Author: TheAppleBlog.com

Investors are betting that Nokia shares will gain 14 percent over the next several weeks, according to a BusinessWeek piece this morning. But even Columbo would have a hard time finding evidence for such an upswing.

The bullish options traders believe Nokia can begin to right a ship that has dramatically tilted in recent months. The company in October posted a brutal quarter and a surprise loss of $832 million due largely to write-offs in its Nokia Siemens Networks unit. Its presence in the U.S. market continues to wane and, as the BusinessWeek piece notes, Fitch Rankings cut Nokia’s credit ranking three weeks ago.

So why the hopeful wagering? From the story:

“Investors are betting that Nokia can’t continue to get things wrong,” said Michael Yoshikami, chief investment strategist at YCMNet Advisors in Walnut Creek, Calif… “The iPhone has been a wake-up call for them and they are starting to show that they understand the market has changed.”

That’s pretty flimsy logic, though, and there’s little to demonstrate that Nokia finally gets it. True, the company has made some smart, recent moves like halving its smartphone lineup, bringing Ovi to AT&T, and vowing to give Symbian a much-needed makeover. But it’s not like the market is getting any easier: In addition to the continued success of the iPhone and the hit Droid, Google’s Nexus One just came to market and Palm appears ready to launch the Pre with both AT&T and Verizon Wireless in the coming months. There are still reasons to be somewhat bullish on N0kia as the handset market rebounds this year, of course, but betting on a 14 percent bump in value by Feb. 19 seems baseless.

Image courtesy of Flickr user Hamner_Fotos.

The nation’s two largest carriers are using this week’s CES stage to push their machine-to-machine (M2M) offerings in a big way as operators increasingly look to the space as a source of new revenues. Verizon Wireless is teaming with 4Home, a home control services provider, to demonstrate 4G services such as residential monitoring, home health and media management, showcasing ways consumers can use their phones to keep tabs on the home front. The offerings will be powered by Verizon’s LTE network, which will be deployed in 25 to 30 U.S. markets by the end of the year.

Meanwhile, AT&T today launched a site designed to help manufacturers of emerging devices bring their AT&T-connected wares to market more quickly. The carrier hopes to expedite the deployment of connected consumer devices such as e-readers and digital photo frames as well as potential residential apps like meter-reading and security.

The two efforts underscore the importance of M2M revenues for carriers, which are facing eroding margins from voice and network-congestion problems from consumer mobile data services. The technology exists to support many such offerings today, and bandwidth for M2M services will ramp up dramatically as 4G networks come online in the next few years. The carriers face a major challenge in building complicated new business models to leverage the space — a home health service, for instance, might require a revenue-share agreement between the health care provider, the equipment manufacturer and the network operator. But as cellular moves far beyond phones into a host of devices, it’s becoming increasingly clear that the home will be a crucial component of M2M revenues as 4G networks are deployed.

Image courtesy of Flickr user DeclanTM.

Dell today said it will team with AT&T to enter the U.S. market with an Android-based smartphone. But the longtime computer vendor could face challenges in making any headway on its home turf.

Dell expanded into mobile two months ago with the Mini 3, an Android-based gadget available in China and Brazil. While the companies offered few details, the new AT&T phone will be a version of the Mini 3 and is expected to debut in the next several months.

The move will mark the first Android phone for AT&T, which will be the last tier-one carrier to offer Google’s smartphone operating system. Dell, meanwhile, adds to an impressive list of carrier customers that also includes Vodafone and China Mobile.

But Dell faces an uphill battle as it comes to market in the U.S. It will be tough to draw attention to the Mini 3 among an ever-increasing number of Android handsets, and taking the spotlight away from Google’s new Nexus One and — to a lesser extent — Motorola’s Droid from Verizon Wireless won’t be easy. Perhaps its biggest challenge, though, will be drawing data-hungry customers to AT&T’s network, which has struggled to handle the congestion of iPhone users. The Mini 3 will not only have to be a compelling device, it will have to be heavily promoted if AT&T and Dell are going to lure users away from the competition — because a good product alone isn’t enough to secure market share in the space, as Palm can tell you.

Image courtesy of Dell’s official Flickr page.

Apple is set to jump into mobile advertising in a big way, shelling out $275 million to buy Quattro Wireless, according to All Things Digital. Which is the latest signal that 2010 will be the year of consolidation for the space.

The reported move comes two months after the iPhone maker tried and failed to enter the mobile advertising market when it lost out in its bid to land AdMob, which instead agreed to be acquired by Google for a whopping $750 million. Quattro is a relatively big player in mobile advertising, according to recent figures from IDC, claiming a 7 percent market share and generating roughly $21 million in 2009.

