Mobile content flops of 2008 revealed

With Thanksgiving just around the bend, and thoughts of turkey beginning to drift through the air, FierceMobileContent compiled its list of the Mobile Content Turkeys of 2008--the industry's biggest flops, including mobile TV and some dumb iPhone applications. Special report

Spansion sues Samsung over flash memory patents

Spansion has filed a lawsuit against Samsung Electronics in federal court and lodged a complaint with the U.S. International Trade Commission over patents it says it holds for flash memory technology that it says Samsung violated.

The complaint seeks to block the importation of devices with the offending flash memory technology, and names Apple, Research In Motion, Lenovo, Sony and Sony Ericsson as companies who are customers of Samsung and are importing products in violation of the patent. Spansion estimates that the proposed blockade would stop the importation of more than 100 million products a year.

The ITC has become a battleground for tech companies to resolve patent disputes, most notably in the long-running saga between chip makers Broadcom and Qualcomm. However, as that experience has showed, the process of resolving technical disputes can take months, if not years, and never truly end. Spansion CEO Bernard Cambou said the company tried to resolve the matter with Samsung privately, but will pursue it and look to build a new patent-licensing business.

"This is not just a nuisance suit," Cambou said. "This company is going to go all the way--we are not going to stop unless we find a solution."

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

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Is it time for a Wireless Stimulus Plan?

Compared to other industries, wireless has been relatively unscathed, so far, by the economic downturn. Third-quarter wireless operator results were surprisingly good.  A stream of exciting new handsets has propped up the device market, and has been a catalyst for subscribers signing onto data plans.  

But storm clouds are brewing. Leading handset OEMs are planning for a contraction of the market, anywhere from flat to down 10 percent globally, for 2009.  PC card makers, accustomed to 70 percent average growth in the past three years, are seeing a pronounced slowdown. And certain sectors of the data market--notably content of the "discretionary" type, such as ringtones, games and off-portal content--have stopped growing. Take away the iPhone/Blackberry effect (data plans, App store downloads) and that ever-affordable small luxury--text messaging--and data growth might cool. Finally, we are starting to see a steady stream of layoffs, in nearly every sector of the industry. Three cornerstone companies, representing services (Sprint), devices (Motorola), and infrastructure (Nortel) are in serious trouble--much of their own making--but the economy ain't helping. I don't think they have a place in the lengthening government bailout queue, but there could be tens of thousands of jobs lost.

By any measure, it looks like 2009 is going to be a challenging year. But I think we have an opportunity to fare better than many other comparable industries. It will take some proactive, and collective, measures, involving some short term pain. My Wireless Stimulus Plan falls into three categories.

1. Stimulate the Handset Market

If there is any time to start being creative about the subsidy "dichotomy" that exists in the wireless market, it is now.  The subscriber who wants the subsidized price for a hot new phone must switch operators or be eligible for an upgrade.  If they are in mid-contract, some operators will offer a partially subsidized price on some phones. This creates all sorts of incongruities in the market, and certainly is not that much incentive to "trade up." What about the subscriber who bought a Blackberry Pearl three months ago for the subsidized price of $149 who now not only sees an ad for the same device for $49, but cannot get the new Storm for anywhere close to $200?  I think we need to start exploring some creative middle ground. Some specific suggestions to stimulate handset sales:

• Offer more favorable handset pricing to customers signing on for a higher ARPU plan, such adding a good data package. 
• Reward customers who are providing clear "household NPV" or loyalty--such as multi-line households, high spending individuals, long-term customers, and so on. The wireless industry still lacks good processes for adjusting its offers based on different customer profiles.

The newest smartphones are selling briskly, and the share of "budget phone" sales is growing. The part of the market that is going to need the greatest attention will be garden-variety feature phones.

