AllThingsD » contract

Eager Upgraders Will Spike iPhone 4S Sales

John Paczkowski — Wed, 12 Oct 2011 10:55:21 +0000

If the iPhone 4S is, as some have suggested, intended to appeal to early-generation iPhone users at the end of their carrier contracts, how many of them can we expect to upgrade?

Short answer: Lots.

Piper Jaffray analyst Gene Munster estimates that 18.8 million iPhone 3GS users will likely upgrade to the iPhone 4S, accounting for about 18 percent of Apple’s fiscal 2012 iPhone sales.

“We believe the number of iPhone 3GS units sold before the launch of the iPhone 4 serves as a conservative proxy for iPhone users that will likely upgrade to the iPhone 4S,” says Munster. “Note that our Aug-11 survey shows that among existing iPhone users, 94 percent expect to buy another iPhone as their next phone; Apple has built an annuity of smartphone buyers.”

Indeed. And Munster’s estimate includes only 3GS upgraders. It doesn’t account for existing users of the original iPhone, iPhone 3G, or even the iPhone 4. In other words, it’s likely that upgrade sales will be even greater than Munster predicts.

We’ll see. Currently, Munster is calling for 25 million iPhone units to be shipped in calendar Q4 of this year, a number he has already conceded may be too low.

What Was Behind the Timing of Yahoo CEO Carol Bartz's Abrupt Ouster?

Kara Swisher — Fri, 16 Sep 2011 21:31:52 +0000

In the end — the bitter end, that is — there really is no good time to fire someone.

But the timing of the ouster of Carol Bartz as CEO of Yahoo is one of the more curious things about the corporate mishegas at the Silicon Valley Internet giant of late.

That included drastically moving up the clock on Bartz, which was not part of a plan until recently. In fact, several sources were told only last month by Yahoo board members that evaluation of her status — her contract ended at the beginning of 2013 — would not take place until the end of 2011.

That obviously changed.

And, because it is Yahoo — which never met a crisis situation it could not hopelessly complexify — there are numerous and conflicting accounts about the reasons it was done so quickly and abruptly.

They include the board’s feeling that Bartz had not responded to their requests for a credible strategic plan; worries that she would not ever meet annual performance goals, including improving its stock price; upcoming weak third-quarter numbers, which will continue a troublesome downward trend in Yahoo’s key advertising business; and, perhaps most intriguingly, the need to make a move before it was revealed that another activist investor, this time Third Point’s Daniel Loeb, had decided to target Bartz and the Yahoo board.

One thing is certain: The firing of Bartz was messier than it needed to be, mostly because several sources said she was caught unawares.

“She did not know it was happening, even if she probably should have seen it coming,” said one person familiar with the situation. “And she had no allies at the company to warn her, either.”

Indeed, at the time Bartz was fired over the phone by Chairman Roy Bostock — who had until late this summer been her fervent supporter — she was set to appear at a high-profile Citigroup investor conference in New York.

“It had to happen then, because you can’t put a CEO in front of investors and analysts and then fire her soon after,” said one person close to the situation.

Actually, former Yahoo CEO Terry Semel stepped down only days after appearing at the company’s annual meeting and telling the gathering he was in for the long haul.

The Loeb problem also played a part. According to several sources, while Loeb did not surface until after Bartz’s firing, several directors and Silicon Valley players were aware of his plans to target Yahoo.

While Loeb was not the more heavyweight threat that activist investor Carl Icahn had been in the past, sources said he was planning to call for Bartz’s firing, as well as a board re-do.

The large part of the reason for letting her go finally, of course, centered on not meeting performance goals set by the board.

While the overhaul of a hairball of systems and a rejiggering of staff was quickly done by the longtime and experienced manager, the turnaround and renewed product innovation promised by Bartz was slow in coming.

In addition, advertising sales results had worsened and recent quarterly reports showed little progress.

To remedy the situation, directors had asked Bartz to present a strategic plan earlier this year, which she did with the help of top execs. It further underscored the idea of Yahoo as a top-level digital media company.

But the board pressed for more details and felt Bartz was not the right exec to carry out the kind of dramatic renewal of Yahoo that is needed.

Looming, too, was the third-quarter earnings results on October 18, which sources said will show continued weakness at Yahoo.

For that, it’s likely the fired Bartz will get the blame, giving the board — which is also being criticized by large shareholders and others — a bit of breathing room as it figures out what to do next.

In other words, with no good news to report, the Yahoo board decided to deliver some bad news to Bartz.

(In related news, according to an 8-K filing by the company, interim Yahoo CEO and also CFO Tim Morse got a small bump in base salary from $600,000 to $750,000, effective September 15, 2011.)

And here is a video I did on WSJ.com’s Digits show yesterday about the buyer interest in Yahoo I previously wrote about, as well as its weak board:

Exclusive: Skype Employees Were Briefed in Plain English -- The Internal Equity Incentive Plan Deck

Kara Swisher — Tue, 28 Jun 2011 20:14:21 +0000

I have largely stayed away from opining about the he-said-he-said over what or what not Skype employees were told about the treatment of their stock options.

Some employees are alleging they were duped via complicated legalese and double-talk in employment contracts about how their shares would be handled upon termination or voluntary departure from the Internet telephony giant.

That matters, since Skype was recently sold to Microsoft for $8.5 billion, well above previous valuations. Thus, those who were, as a Skype PR person said, not in it to win it, um, lost.

Dramatic stuff, to be sure. But, even with all the fervor around the employment contract issue, the handwringing about what it means for compensation issues in Silicon Valley and a whole big dose of how private equity companies (in this case, a firm that had bought Skype called Silver Lake) are evil, it’s struck me as little more than an insider read-the-legally-obtuse-contract dispute.

And, although I love Reuters’ Felix Salmon’s epic tsk-tsking posts, that’s why I like to see real documents as proof of what people knew and when.

Apparently, a lot and rather clearly from this PowerPoint that was given to employees of Skype as of December 2009 as part of its changing ownership, after Silver Lake and other investors bought it from eBay.

While it’s not proof of what employees got it — typically, it is standard HR policy to hand this stuff out to everyone — and who read it (no accounting for slaggards!), it is pretty clear on what happens upon leaving Skype, either by a firing or quitting.

On the eighth slide, as you can see above, it says, in part:

“Good Leaver”: someone who gets fired without “Cause”

* Gets the fair-market value of their currently vested options

“Bad Leaver”: someone who resigns, or is fired for “Cause”

* Skype buys back their options at the lower of fair-market value or strike price

* This provision lapses post-IPO

It seems pretty buyer-beware clear, but check it out for yourself:

Skype – Employee Presentation

Exclusive: AOL Fires Moviefone Editor Who Offered Fired Freelancers the Chance to Work for, Um, Free

Kara Swisher — Wed, 06 Apr 2011 20:28:30 +0000

Yesterday, AOL’s Huffington Post Media Group got into hot water after the top editor at its Moviefone unit sent a memo to freelancers it was in the midst of firing, offering them an opportunity to “contribute as part of our non-paid blogger system.”

Today, that exec–Moviefone Editor-in-Chief Patricia Chui–was fired by the company, which is in the midst of drastically rejiggering its stable of writers.

Many of those were freelance bloggers under contract to AOL, who are now getting the boot in favor of reallocating staff back to largely paid journalists.

Thus came the controversial email from Chui, which read, in part:

“We will, indeed, be moving away from a freelancer model and toward one relying on full-time staffers. Sometime soon-–this week, I believe–-many of you will be receiving an email informing you that your services as a freelancer will no longer be required. You will be invited to contribute as part of our non-paid blogger system; and though I know that for many of you this will not be an option financially, I strongly encourage you to consider it if you/d like to keep writing for us, because we value all of your voices and input.”

Oh dear. Really, oh dear, especially since the Huffington Post has had its own share of controversies over not paying some bloggers (although it never quite ever offered up a doozie that this letter was).

Sources said Chui was terminated by John Montorio, the HuffPo Media Group’s culture, entertainment and lifestyle editor. Arianna Huffiington is head of all content at AOL, which recently paid $315 million to buy the Huffington Post.

Since she took over, Huffington has tried to stress a return to journalism over more algorithmic content creation. The unloading of its freelance writers was part of that effort.

Thus, Chui’s missteps did not help matters.

But it was not the first time recently that she had made an ill-advised editorial judgment.

Sources said the firing is also due to an incident several weeks ago, in which Chui appeared to defend a marketing employee who sent an email to TechCrunch writer Alexia Tsotsis, asking her to soften a review of “Source Code” due to studio relationship considerations.

AOL bought TechCrunch, a well-known tech news site, last fall. At the time, its CEO Tim Armstrong promised editorial independence and no meddling over advertising concerns.

