Author: Kevin Fitchard

  • STMicro taps Quantenna’s gigabit Wi-Fi technology for future chips

    High-speed Wi-Fi specialist Quantenna Communications has found a willing advocate for its new Wi-Fi superchip technology. Semiconductor giant STMicroelectronics has signed a licensing agreement with Quantenna to incorporate its multi-gigabit 802.11ac designs into future chips. The companies said the first products from the collaboration would come out next year.

    While multiple 802.11ac devices and routers have recently hit the market, Quantenna is delving deeper into the 802.11ac standard, using multiple input-multiple output (MIMO) smart antennas to deliver four parallel streams of data over the same frequencies while aggregating both the 2.4 GHz and 5 GHz Wi-Fi frequencies to create connections as fast as 2 Gbps.

    The company already sells its 802.11n chips to router makers like Netgear, but the deal with STMicro could expose its technology to a broader range of devices beyond home and business wireless routers. STMicro sells processors and communications chips to the many industries including automotive, entertainment and security markets. Through its joint venture with Ericsson, it also makes integrated silicon for mobile handsets.

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  • Clearwire board: Sprint buyout is our best chance of survival

    Clearwire is making its case to its shareholders to approve Sprint’s $2.2 billion offer to gobble up the remaining half of the company Sprint doesn’t already own. In a letter to shareholders sent Monday, the Clearwire board said that the Sprint buyout represented the best strategic option for shareholders and painted a bleak picture of Clearwire’s future if it pursued other deals.

    Dish Network in January submitted an unsolicited counterbid for Clearwire offering an 11 percent premium over Sprint’s $2.97-a-share offer, but Clearwire made no reference to Dish’s proposal. Clearwire said it investigated several other possibilities, including proceeding as an independent mobile broadband carrier, which is what the Dish deal would entail. But Clearwire management claimed that those alternatives were either infeasible are or wouldn’t dig Clearwire out of its current financial hole.

    Clearwire tried to sell part of its treasure trove of airwaves back in 2010 and again in 2012, but it couldn’t close a deal despite consulting with 37 prospective buyers, the letter said. The letter said Clearwire also looked into additional debt and equity financing option and even investigated a financial restructuring through Chapter 11 bankruptcy, but neither assured the company’s survival, nor offered much value to shareholders.

    In order to survive independently Clearwire needs another major wholesale broadband access customer besides Sprint, the letter said, but the obvious candidates – the major mobile operators – aren’t interested. They prefer to own their spectrum and build their own network rather than lease Clearwire’s capacity. Given that situation, the Clearwire board concluded Sprint would remain Clearwire’s primary customer for the foreseeable future, so becoming fully owned and controlled by Sprint made the most sense.

    Last week, a group of Clearwire shareholders went into revolt, telling the SEC they wanted either Sprint to make a better offer or force Clearwire to consider Dish’s offer. Meanwhile Dish is playing both sides of the transaction. Not only has it submitted its bid for Dish, it is challenging Sprint’s own buyout offer from SoftBank with a $25.5 billion counterbid.

     

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  • Feast brings the online academy model to cooking classes

    Want to learn how cook? These days it seems like a PC or a tablet is a more indispensible kitchen tool than a sauté pan or a chef’s knife. The internet is a treasure trove of recipes and techniques – and increasingly ingredients – for the aspiring chef. It was only a matter of time before we saw cooking schools move online.

    TV shows Top Chef and America’s Test Kitchen have both launched their own online cooking programs, and we’ve even see the emergence of the first online professional culinary school. Now a San Francisco startup called Feast is taking a tech startup’s approach to the cooking school.

    saute pan kitchen cookingFeast co-founder and CEO David Spinks doesn’t have a cooking background. Instead he’s online community developer that has created or managed the community portals for the LeWeb conferences, Zaarly, u30pro, BlogDash and Scribnia. He even created a meta-community for community managers called, you guessed it, TheCommunityManager. But after he did some consulting work for online learning startup Udemy, helping it develop its community strategy, Spinks got the idea for Feast.

    Spinks said he wanted to apply the same online education methods underlying teaching sites like Udemy and Coursera to create a platform for cooking lessons. In addition, Spinks wanted to anchor those classes with a strong community, not only to address the inevitable questions and problems that emerge when trying to prepare a dish, but to keep students interested and engaged.

    Spinks added that he didn’t want to create something dull or overly academic either – not the cooking equivalent of a coding course.

    “We wanted to take the entertainment value you get on television, but create a format where you can actually learn,” Spinks said. “There is a problem with the Food Network. It’s entertaining you, but they’re not really teaching you how to cook. They’re selling you a lifestyle. We’re actually trying to get you in the kitchen.”

    Last fall, Feast launched its first online cooking course, a four-week class designed to teach basic cooking techniques ranging from knife skills to braising. Led by Feast’s in-house chef Jeremy Umansky, the self-paced lessons use detailed text descriptions and photographs along with numerous videos.