2. Creativity in Pricing Plans

"All-inclusive" has been the theme this year. Take-up of these plans has been solid (Sprint) to tepid (Verizon). Operators are trying hard to avoid a price war, especially as cost per gross add has crept up. I think we need to focus on two items for 2009:

• A more holistic look at household communications spend. Landline losses are accelerating. At AT&T and Verizon, there's some robbing Peter (landline, DSL) to pay Paul (wireless, FIOS/U-verse), but they are also losing a fair share of fixed lines to cable and even landline "replacement" plans from pure-play wireless operators such as Metro PCS and T-Mobile USA. The integrated telcos must make a more concerted effort to capture as much of a household's communications costs as possible.  Why cede the landline business so readily?  How about offering some creative bundles of landline/wireless minutes, or a "keep your landline" incentive? There's a host of Femto solutions to add to the mix that should make the "household" space quite interesting in 2009.

• Stimulate data sales. Wireless operators should have a concerted strategy to get as many subscribers as possible onto a data plan. Take a page out of the cable business, which has been effective in encouraging subscribers to upgrade to a series of ancillary services, from digital cable to "triple play" plans and now DVR. AT&T has been successful with its $30/month iPhone data plan, but I think the typical price for a data plan (unlimited messaging, email and browsing) is going settle at the $20-25 range over the next couple of years.  Another option to stimulate content sales, and tryouts of all the budding app stores, widgets, and device portals, is to offer some bundle of content along with a data plan (for example, $30 gets you our data plan and five apps). 
  
  
• Greater choice, flexibility for broadband wireless. These services are great but remain expensive. In a tough economy, it is going to be hard to penetrate the next "rung" of the addressable market for wireless broadband access. Plus, alternative options are expanding, i.e., WiFi-enabled handsets, proliferation of free WiFi, and 3G price aggressiveness from upstarts (T-Mobile, Metro, etc). Given usage patterns, there's not that much room for maneuvering if these services are to be profitable on a standalone basis. But there is room for greater flexibility, such as per-day or per-week pricing for occasional travelers, better "tethering" options, and bundles (so it's not always an either/or choice between a Blackberry plan and a PC card plan).  Also, it's time for the PC OEMs to get off their duff and start marketing these services too. 

Again, the integrated telcos need to show some creativity here, especially before Clearwire is available in more markets, with the possibility that "Cable in Wireless, Act 3" gets it right. AT&T and Verizon should offer their home broadband subscribers a wireless add-on package for a modest price (I like $19.99), with the "broadband everywhere" moniker.

3.  Rationalize Retail and Customer Service. Wireless operators, rather accidentally, have become some of the largest retailers in the country, operating tens of thousands of outlets on a direct or indirect basis. I think there are, collectively, too many "doors," and the metrics are rather fragile, since a lot of traffic in the stores is non-revenue generating. No doubt the broader downturn in consumer electronics will cause some closings via attrition (i.e., Circuit City), while other doors will shut due to consolidation  (i.e.,Verizon-Alltel). 

Finally, customer service continues to be a very high cost to the wireless operators. There's a juxtaposition here, as increased sales of high-end devices are leading to calls from customers with PC-like problems. Operators are, for the most part, absorbing the cost for calls about issues that are increasingly outside their core service. I'm not sure how much longer the current model is sustainable. I would expect there to be enhanced efforts toward self service; some tough negotiations with vendors to take some of this on themselves; and higher levels of outsourcing. Operators might also borrow a page from cable, which is to limit the scope of problems they are prepared to address. And don't dismiss the possibility that operators will start charging some customers for service, a la Apple and HP.

To those who argue that many of my suggestions are revenue dilutive, I respond that it will be difficult to sustain business as usual.  I believe some short-term pain is necessary to avoid dire circumstances down the road, which would lead to significant industry job loss, contraction of capex, and loss of appetite for risk and innovation.

Mark Lowenstein is Managing Director of Mobile Ecosystem. Click here to subscribe to his Lens on Wireless newsletter.

More details on Verizon-Alltel deal emerge

The FCC has provided more details on Verizon Wireless' $28.1 billion acquisition of Alltel, which will create the largest wireless operator in the country. Verizon has to divest from five additional markets in Lyon, Iowa; Muskegon, Manistee and Newaygo, Mich.; and Johnson, Tenn. The company will have 120 days following the close of the deal to divest those markets. Article

Kodak sues LG, Samsung over camera phone patents

Kodak is suing LG and Samsung over patent infringement in the design of camera phones, accusing the handset makers of using Kodak's design for the capture, data compression and storage of pictures.

