Author: Tricia Duryee

Intel (NSDQ: INTC) is keeping an eye out for potential companies to buy that could help it expand its chip business to smartphones and consumer-electronics.

Intel’s CFO Stacy Smith told Bloomberg in an interview today: “We are looking at what we believe can accelerate our progress in those markets…As we see other opportunities like that, we think it’s a place where we can and will deploy capital.” Smith did not elaborate on what kind of companies they would consider, but it could be something on the integration side of the business that would aid in integrating the chips, rather than anything consumer-facing, like a device or OS-maker.

For instance, last year Intel acquired Wind River for $884 million, which gives Intel the software it needs to run devices ranging from cars to mobile phones.

To be sure, Intel has options given that it ended the first quarter with $16.3 billion in cash after reporting record sales for the period. The purpose of the acquisition would be about the technology, rather than for the company’s earnings. Today, Intel’s processors run in about 80 percent of the world’s personal computers, but as trends move to cheaper and more portable devices that are always connected, Intel will want to expand its offerings.

It recently agreed to merge its mobile operating system with Nokia’s Maemo operating system. Together, the two are building a high-end operating system called MeeGo that will be able to run on a variety of devices from in-car navigation to portable devices and mobile phones.

Sony (NYSE: SNE) Ericsson (NSDQ: ERIC) surprised analysts with a strong first quarter, after working for the past year to cut expenses and shift production to higher-end devices.

The joint venture turned a profit, increased the average selling price of its phones, and substantially grew gross margins compared to the year-ago period. The restructuring is obvious when looking at the number of phones it shipped, which dropped 28 percent to 10.5 million from the year ago period. The drop is attributable to building fewer, more expensive phones, which could pay-off. The average selling price increased to $181 (Euro 134) from $162 (Euro 120) a year ago. Sony Ericsson still has work to do to increase its market share, which it estimated to have fallen by one percentage point to about 4 percent.

The company also announced today that it appointed Bill Glaser, Jr, former Sony VP and Head of Sony Group Risk Office, to the position of CFO. Glaser will succeed Ulf Lilja, who will go back to work at Ericsson on July 31. Glaser will report directly to Sony Ericsson’s President Bert Nordberg, and will split his time between the London and Lund, Sweden offices.

Sony Ericsson reported a profit of $28 million (Euro 21 million), compared to a year ago loss of $396 million (Euro 293 million). That clearly beat analysts’ expectations. In a Reuters poll of 27 analysts, the mean forecast called for a 157 million euro loss. However, revenues continued to decline, totaling $1.9 billion (Euro 1.4 billion) during the quarter, or 23 percent less than the year-ago period. Gross margins jumped significantly to 31 percent from 8 percent in the first quarter 2009.

In a release, Nordberg said, “We are pleased to see the positive impact of both the launch of new products and the business transformation programme improving the company’s results.” The company started selling its first Android-based device, the Xperia X10, towards the end of the quarter. A better economy might also help Sony Ericsson, which is forecasting a slight growth in global mobile phone shipments in 2010.

Since mid-2008, Sony Ericsson has reduced its workforce by about 3,150 people for a total of 8,450. It expects to reach its goal of cutting annual expenses by Euro 880 million in the second half of this year. During the quarter, Sony Ericsson said it raised additional funding of Euro 150 million from its parent companies, and now has a cash balance of Euro 563 million.

The biggest takeaway from a report published by Millennial Media today is that smartphone users are consuming more content—and therefore more ads—on nearly every smartphone and connected device available in the market.

—Android ad requests grew 72 percent in March month over month.
—iPad impressions increased 713 percent in the first full week the device was available.
—Apple (NSDQ: AAPL) ad requests grew 20 percent month over month.
—RIM (NSDQ: RIMM) ad requests grew 25 percent month over month.

Beyond those major platforms, specific phones new to the top 20 included: the BlackBerry Tour, the Palm (NSDQ: PALM) Pixi and T-Mobile’s myTouch, showing the diversity of devices that people are buying and using to access the mobile Web. The iPhone continues to be the No. 1 device in March.

