Opinion: New iPhone Could Spell Doom for Sprint, Palm
By Andrew Berg
Apple has fundamentally changed the smartphone game, and it could have devastating consequences for Sprint and the Palm.
When the doors at Best Buy and Sprint stores opened just last Saturday, they did so to a world where the Palm Pre and iPhone 3G were identically priced. Today, only four days after the Pre launch, two more upgraded iPhone models are on the showroom floor at AT&T – the 3GS 32GB and 16GB models – and the same iPhone 3G for $100 less.
What’s perhaps most notable about Apple’s moves yesterday is the extent to which the company is now leaning heavily on software while simultaneously leveraging its existing hardware. The company avoided the redundancy and high production costs of the rumored iPhone Nano and will now run through its existing inventory of 3Gs at a recession-palatable price point.
To some extent, the new 3GS isn’t that different from the existing 3G. Sure, it’s faster, has more memory and a better camera that can handle video, but it’s essentially the same phone. However, with the new APIs and features offered by the iPhone OS 3.0, every iPhone gets an overhaul, even the now lowly 3G. Let’s not forget that up until about 11 a.m. Pacific time yesterday, the 3G was still seen as one of, if not the premium, smartphone on the market.
Has that really changed in 24 hours? No. Instead, Apple has managed to expand the iPhone’s demographic in a way that is inclusive of the 3G and creates a kind of status strata for its product with the 3GS 32GB model crowned as king. And what of the Pre? Well, there it sits, $100 over its nearest competitor and still unproven, which is to say nothing of the two companies clinging for dear life to its inevitable success or failure.
But while Apple may have redefined smartphone pricing, will such a drastic reduction in the price of the 3G hurt sales of the 3GS? Only time will tell, and unlike Palm and Sprint, Apple has plenty of that. Does Apple really care if 3GSs aren’t immediately flying off the shelves? Sure it would be nice, but it’s not going to hurt them if early sales are shy of record breaking.
And when all those $99 3Gs are gone, Apple will have effectively increased adoption and can discontinue the 3G, moving the 3GS to the forefront of AT&T’s upgraded 7.2 HSPA network. Pairing of the 3GS and an upgraded AT&T network could be the fastest smartphone/network combination the industry has ever seen. As it stands, the old 3G is actually faster than AT&Ts current 3G network.
With an App Store that has already recorded 1 billion downloads and a new rush of development that makes use of over 1,000 new APIs included with the iPhone OS 3.0, it is almost unthinkable that any device will rival Apple’s current smartphone supremacy in the near future. But then again, only time will tell.
Sprint: Pre Sets Sales Record
By Monica Alleven
Despite low levels of inventory on hand, Sprint says the Pre delivered a record sales debut. By late Sunday, the Palm Pre had broken all previous sales records for a Sprint device, although the carrier didn’t provide any specific numbers.
In a press release, President and CEO Dan Hesse reiterated that the Pre is the “coming out party” for a new and improved Sprint. Among the changes: the Ready Now retail store experience, improved customer care, value pricing plans and its “most dependable” 3G network.
On Saturday, Sprint found one man, Theodore Travis, in line at an Atlanta-area Sprint store at 7 a.m.– on his wedding day. His wedding was scheduled for 8 a.m., so, not wanting to miss it, he abandoned his wait at 7:45 a.m. and left his line number and credit card info with a store employee, asking that he “hold the 14 phone for me.”
The newlyweds later returned to pick up the phone, although the bride eventually revealed that her initial reaction was “You did what?”
Sprint sold out in many locations but says it is getting the device to its retail locations “as fast as Palm can make them.”
Sprint also reiterated that its Simply Everything plan saves customers $1,200 over a comparable plan for AT&T’s iPhone and more against Verizon Wireless’ smartphone and PDA pricing over two years.
Former AT&T CEO to Become New GM Chairman
By The Associated Press
DETROIT (AP) — General Motors Corp. says the former chairman and CEO of AT&T will become the chairman of the reorganized automaker later this summer.
