AllThingsD » networks

Internet Pricing: The Next Policy Frontier

Daniel Lyons — Mon, 01 Apr 2013 22:45:50 +0000

nicemonkey / Shutterstock.com

In the past few years, broadband providers have begun shifting toward tiered service plans (sometimes known as usage-based pricing) that offer customers a fixed amount of data each month for a fee. On average, less than 2 percent of users exceed the most commonly-used tier of 300 GB; nearly 80 percent of consumers never exceed even 50 GB per month.

Nevertheless, some critics such as Public Knowledge and the New America Foundation are concerned that this trend may bring higher prices and reduced service. Most recently, NAF analyst Benjamin Lennett asked whether tiered service plans are a plot by cable companies to eliminate Internet-based competitors such as Netflix, which alone generates one-third of all North American download traffic.

But a closer examination shows these concerns are largely exaggerated. Usage-based pricing is not inherently anticompetitive or anti-consumer. Rather, it is an alternative method of spreading costs across a network’s customer base. Unlimited plans are popular because they are simple and predictable. But this simplicity masks significant inequality. Heavy gamers and peer-to-peer file sharers spend much more time online and consume more bandwidth than the grandmother who simply checks her email. Yet in under an unlimited plan, both pay the same monthly rate, which hardly seems fair.

Under usage-based pricing plans, consumers who value the network more pay more. Economists call this price discrimination, and despite its sinister-sounding name, it is a relatively common phenomenon. Airlines routinely charge different rates to students and businessmen; movie theaters charge the average movie-goer more than children or seniors; car dealers give a better deal to consumers who haggle. In each case, two customers face different prices for the same product, based on their willingness to pay. The practice is common and uncontroversial.

But critics claim that tiered pricing for broadband service is somehow improper, because heavier users do not cost companies more than lighter users. Rather, they claim usage-based pricing exists primarily to pad profits. Lennett states that cable companies earn a 97 percent profit on broadband service, citing industry analyst Craig Moffett. But this claim is incomplete (as Moffett himself notes in the next sentence of his report), because it reflects only the daily costs of running the network while ignoring the substantial fixed cost of building the network.

Broadband providers have invested over $200 billion in private capital in the past decade to build our nation’s networks. Moreover, Internet traffic is expected to triple by 2016, driven by Netflix and other bandwidth-intensive services. This means the industry will continue to invest over $30 billion annually to expand and upgrade those networks. When one examines return on invested capital—which Moffett and others argue is a better indicator of financial health in capital-intensive industries—broadband returns are much less impressive and lag companies like Apple and Google.

Thus, while it’s true that, as Lennett claims, the marginal cost of an additional gigabyte of data is pennies, this fact is irrelevant to the question of how to price broadband service. For broadband providers and other capital-intensive industries, the challenge is designing a pricing model that spreads those fixed costs intelligently across the customer base. Lennett’s preferred unlimited flat-rate model is one solution, but a relatively inefficient one. As the FCC has noted, flat-rate pricing forces “lighter end users of the network to subsidize heavier end users.” Usage-based pricing shifts more of those costs onto those who use the network the most.

Tiered plans can also help make broadband more affordable to low-income consumers. FCC Chief Economist Steve Wildman argues that tiered pricing may facilitate cheaper entry-level broadband plans for customers who cannot afford more expensive unlimited plans. A 2010 study of OECD countries showed that residential broadband plans with data caps averaged $164 per year less than similar uncapped plans.

Critics also fear that data caps are designed to protect legacy cable services from Internet-based video competitors. Lennett highlights the 5GB/month Essentials Internet plan that Time Warner Cable is currently test-marketing. He did not note that TWC also continues to offer an unlimited data plan, which will be the plan most consumers choose. TWC’s unusual capped plan targets very light users. Comcast’s 300GB/month plan is more representative of the typical tiered pricing system. Under this cap, a customer could stream 130 hours of HD content on Netflix each month, the equivalent of two feature-length movies each day, or 1000 hours of non-HD content without concern. This tier does not impact average households, but rather online gamers, file-sharers, and others with very heavy bandwidth demands.

Nonetheless, critics may be correct that some broadband providers have incentives to limit data consumption to harm competitors. This is called a vertical restraint on trade, and is governed by antitrust law. Of course, not all broadband providers have video affiliates: Qwest (prior to its merger with CenturyLink), for example, offered tiered plans but did not sell cable service, and Verizon offers cable service without limits on monthly broadband data consumption.

But antitrust law protects competition, not competitors. Our goal should not be to protect Netflix’s profit margins. It should be to protect consumers by promoting competition among video providers. Vertical restraints on trade may be harmful or beneficial to consumers, depending on the context. For example, AT&T’s exclusive agreement to carry the iPhone gave it an advantage over Verizon and other competitors, but this vertical restraint ultimately helped consumers by jumpstarting a sleepy smartphone industry and igniting the mobile broadband revolution.

Ultimately, concerns about tiered pricing are misplaced. The real problem is market power, and more specifically, the abuse of market power in ways that hurt consumers. If a company with market power adopts a particular pricing scheme that harms consumers, regulators can and should use antitrust law to stop the practice.

But we should be wary of calls to change existing law simply to protect favored companies like Netflix. Netflix is not inherently good, and the cable industry is not inherently evil. Rather, they are competitors with different business models. The law should not pick winners and losers among corporations, especially in such a dynamic marketplace.

Daniel Lyons is an Assistant Professor of Law at Boston College Law School.

Image: nicemonkey / Shutterstock.com

TV Is Changing Before Our Eyes

David Pakman — Wed, 06 Mar 2013 16:26:09 +0000

TV image copyright antpkr

It’s finally happening. The Internet is taking over TV. It’s just happening differently than many of us imagined. There are two major transformations under way:

The Rise of the Internet Distributors. Led by Netflix, the group of new distributors includes Amazon and Microsoft now, but maybe Apple and Google later. They are largely distributing traditional TV shows in a nontraditional way. All the content is delivered over IP, and usually as part of a paid subscription or per-episode EST (electronic sell-through). Important to note that all of this content contains no advertising and is available entirely on demand. This content falls into the “non-substitutional” content bucket. To watch it, you don’t need to be a cable TV subscriber.
The Rise of Alternative Content Producers. Thanks to YouTube’s Channel strategy and investment in hundreds of content providers, new producers of content are emerging and offering nontraditional programming, usually in shorter form. This content is marked by dramatically different production economics than traditional TV content, taking advantage of an expanded labor pool and low-cost cameras and computer editing. This alternative content is chipping away at long- and mid-tail viewership on traditional networks (the “filler” and “nice-to-see” buckets).

Both of these transformations are successful to date, and will only become more so. Rich Greenfield has a nice summary of why the TV industry suddenly loves Netflix. (Disclosure: I’ve been a NFLX shareholder for some time.) The first transformation takes advantage of the massive pressure MVPDs place on traditional cable nets to not offer their programming direct to consumers. In this case, the HBOs and AMCs requirement that you authenticate your existing cable subscription in order to watch their programming over IP successfully persuades the cord-nevers to just avoid the programming on those networks until the hit shows are offered through Netflix or EST. Netflix, once again, looks like the hero. Those empty threats by Jeff Bewkes that he will never work with Netflix turned out to be, well, empty. The second transformation will take longer to fully prove out, but I believe it will happen. As more of our viewership takes place over IP, we lose our allegiance to networks as the point of distribution and allow new distributors to guide us toward content choice.

There is a third budding area of transformation, but I don’t yet see evidence that a business exists: Trying to repackage cable TV bundles and sell them over IP. Companies like Aereo and Nimble TV offer versions of this. I believe we live in a show-based world. Consumers aren’t looking for networks (with the exception of ESPN and regional sports nets) so much as they are looking for shows. Shows delivered over IP allow for the slow unbundling of television. One of the many challenges about this model for traditional broadcasters is that there is no advertising in this world. The traditional cable-net business model enjoys two great revenue streams — affiliate fees and ad dollars. In IP-delivered shows, there are no ads.

