The company saw charges from both pension items and Hurricane Sandy, resulting in a total quarterly loss of $1.48 per share for the fourth quarter. Total quarterly revenue was $30 billion, up 5.7 percent from a year earlier. Wireless revenue was $20 billion, up nearly 10 percent from a year earlier. (Correction: An earlier version of this story originally listed the wireless revenue figure as if it were the companywide figure.)

Verizon’s base of wireless subscribers, though, grew significantly in the quarter, as the company added a record 2.1 million postpaid devices. Meanwhile, some 9 percent of its existing contract base upgraded their devices during the quarter.

Verizon’s FiOS high-speed TV and Internet service also saw gains, adding more customers in the fourth quarter than it had for the prior two quarters.

“Verizon seized growth opportunities in the fourth quarter to cap a year of solid progress across the entire business,” Verizon Communications CEO Lowell McAdam said in a statement.

Verizon is set to discuss its results on a conference call at 5:30 am PT.

Update, 5:40 am PT:: On a conference call with investors, CFO Fran Shammo said that wireless remained one of the company’s key growth areas based on the bet the company made five years ago on building a 4G LTE network, and more recently, toward its shared-data plans.

“These actions have resulted in consistent sequential growth,” Shammo said, adding that wireless revenue now represents nearly two-thirds of overall company sales.

The company activated 9.8 million smartphones in the fourth quarter, including 6.2 million iPhones, with most of the rest being Android devices. Tablet sales doubled as compared to the prior quarter, Shammo said.

The company is no longer adding capacity to its older 3G network, and all future smartphones will be 4G LTE capable, Shammo said.

As for the company’s shared-data plans, Shammo said nearly a quarter of accounts (23 percent) are on a “Share Everything” plan, ahead of the company’s expectations.

5:50 am PT:: On the wired side of things, Shammo said Verizon didn’t see the hoped-for increase in profitability in the second half of the year, in part due to Hurricane Sandy’s impact.

Verizon did say that its FiOS service now represents more than two-thirds of consumer revenue, and with 5.4 million Internet subscribers and 4.7 million FiOS TV users, is up 134,000 from the prior quarter.

The company hopes to move another 300,000 customers from copper to fiber connections this year, Shammo said.

Verizon shares are down slightly ahead of the market’s official opening on Tuesday, changing hands recently at $41.99, off 51 cents, or 1.2 percent.

6:21 am PT: Increased competition among mobile platforms should lead to lower subsidies, Shammo said.

Asked about the BlackBerry 10 launch, Shammo said he doesn’t see any unusual impact to Verizon’s finances.

“This is just yet another platform,” Shammo said, adding that the company still has a lot of loyal BlackBerry customers. “We are hoping that the platform is successful.”

Asa Mathat / AllThingsD.com Lowell McAdam

That’s a jaw-dropping metric — particularly since it was just three months ago that Verizon revealed that 35 percent of its data traffic traveled over LTE. Nearly half of all data routed over LTE in only two years — 15 percent of it added since October.

The trend couldn’t be more clear. LTE and the data speeds it offers are fast evolving from option to necessity. They’re being woven into the fabric of consumer expectations.

And if you don’t quite buy that argument, consider this: About 23 percent of Verizon subscribers had LTE handsets at the end of the fourth quarter. That’s up from 16 percent in the third. And 85 percent of the company’s postpaid net adds for Q4 purchased LTE devices.

So, not only is Verizon converting more longtime subscribers to LTE, most of its new subscribers are starting out on LTE. That’s good news for Verizon, which is simultaneously reducing strain on its 3G network as it moves more subscribers over to LTE, which should drive higher data revenue.

Verizon’s stated goal is to sunset its 2G and 3G networks by 2021. Given the growth in LTE subscribers the company is seeing, there’s no reason to think it won’t make it.

In a filing with the SEC — following Verizon CEO Lowell McAdam’s comments at the 2013 Citi Global Internet, Media & Communications Conference — Verizon said it activated 9.8 million smartphones during the fourth quarter. Importantly, it also noted that those activations included a “higher mix of Apple smartphones.” Verizon offered no details beyond that, so we’ll have to wait until the company reports earnings to learn just how many iPhones it sold.

That said, it’s a safe bet that the Android-iPhone mix at Verizon has moved closer to 50-50 equilibrium — if not beyond it. After all, in the third quarter of 2012, 3.1 million of the 6.8 million smartphones the carrier sold were iPhones.

That’s 45.5 percent right there. Given the fall launch of the iPhone 5, it’s likely that the carrier experienced a significant spike in iPhone sales, perhaps enough to capture a 50 percent share — or more.