Instead of taking this minion to task, on Moviefone’s own blog Chui said, in part:

“The reality of our situation is that, as a movies site, we work with movie studios every day, and it is in our best interests to stay on good terms with them. Staying on good terms with studios means that we will relay information if asked. It does not mean that we would ever force a writer or an editor to edit their work for the sake of a studio–or anyone else.”

Even with the last line, it is not exactly a profile in courage, because it was clear violation of the traditional separation of church and state in force at most media organizations.

Typically, editors are supposed to come down on any such communication. That has certainly been my experience in journalism over the years at the Washington Post and Dow Jones–including during its News Corp. ownership. In fact, I have often been shielded from such requests to pass such complaints onto me and only found out much later of advertiser discomfort about my reporting.

At the time, TechCrunch quite clearly called for Chui’s firing and that happened today.

Here is Chui’s full memo to freelancers, as well as the one about TechCrunch, neither of which were apparently cleared with higher-ups:

From: Chui, Patricia
Sent: Tuesday, April 05, 2011 11:26 AM
To: MoviefoneWriters
Subject: Moviefone/Cinematical–Status of Writers

Dear Moviefone/Cinematical Writers,

I know there’s been a lot of uncertainty regarding the future of freelancers and your status as a writer for the site. I personally apologize for the lack of communication, but I’ll tell you what I can.

We will, indeed, be moving away from a freelancer model and toward one relying on full-time staffers. Sometime soon–this week, I believe–many of you will be receiving an email informing you that your services as a freelancer will no longer be required. You will be invited to contribute as part of our non-paid blogger system; and though I know that for many of you this will not be an option financially, I strongly encourage you to consider it if you’d like to keep writing for us, because we value all of your voices and input.

Some of you have indicated interest in applying for full-time writer and editor positions, and the status of those positions are also part of discussions that are ongoing right now. I cannot at this point, however, tell you how many positions there are, or what the exact nature of those positions will be.

Despite the move toward a full-time staff vs. freelancer model, I’m told that there will be room for “exceptions”–for example, in the cases of writers who specialize in certain subjects. Again, what these exceptions are for Moviefone, and what the budget for them would be, is still being discussed.

As for Cinematical, the resignation of Erik Davis is certainly a loss. But I am continuing to have conversations with the editorial leadership here, and I am hopeful that we will still be able to maintain the Cinematical brand and voice going forward. Again, I will share with you any pertinent information as I have it.

In the meantime, those of you who already have assignments, please do continue to work on them unless you hear otherwise. If you’re uncertain of the status of your assignment, check with me. It may take me a while to get back to you, so please be patient–but I will respond.

I am sorry that I don’t have more specific details to give you, but I promise that I’ll keep you as well-informed as I possibly can. Don’t hesitate to reach out if you have questions or concerns.

Best,

patricia

By now you may have read the recent post in TechCrunch regarding that site’s SXSW coverage of the film “Source Code.” A representative from Moviefone, who set up the interview with Summit Entertainment, received some feedback from the studio and passed it along to TechCrunch (our sister site here at AOL). That email has now caused something of a Internet kerfuffle.

Here is the email–reprinted in the post–that was sent to the TechCrunch writer.

Hey Alexia,

Hope you’re having a good time at SxSW and that it’s not been too crazy busy for you!

First wanted to thank you for covering Source Code/attending the party, etc. But also wanted to raise a concern that Summit had about the piece that ran. They felt it was a little snarky and wondered if any of the snark can be toned down? I wasn’t able to view the video interviews but I think their issue is just with some of the text. Let me know if you’re able to take another look at it and make any edits. I know of course that TechCrunch has its own voice and editorial standards, so if you have good reasons not to change anything that’s fine, I just need to get back to Summit with some sort of information. Let me know.

Thanks!

TechCrunch’s issue with Moviefone is that by sending this email, we, in their words, “asked us to change our post. It’s not just sad, it’s wrong.”

I wanted to take this opportunity to clarify a few things.

1) The person who wrote that email was not acting in an editorial capacity. That person’s job is to act as an intermediary between the studios and editorial–not to dictate content, nor to weigh in on the content of Moviefone or any other AOL site. In fact, the presence of a person with that role is just one means we have of ensuring editorial integrity on Moviefone.

2) This is important: We never told TechCrunch to change the post in any way. A publicist at Summit reached out asking if we could convey the studio’s feedback to TechCrunch. We did so. If the editors had responded that they declined to edit the post–which, naturally, is entirely their call–we simply would have conveyed that information back to Summit.

The reality of our situation is that, as a movies site, we work with movie studios every day, and it is in our best interests to stay on good terms with them. Staying on good terms with studios means that we will relay information if asked. It does not mean that we would ever force a writer or an editor to edit their work for the sake of a studio–or anyone else.

We take editorial integrity seriously at Moviefone, and it’s painful to be depicted as a pawn of the studios when that is emphatically not the case. You may think it unseemly for a studio to request changes in an article; that’s certainly your right. But the accusation of pandering on our part or crossing an editorial line is, to my mind, completely unfair, and I would hope that a reasonable reader would be able to recognize the situation for what it is–overblown and unwarranted.

Patricia Chui
Editor-in-Chief, Moviefone

Motorola's Xoom Starts Tablet Wars With iPad

Walter S. Mossberg — Thu, 24 Feb 2011 02:01:36 +0000

After months of speculation, the tablet wars begin in earnest this week. Motorola is releasing its Xoom tablet on Feb. 24, and I consider it the first truly comparable competitor to Apple’s hit iPad. That is partly because it is the first iPad challenger to run Honeycomb, an elegant new version of Google’s Android operating system designed especially for tablets.

[ See post to watch video ]

Both Motorola’s hardware and Google’s new software are impressive and, after testing it for about a week, I believe the Xoom beats the first-generation iPad in certain respects, though it lags in others. Like the iPad, the Xoom has a roomy 10-inch screen, and it’s about the same thickness and weight as the iPad, albeit narrower and longer. And, like the iPad’s operating system, Honeycomb gives software the ability to make good use of that screen real estate, with apps that are more computer-like than those on a smartphone.

The Xoom has a more potent processor than the current iPad; front and rear cameras versus none for the iPad; better speakers; and higher screen resolution. It also can be upgraded free later this year to support Verizon’s faster 4G cellular data network (though monthly fees may rise.)

Motorola is taking aim at the iPad just as Apple is expected to announce, next week, a second-generation of its tablet. Little is known about this second iPad, but it’s widely expected to take away at least one of the Xoom’s advantages over the original iPad—cameras—and is rumored to be thinner and lighter, since weight was one of the most common complaints about the generally praised first iPad.

The iPad has way more tablet-specific apps—around 60,000 versus a handful—and, in my tests, much better battery life. Plus, whatever the specs say, it’s a fast device with a beautiful screen that delights people daily. But, overall, the Xoom with Honeycomb is a strong alternative to the original iPad, and one that will only improve over time.

The Xoom’s screen is long and narrow, good for widescreen video.

Unfortunately for consumers looking for iPad alternatives, the Xoom has an Achilles’ heel: price. While iPads come in a range of models priced all the way up to $829—none of which requires a cellphone contract—Apple’s entry price for the iPad is just $499. By contrast, the base price of a Xoom without a cellphone contract is $800—60% more. And even with a Verizon two-year contract at $20 to $80 a month—depending on the data limit you choose—the least you can pay for a Xoom is $600, or 20% more before counting the contract costs.

In fairness, the iPad model with the same memory as the Xoom and a 3G cellular modem like the Xoom’s is $729, which is a closer comparison. But it is still less than $800, and consumers still focus on that $499 iPad entry price (for a Wi-Fi-only model.)

As much as I like the Xoom and Honeycomb, I’d advise consumers to wait to see what Apple has up its sleeve next before committing to a higher price for the Motorola product.

Meanwhile, here’s what I found in testing the Xoom.

Hardware

Though it works fine in portrait, or vertical, mode, the Xoom is mainly designed as a landscape, or horizontal, device. The screen is long and narrow, proportioned to best fit widescreen video. The HD screen boasts a resolution of 1280 by 800, versus 1024 by 768 for the iPad.

It felt heavier than the iPad, though the weight of 1.6 pounds is the same as on the cellular version of the Apple product. Overall, it has a solid, high-quality feel. There aren’t any physical buttons except for an on-off switch at the rear and volume controls on an edge. The common Android home, back and other buttons are rendered in the software. The glass on the front is surrounded by a relatively thin black border.

I found it generally comfortable to hold, except when I was reading for long periods in vertical mode, where the long, thin shape and weight made it feel a bit unbalanced.

I performed the same battery test on the Xoom as I have on other tablets. I played video constantly with the connectivity turned on and the screen at almost full brightness until the battery died. Alas, while the Xoom claims up to 10 hours of video playback, I got just 7 hours and 32 minutes. By contrast, on the same test, the iPad, which also claims 10 hours, logged 11.5 hours, or four hours more.