Who are the winners and losers in this model? Well, show creators continue to flourish. The new distributors enjoy great success. Of course, ISPs, who are often the same companies as the MVPDs, do fine in the ISP business, but I believe the decline in total cable subs will continue. In a world where shows do not contain advertising, why do we need Nielsen? They have been a measurement standard for decades, largely because advertisers needed a third-party validator of viewership. You can see why they have a vested interest in insisting TV ad viewership is not on the decline (despite everyone’s experience to the contrary). I don’t think cable nets are in immediate trouble. They enjoy a great business model now, and also get to reap EST or licensing benefits after the shows air. But the Netflix “House of Cards” effort shows that consumers will now expect to be able to watch shows whenever they want, and not be bothered by inconvenient broadcast schedules. The day is coming when the cable nets will have to respond.

For startups, one of the wide-open spaces seems to be in cross-provider discovery. Now that my shows are spread among Netflix, Amazon, YouTube and on my DVR, I would prefer one interface to reach them all. Companies like Dijit’s NextGuide, Peel, Squrl and Telly are taking cracks at this important space.

David Pakman is a partner at Venrock, focusing on ad tech, social/mobile media, consumer services, Web services, e-commerce, big data, SaaS and anything else hugely exciting and disruptive. This post is also live on his blog.

Mobile Rewards Apps That Lure Shoppers Back to Stores

Lauren Goode — Mon, 11 Feb 2013 14:00:45 +0000

What would it take for you to shop in stores these days, rather than buy from the comfort of your couch? Some companies are betting that smartphones can help lure you back to the mall by offering rewards, coupons and other incentives that can only be earned when you’re physically in a store.

Personally, my dislike for shopping goes against gender stereotypes. I’d much rather hide behind my computer screen, order all the gifts and clothes I need, and wait for them to show up at my door.

But for the past couple weeks I’ve been venturing out to stores, armed with two shopping rewards apps.

The first app is Shopkick, which launched in 2010 and was recently redesigned. This iPhone and Android app is free, and rewards you in the form of gift cards from brand-name retailers, including Target, GameStop, Starbucks, Macy’s and Sephora.

[ See post to watch video ]

What makes Shopkick interesting is that you don’t have to buy anything to earn the “kicks,” or points, toward your gift card: You earn kicks just by walking into a store or by using the app to scan a specified item. And these kicks can be earned at any Shopkick partner store, not just the store that’s offering the gift card you want.

The other app I’ve been using is called Kapture. This new iPhone app is all about giving rewards if you capture a photo in-store. As with Shopkick, you don’t necessarily have to buy anything.

The catch? You then have to shamelessly share the Kapture photo to your social networks. Currently, Kapture works at around 300 New York City retail locations.

The participating Kapture businesses were fewer and farther apart than Shopkick partners, but I did manage to redeem two Kapture rewards last week. I don’t think I would use Kapture reguarly, mainly because I don’t want to become that over-sharer constantly posting photos of myself, my clothing or my food, just to get a deal.

Shopkick, on the other hand, is an app I’d be inclined to keep using, even if intermittently. Last week, when I had a half hour to kill between meetings, I ducked in and out of Old Navy just to get 35 kicks.

Consumers concerned about privacy might be a little creeped out by the idea that a Shopkick retailer knows when they’ve entered the store. And users should be aware that if they answer the Shopkick surveys that pop up in the app, that data is given to Shopkick’s retail and brand partners. Fortunately, these in-app surveys are optional and dismissible.

When I first signed up for Shopkick, I selected my goal: A $25 gift card from Sephora, which requires 2,500 kicks. On the main page of the app, there’s a stack of cards, expandable through a quick swipe, that shows all the kicks currently available at Shopkick’s retail partners.

At the bottom of the same page, there’s a location-based feature: “Find kicks waiting nearby.” I mostly used this feature to look for kicks.

My first Shopkick experience was at a Target store, a dangerous task, given that it’s easy to walk into Target with the intent to buy a bathmat and instead walk out with $75 worth of miscellaneous items. I opened the app on my iPhone before walking in. As soon as I walked through Target’s doors, the app chimed and told me I’d earned 35 kicks.

Rather than using the same geo-fencing technology that other location apps use, Shopkick has installed little boxes that sense your entry at thousands of store entrances. (Even when I had spotty cell service, these boxes would transmit walk-in data to the app, and then later, when I had a signal, the kicks would go through.)

Once I entered Target, I could earn more kicks by simply scanning selected products, as directed by the app. So I took a few minutes to find three different beauty products and scan the bottles, which earned me 75 kicks. I didn’t buy any of these products, but I did end up walking out of Target with a bottle of shampoo and a new set of wine glasses. (See? Dangerous.)

There’s also a way to earn kicks through purchases at certain retailers. However, to do this, you have to link your credit card to the app. I opted not to do this, simply because I try to be judicious in terms of how many apps hold my credit card info. I also didn’t spend a lot of time adding specific items to my “lookbook” — a newer feature of the app that earns you kicks, and doesn’t even require you to be in stores.

I had a mildly frustrating Shopkick experience when I went out of my way to get kicks at a Best Buy, only to lose cell service on the lower level of the store, and along with it, my ability to scan items.

After a couple weeks, I had earned over 200 kicks — far from my goal of 2,500, but it was surprisingly easy to accumulate these kicks.

Kapture takes a little more effort. Like Shopkick, it uses your location to tell you where the nearby Kapture rewards, or “photo ops,” are. Kapture breaks these ops down into categories like food, fashion and health and wellness.

I first tried the app at an organic juice shop, where I had to take a 14-ounce bottle of juice and share the photo to my Facebook and Twitter accounts. After I shared the photo, a promo code popped up on the app.

When I showed it to the cashier, he looked at it blankly, but still jotted down the promo code and gave me a free shot of some cayenne pepper juice that lit my mouth on fire. (I still ended up paying $9 for the 14-ounce bottle of juice — something I’ll avoid doing again.)

If for some reason I didn’t want to redeem the Kapture reward right then, I could also opt to save it in my account for the next time I was in the store.

The same thing happened when I went to a bar to get a free beer sampler — the bartender hadn’t heard of Kapture, but still gave me the reward. This time, I had to include myself in the photo, pointing to a map of New York breweries. I felt silly doing this, and even more silly sharing it to my Facebook page.

Kapture says it plans to expand to more U.S. cities in the near future, but for now, those outside of New York won’t be able to use the app and grab “photo ops.”

These apps aren’t enough to tear me away from online shopping entirely, and they definitely won’t lure me out of the house to go shopping during a blizzard like the one we saw this weekend. But in some ways they’re sticky enough to make me at least reconsider how I shop.

Online Media Will Star at the Conventions

Keach Hagey — Mon, 20 Aug 2012 04:33:44 +0000

Political conventions, long the ultimate made-for-TV presentation, this year are coming of age as digital-media events — highlighting the decline of network television coverage of the gatherings.

When Republicans convene next week in Tampa, Fla., and Democrats the week after in Charlotte, N.C., major broadcast networks will use the Internet to provide the kind of extensive coverage they long ago abandoned on their airwaves.

NBC, in fact, is likely to forgo prime-time TV coverage entirely of the Democratic convention the night of Wednesday, Sept. 5, when it is contractually bound to air the kickoff game of the NFL season between the New York Giants and the Dallas Cowboys.

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Cable Companies Going Online: It’s the Advertising, Stupid

Jef Graham — Tue, 03 Jul 2012 18:54:38 +0000

Cisco’s $4 billion purchase this past spring of NDS Group — which helps cable companies stream digital programming to multiple devices — is a sign that the Internet is fundamentally transforming the TV industry. Another strong signal: Chip giant Intel’s recently-disclosed whopper of a plan to move into the video-delivery business (we’ll see how that goes). Cable companies are indeed steadily marching toward a more Web-friendly world, in large part because of competition from upstarts like Netflix, YouTube and Amazon. These companies are nipping at cable’s dominance as the best video-delivery game in town.

But there’s another, less-understood force prodding the cable guys to move: Advertising. That’s right, advertising. While competition from Internet video is the proverbial stick behind the cable industry’s push to provide IP-enabled “TV Everywhere” — TV on PCs, smartphones and iPads, in addition to the stationary living-room set — the tantalizing carrot for big companies like Time Warner and Comcast is the potentially lucrative new revenue stream generated by Web advertising that simply isn’t possible with current cable technology.