So congrats to Reuters’ Yinka Adegoke and Sinead Carew, along with The Wall Street Journal’s Sam Schechner, Anton Troianovski and Spencer Ante on their new gigs! If you guys ever want to get together and trade tips (Google Analytics or Chartbeat? etc.) I’m totally down for a Meetup. It would be good to get out of my pajamas …

Meanwhile, this blogger can also report that Verizon has been talking to programmers about a Netflix-style video service. There don’t appear to be any signed deals, and there may not be anything formal on the table yet, so don’t expect to see anything until next spring at the earliest.

But the idea of offering packages of video programming, delivered over the Web, is a fairly straightforward one. Which is why it has also appealed to satellite TV provider Dish Networks, which has also had grown-up conversations about the idea. And to Microsoft, and Google, and Apple, whose discussions about it over the years haven’t progressed very far.

And, of course, to Hulu and Amazon, who are already doing it.

So we’re certain to see more “over the top” video from big brand names down the line. “Shame on those [Netflix] competitors for not being in the market years ago,” says a TV executive — who would be happy to sell any of them some programming when/if they do get into the market.

So if that’s the case, what does that mean for companies like Verizon, which sell traditional pay TV services right now?

Here McAdam, speaking at the UBS media/telco conference this morning, doesn’t just disagree with professional typers. He’s also butting rhetorical heads with Ivan Seidenberg, whose last job was … CEO of Verizon.

A year ago, Seidenberg told investors that “over the top” video — stuff that comes from the Web instead of a cable subscription — was going to be a big problem for pay TV services: “Young people are pretty smart. They’re not going to pay for something they don’t need to … Over the top is going to be a pretty big issue for cable.”

Nah, says the new guy, who takes the conventional line that over the top is a complement to his business, not a threat. Or at least not anytime soon. “We have a tendency to see trends like this in the industry and extrapolate it to become the majority. I think it will be many years before it is,” he said.

Still! McAdam did allow that Verizon was interested in offering stuff that sounds a whole lot like the “over the top” options that Reuters and the Journal reported about yesterday (and I am reporting this morning! From my basement!).

He acknowledged, as we reported earlier this year, that the company had kicked the tires on Hulu this summer. “We kind of  looked at that,” he said. “And we’ll continue to look at alternatives.”

Unlike many companies in the industry, Verizon has maintained a neutral posture on the deal. But on Wednesday, Mr. McAdam said “that match had to occur” and cautioned the government that if it chooses to block such mergers, it needs to come up with a clear plan for getting the industry the spectrum it needs to meet growing demand.

Read the rest of this post on the original site »

“In terms of earnings growth and the acceleration of revenue growth, this has been one of Verizon’s best quarters since the 2008 economic downturn,” CEO Ivan Seidenberg said in a statement. “We expanded sequential margins in both our wireline and wireless businesses, and in the second half of the year we expect Verizon to build on this strong, positive momentum to continue to drive profitable, sustainable growth.”

The company also named Lowell McAdam as its CEO, effective Aug. 1, replacing Seidenberg as part of a planned transition. Seidenberg will remain Chairman. McAdam was head of Verizon Wireless until last September and most recently has been Verizon Communications president and COO.

The company said it activated 2.3 million iPhone 4 units in the quarter and 1.2 million devices that run on its high-speed 4G LTE network. In its earnings report on Thursday, AT&T said it sold 3.6 million iPhones last quarter, though that carrier also sells the cheaper iPhone 3GS model.

Verizon also noted that its churn level for traditional postpaid retail customers was 0.89 percent — the lowest level in three years.

“We expect Verizon Wireless to gain share in the retail postpaid market and widen its network-quality lead throughout 2011,” Seidenberg said. “We also continue to see strong customer demand for FiOS Internet and TV, and for cloud and other strategic services. At the same time, we remain focused on our cost structure, as we deliver improvements in wireline margins quarter after quarter.”

Excluding acquisitions, Verizon said it added 2.2 million wireless lines during the quarter, including 1.3 million retail postpaid customers, and 890,000 wholesale and other connections. Smartphones now make up 36 percent of traditional retail customers, up from 32 percent a quarter earlier.

On the nonwireless side, Verizon said it added 189,000 net new FiOS Internet connections and 184,000 net new FiOS TV connections during the quarter, for a total of 4.5 million FiOS Internet and 3.8 million FiOS TV connections at the end of the quarter.

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

I’ll be covering the event in real-time below, but you should also be checking in with my colleague Ina Fried, our mobile expert who flew across the country for this thing.* Here’s her useful crib sheet for this morning’s news.

Liveblog

Welcome to LIVE COVERAGE OF VERIZON IPHONE DAY!

Lowell McAdam and Steve Jobs have yet to show up. But the Daily Show’s John Oliver is here. He’s standing up and shouting “Fuck yeah! Oh god! Fuck yeah!” It is alternately amusing and scaring the rest of the nerd/analyst/press audience.

Lights dimming.

Here’s Lowell McAdam, smirking: “If the press writes something long enough, eventually, it will be true.”

