FierceWireless

Latest News Posts

1. Tracking the latest handset design trends
2. NTT DoCoMo to demo LTE handset
3. Qualcomm to open R&D center in South Korea
4. Report: Nokia shaves prices on handsets
5. Apple's Jobs dismisses Google's mobile advances
6. CTIA's Largent on wireless: Responsive and reliable in disasters
7. Handset market bounces back in Q4
8. AT&T requiring data plan for 'Quick Messaging' phones
9. Time Warner open to idea of WiMAX voice service
10. ZTE beginning LTE trial networks out West
11. Samsung's handset shipments soar in Q4
12. AT&T nears record with 2.7M net adds in Q4
13. Apple approves VoIP apps over 3G for iPhone
14. Nokia swings back to black, reports smartphone gains in Q4
15. Motorola's sluggish quarter dampens comeback hopes
16. Mobile broadband: When is it profitable?
17. Mobile broadband: When is it profitable? Page 2
18. Investors anxious on Qualcomm's revenue slowdown
19. Apple's iPad brushes aside AT&T

Tracking the latest handset design trends

2010-02-01 16:24

Phil Goldstein - Handsets

As the handset market regains some of its momentum, what handsets and phone functions are leading the charge? Every month, research firm Strategy Analytics issues a report on the new handsets released during that month, and provides rankings based on the specifications of those handsets. Thanks to a partnership between the firm and FierceWireless, we'll bring you some of these key figures. In November, another 101 new handsets and seven new USB dongles were announced globally by 33 vendors. One of the highlights from the report is that NTT DoCoMo launched 13 high-devices from various Japanese handset OEMs, all with 7.2 Mbps HSDPA capability. Check out the other trends: Special feature

Top

NTT DoCoMo to demo LTE handset

2010-02-01 16:14

Phil Goldstein - Fujitsu

NTT DoCoMo will demonstrate a prototype LTE handset later this month at the Mobile World Congress trade show in Barcelona, Spain, according to NEC, one of the operator's LTE development partners. The prototype marks a significant step forward for the industry, which has thus far focused its attention on LTE modems for computers and other non-phone gadgets.

The Japanese carrier is one of a handful of wireless operators around the world making aggressive strides to deploy LTE this year. TeliaSonera has the world's first commercial LTE network online in Oslo and Stockholm, and Verizon Wireless plans to deploy LTE in the United States this year in 25-30 commercial markets, covering 100 million POPs.

Much of the industry's LTE rhetoric to date has been spent on network buildouts and technical specifications, rather than bringing commercial phones to market. LTE handsets are not expected to be widespread until 2011, and likely won't reach mass market appeal until sometime after that.

NTT DoCoMo has been working with Fujitsu, NEC and Panasonic on prototype LTE handsets and other terminals, and plans to spend between $3.3 billion and $4.4 billion to deploy LTE over the next five years. In a release, NEC said that concept device will demonstrate the "transmission of high resolution video through its 'LTE-PF' equipped communications platform and showcases the advantage of high-speed LTE communications."

For more:
- see this release
- see this IDG News Service article

Related Articles:
Chip vendor predicts 'millions' of LTE handsets by 2012
In-Stat: 30% of subscribers will be 3G or 4G by 2013
Report: 56 million LTE phones in 2013
LTE network growth will outpace phone availability

Top

Qualcomm to open R&D center in South Korea

2010-02-01 15:55

Phil Goldstein - antitrust

Qualcomm will launch a research and development facility in South Korea to work on next generation mobile chip technology, striving to forge ahead in a country where it was stung by antitrust regulators last year. The company also is going invest around $4 million in local chip maker Pulsus Technologies.

Qualcomm said it will open the R&D center with the cooperation of the South Korean government, researchers and academics, but it did not provide details on the amount it would invest in the facility. The company will be working on new mobile communication technologies, including mobile applications and multimedia, at the facility. The chip maker has a similar R&D plant in China.

The investment in the country is not entirely a surprise. Last spring, Qualcomm CEO Paul Jacobs said the company was looking at potential investments in South Korean wireless and health care companies. However, the investment is a visible signal that the company is looking to continue to expand its presence in the country months after antitrust regulators at the South Korean Fair Trade Commission fined Qualcomm $208 million for engaging in "unfair" business practices related to its chipset sales.

Last week, Qualcomm posted revenues of $2.67 billion for its fiscal first quarter, up 6 percent year-over-year and down 1 percent sequentially. The company's stock took a hit though after Qualcomm lowered it fiscal year revenue expectations due to what it said was tightened competition and economic struggles in Europe and Japan.

For more:
- see this Dow Jones Newswires article (sub. req.)
- see this IDG News Service article

Top

Report: Nokia shaves prices on handsets

2010-02-01 15:39

Phil Goldstein - Handsets

Nokia reduced the price on phones across its handset portfolio in late January, according to Reuters, citing industry sources who said the world's largest handset maker cut prices by as much as 10 percent. The effort brings the company's handset pricing more in-line with offerings from Nokia rivals, such as Samsung and Sony Ericsson.