I also tested the Xoom’s front-facing 2-megapixel camera by performing a video chat with a Motorola employee using Google Talk software. The chat broke up or froze several times over Verizon’s network, but we eventually got it to work pretty well on Wi-Fi.

The Xoom’s battery is sealed, and it only comes with 32 gigabytes of memory, versus a range of between 16 and 64 GB for various models of the iPad. However, it has a slot for a memory card that Motorola says will work after a software upgrade to add more memory. There is also a removable back and a SIM card slot that would be used only if you chose to upgrade to 4G in the second quarter of this year.

Software

Perhaps even more impressive than the hardware is the Honeycomb software, which, for now, Google won’t offer on cellphones, only tablets, of which the Xoom is the first.

I’ve always felt that Android had a rough-around-the edges, geeky feel, with too many steps to do things and too much reliance on menus. But Honeycomb eliminates much of that. Actions like composing emails, or changing settings are much more obvious and quicker. The smart but cluttered notification bar has been moved to the lower right and simplified. A tap on it pops up relevant information.

There is still a separate email app for Gmail, as opposed to other email services you may use. But, now, as on the iPad, email is presented in multiple columns and is more attractive and easier to use.

The browser is especially impressive, with PC-like features, such as visible tabs for open pages and the ability to open a private browsing session. Apps like Maps and YouTube have 3-D views. There’s a movie-editing app and live widgets for the home screens that show email previews or video frames.

There are some downsides. The ability to play Flash video—a big Android selling point—won’t work on the Xoom at launch. It will take some weeks to appear. And I found numerous apps in the Android Market that wouldn’t work with the Xoom. I couldn’t locate a working video download or rental service, though Google says these will be available soon.

Some apps for phones, like the popular game Angry Birds, filled the screen beautifully and worked fine.

Bottom line: The Xoom and Honeycomb are a promising pair that should give the iPad its stiffest competition. But price will be an obstacle, and Apple isn’t standing still.

Find all of Walt Mossberg’s columns and videos at the All Things Digital website, walt.allthingsd.com. Email him at mossberg@wsj.com.

Analyst: Cheaper iPhone Would Be a Bonanza for Apple

John Paczkowski — Wed, 16 Feb 2011 22:47:49 +0000

For Apple, a smaller, cheaper iPhone may be more than a means of entering the market for lower-end phones currently dominated by Android and Symbian–it could be the final step in the company’s global smartphone dominance.

That’s the theory put forth today by Bernstein analyst Toni Sacconaghi, who believes Apple’s market-share aspirations for the iPhone are a lot like those for its iPod business. Sacconaghi sees an iPhone Nano or Mini as an inevitability, one that would dramatically expand Apple’s addressable market.

“We are surprised that Apple hasn’t moved sooner to introduce a lower priced offering that could help secure a more dominant installed base,” Sacconaghi said in a note to clients today. “After all, the smartphone world is a platform war, where first mover advantage and scale matters. The dual facts that (1) iPhone has not been available at several very important global carriers and that (2) it carries a very high price point have contributed to creating an opportunity for Android that has been successfully exploited. Particularly with Android now outselling iOS, the imperative for Apple to expand its installed base has never been higher.”

A scaled-down version of the iPhone with a cheaper data plan–or one that required no data plan at all–is one very obvious way of doing that. Roll out a device like that with a street price that falls somewhere between $149 and $199, says Sacconaghi, bring it those carriers that don’t yet offer the iPhone, and mass-market adoption will follow. Serious mass-market adoption.

“It is difficult to estimate the size of a market for a product that we don’t yet know the form-factor or timing for. But as a rough guide, we estimate that at an end-user price of $150-$200 and no data plan contract, Apple could address potentially all of the remaining smartphone segment, the non-smartphone postpaid segment, and about 15 percent of the non-smartphone prepaid segment. This would amount to an incremental 700M+ units and $90 billion in revenue in terms of market opportunity; even if Apple succeeded in capturing just 5 percent of these incremental units, it would add $12+ billion in revenues and $4.50+ in EPS.”

Atrix 4G: Faux Laptop With a Phone For Brains

Walter S. Mossberg — Wed, 16 Feb 2011 22:37:55 +0000

Today’s best smartphones are really hand-held computers. They run a vast variety of applications, from productivity programs to games, that mimic what laptops do. Their biggest limitations for serious work, gaming, Web surfing and multimedia are their small screens, cramped keyboards and tinny speakers.

[ See post to watch video ]

So, what if you could use the brains and connectivity of such a hand-held computer to drive a laptop-size screen, keyboard and speakers, thus overcoming these limitations? Well, Motorola Mobility has devised a new phone and accessory that aim to do just that: to make the phone the only computer you need.

I’ve been testing this new phone, the Atrix 4G, an Android device that will cost $200 with a two-year contract and will run on AT&T’s network. It’s slated to be available by March 6. I’ve also been testing its unusual and clever accessory called the laptop dock, which looks like a large netbook, with an 11.6-inch screen, full keyboard, touch pad, and stereo speakers. This dock, the price of which depends on when you buy it, has no processor, no file storage and no connectivity of its own. It’s dormant until you plug the Atrix into a slot behind the screen.

When you dock the phone, the faux laptop comes alive. It duplicates the phone’s screen on its larger display and lets you use its connectivity and apps. It also contains a battery that charges the phone. The image of the phone’s screen, and any of its apps you run, can be actual size or blown up to use the dock’s larger screen.

With Motorola’s Atrix 4G smartphone, the laptop is the accessory. The phone shown docked to the laptop dock.

Full-Screen Firefox

Even more interestingly, the dock gives you access to a full, and full-screen, PC version of the Firefox Web browser. Firefox is tucked away inside the Atrix but is available only when the phone is plugged into the laptop dock or a second, smaller dock that’s meant to connect to a TV or desktop monitor. The smaller dock lacks a built-in keyboard, battery or screen.

The laptop dock costs $500, but AT&T will knock the price down to $300, after rebates, if you buy it at the same time you buy the phone. That brings the combined price of both devices to $500—the same as the separate price for the dock. The smaller dock, called the multimedia dock, costs $190.

In my tests, the Atrix and the laptop dock performed mostly as advertised. The phone had no trouble driving the larger screen or the full Firefox browser.

I was even able to insert a flash drive into one of the dock’s two USB ports and copy songs, photos, videos and documents into the phone’s internal memory using the keyboard and touch pad. I edited and wrote text in an app called Quickoffice on the phone using the laptop dock’s keyboard, and ran various other apps, including the popular game Angry Birds, on the larger screen.

The Firefox browser worked as normal, using either the phone’s cellular or Wi-Fi connections to access the Internet. And both the phone itself and Firefox can run Flash videos, which mostly played fine.

But the combination of the phone and dock wasn’t as fast, smooth or versatile as having a real laptop, even though to use them you’re essentially carrying around a light laptop (the dock weighs 2.4 pounds). Many apps on the phone aren’t as polished or powerful as typical PC apps, and I found them clumsier to use with the keyboard and touch pad, as opposed to the touch screen for which they were designed.

Installation Issue

Also, other than Firefox, you can’t install PC programs. You can use Web apps inside Firefox, such as Google Docs or the stripped-down Web versions of Microsoft’s Office apps. For email, you can either use the program based in the phone or any Web-based program via the Firefox browser, such as Gmail or Yahoo Mail. But you can’t, say, install iTunes, or PC-based games, or the full versions of Outlook or Microsoft Word.

And there is only a primitive file system, limited to the capacity of the phone, which is just 16 gigabytes, with an option to expand to 48 gigabytes.

The dock’s screen required a lot of scrolling when using Firefox, partly because the browser has a lot of menus and toolbars. To address this, Motorola lets you convert Web pages to versions with the Firefox controls stripped out, so you just see the content.

There’s another problem with the laptop dock. When you make or receive a voice call while the phone is docked, you must rely on the phone’s microphone and speakers, hidden behind the screen of the dock. As a result, calls sounded muffled on both ends, even though the phone automatically switches into speakerphone mode. Motorola says it is working on this issue.

Despite the drawbacks, some folks will surely be attracted to this innovative combination.

If you mostly do your computing tasks on a phone or a PC Web browser, storing files in the cloud and using phone or Web-based apps, Motorola has you covered. And the fact that the dock can charge the phone is a big plus.

Motorola’s Atrix 4G

The Phone Side

What about the phone itself?

Well, it’s one of the nicest smartphones I’ve tested. Its processor makes it fast, and it has a 4-inch, high-resolution screen—almost as high as the iPhone 4′s, though not quite as sharp to my eye. It runs an older version of Android, but Motorola is promising an upgrade.