Kodak usually inks licensing deals for its technology and it has done so with other camera manufacturers and cell phone makers, but the Rochester, N.Y.-based company said its negotiations with the two South Korean handset makers did not result in an agreement.

"Our digital-camera technology is different from the one used by Kodak. We haven't infringed upon Kodak's related patents," said LG Electronics spokesman Choi Jun-hyuk. "We'll actively deal with the case." Samsung said it works to protect intellectual property rights, but would respond actively to the litigation.

Kodak, which gets a significant portion of its revenue from licenses, filed suit in U.S. District Court in Rochester and also lodged a complaint with the U.S. International Trade Commission.

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

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T-Mobile launches Samsung Gravity

T-Mobile USA seems to be getting the message.

The carrier launched a quick-messaging phone from Samsung, the Gravity, joining AT&T Mobility and Sprint Nextel in support a quick-texting phone from the handset maker. Earlier this fall AT&T came out with the Samsung Propel, Sprint launched the Samsung Rant and Verizon Wireless launched the Samsung Glyde.

The quad-band global and UMTS and EDGE-enabled Gravity has a slide-out QWERTY keyboard, 1.3 megapixel camera, supports multiple instant messaging services and is enabled with T-Mobile's myFaves. It also has stereo Bluetooth and an expandable microSD slot capable of holding up to 4GB. The phone will be available on Tuesday for $49.99 with a two-year service contract.

For more:
- see this article
- see this picture of the Samsung Gravity

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Infrastructure revenues for Q3 rise, firm finds

The top OEMs saw their wireless infrastructure revenues grow 3.7 percent in the third quarter, growing to $12.2 billion, compared to the year-ago period, according to the research firm EJL Wireless.

The infrastructure market saw a sequential decline because of the drop off related to the Beijing Olympics, but the sector continued to grow, the firm said. The report looked at the figures from a number of companies, including Alcatel-Lucent, Ericsson, Motorola, Nokia Siemens Networks, Nortel Networks and ZTE.

"Given the undeniable decline in cap ex spending by mobile operators due to the global financial crisis, we believe that weakness could continue into Q4 and that overall revenues in USD may be flat to down 1-2 percent for 2008 compared with our prior outlook of 5-7 percent growth," said Earl Lum, the president of EJL.

The news from the infrastructure market has not been universally positive. Nokia Siemens said it would continue to trim jobs as it restructures, Nortel posted a huge lost and said it was cutting 1,300 jobs. Although Alcatel-Lucent improved its financial position in the quarter, it still posted a net loss. 

For more:
- see this release

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Prepaid service growth to continue into 2009

Prepaid wireless service, which has been gaining steam over the past year, will continue to outpace contract-based growth going into 2009, according to third party research from Boost Mobile, Sprint Nextel's prepaid unit.

The data shows a growth rate of 14 percent for 2009 in the prepaid market, compared with 4 percent for postpaid. The carriers are also seeing some returns in the market; T-Mobile USA had 370,000 prepaid subscribers in the third quarter, up from 143,000 in the year-ago period. As credit has tightened up, prepaid may look like a more attractive option to customers that still allows them to keep their wireless phone, according to Boost.

The trend also fits with research done by Informa Telecoms & Media that found prepaid growth outstripping postpaid in both 2007 and into 2008.

For more:
- see this article

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Handset makers poised for a shakeup in 2009

In the face of a global economic downturn and weakening demand, handset makers and vendors affiliated with cell phone components are probably headed toward a large shakeup, according to a report in the Wall Street Journal.

Some of the recent news from the sector has not been cheerful: Nokia, the world's largest handset maker, recently cut its fourth quarter and preliminary 2009 outlook; chip-maker Qualcomm cut its 2009 forecast; and Motorola just cut 3,000 jobs and is refocusing its handset division.

