless, some scientists and public advocacy groups have questioned the limits set by the FCC on how much radiation can be absorbed by body tissue. They argue that the limits set by the FCC in 1997 are outdated and were established for adult males. San Francisco mayor Gavin Newsom said in a statement that the ordinance is not an attack on the cell phone industry but an effort to better inform consumers about the devices they are purchasing.

CTIA has already protested the ordinance by saying that it will no longer hold its CTIA Enterprise and Applications conferences in San Francisco. The conference will be held in San Francisco this October, but will be in San Diego in 2011.

For more:
- see this Washington Post article
- see this release

AT&T views relationship with Apple as a 'net positive'

Phil Goldstein — Mon, 26 Jul 2010 10:37:45 -0400

AT&T Mobility (NYSE:T) views its relationship with Apple (NASDAQ:AAPL) as a "net positive," according to AT&T Mobility CEO Ralph de la Vega.

Speaking at a Fortune conference, de la Vega said that "we have a great relationship with Apple. We have it at every level, from CEO on down." His comments just days after Wired reported that the companies have been at odds over a variety of issues since they first partnered for the iPhone in 2007, and likened the relationship to a "loveless celebrity marriage."

De la Vega's comments also came as a new industry survey seemed to vindicate the idea that AT&T's network problems with the iPhone are more a problem of perception than reality. According to a new survey by the Yankee Group, 73 percent of iPhone users surveyed said they are very satisfied with AT&T's service. According to the report, the satisfaction rate of AT&T subscribers as a whole is 68 percent, and just 69 percent of all smartphone users said they are satisfied with their wireless carrier.

De la Vega also touched on several other issues during his Fortune appearance. He said the carrier has doubled its capacity in New York City over the past few months, resulting in fewer dropped calls. AT&T plans to begin deploying LTE in 2011, and in the meantime is readying a nationwide HSPA+ upgrade for later this year, which AT&T executives have said will be able to deliver real-world download speeds of 7 Mbps. In the meantime, the carrier continues to deploy backhaul to cell sites it has upgraded to HSPA 7.2 technology.

"It's a process that just takes time," de la Vega said. "We have a very deliberate process to get fiber, but it's a couple of years' journey."

De la Vega declined to comment on when AT&T might lose its exclusivity for the iPhone, but said the carrier is going to continue to focus on giving customers a wide array of smartphone choices. He also praised Hewlett-Packard, which recently completed its $1.2 billion acquisition of Palm. "I think they have the opportunity to make the premier OS," he said.

For more:
- see this Fortune article
- see this PCMag.com article
- see this TechCrunch post
- see this CNN Money article

Verizon exec quiets tiered data pricing rumor

Phil Goldstein — Mon, 26 Jul 2010 10:13:33 -0400

Verizon Wireless (NYSE:VZ) will not switch its 3G data pricing plans to a tiered, usage-based model before it launches its LTE network, a top executive indicated, putting to a rest a rumor that had sprung up about a potential switch.

"You have not seen us rush out to make any kind of a change," Verizon Communications CFO John Killian said during Verizon's earnings conference call Friday, when questioned whether Verizon will follow AT&T Mobility (NYSE:T) to a tiered-pricing approach. "We will continue to monitor the situation, of course, and look at opportunities that will say what is the best equation for us to drive long-term shareholder value, and we will be very focused on that. I cannot say enough, though, about the opportunity we see ahead given where we are today with smartphone penetration."

Killian said the wireless carrier is seeing enormous benefits from its smartphone lineup, especially its selection of phones running Google's Android platform, such as the Motorola (NYSE:MOT) Droid X. Verizon added 665,000 lucrative retail postpaid customers in the second quarter, outpacing rival AT&T's 496,000.

Earlier this month Engadget reported, citing an unnamed source, that Verizon was preparing to launch tiered data plans for its 3G data network.

AT&T in early June replaced its unlimited smartphone data plans with two tiers: 200 MB for $15 per month and 2 GB for $25 per month.

However, Verizon may well rely on tiered pricing for its forthcoming LTE service. In June, Killian indicated the company will change its pricing plans when Verizon launches LTE in 25-30 commercial markets later this year. "We will probably need to change the design of our pricing where it will not be totally unlimited, flat rate," he said at the time.

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

Components shortage a hiccup for mobile broadband growth?

Lynnette Luna — Mon, 26 Jul 2010 10:13:05 -0400

The entire mobile industry is struggling with a worldwide shortage of components necessary to build base stations and mobile devices. Could the shortage put a serious dent in the demand for mobile broadband services?

Last week both Ericsson (NASDAQ: ERIC) and Nokia Siemens Networks said their sales in the second quarter were impacted by this shortage. Alcatel-Lucent (NYSE:ALU), when it reports results on July 30, likely will suffer from the same problem since it already had issues fulfilling orders in the first quarter because of the shortage.

Since May, the problem has grown more and more acute for nearly all vendors and operators in the industry. Verizon Wireless (NYSE:VZ) has run low on HTC Incredible supplies because of a components shortage. Sprint Nextel (NYSE:S) also has suffered similar difficulties with the HTC Evo 4G. LG Display has admitted that it can't keep up with the demand for the Apple iPad, while AT&T is struggling to upgrade its network because vendors can't get products to the operator.

Thanks to the recession, semiconductor companies in late 2008 and throughout 2009 significantly reduced their capacity, but the consumer electronics business ramped up quickly early this year. As a result, semiconductor companies have been unable to match their inventories with the strong demand for mobile phones and infrastructure. Moreover, smaller components businesses in China went out of business during the worst of the recession, offering fewer sources for vendors.