    It’s in the community discussions, though, that a lot of the real learning goes on, Spinks said. Not only does Umansky engage with students on the boards, but students interact with one another, often solving problems before an instructor get involves, Spinks said. That student interaction also acts a motivator, helping solve one of the key problems of online learning: retention. In self-paced learning programs such as those offered by Coursera, Spinks said, as few as 7 percent of students actually finish the curriculum from beginning to end. Feast’s inaugural class last winter attracted 75 students, and more than half participated up to the very to its conclusion.

    The company’s spring semester starts up next week, offering a new kitchen basics class as well as a new course on vegetarian cooking (both $60 for four weeks). Feast has also begun offering a free mini-course on fermentation where you can learn how to make Kimchi, Korean spicy preserved cabbage.

    Feast has also managed to attract the attention of Dave McClure’s 500 Startups, which accepted the company into its accelerator’s sixth batch of startups.

    Saute pan photo courtesy of Shutterstock user Fedor Kondratenko

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  • Despite Foursquare’s struggles, Chicago’s Evzdrop isn’t scared of the check-in — or “drop”

    Foursquare has a lot of imitators, making the check-in ubiquitous — and even a little passe these days — across social networking apps. At first glance, Chicago startup Evzdrop looks like one of those clones. Instead of checking in at places, users “drop” their locations on the map and, just like Foursquare, you can take the temperature of all of bars, restaurants, clubs and other venues in your area.

    But then you start noticing some differences. There’s no option to find your friends, and certainly no mechanism for following them. You can interact with anyone who “drops” into your location, but you’re most likely dealing with a complete stranger. If you ask a question or make a postive or critical comment, you’re just as likely to get a response from the venue’s owner as you are from one of its patrons. And once you’ve left a location, you’ll still be able to see all of the activity going on there, but you’ll find your ability to interact with the locale much more limited.

    Evzdrop CEO David RushEvzdrop CEO David Rush said he and fellow co-founder Eric Brown were inspired to start Evzdrop in 2012 because of the difficulty of sorting useful information about a bar, restaurant or event from social networks.

    “There’s a fire hose of information coming out of Facebook and Twitter,” Rush said. “Check-ins are more about showing where you are to friends, which is what Foursquare has become today. … We wanted to create an app that allows you to share a common interest in place — one that lets you get the perspective of people who, along with you, are actually at an event.”

    To that end, Evzdrop has created a kind of geofenced social network, allowing only people who are actually at a location to engage with one another and the business itself. Everyone else is just a voyeur. They can follow all of the drop posts going at location, but they can’t participate themselves except to comment on other people’s drops.

    Hot Chip concert pictureFrom my experiences fiddling with the app, many of the drops aren’t terribly useful — “Dude, this band rocks!” — but as more people use the app, more useful information rises to the top through a “props” system that allows other people at vote up the most entertaining or informative posts.

    The idea, Rush said, is to create not just a repository of immediate information — older drops disappear form the site — but a real-time dialogue between all of the people sharing the same space. That differentiates it from Yelp and other reviews sites, Rush said.

    If Evzdrop can reach critical mass it should be able to tell if the Hamachi at the local sushi bar is particularly fresh or foul on any particular hour. Sports bar owners will be able to alert you to which games they’re showing in playoffs, or respond to requests from customers on the premise to switch to a different game. Concert attendees can demand a band play a particular song.

    Do we really need another check-in app?

    Of course, to get this kind of depth out of the service, Evzdrop really needs to scale. Right now it’s still a tiny operation. It has six employees and $500,000 in angel funding, and its Android and iPhone app only has a miniscule 11,000 downloads. Growing that base is going to be difficult to say the least. Not only are there numerous competing apps promoting their own take on the check-in, every major social network, review app and location-based service — from Facebook to Yelp to Google Latitude — have added check-in capabilities. The last thing most consumers want to do is download and register an account with another check-in app.

    Building a business around social-location is also proving to be a difficult even if you 3.5 billion check-ins like Foursquare. New York’s check-in pioneer just raised another $41 million in financing, but it’s under intense pressure to prove it has viable business model.

    Evzdrop ScreenshotRush said that Evzdrop hopes to gain traction by targeting business owners and event planners, getting them to promote the app to their customers. Rush thinks the app would be particularly appealing for helping track customer sentiment and complaints at big events like concerts or benefits, where organizers can communicate with a lot of people en masse.

    To that end Evzdrop is making venue owners a key part of the network, rather than just peripheral participants. They don’t get control their local social networks like, say, moderators on a discussion board. But they can communicate privately with their patrons, Evzdrop provides them with real-time data about the sentiment of their clientele. Rush said it Evzdrop considers itself just as much a customer relations management (CRM) platform as it does a social networking app.

    That business focus is also key to its business model. While any business owner can register their place with Evzdrop, gaining access to its customer communications tools, Evzdrop hopes to build a premium platform that would allow businesses to market promotions to their most frequent customers as well as give them more control over the interaction within the walls of their social networks.

    Rush said one tool Evzdrop plans to implement is a means to flag negative sentiment, allowing a proprietor to intercept a critical drop before it goes live giving them a chance to address the complaint immediately. Rush said Evzdrop would never allow businesses to censor posts — every drop would still go live – just create a kind of early warning system for negative feedback.