The article cites a Strategy Analytics forecast of shipments declining 1 percent in 2009. Companies with more high-end portfolios, including Apple, Research In Motion and HTC will be better positioned to handle any turmoil that would affect the handset market. All three have showcase devices that could help propel them through any choppy waters. In the case of RIM, there are multiple devices that could turn into large sellers, most notably the BlackBerry Storm, which Verizon Wireless is launching this week.

However, others such as Motorola and Sony Ericsson, which cut 450 jobs from its North American headquarters earlier this fall, are in a weaker position. Motorola has said it is planning on focusing more on phones running on Windows Mobile and Google's Android platform to chart it back to growth, but said an Android phone would not be in the market until the end of 2009.     

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

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Study: smartphone popularity leads to higher customer satisfaction

A study by J.D. Power found that as more feature-rich smartphones enter the market, customer satisfaction with handsets is rising, despite higher costs for the phones and for service. Release

Sprint given more time to shut down offending Nextel networks

Sprint Nextel has about a year to shut down Nextel's iDEN network in 81 markets where its affiliate iPCS operates, following an Illinois Supreme Court decision that effectively forced Sprint to stop operating the iDEN network in those markets.

On Wednesday, the court blocked a motion by Sprint for the court to reconsider its decision to side with iPCS. iPCS had brought suit claiming that by operating the Nextel network in iPCS's exclusive territory, Sprint violated the conditions of its Management Agreement with the company. The court extended the timeline from 180 days to 360 days, something that iPCS was not pleased with but was willing to accept.

"We are disappointed that Sprint has been given an extra 180 days to comply with its obligations, particularly since the original order was entered in September of 2006," iPCS CEO Timothy Yager said in a statement. "Nonetheless, we look forward to Sprint's compliance with the trial court's order and are encouraged that the Illinois courts continue to share our view of the protections afforded by our agreements with Sprint."

A Sprint spokesman said the decision was not unexpected and that the carrier had been planning on how to respond for some time. The move is the latest headache for the beleaguered operator, which has been losing customers at a steady clip and is struggling to regain a solid financial position.

For more:
- see this article

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Nokia cuts Q4 handset, networks outlook

Nokia lowered its fourth quarter expectations for both its handset and networks divisions as it expects consumer spending to drop in the face of widespread economic distress.

"In the last few weeks, the global economic slowdown, combined with unprecedented currency volatility, has resulted in a sharp pull back in global consumer spending," the company said in a statement.

For the full year, the world's largest handset maker said it expected volumes of 1.24 billion handsets, down from the 1.26 billion that the firm forecast in October. The company also said it expected the global market for fixed and mobile network infrastructure "will be down in euro terms in 2009 compared to 2008."

The weakening economic conditions have already hurt Nokia's market share, which dropped to 38 percent in third quarter, down from 39 percent in the year-ago period and 40 percent in the second quarter of 2008. Nokia said it will take steps to cut costs in response to market conditions. 

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

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Rumor Mill: Verizon to sell HTC Touch Pro

Verizon Wireless will be selling the HTC Touch Pro starting Nov. 24, and it will be available in stores Dec. 1 for $350 on a two-year contract and after a $70 mail-in rebate, according to the blog Engadget.

The move would make Verizon the third nationwide U.S. carrier to sell the touchscreen and QWERTY keyboard-sporting smartphone.

For comparison, Sprint Nextel is selling the phone for $299 on a two-year contract and after a $50 mail-in rebate, and AT&T Mobility is selling the phone, which it calls the HTC Fuze for the same amount after mail-in rebates and a two-year contract.

For more:
- see this post
- see FierceWireless' Holiday Handset Guide

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Illinois Supreme Court deals legal blow to Sprint

The Illinois Supreme Court dealt another blow to Sprint Nextel in its long-standing legal battle with its affiliate iPCS, when it refused on Wednesday to grant Sprint's petition for leave to appeal a ruling by the Appellate Court of Illinois issued in March 2008.