"We will continue to be impacted throughout this year, although we're working hard to improve," said Ericsson CFO Jan Frykhammer in an interview with FierceWireless.

iSuppli's Rick Pierson, senior semiconductor analyst, said this shortage likely won't go away soon, predicting the problem will linger into the second quarter of 2011.

Certainly vendors will continue taking hits on their balance sheets if they can't fill orders. And if they fill orders, they will also be impacted by the higher prices they are paying for components.

Reports have indicated that Alcatel-Lucent, for instance, is bloating its orders to create surplus stocks of components while also looking for new suppliers and paying higher prices. Ericsson too is searching for new suppliers.

Likewise, operators have a difficult time meeting demand. For operators, smartphones have become the key tool for luring new customers and upgrading existing subscribers. A shortage of some of the hottest new smartphones hurts operators in a number of ways both in financial terms and market positioning--especially as they continue to compete against the iPhone.

Shortages of the HTC Evo 4G phone are wreaking havoc on Sprint's plans to jump past its competitors with a 4G handset. Sprint had hoped the HTC Evo would help it snatch customers away from rivals such Verizon Wireless, which will have its LTE network up and running in late 2010.

Meanwhile, the components problem hitting Verizon's HTC Incredible, mainly a shortage of LCD screens, may have prevented the device from setting a sales record for the operator in the first quarter.

It's a frustrating place the industry finds itself in. Demand for mobile broadband services is ever increasing, but these small but key pieces of equipment could very well hamper the industry's ability to capitalize on that growth--at least within the next year.

It's not a good position for the industry to be in as it heads toward the critical holiday selling season in about three months. And certainly consumer frustration over not getting the latest innovative smartphone isn't good either. --Lynnette

Apple delays white iPhone again; Clearwire buys stake in Irish WiMAX provider

Sue Marek — Fri, 23 Jul 2010 11:26:49 -0400

Quick news from around the Web

@FierceWireless: RT @fmanjoo: How often does your phone drop calls? Cell companies won't say. It's a secret! My @Slate piece. Article | Follow @FierceWireless

> Problems continue to plague the white Apple iPhone 4. The company now says it won't be available until later this year. Article

> The CEO of LG Display Co. said that the company is having difficulty fulfilling orders from Apple for its iPad. Article (sub. req.)

> Clearwire purchased a seven percent stake in Ireland based WiMAX operator, Imagine Communications. Article

> Microsoft is now an official ARM processor licensee but it's unclear why they want to be. Article

Mobile Content News

> AOL launched a new smartphone portal as well as a pair of free apps exclusively optimized for Google's Android platform. Article

> Another contentious chapter in the story of ebooks--Random House cries foul after literary agent Andrew Wylie launches a new publishing venture to produce ebook editions exclusively for Amazon.com. Article

> Verizon Wireless saw a 23.8 percent jump in data revenues. Article

And finally... Sprint Nextel is working with GeckoSystems International to power a programmable human-sized robot. Article

HTC focuses on innovation despite Windows Phone 7 restrictions

Phil Goldstein — Fri, 23 Jul 2010 10:54:57 -0400

HTC said that regardless of the tight control Microsoft is exerting over the user experience for its forthcoming Windows phone 7 smartphone platform, the company will continue to provide innovations like its Sense user interface.

Microsoft confirmed this week that HTC and Dell will be among the first to produce Windows Phone 7 devices, along with Asus, LG and Samsung. The company has said that it will have a tighter grip on the new platform than it has in the past with Windows Mobile, but an HTC executive said that the OEM plans on putting Sense on its Windows Phone 7 devices, due out in October.

"Microsoft has taken firmer control of the core experience [in Windows Phone 7], but we can still innovate," Drew Bamford, who heads HTC's user experience design team, told Forbes. Sense for Windows Phone 7 will not look like it does for Windows Mobile 6.5, but Bamford insisted HTC is optimistic about its ability to innovate. "We won't be able to replace as much of the core Windows Phone experience, but we will augment it," he said.

Windows Phone 7 is centralized around hubs for different aspects of a user's experience, including contacts, games, media and pictures. The way that HTC has deployed Sense for Windows Mobile and Google's Android platform and often changes the look and feel of much of the user interface focusing on integrating contacts and social networking feeds.

Google has hinted that for Android 3.0 it wants to streamline the user experience, but Bamford said he does not expect the next version of Android to hinder HTC's own work. "Google may focus more on improving the user interface on the stock Android [software], but I don't think they'll preclude manufacturer customization," he said.

In other HTC news, the company is considering opening an office in the Research Triangle Park area of North Carolina. Research In Motion (NASDAQ: RIMM) has also started building an office in the area, and the location was once home to a large contingent of Sony Ericsson staff members before closing late last year. An HTC spokeswoman declined to comment.

For more:
- see this Forbes article
- see this Engadget post
- see this Triangle Business Journal article

HP pushes tablets, new version of webOS

Phil Goldstein — Fri, 23 Jul 2010 10:28:44 -0400

Hewlett-Packard says now that its $1.2 billion acquisition of Palm (NASDAQ:PALM) is complete, it's moving full steam ahead with plans to release products based on Palm's webOS platform.

Speaking at the Fortune Brainstorm Tech conference, Todd Bradley, executive vice president of the personal systems group division of HP, said that the company will be releasing multiple tablet products later this year.