    It seem Evzdrop is trying to walk a fine line. It’s admirable that Evzdrop is trying to develop its business model at the get go, as opposed to Twitter and Foursquare, which built their social networks and then tried to figure out how to make money. But if patrons start perceiving Evzdrop as just a promotional pulpit for businesses, they won’t use it as a social network. And if Evzdrop can’t build up a social network, it doesn’t have a business.

    Concert image courtesy of Flickr user humbert15.

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  • Leap Motion delays shipments of gesture-based controller

    Those of you counting on receiving Leap Motion’s hot new minute-motion sensor in May will have to wait a few more months. Leap CEO Michael Buckwald said the startup is delaying shipments of the controller — which promises to give any PC a gesture-based interface – until July 22 in order to allow more time for testing.

    Buckwald said it became clear to the company it needed to expand its beta trials beyond developers to ensure that the device is ready for commercial release. “There is nothing catastrophically wrong,” Buckwald said. “We are proud of the product.”

    The original ship date was set for May 13 for customers who pre-ordered the device for $80. It was also set to appear on Best Buy shelves on May 19. Buckwald said that if Leap Motion’s engineers had pushed they might have made those dates, but they felt that the delay would allow them to improve the product.

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  • New Yorkers can now get cellular signals in 30 more subway stations

    Back in 2011, Transit Wireless and New York City’s Metropolitan Authority announced an ambitious plan to blanket the Big Apple’s 277 underground subway stations with mobile voice and data coverage. After launching in six stations in Chelsea, nothing much else happened, but on Thursday Transit and MTA finally announced the next phase of their project.

    It’s only 30 stations so the project is still well short of its goal, but AT&T and T-Mobile customers should start noticing their phones maintaining their connections as they descend into the depths of Midtown Manhattan. In addition, Boingo is also using the system to expand its hotspot networks underground. Transit said the stations are located in Times Square, Rockefeller Center, Lincoln Center and Columbus Circle. (You can see a list of the specific stops here.)

    Transit has installed a distributed antenna system, or DAS, which is neutral-hosted cellular technology. That means that, unlike with traditional tower radio infrastructure, multiple carriers can use the same equipment to reach their customers. They just install base station gear in a hidey-hole somewhere in the MTA’s underground maze, and Transit’s antennas spread their signals to nearby stations.

    T-Mobile and AT&T are the anchor tenants of the project, but Verizon Wireless and Sprint said they are negotiating agreements with Transit and the MTA to use the network as well. Transit is targeting 2016 to complete its DAS installation throughout NYC.

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  • Square hires ex-Googler to handle global expansion, partnerships

    Francoise Brougher, the former chief small business salesperson for Google has joined Square, taking over the quickly growing mobile payment company’s Business Lead role.

    What’s a business lead? We’re a bit confused by the term as well, but according to Square, Brougher will oversee Square’s “growth operations including revenue products, international expansion, customer support, and partnerships.” That’s a big plate.

    Brougher was most recently Google’s VP of SMB Global Sales and Operations, where she managed the team in charge of acquiring, growing, and retaining small business advertisers. That experience should serve Brougher well as Square, since a good chunk of its mobile payments revenues comes from 3 million small business owners.

    As for international expansion, Brougher has a lot of ground to cover. Outside of the U.S., Square so far has only launched in Canada.

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  • Belly lands big national chains as loyalty platform customers, including McDonalds

    Belly started out empowering local businesses to create loyalty programs of their own, allowing them to compete with the sophisticated customer retention campaigns of the big nationwide chains. But it turns out that those big chains are interested in Belly’s loyalty platform as well.

    The Lightbank and Andreessen Horowitz-backed startup on Thursday revealed it is expanding its scope from small and medium-sized business to large enterprises. The company said it’s currently working with 40 national chains, which have installed its loyalty card scanning system in 500 locations. Belly said those chains collectively represent 40,000 restaurants and stores nationwide, though it didn’t reveal the names of the names of specific companies.

    But a quick glance on Belly’s merchant map in Chicago reveals plenty of big names: McDonalds, Chick-fil-A, 7-Eleven and Domino’s Pizza among them. For instance, McDonalds is offering up rewards like a free regular fries or free cookie after accruing a specified number of Belly loyalty points.

    Belly loyalty command center iPadBelly’s system is pretty simple. Belly members either order a universal loyalty card with a QR code or download the Belly app to their smartphone, which displays the QR code on screen. All merchants have an iPad set up at the register or other convenient location, and customers scan their card or app into the tablet to accrue points for every visit. Get enough points and you can pick prizes. Those can come in the form of free goods, discounts or sometimes more off-the-wall rewards, such as a personal serenade from the store’s owner.

    Belly has attracted interest from businesses nationwide, but its hometown of Chicago remains its biggest market with more than a thousand locations using the Belly system. As a Chicagoan, I’ve seen Belly pop up everywhere. My wife and I use it to get free booze at our local liquor store, and we’re saving up our points so we can get a free cooking lesson from the chef of our favorite local restaurant Bistro Dre.

    While I love the idea of unique tailored rewards programs for local businesses, it’s easy to see the appeal for Belly to go after the national chains. Chicago has many e-commerce companies that were founded on the principle of targeting small, local merchants, but they’ve been shifting their focus to the national retailers and brands.