Nokia spokesman Joseph Gallo told FierceWireless that "price adjustments are a normal part of our business" and that any recent changes to prices across the portfolio are not out of the norm. Beyond that, he said, the company does not comment on pricing for specific models.

Nokia reported strong earnings for the fourth quarter, with shipments of 126.9 million units up 12 percent from the year-ago quarter and up 17 percent sequentially. The company also made strides in the smartphone market--its global market share shot up to 40 percent in the period, an upswing of the 35 percent it reported in the third quarter. Nokia shipped 20.8 million smartphone units in the fourth quarter of 2009, up from 15.1 million in the fourth quarter of 2008.

The drop in Nokia's handset prices could help spur sales of high-end smartphones, but also might hurt margins on mid-tier and low-end devices.

Last week, Nokia reiterated expectations of 10 percent growth this year over last year in the overall handset market, though it said it expects its share of the market to remain flat.

For more:
- see this Reuters article

Top

Apple's Jobs dismisses Google's mobile advances

2010-02-01 15:21

Phil Goldstein - Adobe

Apple CEO Steve Jobs discounted the progress Google had made with its Android mobile platform, and said Apple will outstrip the company with its own aggressive updates to the iPhone, according to reports from Wired.com and Macrumors.com. Both reports are based on accounts of an internal Apple company meeting Jobs held after the unveiling of the company's iPad tablet last week.

According to the reports, Jobs said Google entered the mobile phone business and that Apple has not entered the search business, and noted there are elements within Google, most likely those working on Android, that are seeking to "kill" the iPhone. Jobs also disparaged Google's "don't be evil" motto, though the reports conflict as to exactly what he said on the topic.

Google has significantly increased its investments in the smartphone industry of late, most recently with the launch of the HTC-made Nexus One, which it is selling through its own online store. Jobs, however, has reason to be confident in his approach: In its most recent quarter, Apple's iPhone sales doubled, to 8.7 million.

According to Macrumors.com, Jobs said Apple would continue to make aggressive changes to the iPhone that Google would not be able to keep up with, and said the next iPhone update will be an "A+." Apple has released an update to the iPhone every summer since the first iPhone launched in 2007.

The chief executive also took aim at Adobe. Jobs reportedly said Flash is buggy and that the world is moving toward HTML5 technology, which will help render Flash obsolete. Apple and Adobe have had a rough relationship--Adobe's Flash technology is not available on the iPhone or iPad.

An Apple spokeswoman did not immediately respond to a request for comment.

For more:
- see this Wired article
- see this Macrumors.com post
- see this Daring Fireball post

Top

CTIA's Largent on wireless: Responsive and reliable in disasters

2010-02-01 15:12

Steve Largent - haiti

CTIA Steve Largent On Tuesday, Jan. 12, at 4:53 p.m. EST, a 7.0 earthquake struck 10 miles southwest of Port-au-Prince, Haiti, and directly impacted more than 3 million people, or one-third of its population. The toll on human life and property damage is extensive, and the challenges to providing aid are many.

In the aftermath of such a natural disaster, communications are critical as people try to find their loved ones to ensure their safety. With more than 3 million wireless subscribers in Haiti, and just 125,000 landline phones, it is a powerful reminder to all of us that mobile devices are public safety tools. We give them to our loved ones to provide that invaluable connection at a time of need.

Within 24 hours of the devastating quake, wireless service was partially re-activated. There was understandable spotty coverage and bottlenecked coverage, but the benefits wireless provided were beyond phone calls.

It allowed relief workers to best coordinate their needed efforts. Wireless helped rescue workers find individuals who were underneath collapsed buildings. In some cases those trapped in rubble used their devices to summon help. The Centers for Disease Control also used mobile devices to track the spread of diseases.

Text messaging was encouraged by the U.S. government because it's one of the easiest tools to use in a crisis. It does not require both parties to have their devices "on" to send or receive communications. It also consumes very little bandwidth, which helps public safety officials communicate with each other in times of congestion or other challenges.

The disaster in Haiti highlighted another very powerful use for texting: financial donations. When CTIA initiated mobile giving through our Text 2HELP program with the American Red Cross in 2005, we believed that smaller donations would lead to a greater adoption rate. We thought that consumers would appreciate the simplicity of sending a text message to donate money on-the-go and having it appear on their billing statements. While I'd like to say that we anticipated the $25 million that was donated within seven days to the campaign the American Red Cross instituted in Haiti, we were actually overwhelmed. The industry is honored to provide texting as a way for consumers to lend their support and we are proud to have such philanthropic customers.

As usual, we were also impressed with the wireless industry's response. Many of our members offered the services of their disaster response teams, and while many of them have seen terrible tragedies, we heard from some that this was "utter devastation" and unlike anything they had seen before. CTIA members immediately stepped up with aid, whether it was through matching employee donations or direct financial and product contributions.

