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FreedomPop's iPhone Sleeve stuck in FCC certification, costing $550,000

LAS VEGAS--MVNO FreedomPop said its WiMAX-capable iPhone Sleeve has been delayed in the FCC's approval process due to an untested design element. The company said the unexpected delay in obtaining approval has cost the company and its manufacturing partner a total of $550,000 so far.

freedompop iphone sleeve

FreedomPop's iPhone Sleeve

FreedomPop CEO Stephen Stokols said in an interview with FierceWireless here at the 2013 Consumer Electronics Show that the design of FreedomPop's iPhone Sleeve places the Sleeve's WiMAX radio right next to the iPhone's cellular radio. He said the FCC has never tested a device with that radio-against-radio design, which required the agency to conduct extensive testing of the gadget--thus delaying the commercial release of FreedomPop's Sleeve for the iPhone 4S and iPhone 4. (FreedomPop currently sells an iPhone Sleeve for the iPod touch, which does not have a cellular radio.)

Stokols said FreedomPop had been taking pre-orders for the WiMAX-capable Sleeve, which uses Clearwire's (NASDAQ:CLWR) network, but stopped taking pre-orders due to the delay. He said the company has 5,000 sleeves at U.S. customs waiting for FCC approval. Stokols said he expects to receive FCC approval within the next few weeks, and the firm can start shipping the case immediately thereafter.

Stokols declined to say how many subscribers FreedomPop currently counts.

But FreedomPop's iPhone Sleeve is just the first tentative step in the company's go-to-market strategy. Stokols said the company is currently designing a case for Android devices that will include support for Sprint Nextel's (NYSE:S) LTE network. He said FreedomPop will sidestep the FCC's approval process by designing an LTE module for Android phones that can slip into a variety of cases--a design that will require just one certification rather than a new certification for each case. The result, Stokols said, will allow FreedomPop to quickly manufacture and sell LTE-enabled cases for a wide range of popular Android phones, thereby expanding FreedomPop's addressable market beyond just iPhones.

Stokols said FreedomPop expects to begin selling LTE-capable cases for Android phones like the Galaxy S III in about six months. "Now we can go after Android pretty aggressively," he said.

As part of FreedomPop's Android strategy, the company is putting the finishing touches on its Android app. The company currently powers its iPhone services through an iOS app, and FreedomPop's Android app will provide similar services to its Android users. FreedomPop subscribers can manage their accounts through the company's mobile app, and can purchase upgrades to their service including increases in download speeds ($3.99 per month) and overage alerts ($1.99 per month).

Here at CES, FreedomPop announced an agreement with textPlus to bring VoIP-powered voice and messaging services to its freemium business model, which currently offers users 500 MB of free WiMAX data per month as well as a number of paid data tiers. Stokols said FreedomPop will likely offer textPlus' services under the "FreedomPlus powered by textPlus" brand, and users can pay for voice plans that will range from 200-300 voice calling minutes per month for $3.99, to 1,500 minutes for $14.99 per month. Stokols said users will also be able to pay on a per-minute basis.

FreedomPop, which counts around 38 employees, raised around $7.5 million in venture capital last year. The company currently offers WiMAX services as a Clearwire MVNO, but Stokols said the company will transition to Sprint's LTE network as an MVNO likely in the second quarter of this year.

Stokols said FreedomPop is in discussions for a Series B round of funding he said would likely be around $15-20 million. He said the round would include venture capitalists and a possible "strategic investor."

For more:
- see this GigaOM article

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