The phone also has good battery life. It lasted a full day while I was testing it and Motorola claims up to nine hours of talk time. Photos and videos I took with the phone were sharp, and it has a front camera for video calls.

The Atrix also has two other notable features. First, it can take advantage of AT&T’s souped-up 3G network, which the carrier calls 4G because it can supposedly achieve 4G data speeds.

In my tests, in the D.C. and New York areas, the speed wasn’t especially impressive, averaging just a bit better than 3G speeds on other AT&T phones I’d tested.

There is also a fingerprint sensor built into the phone, which you can use instead of a pass code to secure the phone. It worked fine for me.

Overall, this is a very nice Android phone that can imitate a limited version of a laptop. That may be enough for some folks, but fall short for others.

Write to Walter S. Mossberg at walt.mossberg@wsj.com

Apple and Samsung Hammering Out $7.8 Billion Display Deal

John Paczkowski — Mon, 14 Feb 2011 15:32:46 +0000

With demand for its iOS devices growing, Apple is once again moving to secure vast storehouses of parts with which to build them. Cupertino is said to be finalizing a massive component contract with Samsung, one that would make it the company’s single largest customer.

Worth about $7.8 billion, the deal is believed to include liquid-crystal display panels for the next iteration of the iPad, as well as mobile application processors and NAND flash memory chips used for the U.S. company’s iPhones and iPads.

One unknown: Whether the displays reportedly included in this deal are the rumored Super PLS panels that offer not just a wider viewing angle, but superior visibility outdoors. Another: Whether this deal is somehow related to the $3.9 billion component supplies and capacity contract Apple COO Tim Cook mentioned during Apple’s first-quarter earnings call.

“In the past several quarters we’ve identified another area and come to some recent agreements that [CFO Peter Oppenheimer] talked about in his opening comments, in that these payments consist of prepayments and capital for process equipment and tooling,” Cook said back in January. “And similar to the flash agreements, they’re focused in that area we feel is very strategic. And so I’d prefer not to go into more detail about what specific area it’s in, but it’s the same kind of thinking that led us to those deals that led us to the flash deal.”

PREVIOUSLY: Apple Using Cash to Secure Cache of Components

Apple Works on Line of Less-Expensive iPhones

Yukari Iwatani Kane and Ethan Smith — Sun, 13 Feb 2011 17:00:52 +0000

Apple Inc. is working on the first of a new line of iPhones and an overhaul of software services for the devices, people familiar with the matter said, moving to accelerate sales of its smartphones amid growing competition.

One of the people, who saw a prototype of the phone late last year, said the device is intended for sale alongside Apple’s existing line. The new device would be about half the size of the iPhone 4, which is the current model.

The new phone would be available to carriers at about half the price of the main iPhone repertoire. That would allow carriers to subsidize most or all of the consumer’s cost, putting the iPhone in the same mass-market price range as rival smartphones, the person said. Apple currently sells iPhones to carriers for $625 apiece on average. With carrier subsidies, consumers can buy iPhones for as little as $199 with a two-year contract.

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Sprint Now Gaining Subscribers Instead of Losing Them

John Paczkowski — Thu, 10 Feb 2011 14:45:26 +0000

Good news for long-suffering Sprint Nextel investors: Customer retention has finally improved to the point where the carrier is able to report actual gains in postpaid subscribers, rather than losses.

Posting fourth-quarter earnings this morning, Sprint said it added 1.1 million total wireless subscribers, 58,000 of them two-year contract customers. Quite a milestone for a company that hasn’t seen a gain in postpaid subscribers in 13 quarters and a sign that Sprint may finally be turning a corner. Another good sign: Postpaid churn fell to 1.86 percent from 2.11 percent in the third quarter, and prepaid churn fell to 4.93 percent from 5.32 percent. And another: For the quarter, Sprint added almost 1.1 million wireless subscribers, its best showing in nearly five years.

All welcome news, even if Sprint is still losing money. The company reported a fourth-quarter loss of $929 million, or 31 cents a share, on revenue of $8.3 billion, up from $7.9 billion a year ago. Analysts polled by Thomson Reuters most recently forecast a loss of 30 cents a share on $8.15 billion in revenue. Said Bernstein analyst Craig Moffett, “Sprint CEO Dan Hesse might be forgiven for the temptation to hang a “Mission Accomplished” banner on the aircraft carrier that is Sprint. To his credit, he expressly declined to do so. Still, the company has at last achieved post-paid and total subscriber growth, customer service levels have improved, churn rates have been brought under control, and revenues were up.”

At $4.41, Sprint shares are up 1.15 percent in early trading as I write this.

The Streak 7: Bargain Tablet From Dell Is No Real Deal

Walter S. Mossberg — Thu, 10 Feb 2011 02:01:23 +0000

If you could get a tablet for the price of a smart phone, and if it also worked on one of the new, faster, 4G-class cellular networks, you’d jump at the chance, right? Dell and T-Mobile hope so, and that’s why they’ve brought out the Dell Streak 7, at just $200 with a two-year service contract.

[ See post to watch video ]

The Streak 7, Dell’s second effort to compete with Apple’s $500 iPad, is the least expensive tablet I’ve seen from a major manufacturer, and claims to be the first capable of 4G cellular speeds (it also has Wi-Fi). Like many planned iPad competitors, it runs Google’s Android operating system. It’s also the first I’ve tested using a fast new processor from nVidia, the Tegra 2, which will power a number of new tablets this year.

Unfortunately, after a week of testing, I found the compromises Dell made to get to that low price make it impossible for me to recommend the Streak 7. Its screen, battery life, and software are all disappointing, and vastly inferior not only to the iPad’s, but also to those on the Samsung Galaxy Tab, a high-quality Android tablet about the size of the Streak 7 released late last year. In other words, you get what you pay for.

Like the Galaxy Tab, the Streak 7 has a 7-inch screen, measured diagonally, or less than half the size of the iPad’s. But it’s large enough to be properly called a tablet, unlike Dell’s first Streak, an odd tweener device with a 5-inch screen—more like a big phone—that was released last year to a tepid response.

Dell concedes it wasn’t trying to build “the Cadillac of tablets” with the Streak 7, but was aiming for budget-conscious families and home use. Dell notes it has plans for a range of tablets with different prices, screen sizes and specs.

The Streak 7′s screen, battery life, and software are all disappointing. In other words, you get what you pay for.

The Streak 7 has some strengths. Like the Tab, it’s smaller and lighter than the iPad, so easier to hold in one hand. It plays Flash videos, which the iPad can’t. And it has front and rear cameras, unlike the iPad. It can also be used, unlike the iPad, as a Wi-Fi hot spot.

Also, I found its cellular data speeds impressive. In tests I conducted in Silicon Valley, the Streak averaged 4.63 megabits per second in download speed on T-Mobile’s souped-up 3G network (which it calls 4G because it claims similar speeds). That was nearly twice as fast as the download speeds provided by my hotel’s Wi-Fi network. Cellular upload speeds were a bit slower than Wi-Fi, but still averaged about 1.2 mps.

But, in my view, the Streak 7′s minuses outweighed its pluses. Let’s start with battery life. In my tests, the Streak 7 conked out after a pathetic two hours and 10 minutes of watching movies. That compares with about 11.5 hours of continuous video playback for the iPad and just under seven hours for the Galaxy Tab, when I tested them. In a more mixed-use pattern, including Web surfing, game playing, music, email and social networking, with some short videos thrown in, the Streak 7 lasted between 5.5 and 6.5 hours, still underwhelming for a tablet.

Dell says its target audience will use the Streak 7 plugged into wall outlets and TVs through an extra-cost dock, but I wouldn’t buy a tablet with battery life this poor.

Screen resolution also was so low as to be fuzzy at times, especially in reading small type, and viewing the screen at an angle often reduced the image to a ghostly outline. The Streak 7′s screen has a resolution of 800×480, below the much smaller iPhone screen, and well below the resolution of the iPad or the Galaxy Tab. While the internal chips drove video fine—as long as the batteries lasted—it looked worse than on the other two, as did photos.

The software also is a problem. It’s an older version of Android, called 2.2, which was never intended for tablets, and whose core apps—such as email, contacts and calendar—were designed for the smaller phone screens. Months ago, Samsung used the same version of Android on the Tab, but compensated by rewriting key apps to take advantage of the tablet screen, with more PC-like designs. Dell has done none of this on the Streak 7. All it added was a thin user interface called Stage featuring big, blocky widgets that group things like contacts and social updates, an old concept. It preloaded some kid-friendly and family-friendly apps, but some are mere come-ons that require downloading the full app.