Millennial Media is perhaps the largest independent mobile ad network left in the U.S., following Google’s purchase of AdMob and Apple’s purchase of Quattro Wireless. Both AdMob and Millennial publish analysis on a monthly basis and the results can vary widely.

For instance, Millennial said that in March that Apple’s iPhone made up 70 percent of their U.S. smartphone mix. BlackBerry came in second with 14 percent of the device share, and Android was third with only 6 percent. Contrast that to AdMob, which reports worldwide smartphone information. It said that the iPhone makes up 50 percent of its network, but that Android comes in second with 24 percent. Symbian is in third with 18 percent, and RIM is in fourth place with only a sliver of market share, or 4 percent.

The major differences in the data likely derive from Millennial’s U.S.-centric business vs. AdMob’s global viewpoint.

It’s no wonder that long-time mobile content companies like Myxer see smartphones as the big thing. It took the Miami-based company five years to hit one billion mobile downloads—probably one ringtone at a time—when it took Apple (NSDQ: AAPL) only 14 months to hit two billion downloads.

The company, which is one of the bigger destinations for mobile entertainment, including ringtones, wallpapers and games, said today it has launched its first consumer-facing smartphone application. The free Android application, called GeoPix, does not stray too far from the company’s roots. It allows users to update their phone’s wallpapers with pictures based on their location. If traveling to San Francisco, a picture of the Bay Bridge would be appropriate, or it can be simply show a picture of your school’s mascot when in class. Myk Willis, Myxer’s CEO, said: “This is another in a series of announcements that show our commitment to innovation and bold expansion beyond ringtones.”

The application is free, but doesn’t sound entirely automatic. Users must go in and choose specific images in order for them to show up when on the go. GeoPix has access to Myxer’s wallpapers of which 95 percent are free. Premium wallpaper items cost between 49 and 99 cents, but a bit of effort would be required to actually pay for and use them.

Myxer has tested the smartphone waters before. The company’s MobileStage service helps musicians and labels to create mobile Web sites and applications for Blackberry, iPhone, and Android to sell mobile content. But this is the first time Myxer has launched an application aimed directly at consumers. Next up, Willis said the company will be experimenting with a number of apps that include over-the-air music downloads, mobile streaming video, and other services. Whether Myxer will be able to replicate its current feature phone business on smartphones will be key. It now has 34 million users who routinely download more than 90 million pieces of content every month.

It’s pretty logical that a phone that can support a higher quality of game play will be used to play more games, but the rate at which it is happening is fairly shocking.

ComScore (NSDQ: SCOR) reported today that the number of people playing games on a lower-end feature phone plummeted by 35 percent over the past year, while the population of smartphone users playing games ballooned by 60 percent. Overall, the shift led the industry to fall by a painful 13 percent. The report compared the three month average ended in February 2010 to the same period a year earlier.

We’ve already seen some evidence of these trends with companies, like Glu Mobile (NSDQ: GLUU) and others, shifting their production to smartphone games as revenues have dropped over the past year. While many have struggled with the change, the good news is that despite the drop, comScore sees the overall adoption of games increasing with the shift to smartphones. “We can expect to see a profound increase in adoption of this activity, both in terms of audience size and overall engagement,” said comScore’s Mark Donovan.

Some supporting evidence:

—Smartphone users are three times more likely than feature phone owners to play games once a month.
—Smartphone users are five times as likely to play games almost every day.
—A third of smartphone owners have installed five or more games, while less than 1 percent of feature phone subscribers have installed that many.
—13 percent of smartphone owners play a game almost every day vs. 2.4 percent of feature-phone users.

A dozen broadcasters escalated their mobile TV efforts yesterday after forming a joint venture that included financial and content commitments.

The more aggressive measures appeared to be in response to the FCC’s National Broadband initiative, which called for reclaiming unused spectrum from broadcasters for more wireless broadband networks. Without the spectrum, it would limit broadcasters’ ability to roll out mobile TV. But yesterday, FCC Chairman Julius Genachowski, who was speaking at the NAB Convention, declared it a “myth” that the plan would kill Mobile DTV, reports Broadcasting & Cable.