The Appellate Court had unanimously, in turn, upheld a 2006 ruling by Circuit Court in Cook County, Ill., that said Sprint violated the terms of its Management Agreement with iPCS following Sprint's merger with Nextel, because Sprint had wanted to operate Nextel's iDEN network in territory where iPCS had exclusivity rights.

The Illinois Supreme Court issued a similar ruling at the end of September, and ruled then that Sprint would have to stop owning, operating, and managing the Nextel network in iPCS territory. Sprint had asked the Supreme Court to reconsider its decision, which was denied Wednesday. 

For more:
- see this release

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BlackBerry Storm available Nov. 21 for $199

There's a Storm coming.

Verizon Wireless announced that its long-awaited smartphone, Research In Motion's BlackBerry Storm, will be available Nov. 21 for $199.99, with a two-year service contract and after a $50 mail-in rebate.

Speculation around the Storm has swirled for months, most notably about pricing and launch date. The pricing makes it competitive with Apple's iPhone 3G, as the 8GB model also sells for $199 with a two-year contract from AT&T Mobility. The other big player in the market looking to cut into the iPhone's margins is the T-Mobile G1, which sells for $179 with a two-year contract from T-Mobile USA.

For more:
-see this release
-see these Storm pictures

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Robert Dotson named new CTIA chairman

Robert Dotson, the president and CEO of T-Mobile USA, was named the new chairman of CTIA. Dotson had previously been vice chairman of CTIA and succeeds Verizon Wireless CEO Lowell McAdam in the position. Release

Qualcomm: Snapdragon devices will be available in 2009

Qualcomm is pushing its new Snapdragon chipset, which is optimized for mobile computing and mobile Internet devices. The company said there are currently 30 devices in development with the chipset--the first coming out in the first half of 2009.

Qualcomm said some of the companies it is currently working with to develop Snapdragon devices include handset makers HTC, LG and Samsung. The chipset will allow handsets to run on Windows Mobile, Google's Android platform and some Linux-based operating systems.

"Many of the customers we are now working with are new to Qualcomm and are looking to Snapdragon to help them succeed in the mobile space," said Luis Pineda, senior vice president of marketing and product management for Qualcomm CDMA Technologies.

For more:
- see this release

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Mobile data: Can carriers ride the wave?

Data-centric smartphones are gaining popularity with consumers but can carriers keep up with the demands these data-centric devices place on the network?

The year that is coming to a close will likely go down as the year of the smartphone. Apple's iPhone 3G was just named as the top-selling consumer handset in the third quarter, according to the NPD Group, passing the Motorola RAZR, which had been atop the heap for twelve straight quarters. According to Ross Rubin, NPD's director of industry analysis, it was the first time a smartphone had topped the list. 

The changing of the guard offers a window into where the industry is going. Carriers are bringing more smartphones to market, and, in turn, those data-heavy devices that make searching the web, sending email, playing games and browsing social networking sites easy are causing a big increase in data usage. This trend brings both promise and peril for the carriers, according to industry analysts.  

Perhaps lost in the flurry of stories about the drop in AT&T Mobility's margins because of the costs incurred from subsidizing the iPhone was the fact that the carrier's data revenue spiked 50.5 percent compared to the third quarter of 2007 to $2.7 billion. Likewise, Verizon Wireless' data revenue ballooned 42.5 percent over the prior year, to $2.8 billion. Both Sprint Nextel and T-Mobile USA said data revenues contributed strongly to post-paid ARPU in the third quarter.

But much of that data, and much of the revenue, leads back to the handset. And while the iPhone has become as ubiquitous an example for how smartphones are changing the wireless landscape, it is not the only factor at play, just the most-hyped.

According to ComScore M:Metrics' analysis of data use during the three-month average ending in August 2008, more than 18 million mobile subscribers accessed a web search on their phones, and of those 8 million were smartphone users. While ComScore measured spikes in email usage from mobile phones and growth in browser downloads since the debut of the iPhone 3G this past July, the trend toward smartphones and data-heavy applications was accelerating even before the iPhone became a phenomenon.

"The iPhone jumped to the front a parade that was already well in progress," said Mark Donovan, a senior analyst with ComScore.