    For instance, fellow Lightbank startup Boomerang has abandoned its original local-business focus and to turn its peer-to-peer gifting service into a viral marketing platform for big brands like Ghirardelli and Starbucks. Even suffering e-commerce giant Groupon(grpn) (see disclosure) has strayed from its local business focus to offer an increasing number of daily deals for national chains.

    Disclosure: The author’s spouse is employed by Groupon.

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  • Enter T-Metro: MetroPCS shareholders approve T-Mobile merger

    Mark your calendars for May 1, folks. That’s the day MetroPCS ceases being an independent entity and T-Mobile USA will no longer be a fully-owned subsidiary of Deutsche Telekom. MetroPCS shareholders on Wednesday voted to back the T-Metro merger, granting it the last remaining approval it needed.

    The merger will combine the country’s smallest nationwide carrier with its largest regional carrier, giving the new company a total of 42.5 million wireless customers. That’s still not enough to overtake Sprint as the nation’s No. 3, but it will give the new company plenty of spectrum in key markets. T-Mobile has plotted a course that calls for delivering large quantities of mobile data to consumers at cheap prices and with no contracts. That strategy requires T-Mo to lay its hands on all the spectrum it can find.

    metropcsThough Deutsche Telekom is the one making the buyout offer, T-Mobile will actually become a part of MetroPCS, taking advantage of the U.S. company’s placement on the New York Stock Exchange. DT, however, will own the majority of the shares, and – though we’ve been calling the new merger T-Metro for short – the company will take on the name T-Mobile USA. MetroPCS will live on as a brand in T-Mo’s arsenal.

    The deal sailed over regulatory hurdles (the FCC didn’t even bother to vote on it), but it nevertheless suffered a close call when it came before Metro’s shareholders. Institutional investors took exception to what they considered DT’s low-ball offer and threatened to rage a proxy war to derail the deal.

    03/26/2014 T-Mobile iPhone 5 unveilingDT at first played the tough guy refusing back down, but as the shareholder meeting approached earlier this month, it got nervous. MetroPCS rescheduled the meeting for this week, while DT proffered up a new terms – lowering the merged company’s debt load and that debt’s interest rates – to make the more attractive. It worked. The deal’s biggest opponent, hedge fund Paulson & Co., lifted its protests.

    Once the deal closes, T-Mobile has a long integration process ahead – an ordeal that makes me question whether the merger is worth the trouble. T-Mobile, however, isn’t looking to duct tape together its GSM-based networks and Metro’s CDMA systems. It has something more radical in mind: cannibalizing MetroPCS for its spectrum. While T-Mo will keep the Metro brand and support its existing customers, the regional carrier’s CDMA and LTE networks are goners. T-Mobile plans to incorporate Metro’s spectrum into its ongoing network overhaul, creating very fast and high-capacity LTE and HSPA+ networks.

    This post was updated at 9:30 AM Wednesday to add more background details.

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  • MightyText moves beyond cloud SMS, starts synching photos to the PC

    MightyText may have the word “text” in its name, but its plans are bigger than just synchronizing SMS between your Android smartphone and PC. On Wednesday it launched a new version of its app that will sync your smartphone’s photos and videos with a PC or Android tablet as well.

    Does that sound like Dropbox, Google Drive, or any of the numerous cloud storage and synchronization services out there? Well, that’s the idea, said MightyText founder Maneesh Arora. MightyText isn’t claiming to be technologically better than any of those services, Arora said, but it is claiming to be more convenient.

    While Dropbox may be a profoundly useful service for storing and managing files, people don’t check their Dropbox folders everyday, Arora said. But MightyText’s customers do engage with its browser apps and tablet apps every day, Arora said, using them as desktop extensions of the SMS clients in their smartphones. Since customers are already receiving and sending text messages through MightyText, it’s a logical place to manage and share their smartphones photos and videos as well, Arora concluded.

    MightyText Photo sync screenshot

    As with similar services, photos and videos aren’t actually shipped to the PC, but stored in the cloud. From MightyText’s browser extensions, customers can view the files, send them off as MMS messages to anyone in the phones address book or generate a private link that customers can share through other messaging formats. The smartphone client can be set so it only uploads files when connected to Wi-Fi – otherwise data fees might get out of control for shutter flies.

    Arora said the MightyText plans to add other synchronization capabilities in the future. He didn’t give any specifics, but he said the end goal is recreate as many smartphone capabilities as possible on the desktop. For instance, MightyText recently added a battery meter to its apps so customers can track their phone’s charge from their PCs.

    The more immediate goal is to expand its reach. It now has 3 million users, and is developing desktop apps for the PC and Mac for customers, which will allow more people to use its services features, as well as an iPad app.

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  • FreedomPop goes national with a Sprint-powered mobile hotspot

    FreedomPop has made national headlines for its “freemium” take on mobile broadband service, but it’s never been able to offer a nationwide service. The reason is it’s always been dependent on Clearwire’s WiMAX network to connect its customers, and Clearwire only offers that connectivity to about a third of the country’s population.