Genachowski said pretty much that broadcasters can have their cake and eat it, too. In other words, they would be able to provide that service and turn over some spectrum for wireless broadband. The FCC is currently looking into how it could pay the broadcasters for those airwaves, which is not currently legal. In his speech, he said that he’s happy with the progress that broadcasters have made in establishing standards and getting trials off the ground. “Our job is not to prevent innovation or business models, but to enable them. Under the incentive auction plan, broadcasters will be able to provide mobile DTV, both licensees that choose to retain all 6 megahertz, and those that choose to share.”



It’s unclear whether the broadcasters share that view that there’s enough spectrum to go around. In a press release issued yesterday by the group of broadcasters, it said the venture “is designed to complement” the initiative by reducing congestion of the nation’s wireless broadband infrastructure. In other words, they are arguing that if they can offload video to broadcast spectrum from today’s mobile networks fewer new networks will have to be built.

Related

• A Dozen National Broadcasters Align To Create One Mobile TV Network

Verizon Wireless has launched its first wave of NFL Mobile applications, including live streaming of Sunday and Thursday night games, for subscribers today as the official sponsor of the NFL.

If you are a Verizon subscriber and interested at all in the NFL, you should download the application before the end of the year while it’s free and requires no monthly subscription. After Dec. 31, a spokesperson said Verizon did not know what it may cost. Of course, subscribers should have a data plan if they plan to use the application much, but the applications launched today are mostly for BlackBerry and Android devices, which typically carry a data plan anyway.

In March, Verizon Wireless reportedly paid $750 million to be the exclusive partner of the NFL, taking over the reigns from Sprint (NYSE: S) which had a similar deal for previous five years.

The NFL Mobile app will kick-off with coverage on April 22 with the start of the draft. Then as the season progresses, more features will be added, including information from training camps, preseason games and live streaming coverage of games throughout the 2010 NFL season. Also later this year, NFL RedZone, will come to mobile for the first time. 

Verizon said the application is available on 13 smartphones and multimedia phones, ranging from the Droid to a plethora of BlackBerrys and LG (SEO: 066570) Chocolate Touch, the LG enV TOUCH, and the Samsung Rogue. Android users can download it in the market starting today; BlackBerry users can go to http://mobile.vzw.com/nfl from their browser to download it; and other customers can text “NFL” to 2777 to receive instructions.

After working together for years through a trade association, a dozen broadcasters are now forming a financially-backed joint venture to develop a national mobile service, including live and on-demand video, local and national news and entertainment from both TV and print companies.

The joint venture is upping the financial stakes in the mobile TV space, which has been dominated by MobiTV, and Qualcomm’s FLO TV subsidiary. It consists of: Belo (NYSE: BLC), Cox Media Group, E.W. Scripps (NYSE: SSP), Fox, Gannett (NYSE: GCI) Broadcasting, Hearst Television, ION Television, Media General (NYSE: MEG), Meredith (NYSE: MDP), NBC, Post-Newsweek Stations and Raycom Media. The plan is to pool spectrum together from Fox, NBC & Telemundo and ION to be able to reach about 150 million U.S. consumers. It requires commitments for content, marketing and capital.

The joint venture is escalating its mobile efforts following the passage of the FCC’s National Broadband Initiative, which proposes to reclaim some of the broadcasters’ spectrum for more mobile broadband networks. The broadcasters will have to move fast to prove to the FCC that the spectrum is being used to the nation’s benefit. In a release, the group said the venture “is designed to complement” the initiative by reducing congestion of the nation’s wireless broadband infrastructure. In other words, they are arguing that if they can offload video to broadcast spectrum from today’s mobile networks fewer new networks will have to be built.

The Open Mobile Video Coalition, which names these dozen broadcasters as members, along with over 800 TV stations, has been working for years to establish a national mobile TV standard. The goal is for broadcaster to be able to transmit the same TV signals that they do today to mobile devices, like phones, cars and portable consumer electronics, without much financial investment.