"I think you'll see us with a family of slate products, clearly a Microsoft product in the enterprise and a webOS product broadly-deployed," Bradley said. "Slates are going to be an enormous category, this is just in its infancy." The new tablets will join a host of others running on Google's Android platform as handset and computer makers alike try to capitalize on the success Apple (NASDAQ:AAPL) has found with its iPad; Apple said this week that it sold 3.27 million iPads in its latest quarter.

Former Palm CEO Job Rubinstein, who now is a member of HP's executive team, also said that webOS 2.0, a refreshed version of the company's highly-praised operating system, is on track for later this year, according to Engadget. Additionally, he said that Palm is aggressively working on new hardware.

HP CEO Mark Hurd said in an interview with the German newspaper Frankfurter Allgemeine that HP wants to focus on developing mobile phone hardware now that it has acquired webOS. However, he said that the company will continue to emphasize the corporate HP brand above all else, and that Palm might fade into the background as a "sub-brand," similar to HP Pavilion computers.

For more:
- see this Engadget post
- see this Fortune article
- see this Engadget post
- see this Frankfurter Allgemeine article (via Google translation)

Ericsson is hit by component shortages, weak demand

Sue Marek — Fri, 23 Jul 2010 10:21:27 -0400

Swedish infrastructure vendor Ericsson (NASDAQ: ERIC) disappointed investors with lower-than-expected second quarter 2010 profits. The company reported that component shortages, tight supply and weak demand caused its net profit to be $260 million, which is double what the company did in the same quarter last year ($112.8 million), but significantly lower than what analysts predicted.

Sales declined 7.9 percent to $6.5 billion down from $7.05 billion. Ericsson President and CEO Hans Vestberg said that the market conditions the company saw in the second half of 2009 with mixed operator investment behavior prevailed in the first half of this year. Specifically, group sales in the quarter declined 8 percent year-over-year with lower sales in networks. Sales in global services were flat due to a decline in network rollouts. The one positive area was professional services, which increased its sales by 5 percent.

The North American market was a sweet spot for the Swedish firm. Sales in North America increased 128 percent year-over-year and 37 percent sequentially. The growth was attributed to strong data growth which meant operators increased their investments in network capacity. In addition, during the quarter Ericsson said it started volume deliveries of 4G/LTE gear.

Vestberg said that the company's cost reduction activities have reduced operating expenses as planned. However, the integration of the CDMA business acquired from Nortel as well as higher investment in R&D and the growing number of 4G/LTE trials have resulted in an increase in operating expenses.

Ericsson is expected to face increased competition from Nokia Siemens Networks (NYSE:NOK) in North America. Last week NSN agreed to buy Motorola's (NYSE:MOT) wireless networks business for $1.2 billion, and the deal is expected to close by year-end.

For more:
- see this press release
- see this Bloomberg article
- see this Wall Street Journal article (sub. req.)
- check out the FierceWireless Q2 earnings page

Verizon adds 1.4M subs in Q2, as reseller customers swarm ranks

Phil Goldstein — Fri, 23 Jul 2010 08:46:09 -0400

Verizon Wireless (NYSE:VZ) reported solid operating results for the second quarter, but the nation's largest carrier continued to see the pace of its postpaid subscriber additions slow down. Nevertheless, the company's earnings and growth were boosted by the addition of new smartphones such as the Motorola (NYSE:MOT) Droid X as well as from reseller customers.

Parent company Verizon Communications reported a net loss of $198 million, compared to a net profit of $1.48 billion in the year-ago quarter, as it was forced to book $2.3 billion in charges stemming from its ongoing buyout of around 11,000 employees. (Verizon Wireless is a joint venture between Vodafone and Verizon Communications.)

Here's a breakdown of the other key metrics:

Revenue: Verizon Wireless posted total revenue of $16 billion in the quarter, up 3.4 percent from $15.5 billion in the year-ago period. Service revenues in the quarter clocked in at $14 billion, up 5.2 percent from $13.3 billion in the second quarter of 2009. Verizon said retail data revenue was up 23.4 percent to $4.7 billion, a sharp jump from $3.9 billion in the second quarter last year. Wireless operating income margin stood at 30.3 percent, up 1.5 percent from the year-ago quarter.

Net adds: The carrier notched 1.4 million total subscriber additions in the quarter, bringing its subscriber base to 92.1 million. Verizon added added 665,000 lucrative retail postpaid customers in the quarter, outpacing rival AT&T Mobility's (NYSE:T) 496,000. However, Verizon also took in a larger number of reseller customers--896,000 to be precise. Verizon's network hosts TracFone's prepaid unlimited Straight Talk service.

ARPU: Retail average monthly revenue per user grew 0.9 percent in the quarter to $51.56. Retail data ARPU increased 19.4 percent over the year-ago period to $17.85.

Churn: Retail postpaid churn dipped to 0.94 percent, down from 1.07 percent in the first quarter. Total customer churn was 1.27 percent, better than 1.46 percent in the first quarter. Verizon said that both are the company's best levels in nearly two years.

Devices: Verizon said it has 7.7 million "other connections" at the end of the quarter--defined as machine-to-machine, ereaders and telematics--and added 264,000 net "other" connections in the quarter. Verizon said it had 99.7 million total wireless connections at the end of the second quarter.