And while Cupertino has continued to generate impressive profits even as many competing phone makers are watching their margins be whittled away, it’s surely concerned about maintaining its own, as a host of impressive new devices come to market from competing vendors and smartphone prices continue to fall. So the company is scrambling to find new ways to monetize the mobile web and the surging uptake of wireless apps. The rise of in-app ads has led to a rapid expansion of the space since 2007, when AOL acquired Third Screen Media, Yahoo  picked up Actionality, Microsoft bought ScreenTonic and Nokia acquired Enpocket.

Some deep-pocketed players are looking to increase their presence in mobile advertising this year, and the list of potential targets is a lengthy one. Millennial Media, which according to IDC boasts an 18 percent market share, tops the list; other possible pick-ups include JumpTap and the analytics firm Flurry. Expect another round of consolidation this year as mobile apps and the wireless web continue to evolve into mass-market industries.

Image courtesy of Quattro Wireless.

As the tech world readies itself for the unveiling of Google’s Android-based — and much-hyped — Nexus One, MIPS Technologies Inc. this morning said it will team with a host of partners to showcase new Android-based offerings at this week’s CES. Among them are set-top boxes, a netbook and a social media center designed to enable consumers to consume and share TV content.

MIPS provides processors and architectures for home entertainment, portable media and communications gadgets, and today’s announcement isn’t unexpected given the company’s well-documented plans to bring Android to its entertainment offerings. MIPS is also using CES to tout its new membership in Adobe’s Open Screen Project, which aims to expand support for Flash beyond the traditional Internet to phones and other connected devices. The 18-month-old project has garnered backing from a host of media and tech heavyweights, including MTV Networks, ARM, Cisco, Intel, LG Electronics and Verizon Wireless, all of which are looking to enable consumers to view web-based video on a broad range of devices, operating systems and networks.

MIPS is joined on the Android bandwagon by fellow chip company ARM, semiconductor design firms like Aricent and Mentor Graphics, and others. Meanwhile Freescale Semiconductor is working on an Android-based netbook design, as is Qualcomm. While most of the attention surrounding Android is focused on mobile — more specifically, Android vs. the iPhone operating system — the flurry of activity from those in the chip space is a clear indication that Android is attractive not just to phone makers but also to hardware vendors and service providers in a wide variety of industries. Which bodes well for the concept of the Androidification of everything.

Image courtesy Flickr user p_kirn.

The new Samsung Galaxy has garnered positive reviews as a worthy competitor in the era of high-tech superphones. But it won’t be getting the latest version of Google’s Android operating system, according to a report today from The Register. So why would any informed shopper opt for the gadget over a device that can run the most recent OS?

Galaxy users should demand the latest version of Google’s OS, because they’ll be missing out on some pretty cool features: Android 2.0, which first came to market with the Motorola Droid from Verizon Wireless just two months after the Galaxy appeared, includes a host of upgrades such as camera and browser improvements and vastly improved messaging and contact features. Android 2.0 will likely hit Verizon’s Droid Eris from HTC early next year, and rumors have the latest version of the platform being readied for T-Mobile USA’s G1.

The Galaxy launched in September and is available through O2 in the UK as well as Canadian carrier Bell. O2 appeared to confirm that the device won’t receive an upgrade via an e-mail to a customer, saying Samsung is “currently not supporting a migration path…to Android 2.0.” (O2 later told El Reg that the e-mail should not have been sent.) Firmware updates are routinely delivered by carriers to mobile phones over the air, and users are often not even aware when the handset receives it. (Although as Stacey can tell you, that’s not always the case.)

What’s most irksome for Galaxy owners, of course, is that Android is an open-source operating system, which should eliminate any concerns over proprietary technology and incompatibility. Open source can be a double-edged sword, though, as James at jkOnTheRun noted months ago, giving birth to a fragmented market where upgrades are available only on specific handsets or through certain carriers.

The Galaxy’s lack of support for Android 2.0 evidently has less to do with technology than with simple economics, as Samsung has little incentive to support new software once the phone is sold. But the fact that the cutting-edge phone can’t support the latest version of the operating system is absurd. Galaxy owners should demand that Samsung address the problem immediately and enable support for Android 2.0. And if Samsung doesn’t comply, users should consider another manufacturer next time around.

Image courtesy Flickr user louivolant.