Edward Whitacre Jr., 67, will replace Kent Kresa, but Kresa will remain GM’s interim chairman until the automaker emerges from bankruptcy protection as a new entity majority owned by the U.S. government.
GM is in operating under Chapter 11 bankruptcy protection as it seeks to reorganize and shed unwanted assets.
Verizon, T-Mobile File Proposals for Broadband Plan
By Maisie Ramsay
Verizon Communications and T-Mobile USA have submitted proposals for the national broadband plan called for by Congress and President Barack Obama.
The comments are part of the FCC’s effort to meet its February 17, 2010, deadline to create the plan, which allocates $7.2 billion of the president’s $800 billion stimulus bill to extend broadband coverage to every U.S. resident, especially in underserved rural areas.
Verizon’s proposal includes recommendations to improve cybersecurity, encourage IP-based services and reform the universal service fund (USF).
“…much work remains to be done for broadband to achieve its full potential in the United States,” Verizon said in a statement. “Well over 90 percent of Americans have access to broadband, and most can choose from at least two wireline, three wireless and two satellite broadband providers. This is a level of facilities-based competition hardly seen in any other country in the world. But gaps in access remain in some hard-to-serve, rural areas.”
T-Mobile’s proposal states that mobile broadband should be an essential component of the national broadband plan and calls for additional spectrum that would be obtained by reallocating at least 200 MHz for commercial use.
“[Mobile broadband] builds on today’s successful terrestrial mobile wireless services to provide consumers and businesses with anywhere, anytime access to convenient and productivity enhancing applications,” T-Mobile said in a statement. “Mobile broadband also can support applications that directly benefit consumers, such as public safety and telemedicine, with greater flexibility than wired broadband.”
Separately, Verizon Wireless and CTIA voiced their support for the “Mobile Wireless Tax Fairness Act,” which calls for a five-year halt on new wireless-specific taxes by state and local authorities.
“Wireless customers should not be subject to unfair and discriminatory taxes. This legislation addresses that concern by providing for a ‘time out’ from allowing any more of these taxes from being added to our consumers’ bills,” said Steve Zipperstein, vice president and general counsel at Verizon Wireless, in a statement.
According to statistics compiled by CTIA, the typical consumer pays 15.2 percent of their total wireless bill in federal, state and local taxes, fees and surcharges. Other goods and services have an average tax rate of 7.07 percent.
The bill was introduced by U.S. Senators Ron Wyden (D-OR) and Olympia Snowe (R-ME), and is similar to the “Cell Tax Fairness Act,” which attracted bipartisan support in the U.S. House.
Nokia N97 Goes on Sale
By Monica Alleven
It costs more than the latest iPhone 3GS and it doesn’t have a U.S. carrier/subsidy behind it, but the Nokia N97 is now available in the United States.
Nokia’s flagship mobile computer, the N97, is now on sale through Nokia flagship stores in New York and Chicago, nokiausa.com and various independent retailers and e-tailers for an estimated $699.
The N97 features a live widget homescreen, a 3.5-inch touchscreen, a full qwerty keyboard, 5-megapixel camera with Carl Zeiss Optics and dual LED flash, A-GPS with a built-in compass, and up to 48 GB of memory (32 GB onboard), as well as Ovi Services such Ovi Store, Nokia Maps and Ovi Share.
Nokia announced the N97 in December and last week said it would begin selling the device in June in more than 75 countries. It’s the first device to feature the Ovi Store inside. The device will come with preloaded software ready for use like Qik, a live video streaming platform, a variety of widgets like AP Mobile as well as a three month free trial of Nokia Maps and a free 90-day trial to Boingo Wireless.
Texas Instruments Shares Rise
By The Associated Press
NEW YORK (AP) — Shares of Texas Instruments climbed in premarket trading Tuesday after the chip maker raised its profit forecast for the quarter, a move seen by analysts as a tentative sign of recovery following a brutal six months for the semiconductor industry.