Worse, the Streak 7 appears shortly before the true tablet-optimized version of Android, called Honeycomb, and Dell can’t promise that Streak 7 buyers can upgrade to Honeycomb. The company says the device has been designed to accommodate an upgrade, and is hopeful that it’s possible. But there is no guarantee. Buyers might get stuck with the old version built for phones.

Even on a tight budget, the Streak 7′s deficiencies might not make it worth the price. You’ll pay T-Mobile $30 or $50 a month for a capped data plan for two years. By contrast, the base iPad requires no payments to a cellular carrier, as it’s Wi-Fi only. Even if you buy the iPad with cellular connectivity from AT&T, there is no contract. You pay $15 or $25 a month and end the cell service at will, with no penalty.

You can buy the Streak 7 without a contract, but then it costs $450, too much for a device with its drawbacks, and only $50 less than the far superior base iPad. Even the Streak 7′s subsidized price of $200 is only $50 less than what its carrier, T-Mobile, charges for the better Galaxy Tab with a two-year contract.

Dell is serious about competing in the tablet wars, and it may produce a winner yet. But its first efforts, in my view, missed the mark.

Find all Walt Mossberg’s columns and videos at the All Things Digital website, walt.allthingsd.com. Email him at mossberg@wsj.com.

What's Better Than One Screen? Two! Sprint Unveils Kyocera Echo.

Tricia Duryee — Mon, 07 Feb 2011 23:57:40 +0000

Ahead of Apple’s iPhone launch on Verizon later this week, Sprint unveiled the Kyocera Echo, a dual-touchscreen smartphone. The Android phone, which looks a lot like a Nintendo DS, is being positioned against tablets because of better multitasking capabilities. It allows people to watch videos on one display while browsing on another. The Echo will be available this spring for $200 with a new contract. Monthly plans start at $80 for unlimited text, talk and data.

Arianna Huffington on Her New AOL Job: "I Want to Stay Here Forever"

Peter Kafka — Mon, 07 Feb 2011 13:55:58 +0000

Tim Armstrong and company spent yesterday explaining their $315 million Huffington Post purchase to the press. Now they’re doing the same for Wall Street, via a conference call.

AOL CFO Artie Minson prepped investors for the call with a memo laying out expectations. Short version: AOL thinks HuffPo will earn about $10 million on revenue of $50 million this year (as long as you’re okay with using “adjusted OIBDA” as a proxy for “profit”). It also thinks the purchase will save it $20 million a year, but it’s going to spend around $20 million on restructuring charges when the deal goes through.

I’ll liveblog the call below:

8:02 am: Greetings! About to start now.

8:03 am: On the call: Tim Armstrong, Arianna Huffington, Artie Minson.

8:03 am: Armstrong makes a Super Bowl joke that I can’t quite follow, and I like football. But now praising Arianna, co-founder Kenny Lerer and outgoing AOL CEO Eric Hippeau.

“The Huffington Post is one of the best properties on the Internet.” Armstrong, Huffington and Minson are all BlackBerry users.

8:06 am: On revenue: This gives an opportunity to serve more brand marketers, who are “very interested” in the scale this gives us.

8:07 am: Spending next 30 days on integration. “Really synergies to be had.”

Next steps: Next 72 hours communicating with employees, talking to partners. 1,500 AOL workers on the phone this morning explaining deal to others.

“This may be the smallest disruption” internally of any deal I’ve worked on. Majority of integration done within 35 to 40 days.

8:09 am: We’ve looked at a bunch of companies, though we’re mainly going to concentrate on organic growth. But Arianna is great [many superlatives] and she “also happens to be a woman.”

8:10 am: Here’s Arianna.

8:11 am: “Amazing” how aligned two orgs are.

8:11 am: HuffPo was profitable last year. We were thinking about bringing in additional investors last year, and an IPO down the line. But this made perfect sense.

8:12 am: This deal provides a “dramatic acceleration” for the plans we already had.

8:13 am: Some praise for Patch, AOL’s local strategy.

8:14 am: Can’t wait to start!

8:14 am: Alrighty, then. Here’s Artie Minson with some nuts and bolts.

Actually, it’s some color on the deal. But a lot of it is in the prepared remarks he put out earlier this morning.

8:15 am: Again, $20 million in cost savings here. And again, we’ll have to pay up for restructuring: $20 million for cuts, and $10 million for purchase price.

8:17 am: Still basically reading from prepared remarks. Some bookkeeping talk re: compensation accounting.

8:18 am: Remember, display ad growth coming will finally start showing up second half of this year.

8:19 am: Q&A:

Q: Talk about content strategy. Does HuffPo become hub for content going forward? Does it replace Seed? And how long is Arianna’s contract?

A: “The press” has been talking about our content strategy, so let me be clear–we’re focusing on premium content. Things like Seed and StudioNow are platforms–you can do whatever you want with them, different quality levels, at different types of scale.

And then the other thing that is important about those platforms is the ability they give us to work with advertisers.

One of our main interests in HuffPo is their technology and publishing system. So now we have multiple systems [which he is saying is a good thing]. “Our content strategy hasn’t changed.” The “stuff that was out in the press about the AOL Way” was just one way of doing things. [This is not very convincing]

Arianna, tell us how long you’re going to stay.

8:24 am: Arianna: “I’ve told Tim I want to stay here forever. I want this to be the last act of my life.” Anything I want to do I can do here.

[Sorry, missed next part but it was a defense/explanation of content strategy.]

8:26 am: Armstrong: Arianna has a multiyear contract, but it’s open-ended.

8:27 am: Arianna: By the way, we’re going to bring back commenting to AOL stories, and socialize them.

8:28 am: Q: Why buy instead of partnering? Were there other bidders? Also, how will HuffPo politics affect AOL?

8:28 am: Armstrong: We do partnerships where there is “limited upside to those arrangements” so ” we can really spend time on the areas we want to win”–i.e., we don’t care about sports, we do care about women.

“Arianna is somebody we’d rather have inside our building than outside our building.”

“If there were or weren’t bidders on the other side,” I think we got the right price.

8:30 am: Arianna. “As we’ve said, again and again, Huffington Post was not for sale….Nobody was in a hurry to cash out, everybody believed that we could do an IPO down the road.” It’s just that Tim gave us a great offer. [hrrrm.]

On politics–we used to be all about politics, now we’re not. Just 15 percent of our traffic. We have a divorce section now.

Talking up AOL’s “college” section.

8:33 am: Q: For Arianna: More on Patch, please. What do think about what AOL’s done with it, and what you can do with it?

8:33 am: [Every time Arianna says "local level" I think she's saying "locker level." It's happened at least twice, maybe more, on this call.]

There’s a “greatest person of the day” feature we have, and I think Patch should use that. [Or maybe vice-versa, sorry.] I also like their five percent “giving back” rule, cause marketing, etc.

8:35 am: Armstrong: Again, we can do national and local. That’s important. NFL rights are important, and so are local news stories.

8:36 am: Q: Who’s going to sell what? And can you talk about pricing disparity between AOL and HuffPo?

8:37 am: Armstrong: “We would like to maintain all the people from both sales forces [except for Greg Coleman!]. I think we will end up with a large-scale, large-property organization–I don’t know exactly what that’s going to look like, though.

On sell-through rate: Slightly lower at HuffPo, because they’ve been ramping up traffic, and sales force. On CPM, same story. So we can bring up sell-through rate and CPM, and have a larger sales force. [This is pretty much the best argument for the deal that Armstrong can make.]

[BTW: Good back-channel discussion on Twitter right now about AOL's SEO skills, and the people behind it. None of that coming up during this call right now.]

[Sorry, I meant HuffPo's SEO skills, much of which stem from blueprint BuzzFeed CEO Jonah Peretti set out.]

Q: Why not use equity for this deal?

A: Because our equity is priced too low, essentially. But HuffPo employees did roll over 25 percent of deal consideration into AOL options. So as that equity gets more valuable, they’ll get upside.

8:45 am: Q: In your statement, you talked about OIBDA growth in 2013. More on that please.

Minson–probably going to stick to my prepared remarks on that one.

8:46 am: Last Q: Your acqusitions have been about toolsets or content. As you think about others going forward, what else do you want?

Armstrong: We have long-term vision. On plumbing: We’ve wanted to get platforms and plumbing straightened out, and we’re doing that now. Think about the bones or foundation of a very large property. That’s why we’ve been doing infrastructure, like with video–5Min and GoViral and StudioNow.

Going forward, we’ll be doing infrastructure. And we’ll continue to look at “media properties and media brands” that fit our strategy. [Remember, Web site owners: HuffPo just got 10x revenue.

8:50 am: Minson: But we're very price sensitive and we've walked away from deals.

8:50 am: Arianna: And we like women!