Consider the decidedly low-tech way cable-TV advertising works today. Right now, most of the ads you see are sold by the big content providers, like NBC and CNN. Everyone viewing the same program, whether it’s “Today” or the NCAA Final Four, is seeing the same ad. By definition, those non-targeted ads aren’t very effective (even though some, such as those sold during the Super Bowl, can be very memorable). The 15 percent or so of ads sold by the local cable companies can be more targeted, but only down to a neighborhood level. Your cable company knows your address and zip code. But usually all this means is that your cable provider can beam you a pitch for a nearby dentist or car dealer as you’re catching your late-night shows. Generally, these local ads stick out like a sore thumb in the middle of your programming.

Imagine a future, though, in which you also frequently watch TV on your iPad or through a browser on your laptop (this is obviously happening now, for you early adopters). In this case, cable companies know much more about you because they can track your IP address as you move around the Web. This is Web Advertising 101: You see much more relevant advertisements as you peruse various Web sites because all of your previous activities (reading, searching, shopping) have been captured by the sites you visit.

Men aren’t seeing ads for women’s shoes, for instance; someone doing Web searches in advance of a trip to Hawaii might see pitches for hotels or rental cars. And since there are now often multiple Internet-enabled devices in a given home, ads can be targeted directly to the device that a particular family member uses most often. Dad would see ads meant just for him on the smartphone he gets from the office, while the kids watching streaming Disney videos on the family iPad would see ads for toys and bikes.

There are important privacy concerns related to some aspects of Web advertising, of course (some argue that Web advertisers know too much about us), but the basic model is unchallenged and quite successful. Online advertising has surged in the last several years: In the first half of 2011 alone, Internet ad revenues in the U.S. soared to nearly $15 billion, up 23 percent from a year earlier, according to the Interactive Advertising Bureau. Just think about the new power cable companies can get from this targeted, or even hyper-targeted, advertising.

Earlier this year, analyst Laura Martin of Needham & Co. predicted that the rollout of TV Everywhere over the next three to five years could add $12 billion in revenue to the U.S. television ecosystem — most of it in advertising. Martin noted that this new revenue would be additive, and not in place of, existing cable-industry revenues, and would dwarf the revenues of video sites like Hulu and YouTube. She added that people watching content on demand, as people generally do on non-TV devices, are more likely to view ads than people who record shows on DVRs. This all means that cable companies can likely increase their share of the advertising pie by going digital. And there’s upside for the consumer, too. I know I’d rather see ads for products I’m likely to buy than the random ads I currently see when watching TV at home. Relevance is a win-win for operators and their subscribers.

At my company, RGB Networks, we are in the business of selling gear to cable companies and other TV service providers to make it easier for them to deliver IP-based TV to multiple devices. We’ve been extremely busy lately, and have seen cable companies take big steps toward embracing the Internet: Early this year, Comcast struck a deal with Disney — which owns ABC, ESPN and other key TV channels — to let subscribers watch those channels on Internet-enabled, non-TV devices, like phones and tablets, outside the home. Charter did a similar deal with Turner Broadcasting. RGB competitors Harmonic and Envivio — which just revived plans to go public — also aim to profit from this trend.

We think 2012 will be a breakthrough year for TV Everywhere — we’re involved in many deployments with large operators around the globe (with the smaller ones beginning to follow suit). And as they have worked through their smaller trials and vetted both the technology and the business model, we now see them going bigger — with more channels and more devices — and turning to targeted advertising to help recoup some of the investment they’ve made in new infrastructure to keep their networks state-of-the-art.

We are not yet at a place where we can simply transfer our at-home, cable-TV lineup to our iPads and watch all the same shows on the go that we can in our living rooms. That will take a lot more negotiation between the cable companies and the content providers. But that’s clearly the way things are going.

And as the technology side of the house has worked through its issues and stands poised for broad deployment, we see the barriers breaking down on the content side as well. We expect to see a similar pattern for targeted advertising — the technology is in place, and the new ad model will follow as the stakeholders work through their negotiations, with everybody coming out a winner.

Jef Graham is the CEO of RGB Networks, a Sunnyvale, Calif., company making network-infrastructure products to allow video providers to deliver content to multiple screens.

T-Mobile's $20 Prism Sacrifices Speed, but Not Call Quality

Lauren Goode — Mon, 28 May 2012 13:00:09 +0000

For the first time, the majority of adult mobile-phone subscribers in the U.S. are now using smartphones, according to a recent report from Nielsen.

But smartphone ownership dominates by just a slim margin, which means a lot of people are still using regular old cellphones. Some people may not feel the need to run lots of apps or to be connected to email all the time, while others may not be able to afford high-end smartphones, which can cost hundreds of dollars — not including the monthly data plans.

Stripped-down, inexpensive smartphones — known as “budget phones” — do a lot of the same things that fancier smartphones do, but make some sacrifices that impact performance.

I’ve been testing one such smartphone: T-Mobile’s new Prism, which is aimed at first-time smartphone buyers and costs just $20 for contract customers after a $50 mail-in rebate. The Prism is made by Huawei, and was introduced in early May. It’s currently available through T-Mobile’s retail stores and Web site, as well as through Walmart and Best Buy stores. It runs Android’s Gingerbread operating system, which isn’t the newest flavor of Android.

[ See post to watch video ]

After five days of testing the Prism, I found it to be a pretty decent phone with good call quality, a device that first-time smartphone buyers would probably find easy to use. But it runs on T-Mobile’s slower 3G speeds, Web browsing was slow, and its build felt cheaper than some other budget phones. Also, it’s really not meant for heavy media consumption, so those with an inclination toward that will want to steer clear of this phone.

For two-year contract customers, T-Mobile has Value Plans and Classic Plans that offer up to 10 gigabytes of data service per month for around $65 dollars.

Month-to-month call and data plans are also available for this phone, ranging in price from $30 for 1,500 minutes or text messages using as much as 30 megabits of data, up to $70 for unlimited talk, text and Web, with the first 5GB of data at faster speeds.

Here’s where it gets confusing: Most of these month-to-month schemes, called Monthly4G plans, are designed for phones with faster 4G speeds, even though the T-Mobile Prism is a 3G phone. T-Mobile confirmed that with the Prism, users can get unlimited data — just at a much slower speed. After you surpass that data usage, you’ll be notified that you’ve reached your limit and the phone will switch to basic 2G service.

I ran speed tests in various locations around New York City, comparing the performance of the Prism, a competing Sprint budget phone, and a Verizon iPhone. The average download speed with the Prism was 0.71 megabits per second, and the average upload speed was 0.17 Mbps; the Sprint ~~LTE~~ ZTE Fury averaged download and upload speeds of 0.77 and 0.55 Mbps. The average download speed with the 3G Verizon iPhone was 0.88, and the average upload speed was .93 Mbps.

In terms of hardware, the Prism is about the same size as an iPhone, though with its curved plastic back it’s not as angular. It has a 3.5-inch touchscreen display. This 4.4-ounce featherweight phone felt much less solid than something like the Sprint ZTE Fury, another $20 budget phone of about the same size but with more substantial hardware.

People who are used to tactile “push” keys on a phone or fatter touchscreen keys will probably bristle at using the tiny touchscreen keys on the Prism. However, the keypad does have Swype, an input method that lets you drag your finger from letter to letter and formulates the words for you.

The 3.2-megapixel camera on this device isn’t great. I took side-by-side photos with this phone and an iPhone, which has a five-megapixel camera, and the Prism’s photos didn’t look as crisp as the iPhone’s.

But one thing this phone doesn’t sacrifice is call quality. I made and received several calls from it, and never had trouble hearing anyone; it really didn’t sound that different from an iPhone or a sleeker Android phone.

The Prism also works with T-Mobile’s built-in Wi-Fi calling app, which allows you to make phone calls over an Internet connection, provided you have access to Wi-Fi. This worked fine for me, but the person’s voice on the other end sounded much less clear than it did with non-W-Fi phone calls.

The Prism also has good battery life. I first charged it on a Sunday morning, and it lasted until early Tuesday, after I’d made several calls, checked email consistently, and used a couple of social-networking apps. T-Mobile says the Prism should get 6.5 hours of talk time.

A first-time smartphone user would likely find it easy to get the hang of email on this device, both through the native email app on the phone and via email apps that are available for download through Google Play, the new name for the Android app market.

In addition to checking email incessantly, as I do, I also downloaded Twitter and Instagram and tested those apps, along with Facebook. This experience wasn’t much different from using these apps on a high-end smartphone. T-Mobile has put its stamp on the phone by cluttering the interface with some carrier-branded apps, but those can be moved or deleted.