    But starting Wednesday FreedomPop is selling a new hotspot modem that connects to Sprint’s nationwide CDMA EV-DO network. The modem will likely clock sub-megabit 3G speeds when on Sprint’s network, but it will connect to any Clearwire tower when available. That allows FreedomPop to give its current customers nationwide coverage as well as market the service to customers outside of Clearwire’s 80-city footprint.

    As we’ve reported, FreedomPop eventually plans to tap into Sprint’s new LTE network, allowing it to wean itself off Clearwire’s WiMAX systems (it will keep its home broadband service with Clearwire though). According to CEO Stephen Stokols, FreedomPop will start selling an LTE-CDMA hotspot in about six months. He added that the mobile virtual network operator (MVNO) wants to wait until Sprint builds up its LTE footprint before making the leap. Right now Sprint has 88 cities and towns under its LTE umbrella, but plans to make a big expansion push this summer.

    FreedomPop iPhone sleeveFreedomPop is only selling a hotspot, the Overdrive Pro, on the new network. It’s signature device, a sleeve modem designed to fit around the iPhone 4 and 4S is still AWOL, caught up in the Federal Communications Commission’s testing process. Stokols said he still holds out hope that the device will clear those tests soon. That’s probably of little consolation to the customers who pre-ordered the device last May, but Stokols said he’s hoping that a belated approval will clear the path for an iPhone 5 sleeve later this year.

    Even without the Sleeve, FreedomPop has been growing rapidly as consumers latch onto its free 500 MB of monthly data and its bandwidth sharing and earning features, as well as its hotspots and iPod Touch sleeve, Stokols said. He wouldn’t reveal exact subscriber numbers saying only the virtual carrier has “hundreds of thousands” of customers. FreedomPop also plans to launch a voice service in the next few months via a partnership with VoIP and IP messaging provider textPlus.

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  • Sprint customer losses mount as Nextel sunset date nears

    Sprint posted another quarter of big subscriber losses thanks to the continued flight of customers from Nextel’s sinking ship.

    In the first quarter,  the country’s No. 3 carrier managed to sell 5 million smartphones — including 1.5 million iPhone activations — add half a million new CDMA prepaid subscribers and even boost its average revenue per customer. But the impending shutdown of Nextel’s iDEN network continues to weigh on Sprint’s performance, and the company acknowledged it would continue to do so until the final Nextel cell site is turned off on June 30.

    Sprint’s Q1 revenues remained flat year over year at $8.8 billion, but the company’s losses narrowed from $863 million to $643 million.

    Nextel shed 771,000 customers, but Sprint managed to recapture 46 percent of them bringing them over to a CDMA service. That leaves 1.3 million remaining iDEN subscribers, which will have to go in the next few months.

    That means Sprint is in for an even more painful quarter of subscriber losses in the second quarter, and according to CFO Joseph Euteneuer those holdouts will be the most difficult to recapture. He said Sprint is predicting a recapture rate from 30 to 40 percent in Q2.

    Once that final Nextel transmitter goes dark, though, Sprint won’t waste any time putting Nextel’s old 800 MHz spectrum back to work. President of Network Operations Steve Elfman said Sprint has already begun replacing shutdown iDEN sites with CDMA, and in the fourth quarter Sprint will expand its LTE network into 800 MHz. That will considerable capacity to its 4G network, and 800 MHz’s low frequencies will give it better range.

    Sprint’s saw its biggest gains were across its numerous brands. It added 568,000 prepaid CDMA subscribers, but its contract customer gains were marginal and it lost 224,000 wholesale and affiliate connections. When you add all of the loss and gain numbers up Sprint posted an overall net subscriber loss of 415,000 for the quarter. It not has a total of 55.2 million customers.

     

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  • Swype takes SwiftKey head on, debuting on Google Play

    Swype and SwiftKey have long competed for Android users’ attention, each proffering their own version of an intelligent touchscreen keyboards. But SwiftKey has always had a big advantage: easy availability. Anyone can go to Google Play and download the SwiftKey software onto their Android smartphones or tablets.

    Swype’s maker Nuance Communications has traditionally distributed its smart keyboard through handset makers, though it has made new releases of the software available to anyone through a registered beta program. But Nuance has decided to change up its distribution model, likely to expand its presence beyond the Motorola, Samsung and HTC handsets on which it ships. On Wednesday Nuance will begin offering Swype in Google Play.

    Like SwiftKey, Swype will be a paid app, but Nuance is selling its keyboard of a $1 — at least for the time being — while SwiftKey charges $4. And as with SwiftKey you can download a free version of the fully functioning Swype keyboard for a month trial period.

    My colleague Kevin Tofel is a big fan of SwiftKey and its predictive text algorithms and recommends it over all other third-party keyboards (and there are numerous keyboards). Myself, I’ve always used Swype, at first because the Android handsets I’ve owned came with the smart keyboard pre-installed, but I later got hooked, installing new beta versions as they became available.

    Regardless of which keyboard offers the superior experience, there are likely many smartphone users like me who cut their teeth on Android using a smartphone preloaded with Swype. They might welcome the Nuance software on their newer Android handsets – especially if it can gotten for a quarter of SwiftKey’s price.