8:51 am: Armstrong sums up: Success "in the Internet space" requires vision and execution. That's this deal. And remember, content and brands become more valuable as tech gets faster, more advanced. And "expect us to stay on strategy and on point" going forward. "We're going to overcommunicate" with both sets of employees as we integrate. [You've been warned!]

And we’re done. Thanks for reading.

[Photo credit: Arianna Huffington]

BoomTown Will Have What Greg Coleman's Having: HuffPo Ad Sales Head Scores Big Bucks Twice From AOL's Armstrong

Kara Swisher — Mon, 07 Feb 2011 12:00:35 +0000

AOL CEO Tim Armstrong is the gift that keeps on giving–at least to Greg Coleman.

He’s the Chief Revenue Officer at the Huffington Post, for which the Internet giant just forked over $315 million to acquire.

Sources said Coleman, who has run advertising sales at the privately held news and opinion site since the fall of 2009, will get a multimillion dollar payday from the deal, even though he is not staying on after it closes, since AOL has its own top ad guy.

Except that this is the very same Greg Coleman who had been running ad sales for AOL for only two weeks when Armstrong took over from ousted CEO Randy Falco in February of 2009.

Coleman was gone from AOL by the end of April, replaced by Armstrong with current ad sales head Jeff Levick.

And for those three months of work Coleman got paid out his entire three-year AOL contract.

Not bad work if you can get it.

Actually, many credit Coleman’s energetic work at the Huffington Post for turbocharging its ad sales revenue to $31 million in 2010 and projected revenue upward of $60 million in 2011.

Coleman is an experienced online ad exec who was at Yahoo for seven years, responsible for all advertising revenue worldwide. He came to Yahoo from Reader’s Digest.

But Coleman ran into Yahoo’s management buzz saw after trouble hit the company in 2007. He was one of the first in a long line of execs to leave the troubled company, departing in one of its many controversial reorganizations.

But Yahoo’s ad business did grow strongly under him and former Yahoo ad exec Wenda Millard.

Before AOL, Coleman ran a Los Angeles-based start-up called NetSeer, which focused on ad targeting.

Memo to soon-to-be unemployed Greg: You’re definitely buying lunch next time I see you, and keep in mind that BoomTown is feeling partial to caviar.

AT&T to Push Atrix 4G to Counter Verizon iPhone

Shayndi Raice — Thu, 03 Feb 2011 18:49:02 +0000

AT&T Inc. is cozying up to Motorola Mobility Holdings Inc. as the carrier seeks to bulk up its smartphone portfolio running on Google Inc.’s Android operating system in the wake of losing its exclusive hold on Apple Inc.’s iPhone.

To attract new customers, AT&T Mobility Chief Executive Ralph de la Vega said the forthcoming Motorola Atrix 4G will be the carrier’s leading device in its portfolio. Mr. de la Vega wouldn’t say how much money the carrier will spend on marketing the device, but he said it would receive amounts similar to campaigns for the iPhone or its previous hit phone the Motorola Razr.

On Thursday, the second largest U.S. wireless carrier by subscribers said it will start selling the Motorola Atrix 4G on March 6 for $199.99 with a two-year contract. Presales will begin Feb. 13.

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90 Percent of AT&T iPhone Subs Still Under Contract

John Paczkowski — Fri, 28 Jan 2011 12:00:07 +0000

A metric worth mulling as AT&T’s previously monogamous relationship with Apple shifts into polyamory: 90 percent of the carrier’s iPhone users are still under contract.

That’s according to Susquehanna analyst Jeffrey Fidacaro (and AT&T, which confirmed that percentage to me), who doesn’t see the launch of the iPhone on Verizon as a catastrophic event for AT&T at all. He thinks the carrier stands to lose two million iPhone users at most to Verizon–hardly a mass exodus.

AT&T’s decision last year to accelerate upgrade eligibility for iPhone customers, making it easier for them to get the iPhone 4 when Apple released it, is proving a wise move indeed. What better deterrent to switching networks than the carrier’s $325 early termination fee?

In all likelihood, iPhone subscriber churn will be no worse at AT&T than it has been at other carriers that have lost iPhone exclusivity. As Matthew Key, CEO of Telefónica Europe, said during a February 2010 earnings call, “Ever since Vodafone has started selling the iPhone in January, we see absolutely no evidence of people leaving us, churning on the iPhone going back to Orange or Vodafone, so [we are] very comfortable with our iPhone volumes. We continue to out-trade the market and no sign of churn whatsoever.”

Verizon's iPhone Picture Comes Into Focus

Ina Fried — Wed, 26 Jan 2011 15:00:29 +0000

Although it doesn’t go on sale for another couple of weeks, potential customers for the Verizon iPhone now have nearly all the details they need to decide if the phone is right for them.
That wasn’t the case when Verizon introduced the phone in New York a fortnight ago.

The company said how much the device would cost ($199 or $299, depending on capacity, with a new two-year contract), but was cagey about other details, such as monthly service costs.

We now know, though, that the company will offer a $30 unlimited data plan for the iPhone, similar to that offered for other 3G smartphones, although it still plans to move away from unlimited plans, so there is no telling how long the plan will last. Verizon also said it will charge the same price for the hotspot feature ($20 for 2GB) that it charges for most other smartphones that can act as a wireless hotspot. The hotspot feature is the main distinguishing characteristic of the Verizon iPhone, which in most other respects resembles its AT&T sibling. Even more details on service plan pricing were briefly available on Apple’s site, for those that want to check out voice plans and text messaging rates.

Verizon has also outlined its policies, including who is eligible for an upgrade and what its exchange policy will be for recently purchased devices.

There are still a few unknowns, such as the voice quality of the phone and how Verizon’s well-regarded network will hold up amid the crush of new iPhones hitting the network. And it likely will be a crush. Some analysts have predicted the company could sell 11 million iPhones out of the gate, something that the company on Tuesday’s earnings conference call said was a reasonable forecast.

Verizon Earnings Fall Short as Company Confirms $30 Unlimited Data Plan for iPhone

Ina Fried — Tue, 25 Jan 2011 15:45:48 +0000

Verizon’s earnings report on Tuesday was closely watched, in large part for any hints about the impending arrival of the iPhone to the company’s wireless service.

The numbers themselves were lackluster, with Verizon Communications reporting per-share earnings, excluding pension and other items, of 54 cents on revenue of $26.4 billion. The earnings were a penny short of expectations, Bloomberg said, with revenue about in line with what analysts predicted. After initially dipping, Verizon shares were trading recently at $36.35, up about 3 percent.

Once again, though, much attention focused on the Verizon iPhone, which goes on sale next month.

Ahead of the company’s earnings conference call, Verizon Chief Operating Officer Lowell McAdam told The Wall Street Journal that the company would offer a $30 unlimited data plan, similar to what it offers for other phones.

“I’m not going to shoot myself in the foot,” he told the Journal. AT&T used to offer a similar plan, but switched to usage-based pricing for new customers last year; plenty of the subscribers that Verizon is courting, however, have been able to keep their unlimited plan with AT&T.

Verizon has announced it will sell the iPhone at prices similar to what AT&T charges for the iPhone, so its service pricing has been one of the big remaining unknowns. Verizon is also likely to charge an extra fee for customers who want to take advantage of the device’s ability to act as a wireless hotspot. AT&T’s iPhone doesn’t have such a feature.

The iPhone also impacted Verizon in other ways last quarter, McAdam said, noting that it appeared to hold back subscriber growth, although the company did add some 870,000 new customers.

“It wasn’t what I hoped it would be,” he told the Journal.

Verizon’s earnings report suggests an opportunity to sell some iPhones to its existing customer base; only about a quarter of its contract subscribers have smartphones.

The company said it expects that, with the addition of the iPhone and devices running on its new LTE network it expects that number to roughly double this year, with smartphone penetration accounting for more than half of customers by year-end.

PREVIOUSLY:

Verizon to iPhone Users: You Will Buy The $30-Per-Month, Unlimited Data Plan and You Will Like It

Verizon iPhone to Debut With Unlimited Data Plan

Agonizing Wait for Verizon iPhone Ends With Agonizingly Hyperbolic Advertisement

John Paczkowski — Fri, 21 Jan 2011 02:30:01 +0000

The wait for the Verizon iPhone won’t officially end until Feb. 10, but the company’s already thanking its customers for sticking with it until it was able to ink a carrier deal with Apple. How? With a hyperbolic new advertisement. How thoughtful.

“To our millions of customers, who never stopped believing this day would come…Thank you.”

And, hey, we’re really looking forward to locking you into another two-year contract!

In 4G Race, Verizon Pulls Ahead With Pricey Speed

Walter S. Mossberg — Thu, 06 Jan 2011 02:03:48 +0000

One of the biggest technology trends in 2011 will be the expansion of new, faster cellular networks called 4G, or fourth generation. These networks promise a big increase in speed and capacity to handle the surge in streaming video, audio and Web surfing from hot-selling devices like super-smart phones and tablets, as well as from laptops. But you’ll have to buy new phones, modems and other connected consumer devices to get the higher speed they offer.