While the initial rush of donations and aid was astounding, please remember the devastation for Haitians continues as they try to re-build their homes, their country and their lives.

To learn more about the industry's efforts in Haiti, please visit our blog at www.ctia.org/blog.

Steve Largent is president and CEO of CTIA, the wireless industry's main trade group.

Top

Handset market bounces back in Q4

2010-01-29 16:53

Phil Goldstein - Handsets

The "year-long recession" in the handset industry is over--at least according to research firm Strategy Analytics. The firm found that handset shipments rose by 10 percent in the fourth quarter to 324.4 million units, up from 293.8 million in the year-ago quarter. The future looks bright as well: Both Nokia and Samsung have forecast 10 percent market growth for 2010 compared with 2009. However, not all of the major players have benefited from the comeback: Both Motorola and Sony Ericsson continue to struggle with falling market share. FierceWireless breaks down the handset industry's fourth quarter with commentary from Strategy Analytics and research company IDC. Special feature

Top

AT&T requiring data plan for 'Quick Messaging' phones

2010-01-29 16:47

Phil Goldstein - AT&T Mobility

AT&T Mobility has followed Verizon Wireless' lead and is now requiring customers to add a $20 per month data plan to their service when they purchase certain classes of non-smartphone devices. The changes apply to "Quick Messaging" devices such as the Samsung Solstice and LG Neon.

Under the new requirement, AT&T "Quick Messaging" phone customers must purchase a $20 per monthly minimum plan for messaging and/or data for individual lines. Family plans will be required to have a minimum $30 per month per line plan for texting and/or data.

"Nearly all of these devices now have full Web browsing capabilities, and as such, customers are more likely than ever to surf the Web on them," AT&T spokeswoman Jenny Bridges told FierceWireless in explaining the move. "In light of this increased usage, a data and/or text plan will enable customers to enjoy a plan that does not involve paying as-you-go charges."

The changes apply to new customers who purchase these devices as well as subscribers who upgrade to them, Bridges said, noting the changes went into effect Jan. 18.

The move mirrors a similar action by Verizon Wireless. When Verizon unveiled its new unlimited calling and messaging plans earlier this month, the carrier said shoppers who purchase certain devices--which it classified as "3G Multimedia" phones--will be required to add a minimum $10 data plan to their service. (It's worth noting that AT&T lowered the price of its own unlimited calling service hours after Verizon did--and to the same price as Verizon).

For more:
- see this release
- see this Boy Genius Report post

Top

Time Warner open to idea of WiMAX voice service

2010-01-29 16:05

Phil Goldstein - 4G

Time Warner Cable left the door open for a possible voice service running over Clearwire's mobile WiMAX network, but said that it was still in the early stages of using WiMAX in its products.

As one of Clearwire's wholesale partners--along with Sprint Nextel and Comcast--Time Warner has been offering its own branded WiMAX service, called Road Runner Mobile. Time Warner CEO Glenn Britt said on the company's fourth-quarter earnings conference that he believes the networks of the future will combine wireless and wireline components.

"This will develop in exciting ways we really can't imagine today, but I think there is going to be a whole array of products using these hybrid networks in the future," he said. "So this is the very early beginning and I don't know how to size the opportunity because I don't think any of us really and fully imagine what the products are going to be--but it is an exciting opportunity."

Britt said Time Warner currently has the capability to create a wireless voice product, but that its future is uncertain. "We are working with both Clearwire and Sprint on that," he said. "Having said that, I think there are plenty of voice providers out there today in the cellular business and there doesn't appear to be a crying demand for another one, nor does it appear that we really need that in our product portfolio. We have the capability if we actually need it. Right now I don't think we do."

That stance sits in sharp contrast to Cox Communications, which is actively building out its own CDMA voice network in its AWS spectrum. This week, the company also announced that it had begun LTE voice and video trials on its 700 MHz spectrum.

For more:
- see this Seeking Alpha transcript

Top

ZTE beginning LTE trial networks out West

2010-01-29 15:46

Phil Goldstein - Atlantic Tele-Network

ZTE, better known in the U.S. market as a handset vendor, said it is working with a small regional operator to deploy LTE trial networks in parts of Arizona, New Mexico and Utah.

The Chinese vendor is working with Commnet Wireless, a subsidiary almost wholly owned by Atlantic Tele-Network (which is separately in the process of buying former Alltel assets from Verizon Wireless). The carrier has sparse GSM and CDMA coverage in parts of Arizona, Colorado, Kansas, New Mexico and Utah, and other parts of the Western United States.

ZTE, which so far has made few inroads as an infrastructure vendor in the North American market, is using its core dual-mode CDMA/LTE platform for the networks. Xiangyang Jiang, executive president of ZTE North America, said in a statement that the company is committed to working with carriers for LTE deployments.

ZTE so far has managed to ship phones to the likes of MetroPCS in the United States.

John Champagne, Commnet's vice president of planning and development, did not immediately respond to a request for comment.