The biggest drawback of the Prism was its sluggish Web browsing. I found myself on a street corner one evening, looking for a nearby grocery store and a wine store, and cars whizzed by for a few minutes before I could pull up some pertinent results. The Prism has a processor that’s on the slow side, compared with both high-end phones and some other budget phones.

The Prism is a decent starter smartphone, but, as one might expect for the price, it’s not a genius phone. Some of these budget phones require an ounce of patience, and reasonable expectations about what they can and can’t do. Also, if this phone doesn’t float your budget-friendly boat, there are plenty of other budget smartphones on the market from Nokia, Samsung, Sony, LG and others that you might want to consider.

Dish's Ads to End All Ads

Shalini Ramachandran — Thu, 17 May 2012 00:32:03 +0000

Dish Network Corp. plans to promote its new ad-skipping feature with, ironically enough, a television ad — that is, if broadcast TV networks agree to run the spot.

Amid mounting anger about the capability, at least two are resisting. Fox and NBC both said Wednesday they won’t accept ads promoting the satellite-TV operator’s new digital video recorder that contains the ad-skipping capability.

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Cisco to Acquire Network Analysis Firm Truviso

Arik Hesseldahl — Thu, 03 May 2012 18:50:04 +0000

Cisco Systems said it had reached a deal to acquire Truviso, a privately held company that provides real-time network data analysis and reporting software. The deal is aimed at boosting Cisco’s offerings in helping its customers analyze what’s happening on their networks, and how to make them run better. Financial terms were not disclosed.

Online Video Turns Up Heat

Suzanne Vranica and Sam Schechner — Mon, 23 Apr 2012 22:13:38 +0000

Though television may be losing viewers to online video, it has been holding on to advertisers. But with online-video outlets this week making their most organized push yet for ad dollars, that may be starting to change.

Early expectations are that TV networks will win an increase in total ad commitments for the fall season in the coming weeks of negotiations with advertisers known as the upfront. Yet, some big marketers, including General Motors Co. GM -2.71% and Samsung Electronic Co.’s mobile arm, say they are planning to shift some of their TV budgets to the Web.

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T-Mobile USA Eyes Tower Sales to Raise Cash

Ina Fried — Thu, 29 Mar 2012 18:31:04 +0000

T-Mobile USA continues to look at selling some of its cell towers in an effort to raise money for its network upgrade plans.

According to Bloomberg, T-Mobile has hired TAP Advisors to explore a sale, which could raise as much as $3 billion. T-Mobile has about 7,000 U.S. towers, the fifth-largest collection.

In a statement to AllThingsD, T-Mobile said a tower sale remains under consideration.

“T-Mobile USA continues to evaluate a tower sale as part of its self-funding strategy, but (we) have no specific plans to detail at this time,” the company said.

After failing to sell itself last year to AT&T, T-Mobile is now looking to go it alone. Parent Deutsche Telekom has said the company will spend $4 billion over the coming years to upgrade the T-Mobile network to support LTE.

The move involves reusing current spectrum as well as spectrum gained as part of the breakup fee paid by AT&T after regulators blocked the acquisition.

T-Mobile said last week it was cutting at least 1,900 call center jobs as part of a series of restructuring moves it plans to make.

Poke! I Choose You to Be My Seatmate.

Lauren Goode — Fri, 24 Feb 2012 18:05:56 +0000

Airlines, you’ve gone and done it again.

First it was the baggage fees, and charging for legroom. Then it was denying us our Words with Friends. Now, the New York Times reports, it’s bringing Facebook and LinkedIn to the seat-selection process, so you can gather more information on customers … I mean, pair up fliers with similar interests.

Soon enough, we’ll hear people’s no-longer-serendipitous tales of purposely meeting their soul mate, or maybe selling their company to the passenger in seat 24E.

I’ve got one word for you, airlines, or really, one word that’s used twice to create another single word: GoGo. Wasn’t it just a few years ago that Internet broadband access became an in-flight possibility, allowing us to bury our heads in laptop screens, plow through work while 30,000 feet above the ground, and effectively avoid human interaction? Even the subject at the top of the Times story, Jeff Jarvis, grumbles that he usually has work to do.

And now, you want us to talk to people while we fly? (How does one do that, anyway?)

In case you missed the story, KLM Airlines and others have recently integrated aspects of social media with customer profiles, allowing prospective passengers to share personal information and choose seat buddies based on their profiles.

Sharing the social info is completely optional, and if a customer is uncomfortable with the person who has chosen to sit next to him or her, the seat can be changed up until two days before the flight.

As the story points out, this is likely to appeal to business travelers who are interested in real-life networking, not just social networking.

On one hand, providing more personal info to airlines could help them tailor the flight experience to suit fliers’ preferences, going beyond just the standard meal selection.

And one of the services mentioned, Hong Kong-based Satisfly, lets fliers indicate their preferred level of chattiness during a flight. So the tired mom might not get the talk-shop guy, and maybe the fearful flier won’t get paired with another white-knuckler. (In the videogaming world, I’m told, multiplayer gamers find this kind of feature to be invaluable when they create profiles, so jabberers and silent Halo-ers can peacefully coexist.)

But allowing fliers to handpick their seatmates based on social profiling could also have its pitfalls. As Jarvis aptly says, “Pity the poor venture capitalist who gets seated with the start-up guy who talks his ear off for four hours.”

Which might present another opportunity for airlines: Charge extra for high-tech noise-canceling headphones …

Readers, what do you think? Would you use a social networks to choose a seatmate on a flight, or opt not to share your profile?

(Photo courtesy of Flickr)

With Siri TV, Apple Will Dismantle the TV Networks

Ben Elowitz — Thu, 15 Dec 2011 23:15:01 +0000

Steve Jobs died without fully transforming television, but the day ~~after~~ before he passed away, Apple unveiled Siri, its natural language interface. Though it’s currently only embedded in the new iPhone 4S, Siri could eventually change the face of the TV industry.

Notice I said “TV industry.”

Most observers and analysts believe that Siri’s voice commands could eliminate the need for those clunky TV remote controls. With the blurring and exponential proliferation of television and Web content, telling your TV what you’d like to watch, instead of scrolling through a nearly infinite number of program possibilities, makes a lot more sense.

But from my perspective, Siri’s greatest impact won’t ultimately be on users, or on device manufacturers (though they certainly risk losing market share to Apple). It will be on the TV industry’s content creators and packagers. Why? Because a voice-controlled television interface will fundamentally disrupt the six-decade-old legacy structure of networks, channels and programs. And that’s a legacy that — until now, at least — has been carried forward from analog to digital.

There’s an important underlying precedent here.

If the Internet can be generalized to have one effect across every industry that moves online, that effect would be disaggregation. Choices go from finite to infinite. Navigation goes from sequential to random access. And audiences choose content by the item far more than by the collection. We’ve gone from the packaged and channelized to the unbound and itemized. Autonomous albums are fragmented into songs; series into clips; and magazines and newspapers into articles and individual photos.

As much as we may think that has already happened with video, it is nothing compared to the great leveling that will occur in the voice-controlled living room. Voice-controlled TV means direct navigation to individual episodes, programs and clips. And it will almost certainly lead to a discernible deconstruction of the network and channel structure — not to mention the decomposition of even the aggregated marketplaces like Netflix, Hulu and YouTube.

Here’s the simple reason: No one is going to sit on their couch and say, “Siri, show me NBC’s ‘Community.’” In a voice-activated world, monikers like “NBC” become useless. They don’t stand for anything meaningful to the consumer. They’re just remnants of a decrepit channel structure that’s unraveling. And, in the end, they’ll simply connote the fast-fading allure of mid-20th century mass appeal.

To be sure, the TV majors will lose much of their ability to realize network effects. Already, you’re hearing less about “lead in” and “lead out.” What you are hearing more about, however, is disconnected videos. A program on YouTube, for instance, will sit on a level voice-controlled playing field with an NBC show, and that field will soon become even more level, because Siri will eliminate the menus that structure the artificial hierarchies of content collections.