Sorry, having a bit of tech difficulty. Not sure if it’s wireless or my MacBook. Think it may be the later. But right now McAdam is providing walk-up, context.

Pounding “network quality, the hallmark of the Verizon brand”. “We have a history of pushing the envelope of network innovation on a very big scale.”

More superlatives about Verizon infrastructure, which he insists is “future-proof”

“I’ll let you in on a little secret” – “we debated about calling this 6g”, but “that isn’t in our DNA”

Anyway, our awesome networks “put us at the hub of the wheel that is driving the industry forward”

McAdam is gratified to announce the Verizon iPhone 4, a work in progress since 2008. It will be available early next month using the CDMA network. Sorry folks, that means 3G–not 4G.

8:10 am: Apple’s Tim Cook: Verizon iPhone has all the features you would expect, i.e. FaceTime, Retina display.

8:10 am: Other features carried over from iPhone 4: 5MP camera, Apple A4 chip, etc.

8:11 am: Cook: We had been talking to Verizon for a while. Great respect for the team…

8:11 am: This is just the beginning of a great relationship between Apple and Verizon. Introduces Verizon Wireless CEO Dan Mead.

Mead: Now wireless consumers everywhere have a choice–a choice they have never had before.

8:13 am: Branding is made clear, this is an iPhone 4 on Verizon, not a new iPhone.

8:13 am: Training for Verizon employees starting this week. Been scaling customer service, network, other features.

“We have more than enough capacity…We have designed this network for customers to have the optimum experience.”

Thousands of iPhones have been tested over last several months on Verizon’s network, Mead said.

8:16 am: Even as we roll out 4G LTE, committed to adding capacity to CDMA network. Sounds like iPhone won’t run on LTE 4G network. Not a huge surprise.

On Feb. 3, existing Verizon Wireless customers will have opportunity to pre-order.

On Feb 10, Verizon iPhone will launch online and in Verizon and Apple stores. Prices: $199 for 16GB and $299 for 32GB with a two-year contract.

Will have hotspot capabilities.

“We welcome this game-changing device to our network,” Mead said.

BIG THANKS to Ina Fried for saving my ass by taking over liveblog duties. I’m back for Q&A

Tim Cook (alas, not Steve Jobs) back on stage now.

Q: How many CDMA iPhone can you make in first q and first year of availability?

COOK: I won’t get into forecasts. “We tend to be a company that does something and then reports what we’ve done, instead of predicting.”

But: We’re very psyched. “It’s fair to say that both of think there’s tremendous opportunity…No one more than us wants to give Verizon customers the choice they’ve been waiting for.”

MEAD reminds us that both companies are in quiet period in advance of earnings.

Q: Will CDMA iphone be refreshed sooner, or later?

COOK: No comment.

Q: Why not a 4g LTE iPhone? Why CDMA?

COOK: Two reasons. First gen of LTE chipsets force design compromises, most of which we would not make. Also, Verizon customers “have told us, they want the iPhone now.”

MEAD: “We have a tremendous network in our 3g network” etc etc.

Q: Is CDMA iphone exclusive to Verizon?

8:23 am: Cook: Deal with Verizon is multi-year and strategic, but non-exclusive.

8:25 am: Not talking today about service pricing, including how much hotspot will cost.

8:26 am: Verizon iPhone will also be available in “indirect” sales channels, but not immediately. Verizon didn’t say which partners, but said it would be in a matter of weeks.

Q: What’s different about CDMA “experience” when you make a call vs data, compared to GSM?

COOK: Everyone has been asking when we’ll get the iPhone on Verizon. [Essentially, same answer he's been giving most of press conference]

MEAD: Did I mention we’re excited about this announcement? Also, we’ll be giving demos on this thing right now. Thanks for coming, Tim Cook.

COOK: “This is the start of something big”

And we’re done.

Again, apologies for sporadic in-and-out blogging. Think my MacBook needs a visit to the Apple store.

——

*And she’ll probably end up snowbound in Brooklyn before her trip is over. So please: Read what she has to say!

Or, rather, how has it been responding? Because it’s clear the company has been preparing for this moment for some time. Last year, it accelerated upgrade eligibility for iPhone customers, making it easier for them to get the iPhone 4 when Apple released it. And it locked them all into two-year contracts in the process. And then, last week, it drastically reduced the price of the iPhone 3GS, halving it to $49 from $99.

Presumably, AT&T could follow this with additional pricing promotions that could further limit iPhone subscriber defections to Verizon, though at this point one could argue that it’s as well prepared for its loss of iPhone exclusivity as it will ever be.

Why? Two big reasons:

1. According to Piper Jaffray analyst Christopher Larsen, nearly 80 percent of AT&T iPhone users are currently on family or corporate plans, which makes switching to a new carrier a difficult proposition.
2. Approximately 75 percent of them still have at least a year left on their contracts.