For more:
- see this Cellular News article

Top

Samsung's handset shipments soar in Q4

2010-01-29 15:31

Phil Goldstein - bada

Samsung Electronics bounced back from a year-ago loss partially due to a sharp uptick in handset shipments in the fourth quarter, a rising tide that aided many of the rest of the firm's rivals in the mobile phone market.

The electronics conglomerate reported a $2.6 billion profit for the quarter, a strong showing after a $14.4 million loss in the fourth quarter of 2008, which was its first quarterly loss since it started reporting quarterly earnings in 2000.

Samsung's handset unit reported a record number of handset shipments in the quarter--68.8 million. That was up 31 percent from the fourth quarter of 2008, when it shipped 53 million units, and up from the record 60.2 million units it reported in the third quarter. The handset unit had an operating profit margin of 8.3 percent, up from 7.7 percent in the third quarter and 2 percent in the fourth quarter last year. The average selling price of Samsung's handsets fell to $115, down 4 percent from the year-ago period.

According to IDC, Samsung's global handset market share in the fourth quarter reached 21.1 percent, up from the 18.1 percent the research firm recorded for Samsung in the year-ago period. Samsung is a distant second to Nokia in terms of global handset market share (Nokia commanded 39 percent of the market in the period), though it sits far ahead of No. 3 handset player--and South Korean rival--LG. IDC said LG's market share in the fourth quarter clocked in at 10.4 percent.

"The company capitalized on growing interest in converged mobile devices with its Omnia2 while addressing end-user demand for touchscreen and quick-messaging devices within developed markets," IDC wrote of Samsung's performance in the quarter. "In emerging markets, Samsung's attention to local market tastes and extended distribution channels helped build its presence. Despite its heady growth, the company fell further behind market leader Nokia while distancing itself ahead of LG Electronics."

For the coming year, Samsung said it would continue to try to diversify its smartphone lineup by introducing more Android devices and those running its own OS, bada. Samsung said it expects its market share to continue to rise, and forecast its handset margins to hit double-digit figures. Like Nokia, Samsung predicted that the overall handset market would rise 10 percent in 2010 compared with last year, but said first quarter demand would decline due to seasonal factors.

For more:
- see this WSJ article (sub. req.)
- see this Bloomberg article
- see how Samsung ranked in the fourth quarter
- see this Q4 earnings page

Top

AT&T nears record with 2.7M net adds in Q4

2010-01-28 16:50

Sue Marek - 4Q

Verizon Wireless' aggressive holiday ad campaign slamming the quality of AT&T Mobility's 3G network didn't stop customers from signing up for AT&T wireless service. The carrier rounded up 2.7 million net new wireless subscribers during the fourth quarter--the second highest quarterly gain in the company's history.

However, issues surrounding AT&T's wireless network continue to be a sore spot for the carrier, and executives spent much of their quarterly conference call discussing what AT&T is doing to improve it. Specifically, AT&T will spend $18 billion to $19 billion on its network this year, notably above the $17.3 billion it spent in 2009. This includes an increase of $2 billion for improving backhaul capacity.

On the revenue side, AT&T posted fourth-quarter wireless service revenues of $12.6 billion, up 9.2 percent from the same quarter in 2008. The carrier's operating income clocked in at $3.4 billion, up 24.7 percent over the year prior. Here's a breakdown of the rest of AT&T's key metrics:

Subscribers: AT&T added 2.7 million net new subscribers in fourth quarter, for a total of 7.3 million net new subscribers in 2009. The company's total subscriber base reached 85.1 million (still behind No. 1 carrier Verizon's 91.2 million). AT&T's net new postpaid subscribers totaled 930,000 in the fourth quarter and 4.3 million for the full year.

iPhone and iPad: Apple's iPhone continued to drive consumers to AT&T. The company activated 3.1 million iPhone users in fourth quarter, and more than a third were new to AT&T. During the conference call with analysts, AT&T executives said the new Apple iPad is a different model for AT&T because the company is not subsidizing the device and because customers will activate it online--thus, AT&T won't have the typical activation and billing costs. However, executives also said they believe iPad users will rely predominantly on WiFi, and therefore it won't drain AT&T's 3G network. "We will monitor the usage as the device gets out there," said Rick Lindner, senior executive vice president and CFO at AT&T. "If it turns out substantially different, we will adapt."

Emerging devices: AT&T's new emerging devices division also posted a strong quarter, adding more than 1 million new devices onto the network. AT&T executives said that, despite smaller ARPU than standard phones, such devices typically carry low churn numbers and high margins.

Data: AT&T's wireless data revenues hit $3.9 billion in fourth quarter, an increase of 26.3 percent over the year prior. Text messages increased 70 percent to 135 billion and multimedia messages doubled to more than 2 billion in the period.

ARPU: Postpaid average revenue per user was $61.13, an increase of 2.6 percent over the year-earlier quarter. Postpaid data ARPU was $19.16.