Capital expenditures: Capital expenditures clocked in at $4.2 billion in the second quarter, down 3.6 percent from second quarter of 2009. Verizon is busy putting the finishing touches on its LTE network, which it will launch in 25-30 commercial markets sometime in the fourth quarter, covering 100 million POPs. Verizon said full-year 2010 guidance for capital expenditures remains in the range of $16.8 billion to $17.2 billion.

For more:
- see this release
- check out the FierceWireless Q2 earnings page

AT&T's net adds soar with 3.2M iPhone activations

Sue Marek — Thu, 22 Jul 2010 11:45:58 -0400

AT&T Mobility (NYSE:T) once again experienced strong quarterly subscriber growth, largely thanks to Apple (NASDAQ:AAPL) and the launch of the iPhone 4. AT&T reported that in the second quarter of 2010 it gained a net 1.6 million subscribers for a total of 90.1 million subscribers. The company activated 3.2 million iPhones in the quarter, its largest number of quarterly iPhone activations ever. The carrier said around 27 percent of those activations were customers new to AT&T.

The company reported consolidated revenues of $30.8 billion, up from $30.6 billion in second quarter of 2009. Operating expenses were $24.7 billion in the quarter, down slightly from the $25.1 billion in the previous year's quarter, and AT&T's operating income margin was 19.8 percent, up from 18 percent in the year-ago quarter. Here's a breakdown of the other key metrics:

Net adds: AT&T activated 3.2 million iPhones in the second quarter, but the company didn't say how many of those iPhones were the iPhone 4, which AT&T only started offering June 24. AT&T's quarter ended June 30. Nevertheless, the company did say that pre-orders of the device were 10 times higher than the first day of pre-ordering for the iPhone 3GS. In addition, the company said that retail postpaid net adds totaled 496,000, for a total of 67 million. Analyst firm Technology Business Research noted that without the strong iPhone growth, AT&T would have posted a decline in postpaid net adds for the quarter.

ARPU: AT&T's postpaid subscriber average revenue per user increased 3.4 percent from the year-earlier quarter, to $62.63. The carrier said its postpaid data ARPU reached $21.07, up 18.6 percent vs. the year-earlier quarter.

Devices: AT&T continued to show strong growth in connected or emerging devices such as ereaders. The company had 896,000 net adds in the quarter for a total of 6.7 million connected devices. On the integrated device front, AT&T increased its number of 3G integrated device customers by 2.9 million for a total of 29.7 million. This is an increase of 98.2 percent year over year. The company said 53.2 percent of its 67 million postpaid customers have integrated devices. AT&T CFO Rick Lindner said he believes this percentage could climb to the 70 percent to 80 percent range.

Churn: Postpaid churn was 1.01 percent, down from 1.07 percent in the year-earlier quarter. Total churn was 1.29 percent vs. 1.48 percent in the second quarter of 2009.

Data revenue: Wireless data revenues increased to $4.4 billion, up $936 million from the year-earlier quarter. The number of AT&T subscribers with wireless data plans was up 24 percent over the previous year. Lindner said that early results from the company's move to tiered data pricing plans have been encouraging. In particular, he said the company had expected a lot of customers to migrate to the lower price point ($15 per month for 200 MB of data) but a large portion migrated to the $25 per month for 2 GB of data plan. In addition, he said AT&T is seeing benefits from lowering the point of entry so customers can move into the integrated device category and try data services. "We believe over time they will migrate to higher-tiered plans," he said.

Network: The company did provide some insight into its HSPA network improvements. In particular, AT&T said that in areas where it has upgraded the backhaul and has HSPA 7.2 in place, customers are seeing a 32 percent to 47 percent increase in download speeds. In New York City, the company said that 3G dropped calls have declined by 23 percent in Manhattan and 13 percent in the New York metro area since the fourth quarter of 2009.

For more:
- see this release
- see this AT&T slide presentation
- see this AT&T Investor presentation
- see these key stats from AT&T's 2Q
- check out the FierceWireless Q2 earnings page

KeyOn, Alvarion bring WiMAX to Nevada; Droid X users love data

Mike Dano — Thu, 22 Jul 2010 11:28:09 -0400

Quick news from around the Web

@FierceWireless: RT @Gartenberg: Interesting email from a trusted source. AT&T has apparently signed up for 8 million #WP7 devices. #notkin | Follow @FierceWireless

> Dell appears to be targeting a late July launch for its Streak. Article

> KeyOn and Alvarion launched a WiMAX network in Southern Nevada. Release

> Microsoft could issue free Windows Phone 7 devices to all its employees. Article

> Another day another rumor: Apple's iPhone is purportedly heading to T-Mobile USA. Article

> Verizon Wireless' Droid X users are consuming five times the amount of data as other Verizon smartphone users (which has been estimated at 600-600 MB per month by Verizon Communications CFO John Killian). Article

> Hong Kong's CSL is planning an 1800 MHz/2600 MHz dual-band LTE network. Article

> Nokia and Siemens remain wary infrastructure partners, according to Wall Street Journal reporting. Article (sub. req.)