Yesterday, the Open Mobile Video Coalition provided an update on its efforts, saying that 45 stations have started providing mobile broadcasts. Washington D.C. kicks off on May 3 and two stations in Detroit will follow. But it will take awhile for consumers to start having capable devices of receiving the broadcast signal. The first available consumer device is the “Tivizen,” which was funded by broadcasters. The small device, built by Valups, receives mobile TV signals and then re-transmits them to WiFi devices, such as a laptop or mobile phone. It will cost $149 beginning in May and will be available on Amazon.com.

The broadcasters are clearly trying to position this offering as a way for the FCC to achieve its goals of increasing mobile broadband in the U.S. That may be a tough argument to win. The FCC says the U.S. is currently in a spectrum crisis, given the dramatic growth curve of smartphone usage. But John Wallace, President of NBC Local Media, argues: “This initiative offers a path for the next generation of video consumption, and will help the FCC in its goal of ensuring efficient and reliable broadband service for US consumers.”

The group said more information would be released later in regards to a dedicated management team who would focus on “securing additional content, spectrum and distribution partnerships for the venture.”

This doesn’t necessarily pose a new threat to either Qualcomm’s FLO TV or MobiTV since the broadcasters have been working for a number of years on a plan to roll out mobile TV services. In fact. all three providers have their own set of challenges. FLO TV has recently launched its own branded service after relying on Verizon Wireless and AT&T (NYSE: T) for years to resell the service on a handful of phones. And while it has done a good job of securing rights to a lot of content, it still has major gaps, such as rights to the Super Bowl or the local news. In contrast, these broadcasters in the joint venture will benefit from having the rights to local content, but will clearly have to work together to secure national feeds. Both FLO and the joint venture will have to get new devices into the hands of consumers in order for them to receive a TV signal. That’s one of the biggest benefits for MobiTV. Its service is streamed over the mobile network, so as long as the network is not congested, any subscriber can watch content.

Related

• Broadband Plan May Ask Broadcasters To Free Up Spectrum For Wireless
• What The FCC Is Trying To Achieve With Its National Broadband Plan

—Mobile DTV: At NAB, the Open Mobile Video Coalition provided an update on its efforts to roll-out national broadcast TV to mobile devices To date, it says 45 stations have started mobile broadcasts with Washington D.C. kicking off on May 3 and two stations in Detroit following. The association also says it has gained the support from Intel (NSDQ: INTC). Finally, the first available consumer device will be the “Tivizen,” which was funded by broadcasters. The small device, from Valups, receives mobile TV signals and then re-transmits them to Wi-Fi devices, such as a laptop or mobile phone. It will cost $149 beginning in May.

—The NASDAQ and Consumer Electronics Association has teamed up to create the “OMX CEA Smartphone Index,” which consists of 84 companies that are involved in one way or another with the “building, design and distribution of handsets, hardware, software, and mobile networks associated with the development, sale and usage of smartphones.” It has some of the usual suspects like Apple (NSDQ: AAPL), Google (NSDQ: GOOG) and RIM (NSDQ: RIMM), and has a starting valuation of 250.00. [Engadget]

—Facebook downloads: GetJar says that more than 50 million people have downloaded Facebook’s mobile app from its mobile store in the past six months. Late last year, GetJar was generating one million downloads a week, or about 8.5 million during a two-month trial period. When users visit the Facebook page from their mobile phone, they see a link to download the app to their phone. GetJar is the one that provides that service.

Two of Glu (NSDQ: GLUU) Mobile’s high-level executives have left the company, according to an SEC document, and the mobile game company says it has come up with a new formula for how executives will be awarded bonuses.

Alessandro Galvagni, the company’s SVP of Global Product Development and CTO, will leave Glu effective today, but will provide consulting services for a month. Galvagni will receive one month pay as severance as well as compensation for his consulting services. In addition, Thomas Perrault, the company’s VP of Global Human Resources, said he would be leaving the Company effective Thursday.