Churn: Postpaid churn was 1.19 percent, down from 1.2 percent a year ago. Total churn was 1.44 percent, lower than the 1.64 percent AT&T recorded in the fourth quarter of 2008.

AT&T's stock remained relatively unchanged on the news, hovering at $25.74 in mid-afternoon trading.

For more:
- see this release
- see these metrics on AT&T's quarter
- see how AT&T compares with other wireless companies in Q4 earnings

Top

Apple approves VoIP apps over 3G for iPhone

2010-01-28 16:14

Phil Goldstein - 3G

Nearly four months after AT&T agreed to allow VoIP applications for Apple's iPhone to run over its 3G network, Apple has provided developers the necessary tools to implement the service. According to the privately held company iCall, Apple's newly updated iPhone SDK--an effort that coincided with the unveiling of the company's iPad tablet--removes restrictions that prevented VoIP over 3G. (AT&T reversed the ban following an FCC inquiry into the matter). It's unclear why it took Apple almost four months to implement the change. An Apple spokeswoman confirmed the changes. Release

Top

Nokia swings back to black, reports smartphone gains in Q4

2010-01-28 15:47

Phil Goldstein - Handsets

Nokia reported stronger-than-expected results for the fourth quarter with gains in both global and smartphone market share. The company regained some of the swagger it lost following a dismal third quarter.

And Wall Street rejoiced; Nokia's stock was up almost 8 percent on the news to around $13.90 per share following the news.

The company reported a net profit of $1.33 billion in the quarter, a 65 percent jump from its $804 million in the year-ago period and a dramatic reversal from the $834 million loss the company posted in the third quarter. The Finnish firm scored net sales of $16.74 billion in the quarter, down 5 percent year-over-year but up 22 percent sequentially. Net sales in the firm's devices and services business totaled $11.4 billion, up slightly year-over-year and up 18 percent from the third quarter.

In the quarter, Nokia shipped 126.9 million units, up 12 percent from the year-ago quarter and up 17 percent sequentially. Nokia's global handset market share inched up to 39 percent, from 37 percent in the fourth quarter of 2008 and 38 percent from the third quarter, according to the company's measurements. Nokia's devices and services segment posted an operating margin of 14.9 percent, up from the 9.4 percent it recorded in the year-ago period.

Importantly, Nokia's global smartphone market share shot up to 40 percent, charging back after it dropped to 35 percent in the third quarter. The company shipped 20.8 million smartphone units in the fourth quarter of 2009, up from 15.1 million in the fourth quarter of 2008 and 16.4 million units in the third quarter.

"We grew our market share in smartphones in the fourth quarter, driven by the successful launch of new touch and Qwerty models," Nokia CEO Olli-Pekka Kallasvuo said in a statement. "Our performance in smartphones, combined with continuing success in the emerging markets, helped us increase sales in our devices and services unit, both quarter-on-quarter and year-on-year. Our solid results also owe a good deal to world class supply chain management and impressive sales execution."

As for Nokia's outlook on the overall global handset industry, the firm reiterated expectations of 10 percent growth this year over last year, though it said it expects its share of that market to remain flat.

Analysts were impressed with the company's performance, particularly its smartphone gains.

"The fact that Nokia's market share in the smartphone market grew to 40 percent from 35 percent is quite impressive and highly unexpected, especially given the increased level of competition from companies like LG, Samsung, Apple, Palm, RIM and HTC," said Julien Blin of JBB Research. "That said, while Nokia is not out of the woods yet, Nokia's strategy seems to be paying off; Nokia recently reorganized its U.S. operations to work more closely with the leading U.S. carriers, made key management changes, and is changing its strategy toward the U.S market as it now intends to make specific devices for U.S."

As for Nokia Siemens Networks, the firm's joint venture with Germany's Siemens, the business saw a 16 percent decline in sales to $5.36 billion, from $6.4 billion in the year-ago period, due to increased competition from the likes of Ericsson and Chinese vendors Huawei and ZTE. However, Nokia Siemens broke a string of quarterly losses with its $25.3 million operating profit.

For more:
- see this Nokia release
- see this WSJ article (sub. req.)
- see this Bloomberg article
- see this Q4 earnings page

Related Articles:
Nokia to halve next year's smartphone portfolio
Nokia expects handset market to grow 10% in 2010
After quarterly loss, a front-office reshuffling at Nokia
Nokia shocks market, posts $834M loss

Top

Motorola's sluggish quarter dampens comeback hopes

2010-01-28 14:13

Phil Goldstein - Google

Motorola reiterated its hopes for a turnaround pinned on the back of Google's Android smartphone platform, but the company's drooping handset sales and market share in the fourth quarter offered another reminder that the firm has not yet hit its stride.

As a result, investors sent the company's stock down more than 10 percent in the hours following the news, to around $6.60 per share.