And there’s a third wild-card reason as well: How Verizon’s network fares after a big influx of data-heavy iPhone subscribers. That’s tough to predict, but two analysts I’ve spoken with said they expect Verizon to suffer some network growing pains, though not as bad as the ones suffered by AT&T. Ultimately, Verizon is starting off with a better network, and CDMA is said to be a more spectrally efficient standard than UMTS.

So will there be some AT&T subscribers who switch to Verizon when it begins selling the iPhone? Certainly. But they may not be nearly as large in number as you might think.

“AT&T has done everything it can,” Needham and Co. analyst Charlie Wolf told me this morning. “The company locked in a lot of iPhone owners by waiving early termination fees last summer. It’s moved aggressively to add a bunch of BlackBerrys and Android phones. And it should be remembered that AT&T will continue to sell the iPhone. So I doubt that the loss of subscribers to Verizon will be that large. But it could be material as it pertains to the bragging rights between AT&T and Verizon. “

PREVIOUSLY:

• Why Verizon’s iPhone Won’t Be So Bad for RIM
• How Might the Verizon iPhone Differ From the iPhone 4 (Besides Being Able to Make Calls)?
• Tired: Speculating About Verizon iPhone. Wired: Speculating About Verizon iPhone Sales.
• Verizon iPhone to Debut With Unlimited Data Plan
• Apple CEO Likely to Appear at Verizon iPhone Event
• Verizon Event Set for Tuesday–iPhone Time

But only because those who speculated about the existence of a Verizon iPhone have been struck by a new monomania: Speculating about first-year Verizon iPhone sales numbers.

Indeed, the sales estimates are already rolling out, with the consensus so far hovering between nine million and 12 milion.

“Some think 10 million is possible in the calendar year,” Wedge Partners analyst Brian Blair told me. “And I think it’s a reasonable assumption–not just because of what we’ve seen on AT&T but because you have three years of pent-up demand from users who are loyal to the Verizon network because of its coverage and reliability.”

Gleacher & Co. analyst Brian Marshall agrees, though he’s betting on sales hitting the top end of the range I mentioned.

“The iPhone on Verizon will sell 12 million units in calendar 2011 assuming there’s a ramp-up similar to the one AT&T experienced in 2007-2008 (i.e., 5 percent penetration of the postpaid subscriber base within five quarters of launch),” he told me, adding that AT&T will see a material decline in its iPhone sales as a result.

Taking a more conservative view of the iPhone’s prospects on Verizon is Piper Jaffray analyst Gene Munster, who expects Verizon to activate roughly 25 million smartphones in calendar 2011, of which nine million will be iPhones.

Barclays Capital analyst James Ratcliffe too is betting on that nine-million figure, and of those he expects approximately 500,000 to one million to be purchased by AT&T switchers. Said Ratcliffe, “We don’t believe that the addition of a Verizon iPhone will be a seismic event in the wireless competitive environment, although we do expect it to result in a modest spike in AT&T churn, as customers who love their iPhones but have become unhappy with AT&T’s network take advantage of the alternative.”

PREVIOUSLY:

• Verizon iPhone to Debut With Unlimited Data Plan
• Apple CEO Likely to Appear at Verizon iPhone Event
• Verizon Event Set for Tuesday–iPhone Time

Here’s one way: By offering it with a wireless service plan free of the data caps used by AT&T.

Sources close to Verizon tell me the carrier will offer the iPhone with an unlimited data plan (presumably the same $30 unlimited plan it offers for other smartphones)–though they wouldn’t say for how long. That should distinguish it a bit more from the iPhone on AT&T, which requires a capped plan for data service.

Not that such differences worry AT&T any. “We think customers will prefer AT&T’s faster speeds and better functionality over a CDMA network device,” a spokesperson told me. And he has a point. AT&T’s UMTS network allows the use of data and voice simultaneously. Verizon’s CMDA network doesn’t–at least not yet. So, initially, Verizon iPhone users won’t be able to use the Web or check email while on a call–something AT&T iPhone users have long been able to do.

All Things D reported Friday that the special event Verizon is holding in New York Tuesday will be the carrier’s long-rumored iPhone announcement.

PREVIOUSLY:

• Apple CEO Likely to Appear at Verizon iPhone Event
• Verizon Event Set for Tuesday–iPhone Time

Verizon Wireless’s Tuesday iPhone announcement will be headlined by President and COO Lowell McAdam, but there will likely be a special guest as well.

Apple CEO Steve Jobs.

While the appearance isn’t 100 percent assured, sources in a position to know tell me that, barring any unforeseen circumstances, Jobs will likely join McAdam onstage in New York when he announces the addition of the iPhone to its handset lineup.

All Things Digital reported earlier today that the special event Verizon is holding in New York Tuesday will be the carrier’s long-rumored iPhone announcement.