Nokia today stepped up its legal fight with Apple, filing a complaint with the U.S. International Trade Commission that alleges the Cupertino, Calif., company “infringes Nokia patents in virtually all of its mobile phones, portable music players and computers.” It’s just the latest eruption in the mobile space, which is quickly becoming a hotbed of legal activity.

In the case at hand, there are seven patents in question, relating to user interface software as well as camera, antenna and power-management, Nokia said. A long-running legal feud between the two companies has heated up in recent months. The Finnish manufacturer in October filed a suit claiming Apple had violated 10 Nokia patents regarding wireless technologies; Apple responded a few weeks ago with a countersuit regarding 13 of its own patents. The suits appear to be little more than bargaining tactics, as Stacey noted earlier this month, since both companies have technologies worth licensing.

Nokia has become very active in the courtroom lately as it continues to take a beating at the hands of Apple and other handset vendors. And it’s not alone; a host of other players are waging legal battles, too, including Motorola, Palm and Research In Motion. We’re sure to see more of these types of lawsuits as connectivity comes to more devices and the lines between mobile phones and a host of other consumer electronics continue to blur. Many of the lawsuits will likely come from vendors (like Nokia) who are watching their market share decrease as the space evolves.

Image courtesy Flickr user William Hook.

Next year is shaping up to be the year of the slate computer: Verizon Wireless expects slates to come to market in a big way in 2010; Apple appears to be mere weeks away from introducing its much-hyped tablet, rumored to be dubbed iSlate; and a handful of Android-based devices are already making their way to retail shelves. Google could move the needle with a rumored no-frills slate that would be available on the cheap — or even free — to users willing to sign up for 2-year data plans. And with its Chrome OS, the company is well-positioned to quickly become a leader in the space.

Like netbooks, slates have an obvious appeal, combining intuitive touchscreen interfaces with improved processing power and better screens than most phones can boast. Apple’s iPod touch has proven there’s a market for such gadgets. The question, though, is which operating systems are best positioned to gain traction as slate sales ramp up? Apple’s entry is likely to have either a full Mac OS X operating system or a modified version of the iPhone platform. Jolicloud, a startup that pocketed $4.2 million in venture capital earlier this year, is negotiating with manufacturers to package its impressive OS with their hardware. Moblin is garnering positive reviews for the latest release of its mobile operating system, which Kevin at jkOnTheRun believes is particularly well-suited for devices that are smaller than netbooks. Fusion Garage’s JooJoo is also receiving praise for its proprietary, Linux-based OS, although the gadget’s $500 price tag will surely limit its appeal.

The biggest winner in the space, though, is likely to be Google’s Chrome, as James at jkOnTheRun hinted last week. Google’s new OS is a natural fit for small mobile Internet devices, and the company has solidified the kind of carrier relationships necessary to sell subsidized devices through a wide variety of retail outlets. Apple, JooJoo and others may find an audience for high-end devices with price tags to match. But Google and its Chrome OS could absolutely own the slate space if the search giant can offer hardware for just a few bucks — but packaged with a lengthy data contract.

Image courtesy Flickr user nDevilTV.

The growth of data revenues was a huge story for the mobile industry in 2009, and those gains are sure to ramp up over the next few years as connectivity continues to expand beyond phones to new devices like netbooks, e-readers and a host of other consumer electronics. That uptake will increasingly be a double-edged sword for carriers, though, which are already struggling with ways to support the increased traffic driven by Apple’s iPhone and other multimedia-friendly devices.

Which is why AT&T and its competitors are beginning to discuss ways to minimize congestion on the network as they increase revenues from data-hungry consumers. There are lots of ways to attempt that, of course, from the current “unlimited” caps that generate disdain among users — and have largely failed to address bandwidth issues — to the congestion pricing that cable companies are beginning to toy with. But as Stacey points out in the latest report from GigaOM Pro (sub. required), each option has some important pros and cons. Variable-pricing models can be confusing to consumers who (like me) don’t know how much bandwidth they typically use. And while embracing alternative technologies like Wi-Fi can ease traffic on the cell network, it can also cut into the mobile-data revenues that will increasingly become crucial as margins from voice whittle away.

The dramatic surge in mobile data usage will continue to ramp up quickly as Android gains traction and superphones become more commonplace. Among carriers, the rich are getting richer thanks to that uptake, but they’re also beginning to experience the kind of network hiccups that invite users to move to rivals that can handle the traffic. The challenge for operators, then, is to figure out how to deliver — and monetize — data-heavy services to the relatively few users who demand that kind of bandwidth without sacrificing the connectivity required from more mainstream consumers. The carriers that can most effectively solve those issues will have a significant edge as we move from 3G toward 4G.