> Sen. Jay Rockefeller (D-W Va.) offered legislation that runs counter to the FCC's plan to auction the D Block. Article

Mobile Content News

> Bookseller chain Barnes & Noble introduced Nook for Android. Article

> Nokia continues to grow its Ovi Store content marketplace, with downloads now averaging more than 1.7 million a day. Article

> Verizon Wireless launched an updated version of its NFL Mobile application. Article

Broadband Wireless News

> A report from the FCC concludes that broadband service is not being deployed in a "reasonable and timely" manner. Article

> Nokia Siemens has gained some much-needed relevancy in the United States. Commentary

European Wireless News

> BT has chosen a dedicated long-range wireless solution instead of opting for GPRS. Article

> The Vodafone board of directors needs a vigorous overhaul, claims a leading investor group. Article

> O2 UK decided to appoint a managing director to lead the overall strategy and operation of the firm's financial services business. Article

> Ernst & Young claims operators are facing an explosive surge in the volume of data traffic within their networks. Article

And finally... Apple added Nokia to its "antenna hall of fame." Article

Report: Smartphone surge continues unabated in Q2

Phil Goldstein — Thu, 22 Jul 2010 11:04:31 -0400

The hottest segment in mobile keeps on growing. According to a new report from research firm Strategy Analytics, smartphone shipments rose 43 percent to a record 60 million units in the second quarter. Nokia (NYSE:NOK) continued to lead the market via its Symbian phones; the firm's smartphone market share jumped to 40.3 percent, according to the firm, up from 38.8 percent in the first quarter (but down slightly from 40.7 percent in the second quarter of 2009). Research In Motion's (NASDAQ:RIMM) market share stood at 18.8 percent, down slightly from 19.1 percent in the first quarter and 19.3 percent in the year-ago quarter. Meanwhile, Apple (NASDAQ:AAPL) took 14.1 percent market share, down from 15.9 percent in the first quarter but up solidly from 12.5 percent in the second quarter of 2009. Special feature

Verizon trials $50 prepaid unlimited plan

Phil Goldstein — Thu, 22 Jul 2010 10:47:58 -0400

Verizon Wireless (NYSE:VZ) is testing a $50 prepaid monthly unlimited plan across the Southeast.

Verizon spokeswoman Brenda Raney confirmed separate reports about the company's trial offering. According to Prepaid Reviews and BTIG analyst Walter Piecyk, Verizon started testing the prepaid plan earlier this week in at least 11 states in the Southeast. The plan, which is being dubbed the "Southeast save program," according to Piecyk, is only open to subscribers who have been targeted with text message and email campaigns. The service includes unlimited voice and texting, but has no data option included.

Raney said that the trials are "a special, limited-time offer to select prepay customers." She declined to provide other details about the trials.

"We suspect that in Q2 Verizon came under more pressure in its prepaid business from the increased competition over the past year," Piecyk wrote. "MetroPCS might be having increased success against Verizon in these markets. We think prepaid subscriber losses are likely to increase on a sequential basis when Verizon reports Q2 results tomorrow."

Interestingly, TracFone rides on Verizon's network for its Straight Talk service. Straight Talk offers a $45 plan with unlimited voice, texting and data. The Straight Talk service continues to perform well, Piecyk said, adding that "we estimate that by the end of the year, Straight Talk will be generating more revenue and profit for Verizon than its own prepaid business."

Verizon added 1.6 million net new customers in the first quarter, bringing its total subscriber base to 92.8 million. However, it added just 423,000 retail postpaid customers in the quarter.

The prepaid market has grown more crowded in recent months, with Sprint Nextel (NYSE: S) introducing several new brands into the mix. Its relaunched Virgin Mobile USA brand has a plan for $40 per month that offers unlimited messaging, email, data and Web access with 1,200 voice minutes. Sprint is also still touting its Boost Mobile $50 monthly unlimited service, which can now run on Sprint's national CDMA network (previously Boost was limited to Sprint's iDEN network).

For more:
- see this Prepaid Reviews article
- see this BTIG research note (sub. req.)

Nokia's Q2 profit sinks 40% as pressure mounts

Phil Goldstein — Thu, 22 Jul 2010 08:45:27 -0400

Nokia (NYSE:NOK) reported a sharp drop in net profit in the second quarter, with speculation continuing to swirl about the fate of its embattled CEO, Olli-Pekka Kallasvuo.

The Finnish firm reported net profit of $291.9 million, down from $488.7 million in the year-ago quarter. Nokia had warned in June that its financial results were going to be lower than expected. The company--still the world's leader in smartphone and overall handset market share--reported total sales of $12.8 billion, up slightly from the year-ago quarter.

Nokia did not address the speculation about Kallasvuo's job security in its earnings announcement. On Tuesday the Wall Street Journal reported that the company is actively searching for a replacement for Kallasvuo, who has been at the helm since 2006 but has come under pressure for failing to deliver hit high-end smartphones to match Apple's (NASDAQ:AAPL) iPhone, devices running Google's Android platform and others.

Kallasvuo himself sought to tamp down the speculation. "Obviously there has been a lot of speculation on my position," he said in an interview with CNBC. "This speculation is detrimental. It's not good for Nokia and I feel it needs to be brought to an end one way or the other."

In Nokia's key devices and services unit, sales clocked in at $8.74 billion, up 3 percent from the year-ago quarter and 2 percent from the first quarter. Nokia shipped 111.1 million units in the quarter, up 8 percent year-over-year and 3 percent sequentially. The company said its handset market share was 33 percent in the second quarter, down from an estimated 35 percent a year ago and unchanged from the first quarter.

In the key smartphone category, Nokia said it shipped 24 million units, up 42 percent from the year-ago quarter and 12 percent from the first quarter. However, the company said its smartphone market share stood at 41 percent, unchanged from the year-ago quarter or the first quarter. Nokia plans to release Symbian^3 smartphones in the third quarter, followed by at least one device on its new high-end MeeGo platform before the end of the year.