Update: Apple CEO Likely to Appear at Verizon iPhone Event

And there it is: Verizon will hold a special event at New York City’s Lincoln Center (Frederick P. Rose Hall) on Jan. 11–next Tuesday. No details on its focus, but sources close to the company tell me this will indeed prove to be the long-rumored Verizon iPhone announcement. Question now is will Apple CEO Steve Jobs join Verizon President and COO Lowell McAdam onstage to make it. Remember, while there’s an enormous amount of interest in the Verizon iPhone, this really isn’t much more than a carrier announcement — for last year’s iPhone. If it were more (e.g., a hardware announcement), you can bet the event would be in Cupertino or San Francisco.

Below, the event invite, which I’m posting here despite Verizon’s mandate not to. Just hope it doesn’t result in a personalized data cap.

“RIM has struggled in the U.S. during 2010,” Kvaal wrote. “Net add momentum has slowed and market share for data has ebbed. RIM acknowledges that the pace of technical advance in network technology exceeded its expectations in 2010.”

Evidently, RIM didn’t expect carriers to be quite as aggressive about moving to WiMAX, HSPA+ and LTE as they ended up being. Rather than skating to where the puck would be, RIM spent the year chasing after it–occasionally in an entirely different game.

But that’s not going to happen in 2011. With the PlayBook tablet headed to the market, perhaps along with a Touch Bold, refreshed versions of the Curve and the Storm in the works, and a smartphone migration to RIM’s new QNX OS on the horizon, the company is poised for a good year.

“We believe 2011 will bring a steadily improving line of products to the U.S. market in general, with AT&T and Verizon particularly noteworthy,” Kvaal said. “AT&T, for example, is demonstrating clear evidence of its desire to diversify away from the iPhone in recent months. We highlight the Torch and Motorola’s Android phones as examples. We also believe that Verizon is likely to be more supportive of BlackBerry in 2011 following a difficult 2010. Verizon CEO Lowell McAdam has indicated that he considers BlackBerry one of the top platforms in the U.S.”

A good forecast all around for RIM, then, though with an interesting side note about Verizon’s LTE network. Said, Kvaal, “RIM’s planning process suggests to us, however, that RIM may not participate in Verizon’s 4G device launches in January.”

RIM co-CEO Mike Lazaridis appears at D: Dive Into Mobile later today.

“In the short run, people gotta want these phones. I think they’re going to look pretty good. That’s the most important thing. If we start the popularity chain, and start kind of the buzz around these things, we’ll be able to make some money off of them.”

– Microsoft CEO Steve Ballmer

With the launch of Windows Phone 7 today, Microsoft is taking another shot at a market even its CEO, Steve Ballmer, concedes it stumbled in. “We were ahead of this game and now we find ourselves No. 5 in the market,” he said during our D8 conference in June. “We missed a whole cycle.”

Badly, too–as this exchange at the company’s 2009 Public Sector CIO Summit painfully illustrates.

Questioner: With platforms like the Google phone and iPhone coming out, it’s really tough to continue to stand behind Windows Mobile when our employees are bringing these consumer devices into our environments,” the questioner explained. And in your presentation you put Windows Mobile right in the center there, but it was a phone that doesn’t work in America and an operating system that you haven’t released. I’m wondering what your commitment is to continuing to get newer versions of the operating system in our hands so that we don’t have to fight this battle on the ground.”

Steve Ballmer: We have a significant release coming this year. Not the full release we wanted to have this year but we have a significant release coming this year with Windows Mobile 6.5….We still don’t get some of the things that people want on the highest-end phones. Those will come on Windows Mobile 7 next year. Certainly I’m not, um–there’s opportunities for us to accelerate our execution in this area, and we’ve done a lot of work to really make sure we have a team that’s going to be able to accelerate. With that said, we did sell more Windows Mobile devices last year than Apple did iPhones–just an important factoid to have. Blackberry was a little bit ahead, and Google was nowhere to be seen, except in Silicon Valley, I’m sure. But we’ll do our best to help you with that challenge.”

But Microsoft’s “best” at that point wasn’t nearly enough.

Intended as a stopgap, Windows Mobile 6.5 ended up being another damning monument to Microsoft’s failure to innovate in mobile and the ugly strategic misstep that made it an afterthought in a market that had already lapped it once and was well on its way to lapping it a second time. Just last week Verizon (VZ) President and COO Lowell McAdam dismissed Microsoft as a player in the mobile market. “We like our relationship with Microsoft,” he told News.com. “But clearly in the U.S. there are three major mobile operating systems: RIM, Google, and Apple….Microsoft is not at the forefront of our mind.”

If Windows Phone 7 doesn’t put it there, Microsoft (MSFT) might as well hand its fast-diminishing portion of the smartphone market to Apple (AAPL), Google (GOOG) and RIM (RIMM), because they’ll take it soon enough.