So how will we be able to get network effects back in video? Let’s look at four possible ways:

Branded Content — Players can build a strong brand that stands for something with their audiences. Break.com, Discovery and Oprah are all meaningful and build long-term customer loyalty. (“Siri, show me new TED Talks.”)
Curation — Brand the collection with a curation strategy so that the curator’s name and stamp of approval means something to the audience. (“Siri, show me Jason Hirschhorn’s latest movie suggestions.”)
Social — In the fully social world that we expect to see, focusing on the virality of content means you tap the human distribution network and social operating system. (“Siri, show me what videos my friends are watching.”)
Personal — We’ve already seen the extraordinary value of well-tuned personalized recommendations, with Netflix’s notable prize and other famed stories of the benefits of great recommendations. Increasingly, our own patterns of individual videos and the brands we affiliate with, along with recommendations from friends, will be combined into personalized recommendations we won’t even have to ask for. I have no doubt that Siri will be as good a “Genius” as iTunes is at recommending what else to watch. Ultimately, in the age of data, whoever knows the most about us will be able to give us the best experience.

Beyond disaggregation, personalization is ultimately the most powerful consumer value of digital media. My mother’s TV experience was to walk over to her TV set and turn a dial to select among three channels to satisfy her individuality. But in the next generation, no two people will receive the same recommendations from the millions of content choices available.

Before he died, Jobs now famously told Walter Isaacson, his biographer, that he had finally cracked the TV code. It’s unclear what Jobs meant, what this entailed or what he thought it would lead to in the years to come. So, barring further posthumous disclosure, Jobs’s own predictions of his ripple effects will be a media mystery for now.

One thing that’s clear, though, is that Jobs’s Siri will start the dismantling — or creative destruction — of the TV industry as we’ve known it for the last 60 years.

This post originally stated that Siri was unveiled the day after Steve Jobs passed away. It’s been corrected to reflect that the announcement actually occurred the day before.

Ben Elowitz (@elowitz) is co-founder and CEO of Wetpaint, a next-generation media company that is reinventing the media model on the social web. Ben is also author of Digital Quarters, a blog about the future of digital media. Prior to Wetpaint, Elowitz co-founded Blue Nile (NILE).

Meet Qwilt, Creator of Smart Video-Caching Gear, and New Member of the Flash Madness Club

Arik Hesseldahl — Thu, 20 Oct 2011 03:59:23 +0000

Some interviews go faster than others, especially when I can figure out what a company does before they tell me what they’re about. It was like that with Qwilt, a video network infrastructure start-up that is coming out of stealth mode today.

I was on the phone with its two founders: Alon Maor, CEO; and Dan Sahar, VP of marketing. They had just started telling me about how they plan to sell network appliances that network operators — like, say, Comcast or Time Warner or Verizon — might put on their network in order to help them meet the growing demand for video content. The aim, Maor told me, is to get the most popular content as close as you can to the customer.

The first thing that popped into my mind was creating an appliance that sits on the network; close to, but not in the customer’s house. Maybe in the nearest network hub or central office. It turns out I was right. Then I wondered aloud what Qwilt might be using as storage technology. Could it be, maybe … flash memory? The chips that have so revolutionized the data centers of companies like Facebook and Apple and the banking systems of Credit Suisse, among others, when put to use by the likes of Fusion-io and Violin Technology?

Why yes, it does use flash memory, they told me, making them the latest member of the steadily growing “Flash Madness” club, which gives me yet another excuse to use the image taken from the cover of Flash Comics #1, circa 1940. For reference, the other members are Fusion, Violin Memory and Pure Storage.

Maor and Sahar laughed on the other end of the line at my guesses. “Would you like a job in our engineering department?” Sahar kidded me. I didn’t answer, because I wasn’t done guessing things like how Qwilt does what it does. “You must use some kind of algorithm to figure out what’s popular,” I said. Right again, mostly. The interview hadn’t been going for as much as five minutes, and I hadn’t even asked a single question and pretty much had it all figured out.

Well, not everything. There was the small matter of funding. Qwilt has raised $24 million in two rounds from Accel Partners, Redpoint Ventures and the Crescent Point Group, a fund based in Singapore. Maor is a Cisco veteran who got absorbed into that company following its $200 million acquisition of P-Cube. Before that, he was an engineer at Seabridge, which is now known as Nokia Siemens Networks. Sahar was director of marketing at Crescendo Networks, now part of F5 Networks. Tom Dyal, a Redpoint partner, is on Qwilt’s board.

Video is so popular with consumers that Internet services providers are struggling to get their networks scaled up to meet the demand, Maor says. The traditional way to solve that problem when everyone is watching the same show on Hulu, or the same movie on Netflix, is to just add routers and pray. That’s expensive. What if you could add some extra piece of gear that works with the existing network infrastructure? If you could figure out what was the most popular show in a particular neighborhood, make a copy of it right in that very neighborhood, and deliver it from there rather than all the way back from Hulu’s or Netflix’s data center, you’d lessen the network’s burden.

So that’s exactly what Qwilt does: It has three patents pending on processes for determining what video applications are being used on a network, and for figuring out what content is most popular in a particular area. So if you’re in a neighborhood full of “Jersey Shore” fans, the Qwilt box would figure that fairly quickly, and keep copies of it close at hand so that everyone gets their required daily dose of Snooki.

Also on Qwilt’s board is Rich Wong of Accel; Peter Wagner, an independent board member who has previously worked at Accel; Ohad Finkelstein, a partner at Crescent Point; and Giora Yaron, the former chairman of Mercury Interactive, which is now part of Hewlett-Packard. Also investing is Rob Glaser, the former CEO of RealNetworks.

Got all that? I told you it was an easy interview.

QOTD: Networks Are Dead, Says Glenn Beck on Eve of New Net Show

Voices — Mon, 12 Sep 2011 20:00:08 +0000

I think networks are a thing of the past. I don’t know anybody under 30 who is watching television the way I watched television. Technology has allowed people to change the way they consume the news, and we want to be where people are going.

Former Fox commentator Glenn Beck, whose first show airs Monday on his Internet-only GBTV channel

Hacking Targets Multiply

Jennifer Valentino-DeVries — Fri, 09 Sep 2011 07:00:21 +0000

As everything from cars to electricity meters gets hooked up to the Internet or cellphone networks, it isn’t just PCs that are vulnerable to cyberattacks, security researchers and government officials warn.

“The number of these networked devices has skyrocketed in the past two years,” said Don Bailey, of cyber-security firm iSec Partners, who has been studying the vulnerability problem along with colleague Mathew Solnik. “They aren’t just in automotive systems but in security systems, industrial control systems, medical devices.”

At a conference in August the two iSec researchers demonstrated how they could unlock and start a car by sending certain text messages to the car’s alarm system. The researchers said the real problem isn’t the possibility that hackers will start stealing cars. The ramifications are much broader. The same basic approach could be used by hackers to disrupt businesses or vital services.

Read the rest of this post on the original site »

Irene, Can You Hear Me Now? FCC Tips for Calling During the Storm

Drake Martinet — Sat, 27 Aug 2011 20:44:48 +0000

As hurricane Irene marches up the East Coast, the folks at the FCC have issued some hints consumers can follow to help keep the windblown cellphone networks in operation during the storm.

FCC: TIPS FOR HOW TO COMMUNICATE DURING AN EMERGENCY

Limit non-emergency phone calls. This will minimize network congestion, free up “space” on the network for emergency communications and conserve battery power if you are using a wireless phone;
Keep all phone calls brief. If you need to use a phone, try to use it only to convey vital information to emergency personnel and/or family;
Try text messaging, also known as short messaging service (SMS) when using your wireless phone. In many cases text messages will go through when your call may not. It will also help free up more “space” for emergency communications on the telephone network;
If possible try a variety of communications services if you are unsuccessful in getting through with one. For example, if you are unsuccessful in getting through on your wireless phone, try a messaging capability like text messaging or email. Alternatively, try a landline phone if one is available. This will help spread the communications demand over multiple networks and should reduce overall congestion;
Wait 10 seconds before redialing a call. On many wireless handsets, to re-dial a number, you simply push “send” after you’ve ended a call to redial the previous number. If you do this too quickly, the data from the handset to the cell sites do not have enough time to clear before you’ve resent the same data. This contributes to a clogged network;
Have charged batteries and car-charger adapters available for backup power for your wireless phone;
Maintain a list of emergency phone numbers in your phone;
If in your vehicle, try to place calls while your vehicle is stationary;
Have a family communications plan in place. Designate someone out of the area as a central contact, and make certain all family members know who to contact if they become separated;
If you have Call Forwarding on your home number, forward your home number to your wireless number in the event of an evacuation. That way you will get incoming calls from your land line phone;
After the storm has passed, if you lose power in your home, try using your car to charge cell phones or listen to news alerts on the car radio. But be careful – don’t try to reach your car if it is not safe to do so, and remain vigilant about carbon monoxide emissions from your car if it is a closed space, such as a garage.
Tune-in to broadcast and radio news for important news alerts.