Kallasvuo said during the company's earnings conference call that Nokia expects to sell 50 million Symbian^3 devices over the platform's lifespan, according to Marketwatch, and operator response to the platform has been strong, according to Reuters. Symbian^3 is expected to be released at the end of the third quarter, and a "family" of Symbian^3 devices will be released in the fourth quarter.

With regard to MeeGo, the open-source operating system that is a combination of Nokia's Maemo platform and Intel's Moblin platform, Kallasvuo said Nokia will focus on the U.S. market, an area where it has historically struggled at the high end. "They (the MeeGo team) have been instructed, one might even use the word ordered, to give priority to the U.S. markets," he said, according to Reuters.

For Nokia Siemens Networks, the company's infrastructure joint venture with Germany's Siemens, Nokia reported net sales of $3.85 billion, down 5 percent year-on-year and up 12 percent sequentially. The company's operating margin was 1.7 percent, up from 0.1 percent in the second quarter of 2009 and 0.6 percent in the first quarter. Nokia said it continues to believe the infrastructure market will be flat this year compared with 2009, and that NSN will maintain its market share in 2010 rather than grow faster than the market in 2010. Nokia Siemens Networks agreed earlier this week to buy Motorola's (NYSE:MOT) wireless networks business for $1.2 billion, and the deal is expected to close by year-end.

Nokia's stock was up around 4 percent after its earnings announcement, to around $9.20 per share.

For more:
- see this release
- see this WSJ article (sub. req.)
- see this Bloomberg article
- see this FT article
- see this MarketWatch article
- see this Reuters article
- see this FierceWireless Q2 earnings page

Motorola lawsuit alleges Huawei stole trade secrets

Phil Goldstein — Wed, 21 Jul 2010 17:01:09 -0400

Motorola (NYSE:MOT) sued Huawei, alleging that former Motorola employees provided the Chinese equipment vendor with trade secrets about its technology.

In an amended complaint filed last week in U.S. District Court for the Northern District of Illinois, Motorola alleged that over a period of years former employees gave Huawei detailed information about its network architecture technology, including its "seamless mobility" solution. Seamless mobility was an end-to-end system that, according to a 2005 Motorola document, brought together "subscriber devices, access network technologies, a core network that leverages broadband IP switching capabilities, business support and network management systems and comprehensive network services that ensure cost effective planning, deployment and secure operations."

Motorola previously sued the employees in 2008 as well as Lemko, a wireless technology company where several of the employees worked after leaving Motorola.

In a statement, Huawei said the lawsuit had no merit. "Huawei, which has an agreement with Motorola allowing that company to resell Huawei's wireless equipment, has only recently learned of the amended Motorola complaint," the company said in a statement. "Based on our review of the complaint so far, the complaint is groundless and utterly without merit. Huawei has no relationship with Lemko, other than a reseller agreement. Huawei will vigorously defend itself against baseless allegations. Moreover, as an active and significant player in global standards-setting bodies, Huawei has great respect for the rights of intellectual property holders, and will with equal vigor protect its own hard-earned intellectual property rights."

According to the complaint, Motorola said that one of the former employees, Shaowei Pan, worked directly with the founder and chairman of Huawei, Ren Zhengfei. Huawei began receiving secrets as early as 2001, the complaint said. Motorola said Pan was with Motorola for about 10 years until April 2004, before becoming CTO of Lemko.

Faye Vorick, vice president of marketing for Lemko and a defendant in the case, strongly denied the allegations in the complaint. "The documents are a pack of lies," she told FierceWireless. "They're ridiculous and false. It is a case of a big company trying to harass a small company." She said that she could not comment further on pending litigation.

Vorick is accused of "playing a key role as the 'front' person for Lemko's wrongful activities." A Motorola spokeswoman, Jennifer Erickson, told FierceWireless that the company does not comment on pending litigation, "but will continue to vigorously defend our IP (intellectual property)."

Lemko makes equipment that it has termed "distributed mobile architecture." The company's approach is to hollow out the network core and put all of the switching, routing and gateway equipment at the edge of the network.

The disclosure of the lawsuit comes just days after Nokia Siemens Networks agreed to buy Motorola's wireless networks business for $1.2 billion. Huawei had been mentioned in the past as a potential buyer for the unit.

For more:
- see this WSJ article (sub. req.)
- see this Bloomberg article
- see this FT article
- see this Motorola document

Article updated July 22 with comments from Motorola and Huawei.

Qualcomm beats expectations for Q3, hikes forecast

Phil Goldstein — Wed, 21 Jul 2010 16:27:21 -0400

Qualcomm (NASDAQ:QCOM) posted better-than-expected earnings in its fiscal third quarter, bolstered by strong chip sales and global 3G demand. The chipset behemoth also raised its revenue and earnings guidance for the fiscal year.

The company raked in net income of $767 million in the quarter, up 4 percent from the year-ago quarter and down slightly, by 1 percent, from its fiscal second quarter. Qualcomm's revenue clocked in at $2.71 billion, down 2 percent year-over-year, but up 2 percent sequentially. In the previous quarter Qualcomm had warned of a drop in earnings per share of up to 9 percent for the fiscal third quarter.

In terms of key business metrics, Qualcomm said it shipped around 103 million CDMA-MSM chipset units, up 10 percent from the year-ago quarter and up 11 percent from the fiscal second quarter. The company said that during the quarter there were between 134 million and 128 million CDMA-based device shipments, with an average selling price of between $183 and $189 per unit.