But that’s not likely to happen. Because from what I’ve seen, Windows Phone 7 is as slick an OS as has ever come out of Microsoft–easily enough to keep the company in the mobile game, assuming it hasn’t lost it already.

For one thing, WP7 is not simply a rejiggering of Windows Mobile 6.5, it’s an entirely new OS. For another, its interface is unique enough to differentiate it in an already crowded market. It’s smart, too–perhaps even smart enough to give it a leg up on some rivals. Its hubs and tiles GUI, which aggregates applications and content according to subject and delivers real-time information to the home screen without the need for user involvement, is elegant and intuitive.

Add to this a media experience basically identical to Zune HD, very smart social media management, seamless Xbox live and SharePoint/Office integration and high minimum hardware requirements for OEMs and you’ve got a pretty compelling OS–even if it doesn’t yet support cut-and-paste and true multitasking (the company tells me those are coming). The challenge for Microsoft will be to convince a market that saw Windows Mobile made a laughing stock by iOS, Android and webOS, that Windows Phone 7 isn’t just more of the same.

That shouldn’t be too hard given the nearly half-billion dollars in marketing the company is rumored to be throwing at it (check out one of the first ads below) and the quality of the OS itself.

My colleague Peter Kafka will be covering the New York City launch of Windows Phone 7 later this morning. Join him here at 6:30 am PT/9:30 am ET for live coverage.

We like our relationship with Microsoft. But clearly in the U.S. there are three major mobile operating systems: RIM, Google, and Apple. … Microsoft is not at the forefront of our mind.

– Verizon president and COO Lowell McAdam

McAdam appeared on-stage at our D6 conference in 2008 with then FCC chairman Kevin Martin. Below, video of that interview.

Click here to watch the second half of the interview.

]]> http://allthingsd.com/20100920/verizon-taps-mcadam-as-second-in-command/feed/ 0 http://allthingsd.com/20100818/verizon-tablet-rumored-to-get-chrome-finish/ http://allthingsd.com/20100818/verizon-tablet-rumored-to-get-chrome-finish/#comments Wed, 18 Aug 2010 16:42:01 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=46686 In a May interview with The Wall Street Journal, Verizon Wireless CEO Lowell McAdam said the carrier was working with Google to develop an iPad rival. “We’re working on tablets together,” he said. “We’re looking at all the things Google has in its archives that we could put on a tablet to make it a great experience.”

So a report making the rounds today claiming Google (GOOG) is working with Verizon (VZ) on a tablet isn’t exactly noteworthy. But its claim that the tablet will run Google’s Chrome OS, not Android, is. The expectation had been that it would run the latter, though Chrome–in a future-perfect form–would obviously be perfectly suited to the task. In any event, sources tell Download Squad that HTC is building the device and Verizon is looking to launch it on November 26–Black Friday, the busiest shopping day of the year.

]]> http://allthingsd.com/20100818/verizon-tablet-rumored-to-get-chrome-finish/feed/ 0 http://allthingsd.com/20100517/verizon-4g/ http://allthingsd.com/20100517/verizon-4g/#comments Mon, 17 May 2010 21:24:02 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=40805 The transition to next-generation long-term-evolution 4G data networks is moving along nicely, according to comments from Verizon Wireless CEO Lowell McAdam. During remarks made at the Reuters Global Technology Summit, McAdam said the company hopes to have as many as five 4G phones on its network by this time next year.

McAdam didn’t name the devices, but said they would most likely be manufactured by HTC, LG, Motorola (MOT), Samsung and Research in Motion (RIMM)–the usual suspects. Said McAdam: “I’d say all the major manufacturers we’re talking to today are making the transition to LTE.”

Incidentally, a few of those manufacturers will also build tablets for the carrier. And while they’ll run Google’s (GOOG) Android OS, Verizon (VZ) is still obviously hoping to ink an iPad deal with Apple (AAPL). “There’s no reason we couldn’t have an iPad,” said McAdam. Well, I can think of one.

]]> http://allthingsd.com/20100517/verizon-4g/feed/ 0 http://allthingsd.com/20100511/verizon-wireless-is-working-on-tablet-with-google/ http://allthingsd.com/20100511/verizon-wireless-is-working-on-tablet-with-google/#comments Tue, 11 May 2010 22:27:42 +0000 Niraj Sheth http://voices.allthingsd.com/?p=24937 Verizon Wireless (VZ) is working with Google Inc. (GOOG) on a tablet computer, Verizon Wireless Chief Executive Lowell McAdam said Tuesday, as the company works to catch up with iPad host AT&T Inc. (T) in the area of devices that connect to wireless networks.

Tablets are part of the “next big wave of opportunities,” Mr. McAdam said in an interview. He said the work on a tablet is part of a deepening relationship between the largest U.S. wireless carrier by subscribers and Google, which has carved out a space in mobile devices with its Android operating system.