The Dallas company projected earnings of 14 cents to 22 cents per share on sales of $2.3 billion to $2.5 billion for the quarter ending this month.
That’s up from a previous forecast of 1 cent to 15 cents per share on sales of $1.95 billion and $2.4 billion and well above the average estimate from Wall Street analysts, who were looking for earnings of 10 cents per share on sales of $2.21 billion.
Analysts were encouraged to hear from the company that customers are burning through less of their inventories. Texas Instruments makes chips for cell phones and other electronics as well as automobiles, which saw demand plummet as the recession grew worse last year.
Thomas Weisel analyst Tore Svanberg said the company’s improved outlook indicates it “could be experiencing modest demand improvement in its end markets.” Svanberg reiterated an “Overweight” rating on the stock in a client note late Monday.
But observers also sounded cautious on the company’s wireless business, as well as uncertainty over a true recovery in consumer demand.
Deutsche Bank analyst Ross Seymore told investors in a note late Monday that he expects the company’s stock to perform well off of the improved outlook. But he reiterated his “Hold” rating on the stock, warning of economic uncertainty and “pending wireless share losses.”
Craig Berger, an analyst with FBR Capital Markets, said in a note Tuesday, “We respect management’s commendable execution and deep cost reductions,” but kept a “Market Perform” rating on shares because of “the firm’s declining wireless business” and average stock price compared with peer companies.
Startup Caters to Gays, Lesbians
By Monica Alleven
It’s shaping into a busy month for startup MoxieQ, which officially launches today as a mobile and online entertainment destination with a “gay sensibility.” And it just so happens to be gay and lesbian pride month.
MoxieQ was founded by former Third Screen Media executive Heidi Lehmann and Kim Olson, a founding member of the Sprint Mobile Media Network. They spent the past weekend trying to get out the word about MoxieQ at an event in Kansas City, and the company will be making the rounds at other events this month in New York City and Los Angeles.
After Third Screen, a pioneer in mobile advertising, was acquired by AOL in 2007, Lehmann stayed for a few months before striking out on her own. But before forming MoxieQ, she asked some of her contacts at ad agencies about their interest in targeting the lesbian, gay, bisexual and transgender – or LGBT – community.
She found that the LGBT community is indeed one that advertisers want to more effectively reach, as it is viewed as highly affluent and influential – and often with “double-income/no-kids” households. It’s estimated to spend some $712 billion.
More and more, the LGBT community is seen as one representing trend-setters, and Lehmann says the “irreverent” gay sense of humor appeals to a broader audience – think Bravo TV’s “Queer Eye for the Straight Guy.” MoxieQ also offers what Lehmann refers to as a “gay friend for your pocket” for straight people who want to get their “gay” groove on fashion or other trends.
MoxieQ is cross-platform, but “mobile is the main emphasis for us,” Lehmann says. “We’ve gotten some really good traction and enthusiasm.” Some content will be exclusive; other content involves partnerships with LGBT brands.
The endeavor already is attracting some star power, debuting at the GLAAD Media Awards in New York on March 28 and in Los Angeles on April 18. The “Will & Grace” personalities of radio, Ryan and Caroline, formerly of Clear Channel’s Pride Radio, conducted red carpet interviews with celebrities including Suze Orman, Tyra Banks, Judith Light, Kathy Griffin and Wilson Cruz.
MoxieQ’s “re:ACT” feature at http://m.moxiew.com/site/act/ lets uses click to call their senators when they want to weigh in on a local issue, like Prop 8 or “don’t ask, don’t tell.” But the aim of MoxieQ mainly is to be fun and entertaining in a non-political way, Lehmann says.
FirstNews Briefs for June 9, 2009
Companies in the news: Apple, AT&T, Virgin Mobile USA, Ericsson, Netezza, Telcel, TwitVid.com, TwitterFon, Boingo Wireless, Photobucket, Palm, JiWire, Ad Infuse, American Airlines, Usablenet, Envivo, Pike Research, Autonet Mobile, Volkswagen.