More information on emergency communications during Hurricane Irene from the FCC can be found here. Residents can also find more information at ready.gov, the Red Cross or FEMA.

Painful Profits From Web Video

Sam Schechner — Mon, 15 Aug 2011 07:01:40 +0000

Media companies are starting to cash in on Internet video. But that new money could be coming at a cost as fewer young people watch traditional television.

That battle between the old and new ways of watching TV is putting networks and studios in a tricky position — balancing a new, growing online market for shows with a traditional market that is facing new threats and still accounts for the lion’s share of revenues.

Read the rest of this post on the original site »

TV Networks See Key Audience Erode

Sam Schechner — Fri, 27 May 2011 16:44:08 +0000

Fewer young people watched TV on traditional sets over the past television season, the second consecutive year of decline as viewers face a proliferation of ways to watch TV shows.

U.S. TV networks marked the official end of the TV season on Wednesday with a flurry of widely viewed send-offs, including the last episode of “The Oprah Winfrey Show” and the season finale of “American Idol.” But those big programs are closing out a TV season in which few new shows became hits, and ratings for the four most-watched networks fell.

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Verizon's ThunderBolt Moves Like Lightning

Walter S. Mossberg — Thu, 24 Mar 2011 01:19:14 +0000

Amid all the mergers and maneuvering of U.S. wireless carriers, they continue a steady rollout of faster cellular-data networks, dubbed “4G,” for fourth generation. While the companies all use that term for marketing, the actual technologies they’ve adopted to deliver 4G differ, and so does the performance.

[ See post to watch video ]

Last week, Verizon Wireless, which is deploying a flavor of 4G called LTE, or Long Term Evolution, started selling its first phone compatible with this new, speedier network: the $250 ThunderBolt. Previously, its only LTE devices were data modems for laptops. Its other phones, including its much-touted Droids and iPhone, can only use slower 3G networks.

I have been trying out the ThunderBolt and I have found it to be a speed demon. Simply put, when used on Verizon’s LTE network—which isn’t yet available everywhere—the ThunderBolt delivered by far the fastest cellular data speeds I have ever experienced on a wireless phone. In my tests, it blew away not only common 3G phone speeds, but the 4G speeds offered by rival carriers. In fact, it was faster than many home land-line Internet connections.

In dozens of cellular-data tests I conducted in two metro areas—Washington and Orlando, FL—the ThunderBolt averaged 12.6 megabits per second when downloading data and 4.7 Mbps when uploading data. That is about eight times as fast as a Verizon 3G phone I tested in the same locations, and faster than many public Wi-Fi connections. Cellular-data speeds can differ due to factors such as location and time of day, so your experience with the ThunderBolt might vary. However, based on my tests, and assuming future Verizon LTE phones perform as well, I’d have to say Verizon is firmly ahead in the race for the fastest 4G network.

Of course, its competitors aren’t standing still. Sprint was first with 4G and continues to expand its network and add devices. T-Mobile, which agreed to be acquired by AT&T, has a rapidly growing 4G network, though it really is based on a souped-up version of 3G. AT&T has lagged behind, but it claims it will step up its 4G rollout this year.

Verizon’s ThunderBolt

I compared the ThunderBolt to recent phones running on each of the other carriers’ 4G networks, and none could touch the speeds of the Verizon device. In multiple tests in a spot in the D.C. suburbs where all the carriers offer 4G service, Sprint’s EVO Shift 4G and AT&T’s Inspire 4G had an average of just over 2 Mbps in download speed, and much less than 1 Mbps in upload speed. T-Mobile’s myTouch 4G did much better, logging 5.52 Mbps downstream and 1.77 Mbps upstream. But even that was less than half the speed of the ThunderBolt.

Sprint and AT&T attributed their poor performance in my tests to my location. But even Sprint’s maximum claims for average performance don’t match what my Verizon tests yielded. (AT&T doesn’t offer such claims.)

You pay a price: The ThunderBolt is 25 percent more up front than most rival smartphones, which tend to sell for $200. Its battery life, while much better than some other early 4G phones I’ve tested, isn’t as good as on some 3G phones. And, the ThunderBolt is a relatively heavy and bulky device.

Verizon hasn’t jacked up the monthly data fees, continuing to offer the same unlimited $30 monthly data plan for this 4G phone that it does for, say, its pokier 3G iPhone. It is also giving away—through May 15—one extra-cost feature: the ability to use the phone as a Wi-Fi hotspot to power laptops and other devices. This feature has cost $20 a month on 3G phones. Verizon wouldn’t say the cost for ThunderBolt.

The ThunderBolt is built by HTC of Taiwan, and runs on Google’s Android operating system. HTC concedes that, beyond LTE, this phone doesn’t offer any significant hardware or software features that can’t be found on some of the company’s other models. It has a 4.3-inch screen, front and rear cameras, 8 gigabytes of internal memory and a 32GB removable memory card.

Battery life has been a concern on some 4G phones. The HTC EVO, which was Sprint’s first 4G phone, drained its battery quickly while using the faster network. In my tests, the ThunderBolt’s battery lasted about seven hours in mixed, typical use on 4G, which is fair, but not great.

Voice calls on the ThunderBolt were generally good, and it didn’t drop any calls in my tests. That may be because Verizon is still routing its voice traffic through its older networks, which have been very reliable. The LTE network is for data only. This distinction is invisible to the user.

I also tested it as a Wi-Fi hotspot and got download speeds on my laptop of 7 to 10 Mbps and upload speeds of 2 to 3 Mbps. But the hotspot signal occasionally dropped out. I also saw repeated crashes of an Android app I couldn’t identify, though the phone kept working.

The Verizon 4G network currently is available in around 40 metro areas. If you don’t live in an area covered by Verizon LTE, the ThunderBolt will still work on the carrier’s 3G network. You can see if you’re covered by checking this Web page. Verizon is promising to extend LTE to another 140 markets this year. It has announced plans for several more LTE phones and LTE tablets and laptops.

Bottom line: If you live in a Verizon LTE city and you want the fastest possible cellular-data speeds in a phone, the ThunderBolt is the answer.

Come see Walt Mossberg at New York’s Carnegie Hall at the JapanNYC festival, in a conversation with Sony Chairman Howard Stringer about where consumer technology is headed and the fallout from the earthquake. Friday, April 1 at 6:30 p.m. For tickets, call (212) 247-7800 or go to carnegiehall.org. Find all Walt’s columns and videos at the All Things Digital website, walt.allthingsd.com. Email him at mossberg@wsj.com.

Risk of Supply Shock From AT&T

Rolfe Winkler — Wed, 23 Mar 2011 12:40:25 +0000

Another investor question arising from Monday’s megamerger–which plumbers will AT&T go with?

Combined, AT&T and Deutsche Telekom’s T-Mobile USA spent roughly $11 billion in 2010 on wireless capital expenditures–that is, the plumbing that keeps their networks flowing freely. If the merger is approved, big changes may be made to how those billions are spent, creating winners and losers among infrastructure suppliers.

In the early going, AT&T expects to boost its own capex by $2 billion in order to integrate T-Mobile’s network. One winner could be tiny Tekelec, said analyst George Notter of Jefferies. AT&T accounts for a fifth of its revenue and might use more of the company’s technology to unclog its network by shifting traffic to T-Mobile’s.

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Blogs, MacBooks and GSM phones

Walter S. Mossberg — Wed, 16 Feb 2011 23:20:02 +0000

I’ll be starting a two-year assignment with the Peace Corps in the near future. I would like to start a blog where I can record my daily activities for my friends and family to read. Do you have any suggestions?

There are numerous free blogging services that offer templates, simple tools and a free address your friends and family can use to view your reports. Two that I have used and can suggest are Blogger, owned by Google, at blogger.com; and the independent WordPress, at wordpress.com.