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]]> http://allthingsd.com/20100511/verizon-wireless-is-working-on-tablet-with-google/feed/ 0 http://allthingsd.com/20100106/verizon-to-add-palm-pre-pixi-at-ces/ http://allthingsd.com/20100106/verizon-to-add-palm-pre-pixi-at-ces/#comments Wed, 06 Jan 2010 13:00:39 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=31704

“Now we aren’t typically the carrier that comes out and announces what we are going to be selling 12 months from now. Other carriers do that, and the media loves to speculate on what we are bringing to market. But what I will tell you is that over the next six months or so you will see devices like the Palm Pre and the Cousin on our network from Palm.”

– Verizon Wireless CEO Lowell McAdam, May 2009

Verizon has carried just about every smartphone Palm has ever built, so it was really just a matter of time before the carrier began selling Palm’s Pre and Pixi. According to Bloomberg, Verizon will be doing just that in the months ahead.

“Persons who decline to be named” tell the business news service that the carrier will announce the addition of the Palm smartphones to its lineup this week at the Consumer Electronics Show in Las Vegas. Both will boast enhancements beyond those currently offered; the Pixi, for example, will gain the Wi-Fi connectivity it sorely lacks.

Great news for Palm (PALM), which will obviously benefit from the sizable addressable market Verizon (VZ) offers, as I noted yesterday. While Sprint (S) has been a faithful partner for Palm, it is hemorrhaging subscribers and lags Verizon, the industry leader in the U.S.

As Morgan Stanley analyst Ehud Gelblum recently noted, Palm’s primary trouble has been its limited distribution through Sprint.

Said Gelblum: “We believe the single most important factor for Palm over the next year is the reach of its distribution network, which we expect to expand markedly in 2010 as Palm’s exclusivity agreement with Sprint expires, and the strength of its branding and advertising campaign, which has just been gutted, revamped and restarted. We believe both of these events should lead to market share gains, and ultimately margin expansion through greater scale.”

Reached for comment, Palm declined to offer one.

]]> http://allthingsd.com/20100106/verizon-to-add-palm-pre-pixi-at-ces/feed/ 0 http://allthingsd.com/20091117/palm-smartphone-on-verizon-by-early-2010/ http://allthingsd.com/20091117/palm-smartphone-on-verizon-by-early-2010/#comments Tue, 17 Nov 2009 17:02:05 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=29209

“Now we aren’t typically the carrier that comes out and announces what we are going to be selling 12 months from now. Other carriers do that, and the media loves to speculate on what we are bringing to market. But what I will tell you is that over the next six months or so you will see devices like the Palm Pre and the cousin on our network from Palm.”

– Verizon Wireless President and CEO Lowell McAdam

For Palm, 2010 will be a year of channel expansion, with its new webOS handsets coming to more carriers. Top among them, Verizon (VZ), which has been rumored to be getting a device “like the Palm Pre” since Palm (PALM) launched it. In a research note to investors today, Kaufman Bros. analyst Shaw Wu says a Palm smartphone on Verizon is pretty much inevitable.

“Based on our checks with industry and supply chain sources, we have fairly high conviction in Verizon carrying Palm’s webOS-based smart phones sometime in 2010 (potentially as early as 1H),” Wu writes.

“The reason,” Wu explains, “is three-fold: 1) despite heavy promotion and favorable reviews, sales of Android 2.0 smart phones (MOT Droid and HTC Droid Eris) have been somewhat disappointing and below expectations; 2) strong indications point to Palm’s launch exclusive with Sprint ending in 2009; and 3) our checks show high interest in webOS from Verizon including public comments by CEO Lowell McAdam.”

Interesting, especially the comment about Droid sales. If Wu is right, the device may not prove as daunting a competitive challenge as you would think.

“It’s too early to declare game over,” Wu says. “Talking with investors, most have written off Palm as a legitimate competitor and assumed Android will be the platform of choice at Verizon and other carriers. We believe Palm still has sizable advantages with its multitouch capability and vertical integration.”

]]> http://allthingsd.com/20091117/palm-smartphone-on-verizon-by-early-2010/feed/ 0 http://allthingsd.com/20091106/droid-launch/ http://allthingsd.com/20091106/droid-launch/#comments Fri, 06 Nov 2009 13:15:31 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=28348 Droid, Motorola’s most anticipated cellphone since the launch of the Razr in 2004, arrived at market today, to a warm reception by most accounts. Some 2,000 Verizon Wireless stores opened early this morning, many to lines–though admittedly, the lines are far shorter than those that accompanied the launch of certain rival devices.

According to News.com, 100 people or so lined up outside Verizon’s midtown Manhattan store last night prior to its midnight opening. And various reports posted to Twitter suggest there were queues at other outlets as well, though quite a bit shorter (see below; click to enlarge).