On a companywide basis, Motorola reported net income of $142 million in the quarter, a reversal of the $3.6 billion net loss the company posted in the year-ago quarter. However, the firm's mobile devices division suffered from a drop in sales, despite the introduction of new high-end Android devices such as the Droid and Cliq during the period. Handset sales were $1.8 billion, down 22 percent from $2.35 billion in the fourth quarter of 2008. Motorola said it deferred $200 million in smartphone revenue because of accounting rules, but beginning in the first quarter accounting changes will require the company to defer only a portion of revenues. The unit's operating loss narrowed to $132 million, down from $595 million in the year-ago quarter.

Motorola shipped 12 million units in the quarter, including 2 million smartphones, down from 19.2 million from the year-ago period. The average selling price for Motorola's phones was up to $169, according to Motorola co-CEO Sanjay Jha, from $124 in the third quarter. However, Motorola's global handset market share dropped to 3.7 percent, down from 4.7 percent in the third quarter and 6.5 percent in the fourth quarter of 2008.

"We are just at the beginning stage of our transition to a smartphone company, and we have a lot of work ahead of us," Jha said on the company's earnings conference call.

Jha warned that Motorola's sales in the first quarter would be weaker than in its fourth quarter, but said the company would ramp up shipments throughout the year. He said Motorola expects smartphone shipments of between 11 million and 14 million units this year, with volumes weighted to the second half of the year. Jha reiterated Motorola's plans to ship 20 different smartphones this year, with the majority of them running the company's MotoBLUR user interface.

Additionally, Jha promised Motorola's handset division will be profitable by the fourth quarter of 2010.

During the company's call, Jha also commented on Motorola's decision to allow customers in China to use other search engines besides Google, and the company's plan to open its own Android application storefront. "We have taken steps to make sure that our business will continue unaffected to the best way we can," he said.

Google recently postponed the launch of Android phones from Motorola and Samsung in China following what the company said were cyber attacks there, possibly directed by the country's government. The action forced Motorola to push forward in China without Google's aid.

For more:
- see this release
- see this Bloomberg article
- see this Q4 earnings page

Top

Mobile broadband: When is it profitable?

2010-01-28 04:10

Monica Paolini - iPhone

Mobile data plans have started to evolve. U.S. mobile operators, under pressure from exploding traffic volume in their networks and grappling with network congestion, have recently announced new service pricing for voice and data.

Though it is still unclear what the net effect of the new pricing will be on subscribers, the new plans set an important departure in the approach to voice versus data service plans. Subscribers may be able to get cheaper voice, but data pricing shows no comparable decrease.

More importantly, operators have started to require that subscribers have a data plan with some device types--mostly smartphones. Mobile operators seem to acknowledge that they can offer a better deal to their subscribers for voice services, which are substantially more profitable (with the exception of SMS, which on a per-bit basis may give an even better return than voice), but they have chosen not to extend this change to mobile data plans.

Why didn't data prices go down? Two reasons may explain the new approach to data. Mobile operators want data to become an integral part of subscribers' service plans. They are willing to charge less for voice, as long as subscribers pay on average more for data. This reflects a more balanced approach in splitting revenues between voice and data--with operators less willing to have voice subsidize data services. As data services become more mature and widely adopted, this is an approach that is no longer sustainable.

The second reason is that mobile operators cannot afford to lower data plans, as they may lead to a downward spiral in ARPU, at a time when they need to deal with an unprecedented growth in individual user traffic.

Initially the bulk of the growth in data traffic was generated by iPhone users, who now use more than 500 MB per month. With the introduction of new devices including Android-based smartphones and the higher number of applications, mobile data is rapidly becoming a mainstream consumer service. In the U.S., smartphones now represent over 30 percent of shipments and the percentage is likely to go further up. Traffic generated by these devices is also quickly catching up with that from iPhones. In Russia, mobile WiMAX operator Yota sees over 1 GB per month data traffic from subscribers using their HTC smartphone. For laptops, this figure is a staggering 13 GB per month. A large--and rapidly growing--portion of this traffic is video. This is what worries operators worldwide: with email and Internet access, traffic growth is bound by the limited requirements of the application; with video or even audio content takes little effort for subscribers to enter in the realm of the GB/month.

Mobile operators are delighted to see that their subscribers love mobile data services--and that are willing to pay for them--but at which point does the growing popularity of data and video affect profitability of the mobile data? It does not take long, as a quick back-of-the-envelope calculation that compared delivery costs and revenues on a per-MB basis.

The revenues per MB can be computed as a function of the monthly fees, for different levels of traffic. Revenues can be compared to the delivery cost per MB, which we estimate at $0.015 for HSPA, $0.005 for LTE and $0.003 for WiMAX on the basis of our analysis of mobile operator and vendor data. The delivery cost per MB depends on many variables that are specific to different operators--and in particular on the network utilization level--and therefore are subject to variability. Our values are therefore only indicative and on the low end in comparison with other estimates we have come across. It has to be kept in mind that these estimates do not include costs such as customer acquisition and support, or network core operations, which are shared with voice.