In terms of battery life, does it make any practical difference if I leave my common programs on my MacBook Pro running when dormant versus shutting them down when I’m not using them and then firing them up as needed?

I asked Apple about this, and the company said an open, but idle, application on a Mac notebook generally won’t use any or many processor resources, which means almost no impact on battery life, even if it performs periodic background actions like fetching mail.

Exceptions would be programs that do heavy-duty things in the background, like rendering videos. The company strongly advises making sure the laptop is in sleep mode when not in use, and keeping the screen at the lowest brightness level that works for you.

Also, you can check how much demand a program is placing on the processor by running the Activity Monitor, located in the Utilities folder in Applications.

Why would a GSM phone run in 3G-mode only on AT&T and not on T-Mobile?

It’s true that both carriers use the same basic technology, called GSM. But, in some cases, phones (like the AT&T iPhone) are locked so that, unless you do serious hacking, you can use them on only one of the two networks.

In other cases, it might have to do with the frequencies used by a carrier. T-Mobile and AT&T use different frequencies for their 3G networks, and a phone might simply be built to support only the 3G frequencies used by one of the carriers and not the other.

You can find Mossberg’s Mailbox and my other columns at the new All Things Digital website, http://walt.allthingsd.com. Email mossberg@wsj.com.

HTC Shows Off First Tablet, Android Phone With Facebook Button and More

Ina Fried — Tue, 15 Feb 2011 08:55:15 +0000

HTC on Tuesday became the latest cellphone maker to “friend” Facebook in an attempt to capitalize on the popularity of the social network.

At a press conference due to start any minute, the Taiwanese cellphone maker is set to show off a pair of Android phones–the Cha Cha and the Salsa–as well as its first tablet and several other Android devices.

HTC’s move follows that of INQ Mobile, which last week announced two Android models that feature heavy Facebook integration. Gemalto also announced Monday it plans to integrate Facebook into SIM cards, allowing users of low-end phones better access to the social network.

Like many others’ news here at the show, most of HTC’s had leaked out well ahead of the event.

One particularly nice touch–HTC planned ahead and ran Ethernet cables to each seat in the theater. (Unfortunately, Mobilized left the MacBook Air Ethernet adapter back in the apartment.)

Mobilized has live coverage of the event below.

9:58 am: Still waiting for the press conference–which was due to start a half hour ago–to get under way. We do have comfy seats and soothing music, but would have prefereed an extra half hour of sleep.

9:59 am: Apparently all I had to do was complain. Now it’s getting started with CEO Peter Chou taking the stage.

“2011 is going to be an amazing year,” Chou promises.

Some analysts predict smartphones will outsell feature phones, Chou says.

“Features that were once fancy, extra, are now becoming standard,” he says. “‘Nice to have’ is turning into ‘must have.’”

Hardware is important, but so are software and services like Sense and HTCSense.com. Company plans new versions of HTC Sense for phones with keyboards, larger screens, etc.

10:04 am: Some stats from Chou:

25 million smartphones sold last year, more than double the prior year, with revenue up 93 percent.

The company’s global brand awareness reached 50 percent, up from 13 percent a year and a half ago. (Of course, that means half of consumers still don’t know HTC, but a big improvement nonetheless.)

10:05 am: On to 2011: 4G networks will change everything again. HTC Thunderbolt, its first LTE smartphone, shipping this week with Verizon.

10:07 am: Company is announcing five phones today, the most it has ever announced at one time. Chou says.

“I hope you agree it has been worth the wait,” Chou says, bringing out John Wang, HTC’s chief marketing officer.

10:07 am: Talking about HTC Sense. Location-data for 83 countries. HTC spent a year and a half building the maps product. You can preload, so travel won’t cost a fortune in roaming charges.

Weather is another good example, Wang says, where the company aimed not just to provide information, but also offer an emotional experience.

“When it is sunny you almost feel the warmth on your body. When it rains, you almost want to wipe your phone dry.”

10:10 am: First demo fails as video he wants to show won’t play.

“Well, maybe later on,” Wang says, moving on to the new phones.

And another fails as whatever was supposed to happen isn’t happening.

Okay, here we go. HTC Desire S. And, we’ve got some more demo fail going on.

10:12 am: “We apologize for this,” Wang says, annoucing a few-minutes pause.

10:15 am: And we are back, with HTC Desire S, Incredible S and Wildfire S.

Desire S doesn’t have front and back. Machined out of a single block of aluminum. “It feels solid in your hand,” Wang says. Also has full HD video recording.

Wildfire S, smaller and in three colors. “It can almost disappear into your pocket. (Mobilized hates it when that happens. We’ve put two iPod Nanos through the wash.

10:20 am: HTC Incredible S. As you rotate the large Android phone, the icons on the buttons also rotate. 8-megapixel camera, integrated video chat with front-facing camera. “Incredible S combines premium design with premium experience,” Wang says.

So, essentially these are updates to the existing product line.

Next up, the Facebook phones.

10:22 am: There are 500 million Facebook users worldwide, but 200 million check it on their phones. Those users are twice as engaged. Many young people check Facebook right when they wake up with a significant number doing so from their phones before they even wake up, Wang says.

Now showing a video of HTC’s work with Facebook to build the new phones.

10:24 am: Video of Facebook CEO Marc Zuckerberg touting the device.

“A lot has been made about a Facebook phone,” Zuckerberg says, but adds that there will be more than a dozen phones this year with deep social integration. “HTC is doing that here.”

Mobilized is apologizing in advance, but I may not make it through the whole press conference.

10:26 am: The new phones–the Cha Cha (with keyboard) and Salsa (touch-only) both have a dedicated blue Facebook button at the bottom.

10:27 am: Can use button to post updates, but also if taking a picture can use that button to share social network. “When you press this button, the photo is instantly uploaded to Facebook,” Wang says. Button blinks also when reading an article on the Web. Press the Facebook button and it will share that on Facebook. Similar, when you are listening to a song, pressing the button will share that information.

If you hold button down, you check in on Facebook Places.

Both phones also support Facebook messaging and chat.

“We did not just add social networking to the phone,” Wang says.

10:30 am: Bringing up Facebook VP Chamath Palihapitiya to talk about the partnership.

“I’m just frankly very thrilled we are taking this very important step, which I think will be the first of many,” he says, saying he expects Facebook and HTC to do more things together.

10:32 am: Chou back up, saying he could just stop with five great phones and ensure another great year. But he’s not. There’s a tablet coming.

10:34 am: Chou says the company could have rushed out another “me too” experience, but says that wasn’t what the company wanted to do.

Showing video of how the company came up with its tablet, the HTC Flyer.

10:37 am: Chou holds up the Flyer, then hands things back to Wang. Flyer also has unibody design, which he says makes the tablet feel solid but keeps it lightweight.

HTC wanted it to be comfortable to hold in hand. At 415 grams it is about the same weight as a paperback book.

Here are a few features: 1.5GHz chip, 6-hour battery life, dual cameras, Flash 10 and HTML 5 support, along with new 3-D-based HTC Sense experience.

10:40 am: Also has a stylus–unique among Android tablets–HTC Scribe technology.

Allows you to share things more easily, Wang says. Just scribble “let’s go” on a restaurant Web page and press a button and it is sent.

You can also use it to do audio note taking–a la Livescribe, where notes are synchronized to the audio.

Mobilized has to jam to our next meeting, but I think we have hit the high points.

Microsoft to Add Multitasking, Internet Explorer 9 to Windows Phone Later this Year

Ina Fried — Mon, 14 Feb 2011 15:00:42 +0000

Microsoft announced on Monday plans to fill in some of the key gaps from the initial Windows Phone 7 release with two updates due out this year.

The more interesting of the updates is the second one–a major release–due later this year. In a Mobile World Congress keynote, Microsoft CEO Steve Ballmer plans to demo only a couple of features of the release, including improved multitasking, simultaneous game play with an Xbox as well as the addition of the company’s Internet Explorer 9 browser.

An earlier update, now due out by March, brings the long-awaited copy-and-paste features to the operating system as well as some performance tweaks and support for CDMA networks.

Windows Phone unit President Andy Lees told Mobilized that the new release later this year should answer critics who worried that Microsoft wouldn’t be able to innovate fast enough to catch up or leapfrog over features available on rivals such as iPhone and Android.