In any event, the fact that there are lines at all must be a welcome sight for Verizon (VZ), which has been looking for a strong rival to Apple’s (AAPL) iPhone, and for Motorola (MOT), which hopes Droid will revive its much-diminished post-Razr cellphone business. As one Verizon subscriber eager to trade up to Droid told me, “it’s the best smart phone not made by Apple.”

With endorsements like this, Motorola should be working a bit harder on branding the device as its own. Right now, the Droid marketing push from Verizon Wireless is so overwhelming that you’d think CEO Lowell McAdam designed it himself. Why aren’t we hearing from Motorola as well?

“Droid is potentially a game changer for Motorola,” iSuppli analyst Tina Teng said in a recent research note. “Motorola now is no longer just emphasizing slick form factors, such as it did with its RAZR handset. The company now has focused on the hottest segment of the global mobile handset market–providing compelling smartphone products that are usable and expandable through third-party applications.”

That being the case, Motorola might want to do a bit more to get its name out there.

]]> http://allthingsd.com/20091106/droid-launch/feed/ 0 http://allthingsd.com/20091006/google-and-verizon-to-co-develop-android-devices-and-services/ http://allthingsd.com/20091006/google-and-verizon-to-co-develop-android-devices-and-services/#comments Tue, 06 Oct 2009 13:32:19 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=26034 Google and Verizon Wireless have evidently gotten over their 700-MHz spectrum auction-inspired differences. This morning, the two companies announced an agreement to deliver mobile applications and devices. Under its terms, the companies will develop several Android-based devices preloaded with apps designed by Google, Verizon and others.

“Integral to this agreement is a commitment by the companies to devote substantial resources to accelerate delivery of leading-edge innovation that will put unique applications in the hands of consumers quickly,” the companies said in a joint release. “The two industry leaders will create, market and distribute products and services, with Verizon Wireless also contributing the breadth of its nationwide distribution channels. Consumers will be able to purchase products resulting from the collaboration in Verizon Wireless retail and online stores.”

The first new phones are expected at market within weeks. Two will be released before the end of the year and they will, according to Verizon Wireless CEO Lowell McAdam, support Google Voice. They’ll also come with Google’s (GOOG) Android Market preinstalled. So Verizon (VZ) is not favoring its own app store here. There will apparently be netbooks as well, though the companies haven’t yet said when.

During a conference call to discuss the announcement, Google CEO Eric Schmidt applauded Verizon’s “openness,” saying it was “frankly, enormously surprising, given the history and the old-line nature of telcos….In Verizon, somehow, the leadership has decided to embrace a very different philosophy, which works very, very well with the Internet.” Schmidt didn’t go into specifics beyond that, but presumably he was referring to Verizon’s willingness to allow Google Voice on its phones–something Apple (AAPL) hasn’t yet done with the iPhone despite continuing controversy.

Asked during the same call if Verizon would allow Google Voice, Verizon Wireless CEO Lowell McAdam said it would. “Either you have an open device or not,” he said. “This will be open.”

The deal is potentially a big one for Google. Verizon serves some 87 million customers. Putting some slick Android phones in front of them could do much to bolster Google’s standing in the wireless market.

]]> http://allthingsd.com/20091006/google-and-verizon-to-co-develop-android-devices-and-services/feed/ 2 http://allthingsd.com/20090925/palm-pre-verizon/ http://allthingsd.com/20090925/palm-pre-verizon/#comments Fri, 25 Sep 2009 09:00:27 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=25466 Well, now we know why Verizon Wireless CEO Lowell McAdam said he expects to have “devices like the Pre” on his network by next year: The carrier reportedly doesn’t plan to offer the Pre at all.

Sources close to the company tell TheStreet.com that Verizon has reconsidered its plans to add Palm’s new smart phone to its lineup.

An interesting rumor, but clearly one that’s to be taken with a grain of salt, if not a salt lick entire.

Why? Well, Palm (PALM), which declined comment on the report, just yesterday reaffirmed its fiscal year 2010 outlook and its planned product and carrier launches. Which means it doesn’t foresee any material changes in its business in the near future. Presumably, Verizon (VZ) passing on the Pre would count as such a change.

Moreover, the same sources who told the TheStreet.com that Verizon was going to give Palm the high hat also said the company might take a more diplomatic approach to the situation and simply order just a few Pres with no intention of lending the device much marketing support.

So, as I said, to be taken with a grain of salt…

One thing’s certain, though: If the rumor does prove true, it’s a serious blow not just to Palm, but to Verizon customers pining for a decent handset as well. Unless, of course, Verizon has cut an iPhone deal with Apple (AAPL)–in which case it’s just lousy news for Palm.

UPDATE: Analysts who follow Palm are already lining up to debunk TheStreet.com’s report.

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