• On the heels of Apple’s $99 iPhone 3G release, AT&T reaffirmed its 2009 financial guidance. The company targets wireless service operating income before depreciation and amortization margins in the low 40% range. The company expects customer acquisition costs for iPhone 3G S and the newly priced iPhone 3G to be similar to the costs associated with the original iPhone 3G.
• Virgin Mobile USA is launching new contract plans for families, including a $175/month All-In plan with 4,000 shared anytime minutes and a $50 A La Carte plan with 600 shared minutes with unlimited mobile-to-mobile minutes.
• The News & Observer of Raleigh reports that Ericsson is laying off 167 workers at a plant in North Carolina’s Research Triangle Park by the end of the year, leaving less than two dozen. The company once employed 1,800 people there. Ericsson disclosed the layoffs in a filing to the state Commerce Department. The company said workers were notified more than a month ago and will leave in phases between Aug. 7 and Dec. 31.
• Netezza announced that Telcel, the largest mobile phone carrier in Mexico, has chosen the Netezza Performance Server to analyze vast amounts of data for improving revenue assurance. Telcel chose Netezza to replace an existing system after considering options from Teradata, HP and other vendors.
• TwitVid.com, which enables instant playback of Tweeted videos, and TwitterFon, a Twitter application for the iPhone, announced a partnership where the TwitVid video service will be integrated into the TwitterFon iPhone application and made available to its users. As a part of the partnership, iPhone users will be able to Tweet mobile videos to their Twitter followers. The new iPhone 3GS incorporates video capture functionality.
• Boingo Wireless reports that iPhones and iPod touches represented almost 23 percent of all devices accessing Wi-Fi in all Boingo-owned and operated networks in airports, ferries and convention centers during the month of May, second only to Windows XP and ahead of Windows Vista and Macintosh laptops. The iPhone was the fastest growing platform, just ahead of the Nokia eSeries smartphones.
• Photobucket announced the availability of a native photo upload solution for the new Palm Pre. As a pre-installed photo upload partner, Photobucket lets Palm Pre users send photos taken on their mobile device to a Photobucket album without having to download an application. Users just take a picture and tap on the Photobucket entry to send the picture to their Photobucket account.
• JiWire has appointed former Ad Infuse executive David Staas as senior vice president of marketing. JiWire, which reaches 20 million unique users per month through its public Wi-Fi advertising platform, says it is responding to increased market demand from brands and advertisers for its advertising solutions by adding Staas to the management team.
• DeviceAnywhere has added the new Palm Pre phone to its network of 2,000+ feature phones and smartphones available over the DeviceAnywhere platform and accessible by organizations seeking to develop and test next-generation mobile applications.
• American Airlines announced the extension of its mobile boarding pass option to a total of six airports, encouraging travelers to access electronic boarding passes on their mobile devices. The technology was first introduced at Chicago’s O’Hare International, Los Angeles International and John Wayne Orange County airports and now at Las Vegas McCarran International, Jackson Atlanta International and Minneapolis-St.Paul International airports. American’s Airlines’ mobile site is powered by Usablenet.
• Envivio Inc. announced iLiveTV, a mobile video encoding and distribution solution for deploying Live and On Demand TV video services for the iPhone. The solution includes a video encoding platform, content delivery server software and a web-based navigation portal.
• According to a new report from clean technology research firm Pike Research, expenditures on green telecom equipment will comprise 46 percent of the $277 billion global telecom infrastructure market by 2013.
• Autonet Mobile announced an agreement to equip the Volkswagen Routan with uconnect web – the in-car Wi-Fi Internet service already available to Chrysler, Dodge and Jeep owners. Beginning this month, more than 600 Volkswagen dealerships in the United States will offer Routan owners the opportunity to add uconnect web, powered by Autonet Mobile, to their vehicle.