Frank Dickson, the co-founder and chief research officer for the consultancy Multimedia Intelligence, said the company that really started the trend is Research In Motion, going back to 2007. However, Apple changed the dynamic. "I think one of the things that Apple probably did a lot more than RIM is really take that whole smartphone-type concept and instead of focusing on an enterprise user, really focused on making that handset friendly for a consumer market," Dickson said. "And what we're seeing now is what was once the realm of enterprise is the realm of consumers."     

Both Donovan and Dickson agreed that there are a collection of different players influencing the way the mobile data market goes forward. There are the incumbent handset makers such as Nokia; insurgent device makers such as Apple and RIM; software companies such as Microsoft; and Internet-based firms like Google that provision services. 

"I don't think anyone is acting in concert," Donovan said. "Each of these companies are trying to stay on their own strategy and box out what they see as competition from other platforms."

What is the upshot for the carriers? The answer is complicated. "It's certainly a mixed bag for a carrier perspective. They use a lot [applications from third parties found in places like Apple's App Store or Google's Android Market]," Donovan said. "The flipside of that coin is that it's not a one-company town any more in terms of where you're going to buy your games or your applications."

Dickson agreed, adding that the carriers have yet to fully understand the ramifications increased data usage will have on their networks. "If people use the phone as a peer-to-peer service that becomes scary...It could crush the networks."

But some are confident that as mobile data volume grows, carriers will recognize the potential network traffic issues. Randy Fuller, vice president of business development at Camiant, says that the big question is what can operators do about this problem? 

Fuller said operators have a few options. They can use pricing plans to discourage heavy data users with smartphones from buying plans that will not fit their needs; institute soft usage caps that penalize users; or institute solutions that deal with congestion, and slow down some users' connection who are hogging data so that the rest of those on the network do not suffer.

"I would say that like any industry there are people out in front and there are the laggards. By and large because mobile operators have never had to deal with the open Internet, I would say congestion and network use is going to be a problem before the really good controls are put in place," he said.

The net result is that operators will receive more complaints from people who say the network is not operating as fast as it could. "I can't imagine mobile operators can put the genie back in the bottle," Fuller said.

FierceWireless details Q3 carrier metrics

Now that all of the major U.S. carriers have reported their third quarter earnings, FierceWireless has compiled all of the top metrics--ARPU, churn, net additions and total subscribers--for a fuller view at where the operators stand. Metrics charts

Rumor Mill: BlackBerry Storm will sell for $219

Verizon Wireless' launch date for Research In Motion's BlackBerry Storm is still uncertain, but preliminary pricing appears to have leaked. According to a screenshot of the prices,  the phone is retailing for $219 with a two-year contract.

The phone, the first touchscreen BlackBerry, will also sell for $289 with a one-year contract and $519 unsubsidized, according to a staging website screenshot that surfaced on Howard Forums. These prices are subject to change as the screenshot shows the webpage has yet to be completed evidenced by incorrect information describing the Storm's QWERTY keyboard.

Verizon has given no indication of when it will launch the Storm, though Nov. 16 has been rumored as a possible launch date.

RIM also released an online "User Guide" for the Storm that walks through operational how-to's as well as more complex processes.

For more:
- see this post
- see this post about the user guide
- see these Storm pictures

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Nokia Siemens continues job cuts

Nokia Siemens Networks said it will continue to make job cuts as it finalizes a restructuring plan to create $2.55 billion in savings by the end of 2009.

The joint venture said it would cut 700 more workers in Finland, bringing the total number of jobs cut in that country to 1,300. In addition, the company said it would cut 500 more jobs in Germany on top of the 2,300 it has already eliminated.

The final cuts will total about 9,000 workers, or between 10 and 15 percent of its global workforce.

"With the successful completion of these plans, we will have the vast majority of the synergy-related headcount reductions completed and we can then start to put this chapter of our history behind us and focus on creating a world-class company," said Nokia Siemens CEO Simon Beresford-Wylie.