At the current average traffic levels of 500 MB/month, revenues per MB outstrip delivery costs for HSPA, LTE and WiMAX, for ARPUs starting at $20 per month. As traffic grows, however, the costs per MB rapidly exceed the revenues, especially when charging subscribers low fees. At a 50 percent CAGR, the 500 MB per month will reach 2.5 GB per month in five years. At $20 per month, for instance, mobile operators operate at a loss for subscribers using more than 1 GB per month in an HSPA network, or for subscribers using more than 5 GB per month in an LTE network. At 10 GB per month, data subscribers do not generate any net benefit for mobile operators with HSPA. With LTE or WiMAX, revenues from 10 GB subscribers at best reach the delivery cost...Continued

Top

Mobile broadband: When is it profitable? Page 2

2010-01-28 04:10

Monica Paolini - mobile data

After being caught by surprise by the sudden growth in mobile data, mobile operators have started to realize that, to profit from it in the long term, they need to strike the right balance between pricing and traffic, and limit the scope of network expansion to increase capacity. If they raise the prices too much they risk losing subscribers. If traffic is too high, congestion and the need for expensive upgrades ensue--and profitability is threatened. If they spend too much on network expansion, they will hurt profit margins.

One solution that mobile operators have timidly started to mention is the introduction of traffic limitations. Subscribers have been grown accustomed to flat-rate unlimited services--for both data and voice--and it will be difficult to wean them off this type of plans. Unless strict--and likely to be highly unpopular--caps are introduced, they will only affect a small fraction of subscribers. For instance, on AT&T mobile network, 3 percent of subscribers use 40 percent of the bandwidth, according to the operator. Traffic caps may be useful in managing these 3 percent subscribers, but they miss large opportunities for improving traffic.

Increasing the efficiency of the network is crucial to manage traffic in ways that benefit both subscribers and mobile operators. Mobile operators no longer have to transport traffic through a passive, best-effort channel. They can use tools like quality-of-service and traffic prioritization, subscriber policies, compression, deep-packet inspection to give subscribers more control over their mobile online experience while increasing the perceived network capacity through to a more efficient use of resources. The rigidity of traffic cap can be avoided by using a more flexible approach in which traffic flows are actively managed depending on data and infrastructure requirements and operators data policies. And in the process, mobile operators can escape their dreaded fate as commodity providers, and leverage data management to differentiate their offering from competitors and extract more revenues from data services.

The tools to actively manage traffic are available today, yet their implementation is taking a long time. Mobile operators are rightly concerned about the reception among subscribers who may see traffic management as a way to limit their freedom, while in fact it is more likely to result in a more fair use of network resources. Transparency and subscriber education of what managing traffic entails is going to be the next step for mobile operators to gain better control over data services and their profitability.

Monica Paolini is the founder and president of Senza Fili Consulting. Senza Fili Consulting provides expert advisory services on wireless data technologies and services.

Top

Investors anxious on Qualcomm's revenue slowdown

2010-01-27 22:09

Mike Dano - Google

Qualcomm's stock tumbled more than 14 percent, to around $40 per share, after the company reduced its fiscal year revenue expectations due to what it said was tightened competition and economic struggles in Europe and Japan.

"As anticipated, we have seen a competitive pricing environment in the chipset market and are proactively managing within this dynamic to grow our market share," said Qualcomm CEO Paul Jacobs in the company's earnings release. "A subdued economic recovery in developed regions, including Europe and Japan, combined with relative strength at the lower end of the market, is changing our estimated 3G device average selling price and chipset mix for this fiscal year. Accordingly, we are modestly reducing our fiscal year revenue estimates to reflect this near-term market situation, but are maintaining our earnings per share guidance."

Specifically, the company said it now expects fiscal 2010 revenues of between $10.4 billion and $11 billion, lower than its initial expectations of between $10.5 billion and $11.3 billion. However, the company maintained its diluted earnings-per-share growth expectations of between 64 and 85 percent, year-over-year.

As for the company's first fiscal quarter 2010 results, Qualcomm posted revenues of $2.67 billion, up 6 percent year-over-year and down 1 percent sequentially. The chip maker's net income for the quarter clocked in at $841 million, up 147 percent year-over-year and 5 percent sequentially. The pop in Qualcomm's net income year-over-year was primarily due to "a significant improvement in net investment income as our marketable securities recovered value and financial markets stabilized," the company said.

Qualcomm pointed to a number of recent business initiatives in an effort to highlight its forward movement (and possibly pacify worried investors). The company trumpeted the success of its Snapdragon chipset (recently featured in a number of high-profile smartphones such Google's Nexus One), its BREW Mobile Platform operating system (recently incorporated into HTC's latest feature phone play) and its FLO TV mobile video operation (set to launch a major advertising effort during the upcoming Super Bowl).

"We are pleased with our performance this quarter, driven by healthy demand for our chipsets, strong shipments of 3G devices by our licensees and lower operating expenses," purred Jacobs. "We're executing on our strategic objectives and reaffirming our 2010 3G device forecast, an increase of 21 percent year-over-year."