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  • AT&T sells 6M smartphones in Q1, accounting for 9 out of 10 device sales

    As you might expect, AT&T saw its growth drop off considerably in Q1 compared to the always blockbuster holiday quarter, but it didn’t do too shabby. It posted a net increase of 291,000 new subscribers, sold a first-quarter record 6 million smartphones and even saw a surprising uptick in connected tablet sales.

    Per usual, the iPhone was a big driver of its smartphone performance, accounting for 4.8 million activations. AT&T added 365,000 tablets to postpaid plans in the quarter, and increased the overall number of smartphones connected to its network by 1.2 million. At the end of March, 72 percent of AT&T’s contract phone customers now owns smartphone, and nearly nine of ten new phones purchased sports an smartphone OS.

    Financially, AT&T’s revenues were down 1.5 percent year over year to $31.4 billion due to the sale of its advertising business, but its net profit ticked up by $100 million to $3.7 billion.

    AT&T’s major pain point was in its prepaid business. It lost 184,000 prepaid subscribers, but Ma Bell said many of losses came from prepaid tablet users, many of which have switched over to its shared data plans. About 14 percent of 10 million of AT&T’s contract subscribers are now on such shared data plans. For each shared account, customers typically connect three devices, AT&T said.

    We will update this post as we get more information.

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  • 5G doesn’t exist yet. Let’s stop abusing the term

    I’m a bit concerned that we in tech blogging community are doing the mobile industry’s marketing for them. This week a few tech sites published posts that attached the term “5G” to T-Mobile’s forthcoming rollout of LTE-Advanced technologies.

    It’s not my intention here to to attack my peers, but I think it’s necessary to point out we’re descending a slippery slope if we start tossing around the term 5G loosely. 5G doesn’t exist except as the barest concept. It hasn’t been defined by any standards body. The mobile industry only recently began addressing what constitutes 5G, assigning its biggest brains to investigate the technologies that might make up 5G networks in the future.

    mobile phone and telecommunication towersI understand the frustration of my fellow tech bloggers. Presented with a bunch of byzantine acronyms, how do you explain to the average reader the differences between an HSPA network and HSPA+ network, or between an LTE and an LTE-Advanced network, in a single sentence? When dealing in headlines of limited length and Twitter posts of 140 characters, it’s easy to fall into the comfortable trap of using terms like 4G and 5G to explain the differences in technologies (I’m guilty of falling into that same trap as well).

    But I think we owe it to our readers to spell out those nuances. Otherwise we’re not truly explaining mobile technology. Instead, we’re just repeating the marketing messages of carriers and vendors that have every interest in exaggerating the capabilities of their networks.

    To my knowledge, T-Mobile isn’t publicly labeling its forthcoming network as 5G, but the operator has a reputation for this kind of technology-inflation. In 2010, T-Mobile relabeled its HSPA+ service as 4G out of the blue. I had some sympathy for T-Mobile at the time, because it was presented with a quandary: Sprint had long used the term 4G to describe its WiMAX network, but T-Mobile’s ostensible 3G network was routinely beating Sprint in raw speed tests.

    Instead of trying to explain the differences to its customers – which admittedly would have been quite difficult — T-Mobile took the easy way out and simply claimed 4G as its own. Of course, that led AT&T to do the same for its even slower 14.4 Mbps HSPA+ network. Eventually, the standards body responsible for defining the various ‘G’s, the International Telecommunication Union, caved to industry pressure and retroactively defined 4G as pretty much whatever carriers wanted it be.

    ATT-4G-LTE-Logo4G became a meaningless term, and we tech journalists reinforced its meaninglessness by swallowing the terminology carriers fed us. If carriers gets hooks into the acronym 5G, you can bet the exact same thing will happen. Once one carrier succumbs, others will race to redefine their perfectly serviceable 4G networks as 5G networks. An the next operator to gain the slightest technical edge will start bandying about the term 6G.

    I’m not dissing T-Mobile’s technical accomplishments. As I’ve written before, T-Mobile’s new LTE network, by virtue of its newness, has definite advantages over other carriers’ networks. T-Mobile will be able to upgrade to new LTE-Advanced technologies faster and cheaper than its competitors. But T-Mobile certainly doesn’t have an LTE-Advanced network today, it won’t have one in the near future and it will be years before it can legitimately make the claim to owning one. LTE-Advanced is an incremental technology, and many of its key techniques aren’t even commercially available to carriers yet.

    In my opinion, carriers are already abusing the term LTE-Advanced. They haven’t started compounding that abuse by advertising their current or forthcoming LTE networks as 5G, but it’s only a matter of time. Let’s not help them along by doing their marketing for them.

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  • Boomerang shifts focus from social gifting to viral marketing

    Last time we checked in with Chicago’s Boomerang they were one of a growing number of social gifting companies looking trying to distinguish themselves by centering on local businesses. But in the last year, Lightbank-backed Boomerang has decided to change course, shifting its focus from consumers giving gifts to the merchants and publishers supplying the gift cards.

    What Boomerang realized was that standing in the middle of consumer-to-consumer gift transaction was not the greatest business model, CEO Zach Smith said. It depends on massive scale, and other companies like Sweden’s Wrapp and Facebook’s Karma were coming to dominate the market while Boomerang tried to scale its local-merchant strategy.