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

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Clearwire shareholders to vote on merger Nov. 20

During Clearwire's third quarter earnings call with analysts this morning, CEO Ben Wolff said that shareholders will vote Nov. 20 on the whether or not to approve the firm's merger with Sprint's WiMAX business. Wolff says that the merger is still on track for a year-end close pending the shareholder vote and some other administrative items.

Wolff reiterated that once the merger closes the expected infusion of $3.2 billion in capital from Google, Intel, Comcast and others will give Clearwire the resources to launch new markets and covert its existing pre-WiMAX markets to mobile WiMAX. The company had third quarter service revenue of $60.8 million up from $41.3 million in third quarter 2007. The company also had a net loss of $166.6 million compared to a net loss of $328.6 million in the same quarter the previous year. Here's a rundown of the other key metrics:

Subscribers: At the end of third quarter Clearwire had 469,000 subscribers, up from 348,000 in third quarter 2007. However, the company only added 8,300 net new customers during the quarter. Wolff said the firm's growth flattened as the company prepares to move from pre-WiMAX to mobile WiMAX.

ARPU: Average revenue per user was $40.43, up from $37.41 in the prior year. Wolff said the ARPU increase was due to adjustments in pricing and premium plans.

Churn: Churn was 3 percent in third quarter up from 2.3 percent in the previous year and compared to 2.6 percent in second quarter 2008. Clearwire said the increase in churn was due to a reduction of sales and marketing and it expects this trend to continue because of the macroeconomic climate.

White space spectrum: Wolff said that the company may explore opportunities with white space spectrum, particularly in rural areas.

For more:
- see this press release

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Feature: Embedded device vendors focus on laptops

Carriers may envision all types of devices and appliances being embedded with wireless connectivity but vendors don't necessary share that view.

Mobile carriers might drool at the prospect of linking their subscribers to their networks by embedding technology into every device from a cell phone to a refrigerator, but the vendors that build the devices see things a little differently. Not every device needs embedded wide area network connectivity or even mobility: WiFi might just do the trick for a lot of non-commercial devices--at least for the start.

"I don't think we're going to be looking at this so much in the consumer space...maybe your car (with GSM) but I'm not sure your home appliances," said Kyp Walls, director of product management at Panasonic Computer Solutions Company.

Panasonic laptops connect to the mobile network. This field has been plowed already by PC cards and USB dongles but new software flexibility makes it possible to plant the software into the devices themselves for enterprise and government customers with a "need to connect everywhere" who find mobile connectivity is "a little addictive; you feel like if you didn't have connectivity in the taxi and airport and everywhere else you couldn't do your job," he said.

Qualcomm's Gobi initiative, which lets IT managers provide global mobile connectivity by using devices that can be reconfigured in the field to support mobile operators and mobile broadband technologies including EVDO and UMTS, is a big reason the software can move from external to internal.

Gobi's customer list includes computer makers Acer, Dell, Hewlett Packard, Lenovo and Panasonic along with all the major carriers.

"That used to be a barrier for people to adopt an embedded solution because they couldn't commit to a particular carrier. Gobi absolutely eliminates that barrier for embedded wireless technology," Walls said.

Another way to enable network interconnectivity is to use a company such as Jasper Wireless which has "created an MVNO look-alike where they're independent of carriers," said Arun Bhikshevsvaran, CTO and vice president of North American strategy for Ericsson.

Since Ericsson embeds mobile modules into laptops now and it plans to move to other consumer electronics in the future. But having an open network makes it easier to focus on building and certifying cross-platform modules.

"If I certify the module for Lenovo and AT&T, the same module goes into a Dell computer or an Apple computer. As far as network connectivity, the network is turned on to the same exact module" and that module, thanks to someone like Jasper, can operate across different networks, Bhikshevsvaran said.

Interconnectivity is why Jasper exists, said Cindy Patterson, executive vice president of sales and marketing, at Jasper Wireless "Jasper built its system from the ground up just to serve connected devices [with] provisioning systems, billing systems and diagnostic systems that are all part of our software.