Image courtesy Flickr user B Tal.

Palm Pre owners got a bonus gift this holiday season with today’s release of webOS 1.3.5, which promises improved battery life and more usable storage for app installation, among other things. The move makes good on Palm CEO Jon Rubinstein’s recent promise to upgrade the company’s mobile operating system, and it follows the release earlier this month of the Ares SDK, a web-based tool for developers looking to build on the platform. But the struggling manufacturer will need more than just an OS makeover and improved developer tools if it’s to compete in the era of the superphone.

The next few months will be critical for Palm, which has seen its handset sales slide following the Pre’s June debut. The company has promised to take its developer program fully public at next week’s CES show in Las Vegas in an effort to boost development for an app store sorely lacking in titles. And Verizon Wireless  is preparing its employees for the launch of webOS devices as Sprint’s exclusive grip on the Pre and Pixi comes to an end. But the clock is ticking for Palm, which is increasingly being pummeled by competitors such as Apple and Android devices. The company must find better ways of marketing its handsets as they come to market through the nation’s largest carrier, and it must continue to improve the webOS as it fills the shelves of its app store. Palm may be the Jack Bauer of the mobile industry, lurching from crisis to crisis, but what it really needs is a high-profile launch through Verizon in the next couple of months. And it needs to do it without the drama.

The last few years have been brutal for some of the best-known companies in the handset business. Nokia has watched its dominance erode, Motorola failed to maintain the momentum it created with the Razr, and Sony Ericsson’s prospects look bleaker by the day. But while some venerable phone makers struggle to remain relevant, Taiwan’s HTC — a relative newcomer in an increasingly crowded field — has become a dominant force, reports Wired News. Here’s why:

• Smart about smartphones: HTC was early to recognize a shift in mobile toward a more PC-like model, centered on standard chipsets and operating systems and focused on the Internet. The company initially aligned itself with Microsoft and now is solidly in the camp of Google Android. Meanwhile, Motorola, Sony Ericsson and others dragged their feet. Lesson: See the future clearly.
• In Google we trust: HTC (GigaOM Pro profile) recognized that Android — not Windows Mobile — was likely to emerge as a winner, and then it moved quickly. The company is a founding member of the Open Handset Alliance, a Google-led consortium of mobile players centered on the Android operating system. It produced Android’s first handset — T-Mobile USA’s G1 — and has continued to churn out Android phones as the OS picks up traction around the world. Wisely, it plans to ramp up its Android efforts and focus less on Windows Mobile, which is becoming less relevant by the day even as the smartphone space heats up. Lesson: Bet on deep-pocketed winners less hampered by their past.
• Touchscreen crazy. Apple (GigaOM Pro profile) was the first to gain traction with a touchscreen superphone, allowing users to eschew bulky QWERTY keyboards in favor of a more intuitive user interface. HTC saw that touchscreen technology would be the interface of the future long before bigger rivals like Nokia and Sony Ericsson realized it and joined the bandwagon. It has effectively drafted on Cupertino’s momentum with the G1 and, more recently, the Droid Eris from Verizon Wireless. And demand for touchscreen technology will only ratchet up as consumers increasingly demand higher tech in smaller form factors. Lesson: If you can’t invent first, then be a super-fast follower.
• Sense user interface. HTC introduced its new UI earlier this year with the debut of the HTC Hero, which received rave reviews for its software. The Sense UI continues to garner praise and looks to play an increasingly larger role as the company expands its smartphone portfolio. Lesson: Be unique and make your software stand out.
• Effective brand-building. Once happy to churn out handsets that sported carrier brands, HTC has stepped out of the shadows by building its own brand. The company ramped up those efforts in the last few months with its “You” campaign, which touts the personalized features of its handsets. The move not only allows HTC to market a phone as a must-have feature “that gets you,” it also prevents carriers from co-opting its phones with their own marketing campaigns — like Verizon Wireless has done with its Droid initiative. That marketing will be crucial if HTC is continue to grow its mind share among consumers. Lesson: Use marketing to help get people to love your products.

HTC still faces stiff competition in the cutthroat smartphone space, of course. The momentum of Apple’s iPhone continues to grow; Research In Motion has only gained traction in recent months; and a host of other manufacturers are joining the Android bandwagon.

But HTC has impressively built out its worldwide footprint in the last two years, and its ad campaigns are helping the company morph from a simple hardware manufacturer into a major consumer-electronics player. So while some mobile dinosaurs are fighting for their survival, the new kid on the block continues to pick up steam.