Looking ahead, Qualcomm CEO Paul Jacobs said in a statement that the company expects 23 percent CDMA growth in the calendar year for 2010. The company said its fiscal fourth quarter revenue likely will be between $2.67 billion and $2.93 billion, with a 10 percent to 19 percent rise in earnings per share.

Jacobs also strongly indicated that Qualcomm plans to sell its struggling FLO TV mobile broadcast unit. During the company's earnings conference call, he said the firm is considering a "number of alternatives" for the unit, but that Qualcomm has already started talking to other companies.

"It will get done in the next year but I don't think I can be much more specific than that," he said. "A lot of interesting discussions. It's early days." Jacobs hinted at the company's Uplinq 2010 conference earlier this month that Qualcomm was looking to unload the unit, which has failed to live up to expectations.

Qualcomm's stock popped more than 8 percent in the morning after the release of its earnings, to around $39 per share.

For more:
- see this release
- see this conference call transcript
- see this AP article
- see this FierceWireless Q2 earnings page

3D cell phones? Some think it's only a matter of time

Mike Dano — Wed, 21 Jul 2010 13:23:56 -0400

In the past few weeks alone we've seen the launch or introduction of the Android-powered Droid X, Evo 4G, Epic 4G, Galaxy S variants, Droid Incredible, Intercept, Flipout, Charm--and the list goes on (and that's just Android).

The crush of new handsets hitting the market again underscores the need for handset manufacturers to rise above the noise with new and unique products. Thus far such efforts have largely revolved around varying screen sizes, user interface overlays, innovative apps and other tweaks. So what's the next new thing? Sean Mitchell thinks it's going to be 3D technology.

"We're seeing huge interest now," said Mitchell, CEO of Movidius, which sells chip technology for, among other things, processing and rendering 3D images.

Others agree. "Of course, not all smartphone makers will be rolling out 3D handsets next year, but with so many Android-based devices now hitting the market, cell phone vendors will become desperate for product differentiation," wrote chip analyst Will Strauss of Forward Concepts recently. "Clearly, this could be a big differentiation from the rest of the mob."

Does this mean smartphone owners are going to have to wear special 3D glasses just to check their email? Not really, explained Mitchell. He said there actually several different technologies that can essentially "trick" the eye into seeing a 3D image without the use of special glasses (dubbed "Autostereoscopy" for those technically inclined). Among the techniques:

Parallax barrier. A special material is placed over an LCD screen allowing each eye to see only a specific group of pixels. The brain then assembles the information into a 3D image. However, this approach requires that the viewer be in a specific location in order to obtain the desired effect.
Lenticular lenses. An array of cylindrical lenses is positioned on an LCD display, and the lenses direct specific pixels of light to each eye.
Backlight barrier. A barrier is inserted between an LCD backlight and the back of a display. A 3D image is created by manipulating the LCD backlight, thereby projecting two different, full-resolution images projected to each eye. However, this approach requires significant changes to current LCD manufacturing processes.

Movidius sells chips for high-resolution 3D video capture and display, and expects commercial phone launches with its chips in the spring of next year. The company, founded five years ago and based in Dublin, scored a $7.5 million Series B funding round in May.

But Movidius isn't the only 3D glasses-less game in town. Nintendo plans to release its 3D-capable 3DS portable game unit next year, and handset vendors including Samsung and others have teased the Asian market with a smattering of 3D phones.

"The next challenge is to get the capture capability" for 3D, Mitchell said, explaining that he expects cell phones to soon sport two separate, adjacent cameras, thereby enabling users to record 3D video. Surely James Cameron has already placed his order.

Will the next "Avatar" be filmed on a cell phone? Probably not, but based on the momentum behind 3D in TVs, theaters and elsewhere, don't be surprised to see cell phones soon fall into the crowd. --Mike

Droid X difficulties; Lenovo on the Android tablet bandwagon

Mike Dano — Wed, 21 Jul 2010 11:40:05 -0400

Quick news from around the Web

@FierceWireless: Surprised? Nearly 60% of #Android users are running 2.1 or 2.2 Article | Follow @FierceWireless

> Lawmakers are looking to crack down on cell phones in prisons. Article

> Verizon Wireless confirmed that a small number of Droid X devices suffer from screen problems. Article

> A Hewlett-Packard Web page points to a possible Windows 7 tablet. Article

> Dell, Samsung and LG are among Microsoft's Windows Phone 7 launch partners. Article

> Reuters reports on smartphones as the next battlefield accessory. Article

> Lenovo appears to be the latest computer maker with plans for an Android tablet. Article

Mobile Content News

> Mobile advertising firm Crisp Wireless announced a partnership with mobile publishing solutions provider Verve Wireless. Article

> Apple's iTunes sales topped the $1 billion mark. Article

> Yahoo is testing Microsoft's search solutions. Article

> Yahoo's revenues failed to reach expectations. Article

> Adobe showed off a video calling service for Android devices dubbed FlashTime. Article

Mobile Developer News

> A developer apparently snuck past Apple's App Store gatekeepers with a tethering app disguised as a flashlight application. Article

European Wireless News

> Vodafone Germany tapped Ericsson and Huawei for LTE. Article

And finally... Let the spoofs begin! Check out this banned iPhone 4 antenna ad. Video

RIM pushes multimedia advances of BlackBerry OS 6.0

Phil Goldstein — Wed, 21 Jul 2010 11:36:43 -0400

Research In Motion (NASDAQ:RIMM) is wagering a lot on the updated version of its smartphone operating system, BlackBerry Os 6.0, and has started touting the multimedia experiences users will get with the new platform. The company will launch OS 6.0 sometime in the third quarter. Among the new features are improved music discovery via an interactive carousel, album art, multiple options for viewing and organizing photos, expanded video streaming and a new preloaded podcast application. Article

Rumor Mill: Verizon switching to usage-based data pricing before LTE launch

Phil Goldstein — Wed, 21 Jul 2010 11:31:22 -0400

Verizon Wireless (NYSE:VZ) is planning to institute new usage-based mobile data pricing plans, perhaps as soon as the end of this month, according to a report on Engadget, which cited an unnamed source.