    Zach Smith, CEO of Boomerang“There’s a huge opportunity in social gifting, but it’s not in selling gift cards to consumers,” Smith said. “It’s in building viral ads.”

    Smith discovered that businesses loved the idea of gift cards for spreading their brand awareness and luring in new customers, but they wanted communicate with customers directly, not just be an option in growing menu of gift peer-to-peer gift ideas, Smith said. So Boomerang has been increasingly obliging them. It hasn’t abandoned its peer-to-peer gifting engine, but it’s using it primarily as a redistribution system for direct-to-consumer gift-card promotions.

    Here’s an example: A customer like chocolatier Ghirardelli will send out an e-mail to its customer list embedded with a stylized $5 gift card redeemable on the company’s site or at one of its stores. If customers accept, they click a link where they’re taken to Boomerang’s site and given an electronic or printable gift card. Customers are then given the option to share that card with, say, five friends through Boomerang on Facebook.

    There are some compelling reasons why brands like this approach, Smith said. First, one in five customers who receive a Boomerang promotion from a partner redeems their gift cards on the spot to buy goods online. “What other ad unit on the planet gets a 20 percent engagement rate?” Smith said.

    Then there’s the viral distribution platform. People who receive the initial promotion re-gift the card on average to 3.1 friends. Though engagement rates can fall after that first wave, customers can spread a practically compelling gift card well beyond their initial friendship circles, creating what amounts to an ad hoc viral marketing campaign across a social network, Smith said.

    Screen Shot Boomerang gift cards

    The key is getting those gift cards into consumers hands (or inboxes), rather than depending on a consumer to initiate peer-to-peer transaction. To that end, Boomerang has been looking for more avenues to distribute those cards. It’s been working with a few online market research and promotion companies like Lab42 and Jebbit to make Boomerang gift cards rewards for completing questionnaires or engaging with their marketing content. This week Boomerang took the Rewards program out of beta, offering it to all comers.

    One casualty of Boomerang’s new strategy, however, has been its initial focus on local business. National brands allow Boomerang to scale nationally. And while consumers say they like the hipness and flexibility of giving gift cards to a local bakery or coffee shop, Smith said, 90 percent of the gifts they actually give are for national brands like Starbucks(sbux) and Fandango.

    Boomerang still offers gifts FOR about 100 local businesses in four cities, though most of them are in hometown Chicago. While Smith said it would continue to support those customers, it’s not pursuing any new ones. The startup has found that there is budding market for paid gifts — where customers actually buy a gift card rather than pass on a free promotion. But Smith said it’s not a business Boomerang will likely pursue for the simple reason that daily deal companies like fellow Chicagoan and Lightbank prodigy Groupon (see disclosure) have that premium coupon market locked down. Having raised $1 million in July, Boomerang is still a small operation, working out of the Lightbank collective co-located in Grouping’s Chicago HQ building. Last month it had 300,000 unique users, but thanks to its new viral marketing approach, the company is growing quickly, adding some big national brands to its roster, including the Gap, Barnes & Noble and Wine.com.

    Disclosure: The author’s spouse is employed by Groupon.

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  • Kik raises $19.5M to continue waging its messaging war

    Kik Interactive, the over-the-top communications startup that makes the popular Kik Messenger app, has raised a $19.5 million Series B funding round, led by new investor Foundation Capital, and added Foundation partner Anamitra Banerji to its board. Benarji was Twitter’s 30th employee and first product manager, so he knows a bit about building disruptive communications apps.

    Kik has been on a bit of a tear recently. After a year of inaction in the increasingly cutthroat market for OTT messaging apps, in November Kik launched a new update called Cards, which introduced HTML5-based mini-apps into its service and took advantage of its growing network of users. Since then Kik’s rate of growth has doubled from 100,000 to 200,000 new installs per day and its total customer base has grown from 30 million to 50 million registered users, the company said. Those customers have downloaded about 25 million of the card mini-apps, Kik said.

    Banerji said the added functionality evolves Kik from just another OTT text upstart to a social communications platform. “There are similarities between Kik and Twitter when it comes to growth, engagement and vision,” Banerji said in a statement.

    Based in Waterloo, Canada, the company is in a very crowded market where multiple dozens of competing messaging apps vie to lure consumers away from SMS into their private their networks. WhatsApp is the undisputed king of those apps, but there are numerous others, ranging from Pinger to Vibe to TextMe, all offering a slightly different set of communications features to distinguish themselves.

    Kik raised an $8 million round in 2011 from Union Square Ventures, RRE Ventures and Spark Capital. All three of those investors participated in its Series B.

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  • Sprint says its weighing Dish’s offer but presses FCC to approve Softbank deal

    Sprint may be suffering from some indecision over its two suitors, Dish Network and SoftBank — or it could just be playing them against one another.

    On Monday, the Sprint’s board announced that it has formed a special committee of independent directors to “carefully evaluate” Dish’s $25.5 billion offer to buy up the company. But it also wants to keep its original $20.1 billion deal with SoftBank deal on track — despite Dish’s attempts to put it on hold.