[ See post to watch video ]

Wireless carriers and handset makers will be touting their 4G plans and compatible devices at this week’s Consumer Electronics Show in Las Vegas, but it will be a couple of years before 4G networks in the U.S. achieve the same coverage as the current standard, called 3G.

The move to 4G from 3G began last year, with Sprint leading the way and Verizon Wireless joining in the last few weeks of 2010 with a limited deployment. But 2011 will see the service spreading to more and more cities, and is also expected to see the entry of AT&T. T-Mobile hasn’t announced an actual 4G network rollout, but is instead relying on a souped-up version of 3G that it is marketing as 4G because it claims it can deliver similar data speeds with its approach.

I’ve been testing the 4G network of the latest entrant, Verizon, in the suburbs of Washington, D.C., which is one of 38 metro areas (plus 60 airports) where the company turned on its 4G network in December. My verdict is that it’s wicked fast—the fastest 4G network I’ve tried—but also potentially costly. In my tests, with a laptop modem, it proved dramatically faster than Verizon’s 3G network, and recorded speeds on a par with some land-line Internet connections.

But 4G from Verizon won’t be cheap. For laptop modem users, at least, Verizon is charging $50 a month for up to 5 gigabytes of data use and $80 monthly for 10 gigabytes. If you run over, the company will bill you $10 for every extra gigabyte. Such data limits aren’t new, but, with 4G’s much higher speeds, users may find themselves sending and receiving more data more often, and thus breaching the limits more regularly. For instance, in my tests, I was easily able to download a nearly 600 megabyte TV show, something I wouldn’t even try with a 3G modem. That one download would have eaten up more than 10% of my monthly cap under the $50 plan.

Verizon’s first LTE laptop modem, the LG VL600, has a flip top that reveals the USB connector.

Verizon’s variant of 4G uses a different underlying technology than Sprint’s. It’s called LTE, for Long Term Evolution, and is also the 4G system being adopted by many other cellular operators around the world, including AT&T. (Technically, this first version of LTE isn’t considered true 4G by the engineering standards body that rules on such matters, but that makes little difference to consumers looking for faster connections.)

The company says it chose LTE because it is not only fast, but is less prone to interference, can provide better battery life, has less latency, or lag, and can better handle multiple users simultaneously. The LTE system doesn’t affect voice calls on Verizon’s network—it’s only for data, and operates in tandem with the current voice network.

Verizon claims its new network is up to 10 times faster than its 3G network and says consumers will see speeds of between 5 and 12 megabits per second for downloads and between 2 and 5 mbps for uploads, in “real-world, loaded network environments.”

As of this writing, Verizon doesn’t offer an actual LTE-capable smart phone, only LTE USB modems that plug into laptops. But the company is expected to offer a sneak peek at CES this week of several LTE phones that will roll out in the coming months, as well other planned LTE devices, from a variety of manufacturers. Again, I want to stress that your current Verizon phone or laptop modem can’t be upgraded to work with LTE. You’ll need a new one.

For my tests, I used Verizon’s first LTE laptop modem, the VL600 made by LG of Korea. It sells for $100 after a $50 mail-in rebate with a two-year service contract. This modem can handle data over slower 3G networks, if you happen to stray out of one of Verizon’s 4G service areas. For now, it works only on computers running Windows XP, Vista, and Windows 7. But the company says it should have Mac-compatible LTE modems in a month or so.

To use it, you have to first install, from an included CD, a new version of Verizon’s cellular modem software, VZAccess Manager. Older versions won’t work. My test machine was a Lenovo ThinkPad X301, which worked fine with a Verizon 3G modem. Installation was relatively quick and smooth, though I was immediately instructed to download an updated version of the software, so I had to go through it twice.

I disabled Wi-Fi on the ThinkPad, plugged in the LTE modem and ran 10 tests using the popular Speedtest.net website. The results were impressive. Verizon’s 4G network averaged just a shade under 16 megabits per second for downloads and 6.6 mbps for uploads. That was 15 times the download speed, and 13 times the upload speed, of a Verizon 3G modem I tested immediately afterward using the same method in the same location.

To relate these speeds to real-world scenarios, I downloaded from iTunes a standard-definition episode of the TV show “The Good Wife”—a 588 megabyte file—in just seven minutes, instead of the two hours or so iTunes predicted it would take when I was using the 3G modem. I streamed several long videos, including two in HD, from the Web, and they played smooth as silk.

But there are caveats. For one thing, hardly anyone is using this new Verizon network yet, and it’s likely to slow down as it gets crowded, especially with smart-phone users. Secondly, laptop cellular modems typically deliver faster speeds than phones, so my results don’t necessarily predict phone or tablet performance.

Also, speeds can vary by city and distance. My tests were mainly conducted against a server in my local D.C. area. But I also tried a few tests against a server in San Francisco and only got about 6 mbps download—within Verizon’s claims, but much slower.

Still, if you can afford it, and if it works well in phones and tablets, Verizon’s new LTE network could be a great boon to your digital lifestyle.

Find all Walt Mossberg’s columns and videos at the All Things Digital website, allthingsd.com.

2011 Verizon iPhone Sales: Nine Million or 19 Million?

John Paczkowski — Wed, 15 Dec 2010 16:32:22 +0000

Of the 25 million smartphones Verizon will activate next year, nine million will be iPhones, says Piper Jaffray analyst Gene Munster. He figures Apple’s handset will make up about 36 percent of all activations for the year–assuming the iPhone launches midway through the March quarter. And 6.5 million of those will likely be cannibalized from AT&T–which, were it to retain its exclusive on the iPhone, would sell 17.5 million. Which means the Verizon deal may not give as big a spike to iPhone sales in the States as expected.

“We are modeling for Apple to sell an incremental 2.5 million iPhones with the addition of Verizon, which may be conservative,” Munster explains. “We are modeling for iPhone units at AT&T to be down 30 percent year-over-year in 2011 as the US mix shifts towards Verizon, and as AT&T subs wait to upgrade their iPhones until they are off-contract and can purchase an iPhone on Verizon.”

Interesting, yeah? There is a caveat, though. If iPhone sales at AT&T remain flat year-over-year in 2011, Verizon may see as many iPhones next year as its rival did in calendar 2010. And that would add another 10 million units to Munster’s 2011 iPhone estimate. So: Nine million or 19 million.

Howard Stern Says Howard Stern Is Sticking With Sirius [UPDATED]

Peter Kafka — Thu, 09 Dec 2010 14:28:19 +0000

Howard Stern says he’s going to renew his expiring deal with Sirius XM and stay on the subscription radio service for another five years, say people who were listening to the Howard Stern show this morning. You’d think Sirius itself would make its own statement confirming Stern’s statement, but radio silence so far. But investors seem to be taking Stern at his word, and they’re pushing up SIRI shares in premarket trading.

UPDATE: Sirius now confirms the deal. It doesn’t offer up any new details except for this one: The company will now have the ability to transmit Stern’s show to mobile devices. Which would make the company’s mobile apps for, say, Apple’s iPhone and Google’s Android handsets much more attractive, and that’s a valuable deal point.

Press release:

Howard Stern Signs New Five-Year Contract With SIRIUS XM
Agreement Includes Rights for SIRIUS XM to Transmit Howard Stern’s Programming to Mobile Devices

NEW YORK, Dec. 9, 2010 /PRNewswire-FirstCall/ — Howard Stern and SIRIUS XM Radio (Nasdaq: SIRI) today announced a new five-year agreement. The news was first reported by Howard during his show this morning.

“On my first day in satellite radio SIRIUS had approximately 600,000 subscribers. Today, the two companies have 20 million; and, in my view, we have just scratched the surface of how many people will get on board,” said Howard Stern. “I am especially excited that my show will now be heard through SIRIUS XM on mobile devices. Access to my show on mobile devices will open up additional opportunities for my fans to hear me wherever they are.”

“Howard is a great talent and we are thrilled that he will continue to provoke, engage and entertain on SIRIUS XM. Our agreement is good news on all fronts — it is good for SIRIUS XM subscribers and good for SIRIUS XM stockholders. Howard forever changed radio and was instrumental in putting SIRIUS on the map when he first launched on satellite radio. He is one of the few ‘one-name’ entertainers in the country and our 20 million subscribers are lucky to have him,” said Mel Karmazin, Chief Executive Officer, SIRIUS XM.