"It's software that makes it so that someone doesn't need to understand wireless. They don't need to understand the underlying network that the device is using; they just have to look at the user interface and the direction they want to go," she said.

As an example, a medical service could equip patients with wireless monitoring equipment that "turns on and just works out of the box," she said.

This type of application crosses between mobile wide area networks and portable fixed area networks and the devices can do the same.

"A whole class of devices can benefit and change with the addition of WiFi," said Lisa Payne, vice president of marketing for G2, a company that builds "low-end" integrated WiFi chips.

WiFi can handle home-based applications ranging from so-called smart refrigerators to energy-efficient applications. The available-everywhere applications can be handled using embedded mobile technology, she suggested.

The greater number of embedded devices might, therefore, start as WiFi-enabled and as necessary move outside the home using 3G or 4G wide-area networks. For now, the big push in embedded devices is to place the technology inside the laptop which is probably already equipped with WiFi and could be equipped with yet another wireless technology, WiMAX.

Lenovo hedged its wireless bets by becoming one of the first laptop makers to comply with Sprint's Xohm network in Baltimore, specifically because "WiMAX fits right alongside WiFi or 3G broadband, Bluetooth and even ultra-wideband," said David Critchley, worldwide segment manager for Lenovo ThinkPads. "We always try to be one of the first to the market when new communications technologies are available."

For Panasonic, 3G, especially with Gobi, is the way to go.

"Gobi is making it much easier to convince customers that they should get the radio right up front because they don't have to make a [carrier] choice," Walls said. "We put a piece of software on there with a Gobi radio...and tell the radio and the machine which network they want to communicate on. They don't have to decide beforehand if they're going to use AT&T, Sprint or Verizon."

While other embedded devices will quickly follow, laptop connectivity is driving today's market and those laptops will first focus on business customers then migrate to more casual users.

"We're in process with many operators around the world now...that are going to come to market with our software," said Jasper's Patterson. "Some of them love our software for their business channel and also feel that's a way to get a lot of consumer electronics to market. There's going to be a mix of B2B devices and consumer devices. We definitely see a split between both."

iPhone 3G passes RAZR as top-selling phone

The iPhone 3G replaced the Motorola RAZR as the top-selling consumer handset in the United States, displacing the RAZR from the top spot for the first time in three years, according to the NDP Group. 

The other phones that rounded out the top five selling phones in the third quarter were Research In Motion's Blackberry Curve (pic), the LG Rumor (pic) and the LG enV2 (pic). NPD found that despite the average selling price of phones rising 6 percent to $88, the sale of consumer handsets fell 15 percent year-on-year to 32 million units in the quarter.

"We had seen[the iPhone's] popularity rise since the launch of the 3G model at lower prices," said Ross Rubin, the director of industry analysis for NPD. "However, for it to be a device that's selling for a significant premium over the price of average handsets, and to be available only at one of the major carriers in the U.S. is exceptional."

For more:
-see this release
-see FierceWireless' Holiday Handset Guide

Related Articles:
Apple sells 6.9M iPhones in Q4
iGR reports 9.2 million smartphone sales in 3Q

AT&T buys Centennial for $944M

AT&T announced over the weekend that it had purchased wireless provider Centennial Communications for $944 million, further boosting its wireless coverage in rural areas, especially in the Midwest and along the Gulf Coast.

The deal--which, including the assumption of Centennial's debt--is worth about $2.8 billion and comes on the heels of AT&T's $275 million purchase of WiFi service provider Wayport.

The purchase still has to gain regulatory approval, but it should net AT&T 1.1 million of Centennial's customers in Puerto Rico, the U.S. Virgin Islands, the Great Lakes region and in the Gulf Coast. The move also comes less than a week after the Federal Communications Commission approved Verizon Wireless' $28.1 billion acquisition of Alltel, which will propel Verizon past AT&T as the country's largest wireless operator. AT&T currently has close to 75 million subscribers; the new Verizon entity will have about 83 million.

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

Related Article:
AT&T acquires Wayport, boosts WiFi presence
Verizon's Alltel acquisition: What are the ramifications?