    On Friday it asked the Federal Communications Commission to keep its official review of Sprint-Softbank going, keeping the deal on target for final approval this year. The FCC is already 140 days into its initial 180-day review, but the U.S. Department of Justice has asked the FCC to delay proceedings while its National Security division looks into foreign ownership issues.

    When Dish countered SoftBank’s offer last week it asked for a suspension of the regulatory review, but Sprint said there is no reason to stop clock even as Sprint negotiates with Dish. In fact, in its FCC filing Sprint accused Dish of political maneuvering to muck up the SoftBank deal. From the letter:

    “DISH wrongly suggests that it would be prudent for the Commission to derail this review while it waits until an alleged uncertainty – uncertainty that DISH itself is attempting to create by its unsolicited proposal – is resolved. DISH has this exactly backwards. The Commission has been working diligently on the pending applications, which now stand at day 140 of the Commission’s shot clock. The Commission must not be distracted by DISH’s latest maneuverings, just as it was not distracted by DISH’s original request, and, based on long-established precedent, continue the orderly processing of the applications to conclusion.”

    Meanwhile, the special five-director committee will weigh whether the Dish’s bid represents, or will likely lead to, a “Superior Offer” to Softbank’s. Dish may be offering more money, but as TMF Associates analyst Tim Farrar points out, Sprint has to look at other factors besides value to determine if a Dish-Sprint tie-up is worth the trouble.

    Dish may offer Sprint some strategic advantages — combining both companies’ spectrum with Sprint’s mobile network and Dish’s satellite TV service — but if SoftBank matches Dish’s offer, Sprint may figure it can buy whatever strategic advantages it needs with SoftBank’s cash.

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  • Mobile accelerator Tandem bulks up with 2 new partners, 3 new startups

    Silicon Valley’s Tandem Entrepreneurs has always been a small operation, focusing attention on a dozen or so mobile technology startups each year, but it’s showing signs of getting bigger. On Friday Tandem announced it has brought on two new partners: former BlackRock Asia-Pac Chairman Rohit Bhagat and Doug Ellis, co-founder of online advertising tech company Turn.

    Considering that before these new additions Tadem had a roster of only three partners, that’s significant growth. Tandem typically accepts into its accelerator program three or four early-stage startups each quarter, making a $200,000 investment in each, as well as providing office space and mentoring.

    With its newly bulked up team, though, Tandem plans to host and invest in a larger number of companies each year and expand its scope to more countries – while still maintaining its focus on mobile. Last year, Tandem closed its second fund, raising $32 million.

    Tandem on Friday also revealed the three companies that make up its latest accelerator class:

    • Tile: Tandem’s first mobile hardware investment, Tile has developed a small mobile tracking device that can be attached to any personal or important item, even pets.
    • Swoopt: Currently in beta, Swoopt has developed fantasy sports gaming and tournament software for the mobile phone.
    • HomeTapper: This startup is developing a rich-media experience for real-estate listings on the tablet.

    Tandem is accepting applications for its summer class until May 1.

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  • As Straight Talk starts selling the iPhone, TracFone sees jump in subscribers, revenue

    TracFone, the country’s largest prepaid virtual operator, managed to outdo its impressive holiday performance in the usually tepid first quarter. It added 839,000 new subscribers to its total, more than the 753,000 it added in the fourth quarter and 127 percent more than its 369,000 net additions in last year’s Q1. TracFone even beat out mobile giant Verizon Wireless, which grew by 720,000 new subscribers last quarter.

    Why the big boost? América Móvil, the Latin America multinational telecom provider that owns TracFone, didn’t give specifics. But it just so happens that in January TracFone started selling the iPhone 5 at Walmart through its Straight Talk brand.

    The offer presents a cheap alternative for consumers craving Apple’s latest and greatest device. You still have to pay the unsubsidized iPhone 5 price of $649, but Walmart spreads it out over 26 monthly payments of $25. Meanwhile Straight Talk’s prepaid service comes in at just $45 a month, including unlimited SMS, voice and data, though Straight Talk will start throttling back speeds if you consume much more than 2 GB each month.

    That plan is even cheaper than T-Mobile’s new “Un-carrier” $50 tier while also offering more data. The major drawback is that you  don’t get 4G access.  As a mobile virtual network operator (MVNO), TracFone buys network access from the major carriers. The iPhone deal uses either Sprint or Verizon Wireless’s CDMA networks, but so far Tracfone hasn’t gotten permission from either to use their LTE services, which can deliver data speeds up ten times faster than their older 3G EV-DO systems.

    In its earnings statement (PDF), América Móvil said that its big subscriber gains are coming from Straight Talk and its new brand targeting Mexican nationals Telcel América. Both brands offer more expensive plans than Tracfone’s core prepaid service focused on budget users. Consequently, its average revenue per subscriber jumped 16 percent year over year to $19 a month.

    There’s no way to know for certain whether the iPhone is driving those Straight Talk gains unless Tracfone starts releasing device figures. But more of the prepaid operators’ customers seem to be gravitating toward higher-end devices like the iPhone and purchasing more expensive service plans.

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