For more:
- see this release
- see this SeekingAlpha conference call transcript
- see this Reuters article
- see this MarketWatch article
- see full coverage of wireless in the fourth quarter

Top

Apple's iPad brushes aside AT&T

2010-01-27 21:46

Phil Goldstein - Apple

The iPad is finally here, but it's not quite what the market was expecting. In the days leading up to the event, reports were all over the map: Apple would make the tablet for AT&T Mobility and Verizon Wireless' 3G networks; Apple would introduce the new version of the iPhone OS; and--one more thing--Apple CEO Steve Jobs would reveal an iPhone for Verizon at the end of the presentation. Admittedly, FierceWireless engaged in this speculation as well.

Yet only 5 percent of respondents to a poll we put out this week thought Apple would wind up doing what it did: make a tablet for AT&T's network. So the chattering class mostly got it wrong. But to give you an idea of how well Apple's public relations machine whipped the media into a froth over the iPad, consider this: According to Google News, as of 5 p.m. EST on Wednesday there were more articles associated with the iPad than there were with President Obama's State of the Union address.

Putting the media frenzy aside, what does the iPad mean to the wireless industry? Clearly, Apple is confident in AT&T's ability to accommodate the millions of presumed iPad users. Indeed, Apple COO Tim Cook said on Monday that AT&T had presented the company with plans to improve its network, and Apple was pleased by what it saw. Wisely though, iPad users on AT&T will have free access to the carrier's prodigious WiFi network, which should help AT&T offload some traffic.

With the iPad, Apple is making AT&T less a partner and more of a pipe. The data plans run $14.99 per month for 250 MB and $29.99 per month for unlimited use--which presumably comes with a 5 GB cap--and are half the price of what AT&T charges for netbooks. What's more, they are prepaid, no-contract plans that users can cancel at any time. Further, the device is unlocked and compatible with other GSM networks. Take note: I'm saying "users" because they're not really subscribers in the way we traditionally think of them; Apple has made sure that users dissatisfied with AT&T can move elsewhere.

Based on the service pricing, it seems Apple managed to wring some concessions from AT&T. After all, AT&T has come under pressure for its network performance in some metropolitan areas, such as New York City and San Francisco, where there are high concentrations of iPhone users. Perhaps Apple reminded AT&T of that. I have no inside knowledge of this, and it's pure speculation, but it's also possible Apple had Verizon and AT&T bid against one another to be the iPad carrier partner.

I think what Apple has done is similar in some ways to what Google is trying to do with the Nexus One. FierceWireless columnist Mark Lowenstein, managing partner of Mobile Ecosystem, noted the iPad announcement "shows that wireless operators are now running two businesses: a full-service retail business with their own stamp on devices, the user experience, content, and applications; and a wholesale business, where there will be myriad of devices connected to their networks, each with a distinct business model."

With the iPad, Apple has effectively formed a closer relationship with the customer, bypassing AT&T in many respects. I don't know if the device will revolutionize the market for netbooks and similar gadgets, but it is clear Apple is jumping on the bandwagon to revolutionize the way wireless carriers do business. --Phil

Top

Monday, February 1, 2010

xFruits - technology wireless - 19 new items

Latest News Posts

1. Tracking the latest handset design trends

2. NTT DoCoMo to demo LTE handset

3. Qualcomm to open R&D center in South Korea

4. Report: Nokia shaves prices on handsets

5. Apple's Jobs dismisses Google's mobile advances

6. CTIA's Largent on wireless: Responsive and reliable in disasters

7. Handset market bounces back in Q4

8. AT&T requiring data plan for 'Quick Messaging' phones

9. Time Warner open to idea of WiMAX voice service

10. ZTE beginning LTE trial networks out West

11. Samsung's handset shipments soar in Q4

12. AT&T nears record with 2.7M net adds in Q4

13. Apple approves VoIP apps over 3G for iPhone

14. Nokia swings back to black, reports smartphone gains in Q4

15. Motorola's sluggish quarter dampens comeback hopes

16. Mobile broadband: When is it profitable?

17. Mobile broadband: When is it profitable? Page 2

18. Investors anxious on Qualcomm's revenue slowdown

19. Apple's iPad brushes aside AT&T

Phil Goldstein - Handsets

Phil Goldstein - Fujitsu

Phil Goldstein - antitrust

Phil Goldstein - Handsets

Phil Goldstein - Adobe

Steve Largent - haiti

Phil Goldstein - Handsets

Phil Goldstein - AT&amp;T Mobility

Phil Goldstein - 4G

Phil Goldstein - Atlantic Tele-Network

Phil Goldstein - bada

Sue Marek - 4Q

Phil Goldstein - 3G

Phil Goldstein - Handsets

Phil Goldstein - Google

Monica Paolini - iPhone

Monica Paolini - mobile data

Mike Dano - Google

Phil Goldstein - Apple

No comments:

Post a Comment

Phil Goldstein - AT&T Mobility