The world-renowned Stern is credited with revolutionizing the talk radio format. Known for his large and extremely loyal fan base and for his unequalled ability to migrate fans to other media, Stern has embarked on numerous highly successful ventures over the years. Stern has written two best-selling books — Private Parts, which was Simon & Schuster’s fastest-selling book ever, and Miss America, the fastest-selling book in publishing history. He later starred in the highly successful motion picture adaptation of Private Parts, orchestrated one of the fastest-selling soundtracks in motion picture history and has starred in one of the most watched entertainment pay-per-view special of all time.

Howard’s new contract will run through December 31, 2015. Under the terms of the new contract, SIRIUS XM will now have the right to transmit Howard’s exclusive programming to mobile devices. Additional terms of the contract will not be disclosed.

GSA Goes Google

John Paczkowski — Thu, 02 Dec 2010 11:00:43 +0000

The General Services Administration–which oversees government procurement–will soon become the first major federal office to move to cloud-based email and calendar apps on an agency-wide basis. And it’s chosen Google Apps to do it.

A hard-won victory for Google, which beat out Microsoft for the $6.7 million five-year contract, leaving the folks up in Redmond more than a little peeved to see Office’s ubiquity in government threatened in this way.

“We are disappointed in the GSA’s internal e-mail decision,” the company said in a post to its “Why Microsoft” blog, adding that it is nonetheless “gratified that so many federal, state & local governments have chosen Microsoft to meet their business needs.”

You can almost hear the gritting teeth, can’t you? The horror of 15,000 GSA employees all using Gmail….

So again, a coup for Google, which has been working hard to push its cloud computing suite of messaging and collaboration apps to the government.

Interestingly, sources close to the negotiations tell me that the RFP (Request for Proposal) for the GSA contract was amended midway through the process to allow for offshoring of government data outside the United states–as an accommodation for Google.

Which is odd, because you’d think that if the United States government is embracing cloud computing, it would prefer the clouds in which its data is stored to be within its own borders. That Google requested and was granted the option to store GSA data offshore isn’t necessarily troubling (it must meet GSA security requirements regardless), but it is…interesting.

Google wouldn’t tell me the reason for its request, although I’ve heard it may have something to do with how the company segregates data and apps geographically. It was, however, quick to insist that it isn’t planning to offshore any U.S. government data entrusted to it–at least, currently.

Said spokesman Andrew Kovacs, “The government’s starting with Gmail and Calendar, and their data will be stored in a segregated system located in the continental United States that is exclusively for our government customers.”

Windows Phone 7 Update Is No iPhone Killer

Ina Fried — Wed, 01 Dec 2010 22:09:42 +0000

Since it is bubble-bursting Wednesday here at Mobilized, let me assure you that the forthcoming update to Windows Phone 7 is neither “massive” nor an iPhone killer, despite some reports to the contrary.

On the other hand, the software update, which could come as early as January, will add two things that are very important for Microsoft. First and foremost, the update will pave the way for Windows Phone 7 devices that work on Sprint and Verizon’s networks. That’s important because Microsoft is already fighting an uphill battle and doesn’t need to lose potential customers just because its phones don’t work on their carrier of choice.

The second key feature is copy and paste. While not the biggest deal for many customers, it is an omission in Windows Phone 7 that early adopters and reporters have given Microsoft plenty of grief about. Adding this feature should end that and put another tick in the feature check box for those comparing Windows Phone 7 side by side with iPhone and Android. (Now it just needs full multitasking, visual voicemail and a couple of other things.)

Officially, Microsoft is saying only that the update is due “in early 2011″ and will be the first of many regular updates to the operating system.

So how is Windows Phone 7 selling? It’s a little early to say definitively. There have been a couple of reports suggesting slow sales, but they are also based on very small data sets. For example, British phone retailer Mobilesplease says it is seeing Windows Phone 7 being outsold 15 to 1 by Android and 3 to 1 by Symbian-based devices. However, those numbers are based on sales data covering just a couple thousand phone sales.

Enthusiast site WMPoweruser tried to suss things out a bit by measuring how many Facebook activations there have been for Windows Phone 7 and came up with a figure of around 135,000. (Facebook support is built in to the operating system, but not all users choose to link their Facebook account to the phone). There’s also the fact that both T-Mobile and AT&T are offering “buy one, get one free” promotions on Windows Phone 7 devices. That could be a bad sign, but this is the holidays and carriers tend to like getting two users in a household and are willing to put some marketing money behind those efforts.

An AT&T spokesman, meanwhile, told Mobilized that the company has been pleased with Windows Phone 7 sales thus far, though neither he nor Microsoft would go into any specifics.

So what does all this mean? It’s hard to say. It’s clearly not a home run, with the phones selling so fast that stores can’t keep them in stock. At the same time, it is probably not the Kin-scale flop that some predicted either. (I know that doesn’t narrow things down too much. If anyone out there has more data, I’m all ears.)

Also of note, as of Wednesday there is one more Windows Phone 7 device to consider during these holidays, though you will have to go online or to one of a handful of Microsoft retail stores to find one. Dell is ready with its previously shown Venue Pro device. The rugged phone, which runs on T-Mobile’s network and features a vertical slide-out keyboard, will come in 8GB and 16GB versions.

The Venue Pro (seen above) is getting the most aggressive pricing of the early Windows Phones, starting at just $99 for the 8GB version when bought along with a new two-year contract. Those upgrading will have to pay $199, while it will sell for $449 without a contract at all. The 16GB version is priced $50 higher in all cases.

Facebook Acqhirees Make a Quick Mark on Its Products

Liz Gannes — Tue, 23 Nov 2010 13:00:12 +0000

Facebook has a well-defined M&A strategy of bringing in talent from young, small companies*. The company has reeled in 10 acquisitions this year, in most cases shutting down acquired services soon after a deal closes. The most it is known to have paid for a company is $50 million for FriendFeed. This has helped shape the epidemic of short-term thinking in today’s Web start-ups; sometimes, showing you are technically adept and have interesting ideas is all it takes for you to get a lucrative contract with Facebook and give your backers a mild return on their investment.

Bret Taylor

But there’s also a pattern emerging for what happens to that talent once folks arrive at Facebook. Acqhired CEOs hold prominent roles on Facebook’s product team; nearly every recent Facebook product launch seems to have been led by an acqhired employee. Most recently, Facebook Messages was product-managed by Dan Hsiao, who joined the company with the FriendFeed acquisition. Hsiao had actually been a more junior member of the FriendFeed team, having started there as an intern in 2008. Now he is managing what Facebook called the largest engineering team it has ever put together for a launch.

Meanwhile, former FriendFeed CEO Bret Taylor is CTO of Facebook. Hot Potato CEO Justin Shaffer was product manager for Facebook Groups and is now product manager for the company’s Places and Events products (his company was only acquired in August). Divvyshot CEO Sam Odio is now product manager for Facebook Photos. Nextstop CEO Carl Sjogreen now holds the title “head of platform development,” according to a Facebook spokeperson.

And Gokul Rajaram, known for his seminal work as a product manager on Google AdSense, is now in charge of Facebook’s ad technology. Rajaram came to Facebook through the acquisition of his company Chai Labs, also last August. Multiple sources confirmed Rajaram’s role at Facebook, though Facebook declined to.

Gokul Rajaram

Facebook has its reasons for keeping a big-name hire like Rajaram under the radar; for one, Google can’t be happy to have lost the opportunity to buy his start-up. The former Googler has been an adviser and director to multiple companies, including Canoe Ventures and Associated Content.

Elsewhere, Blake Ross and Joe Hewitt from Facebook’s first acquisition, Parakey, have had significant roles on products like Facebook Questions and the Facebook iPhone app. Ross’s title is Director of Product, though he is currently on sabbatical. Hewitt is working on undisclosed projects but “more on the engineering side,” said the spokesperson.

Facebook is not yet talking about where it will assign Sam Lessin, CEO of the just-acquired storage start-up Drop.io, and Cory Ondrejka and Bruce Rogers, founders of the just-acquired gaming start-up Walletin.

Facebook says it has about “two dozen PMs,” so the acqhired folks account for a significant but not dominant portion of that corps.

Facebook CEO Mark Zuckerberg told me last month:

We have a big footprint but we want to operate like a startup and take risks, and the best way to do that is to get people who self-select towards being entrepreneurs… The only real theme is that we haven’t bought any companies yet to get the company. It’s always been because we have a lot of respect for the people involved.

This kind of track record may make Facebook an even more enticing acquirer for small start-ups. On the other hand, it’s probably disheartening for Facebook’s homegrown talent to see these opportunities handed to people who are brand-new and who, in many cases, have little experience working at the scale of hundreds of millions of users.

*Facebook has also explored larger acquisitions of companies like Twitter and Foursquare (though Kara Swisher reported those talks were less serious than portrayed elsewhere), but those deals were never consummated.

Please see the disclosure about Facebook in my ethics statement.

Bret Taylor photo (CC) Brian Solis.