[ See post to watch video ]

“Part of what we are doing is sharing technology across the company,” Lees said in an interview. In other examples, Microsoft is showing a demo of how a user on the phone might play a game throwing balls at someone playing with an Xbox or Kinect. Microsoft also plans to allow sharing of Office documents directly between phones, Windows PCs and the cloud-based Windows Live service.

Moving the full IE9 browser over to the phone will allow for hardware acceleration and other features that had not been possible on phones in the past, Lees said. For battery and other reasons, Lees said that the new release won’t support Adobe’s Flash, but Lees said it is not a religious issue for him, and that the company may add such support down the road.

“We’re not allergic to Flash,” Lees said. “It’s not in this update, but we’re not making some particular statement that it will never be there.”

Microsoft also plans to announce that it will integrate Twitter into the People hub in much the same way that the initial release brings in Facebook updates.

The update later this year will be the one adopted by Nokia in its first Windows Phone, Lees said. Nokia announced last week, of course, that it plans to make Windows Phone its primary smartphone operating system going forward.

As for early reaction to the Nokia move, Lees said the response has been positive, both from mobile operators as well as from phone makers, even those that now find themselves with a new competitor.

Lees said that basically all of the companies that make Windows Phone devices also make phones for Android and have plenty of competition there as well. Lees said that, if anything, Nokia’s move could spur some device makers that were on the fence about supporting Windows Phone 7.

“We have had other [phone makers] approach us who were talking to us and have now increased their, should I say, level of focus,” Lees said.

As for Nokia CEO Stephen Elop’s comments that the amount of money flowing to Nokia from Microsoft is measured in billions rather than in millions, Lees said that one must consider that the deal includes partnerships around search and services as well as the amount of marketing and other support being directly provided by Microsoft.

“We’re not talking about specifics,” Lees said. “But it’s a sizeable opportunity.”

Update: 4:00 pm Barcelona time: I finally made it in after being stuck in a massive crowd (see image). Ballmer’s keynote is slated to begin shortly and I’ll add live updates shortly.

4:06 pm: Ballmer has taken the stage, talking about rapid pace of change in industry and for Microsoft.

Talks about first update, the copy and paste one, which will come in first two weeks of March.

4:09 pm: Ballmer said most of smartphone competition the same–a “sea of icons” that lead to applications that lead to actions. Windows Phone is easier and simpler, he said. “With Windows Phone it’s easier to see information at a glance,” Ballmer said.

4:12 pm: On to new stuff, in the “near future in 2011, we will bring multitasking to Windows Phones” Ballmer said.

Ballmer is talking IE9. “We need to give people the full Web on their phone, like we do on the PC,” Ballmer said. (Wouldn’t that also include Flash, Mobilized wonders?)

4:15 pm: Apps are great, Ballmer said, but not enough. “It’s often too hard to find what you want when you want it,” he said. That, he said, is why Windows Phone also has task-specific hubs like People, Pictures, Office, Music and Video.

4:16 pm: Interesting note, Ballmer has again touted 93 percent customer satisfaction number, but no new sales figure.

4:19 pm: Windows Phone exec Joe Belfiore comes onstage to demo the new features coming to Windows Phone later this year.

4:26 pm: Both updates will be available for all Windows Phone 7 owners, Belfiore said.

4:30 pm: Belfiore showing an IE9 demo highlighting its hardware acceleration feature. In the demo, Belfiore shows IE9 for Windows Phone allowing 50 fish to rapidly swim around in an aquarium demo. He then shows the same demo on an iPhone 4 with the fish barely swimming.

4:32 pm: A few demoes fail. Streaming video doesn’t work because of connection issues. “This is preliminary not final code,” Belfiore said. “We’ll get all these kinks worked out.”

On to multitasking…

4:36 pm: Press-and-hold back button lets users access the new multitasking and see tiles for recently run apps.

Also shows Slacker playing with other tasks. Until now, only Microsoft’s own Zune could play in the background, not third-party apps.

4:39 pm: Last demo is the Xbox one showing Kinect game being played with the phone. Shows a “tech preview” of Windows Phone being used as a companion in Kinect’s dodgeball/breakout game.

4:42 pm: Ballmer back and talking about the ecosystems and Microsoft’s interaction with device makers and mobile operators as well as growth in the number of mobile apps for Windows Phone 7.

“We’re off to a strong start,” he said. “We know we’ve got a lot of work to do.”

Ballmer said the company knows it needs both scale and variety.

4:44 pm: Now he’s talking Microsoft-Nokia deal.

4:47 pm: Ballmer invites out Nokia CEO Stephen Elop,

Elop calls the deal “a natural partnership,” in which Nokia will bring the global reach and scale that Microsoft needs, while giving Nokia a needed in back to the North American market, where it has struggled badly.

Elop repeats now well-worn point that Microsoft-Nokia will offer mobile operators a third viable choice to iPhone and Android.

4:51 pm: Ballmer makes the same point Lees made in our interview, arguing that the Nokia deal will even help other Windows Phone device makers by giving the ecosystem a needed level of scale.

“Today, customers are falling in love with Windows phones,” Ballmer said, adding that the company is investing to further popularize the phone, including new features.

Bubbly "Voice Twitter" Service Launches in the Philippines

Liz Gannes — Thu, 10 Feb 2011 06:53:20 +0000

I last wrote about Bubble Motion, provider of the Bubbly mobile messaging service, exactly a year ago. At the time, the company had 150,000 users. Today, it has more than seven million.

Bubble Motion, which is funded by Sequoia Capital and others, is now launching Bubbly in the Philippines, after releases in India, Indonesia and Japan (chosen because of their deep mobile phone penetration). Its launch partner in the Philippines is Globe Telecom.

By the midway point of this year, Bubbly will be rolled out to all major carriers in those four countries, for a total potential audience of 800 million.

Bubbly allows users to send each other voice-based status updates. People who follow a user receive an SMS each time a new status message is posted, and pay to listen to the status message with a fee added to their regular phone bill. This can be used both for communicating with friends and family and for subscribing to updates from celebrities.

Users pay either a monthly subscription fee for celebrities in India and Indonesia, or per message in the Philippines and Japan, following the carrier billing styles in each country. The average user gets one to two messages per day.

Celebrities on Bubbly often have two to three times as many followers as they have on Twitter, bragged Bubble Motion CEO Tom Clayton on a phone interview on Wednesday. And that’s despite the fact that Bubbly costs money and Twitter is free.

Part of the reason is Bubbly has more reach than Twitter in the four countries it has launched in, Clayton said, given it is a mobile service and Twitter is often accessed over the Internet.

But grooming a stable of stars might not be defensible in the long term, given Twitter is ramping up its mobile efforts and celebrities may want to have a broader reach than they can achieve with local phone carriers and voice updates. Clayton said another edge his company has is the infrastructure it has built to deliver voice files–250 million of them since Bubbly was first launched–without overloading carrier networks.

Clayton said Bubble Motion, which has raised about $30 million in funding, is not profitable yet but is growing revenue with a direct correlation to its traffic, which is to say, doubling every quarter.

Has Cisco Escaped the Air Pockets?

Arik Hesseldahl — Wed, 09 Feb 2011 15:35:41 +0000

The last time the networking giant Cisco System reported quarterly earnings, CEO John Chambers used the phrase “air pockets” to describe the surprise sour turn in its guidance that showed sales would grow only between 3 and 5 percent, way below the 13 percent that analysts had expected. Shares in Cisco fell like a rock, from $24.49 on Nov. 10 to $19.07 on Dec. 3, and have leveled off near $22 a share in recent days.

Today’s the day we find out whether Cisco has successfully navigated the turbulence, and how bad the air pockets truly were. So far, the indications suggest that Cisco is starting to fly clear of the trouble. The consensus of analysts surveyed by Thomson Financial calls for Cisco to report per-share earnings of 35 cents on sales of $10.24 billion.

Barclays Capital analyst Jeff Kvaal wrote in a research note issued Monday that Cisco’s end markets look healthy. Telecom carriers and Internet service providers are spending, and you see that reflected in reports from Juniper, which show sales to service providers up 24 percent, and in AT&T’s optimistic capital spending outlook. Meanwhile, growth in enterprise spending is holding steady as companies improve their networks. And in the end, Cisco’s guidance for sales to grow 3 to 5 percent may prove a tad conservative, meaning those air pockets may not have been as entirely bad as originally thought.