The report had few details about what the proposed plans would look like, but said that the changes could come on July 29. Verizon executives have indicated numerous times that the carrier likely will switch to a usage-based data pricing model when it launches its LTE network in the fourth quarter. However, carrier executives have not hinted at plans to change 3G data pricing options.

A Verizon spokeswoman declined to comment.

In June, Verizon Communications CFO John Killian indicated the company will change its pricing plans when Verizon launches LTE in 25-30 commercial markets later this year. "We will probably need to change the design of our pricing where it will not be totally unlimited, flat rate," he said at the time. He also said Verizon smartphone users typically gobble between 600 MB and 800 MB of data per month, which is similar to what AT&T Mobility (NYSE:T) has reported for average iPhone data usage.

After AT&T switched in June from a flat-rate pricing scheme to a usage-based model for mobile data, speculation centered on which carriers might follow suit. Both Sprint Nextel (NYSE:S) and T-Mobile USA have indicated they have no plans to change their current pricing structures.

For more:
- see this Engadget post

Broadcasters set conditions for participation in spectrum auctions

Phil Goldstein — Wed, 21 Jul 2010 11:04:39 -0400

Broadcasters might be willing to give up some of their spectrum for mobile broadband use in incentive auctions so long as certain conditions are met, the head of a powerful broadcasting lobby said--indicating that there may be a way forward on the issue.

Gordon Smith, the president of the National Association of Broadcasters, sent a letter to the White House expressing the group's position, and signalling that broadcasters might be willing to participate in the FCC's proposed auctions. The commission hopes to get broadcasters to voluntarily give up around 120 MHz of spectrum for the auctions, and will give them a share of the proceeds.

Smith said the NAB has "no quarrel with incentive auctions that are purely voluntary." However, he said that the 120 MHz goal was "arbitrary" and that the reallocation "would create a number of serious engineering and practical difficulties." The auctions are one of the key recommendations of the FCC's national broadband plan, and the CTIA and wireless carriers have been clamoring for more spectrum.

In the letter, Smith said stations that choose not to participate in the voluntary auctions should be given several assurances. He said that broadcasters must not be denied the ability to deliver mobile DTV; that broadcasters should not have signal strength limitations; that stations should have the ability to use spectrum for 3DTV; and that new spectrum taxes should not be imposed.

Notably, the letter was addressed to Lawrence Summers, director of the White House's National Economic Council, and not to anyone at the FCC. An FCC spokeswoman did not immediately respond to a request for comment about the letter.

The letter comes as the Senate considers a bill that would authorize the incentive auctions.

For more:
- see this NAB letter
- see this Reuters article
- see this CQ Politics article

Sprint's prepaid chief Schulman leaves company

Phil Goldstein — Wed, 21 Jul 2010 10:40:07 -0400

Dan Schulman, the head of Sprint Nextel's (NYSE:S) prepaid business, is leaving the company, effective Aug. 23. His departure comes shortly after Sprint launched its new multi-pronged prepaid strategy that was created partly of Sprint's acquisition of Virgin Mobile USA, which was headed by Schulman.

Sprint said Schulman will become an executive at American Express. Bob Johnson, currently the head of Sprint's consumer organization, will take over Sprint's prepaid go-to-market strategy. Leigh Horner, a Sprint spokeswoman, said Schulman is leaving because of the "phenomenal" opportunity at American Express, where he will be the group president for enterprise growth. She said the fact that Schulman is leaving shortly after Sprint's launch of its new prepaid brands is coincidental.

"It had nothing to do with what is going on at Sprint Nextel and everything to do with the opportunity for Dan," she told FierceWireless, adding that Schulman and Sprint CEO Dan Hesse have an excellent relationship.

Sprint currently has four main prepaid brands: Boost Mobile; the re-launched Virgin Mobile brand; Common Cents Mobile, which is aimed at the pay-per-minute prepaid market; and Assurance Wireless, which is aimed at low-income customers. Last week Virgin Mobile launched a "sub-brand" called PayLo, which targets budget-conscious consumers with two cheap plans.

There may be more prepaid moves in store for Sprint later this year. Hesse has indicated that the carrier might launch a prepaid 4G service on Clearwire's (NASDAQ:CLWR) mobile WiMAX network. Horner said Schulman's exit will not change Sprint's focus on prepaid. "We are moving forward with those very specific brand offerings and looking to really take prepaid more into the mainstream," she said." There's no change in strategy or direction as a result of [Schulman leaving]."

For more:
- see this release

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Rumor Mill: Verizon switching to usage-based data pricing before LTE launch

Broadcasters set conditions for participation in spectrum auctions

Sprint's prepaid chief Schulman leaves company