The same document said the executives’ bonuses are now tied to the company’s new goals, which include trying to create communities around their mobile games that could generate recurring revenue from in-game virtual goods purchases. It also down plays the importance of its feature phone business.

The bonus has six parts:

—20 percent is awarded based on achieving three key metrics in the persistent/freemium games category;
—20 percent is awarded for achieving two key metrics in the Studio category;
—10 percent is awarded for achieving the Feature Phone Business goal;
—10 percent is awarded for achieving the Building Customer Base goal.
—20 percent is awarded for achieving three key metrics in the Revenue and Gross Margin category;
—20 percent is awarded for achieving two key metrics in the Operating Margin, Cash and Liquidity category.

The plan went into affect April 8 and all bonuses will be paid no later than March 15, 2011.

Microsoft’s Kin phones, unveiled today, are beautifully designed and laid out, and do a great job of integrating Facebook and MySpace (NYSE: NWS).
But they are missing a lot of key elements that phones have today: There are no apps and no games, and there’s no instant messaging or calendar….the list goes on. So the question is: is Microsoft (NSDQ: MSFT) pushing out the Kin too early?

Actually, probably too late. Other phones in the same feature-phone category from LG (SEO: 066570), Samsung or Nokia (NYSE: NOK) are more polished. That’s especially true when the Kin is compared to smartphones from Palm (NSDQ: PALM) or Google (NSDQ: GOOG) and Apple’s iPhone, which have had a couple of years to smooth out the rough edges. For Microsoft to make a dent in the insanely crowded market, it and Verizon will have to price and market the phone perfectly in May when the Kins go on sale.

It’s not that the duo doesn’t have a chance, but the critical component, which wasn’t announced today, is the pricing—the upfront cost of the hardware and the monthly voice and data plan.

Now is definitely the time to get creative. The problem is that Verizon Wireless, which is one of the premium carriers in the market, will be reluctant to slash its data plans for the teenage segment. And yet, the precursor to the Kin—the Sidekick—was on the T-Mobile network and offers some of the best values in the U.S. Is there a way for Verizon to keep its average revenue per subscriber high, while also offering an attractive package to the consumer that is cheaper than the Droid, and other smartphones, like the BlackBerry?

Here are the two things to look for:

—Data plans: The $30-$40 unlimited data plans will be a hard sell among this demographic. Instead, Verizon could implement a family plan data plan that would provide incentive among parents to buy the device for their kids. Analyst Chetan Sharma has proposed that under a family plan, you could sign up for a data bucket, which is more affordable than every individual signing up on his/her own, but still gives Verizon the kind of return it is looking for. A recent example of an offer like this was when Verizon Wireless launched the Palm Pre and as part of the device’s pricing scheme, let users tether multiple wifi devices, like laptops or an iPod to the device for internet access—for free. There’s obviously some wiggle room available.

—Premium offerings: The second option is for Microsoft to subsidize the device. Already, Microsoft has a financial partnership with Verizon surrounding Bing. As the exclusive search provider, Microsoft cuts Verizon a piece of all its search revenues. Microsoft could do the same thing for other services, such as the Zune subscription music service, Xbox or other Microsoft-branded services that could come to the phone. The Kins will be the first phones to offer full Zune services, but no pricing plans have been announced. With the prospects of selling additional content, Verizon may be compelled to drop the price of the service.

Outside of the pricing plans, the devices have some potential. The big selling points involve the way the phones integrate with social networks and the way they sync to the cloud.

The phone has three home pages with the central page linking to the “loop.” The loop is where you can connect to the people you talk with, Facebook or email the most. The user interface looks like a flashy magazine layout with some pictures being larger than others, which can be based on the importance of those people in your life. The “spot” is where you share photos, restaurant locations or other content with your friends. Simply drag and drop the photo to the dot at the bottom of the screen, and then drag and drop the photo you want to share, and then choose to email or send it to all of those people. The integration is fairly slick, but once again, falls short in a couple of areas. It’s only integrated with Facebook, MySpace and Windows Live—for instance, you can’t send a photo to Twitter.

The second standout feature of the device is the way it syncs to the internet. Everything is uploaded to a web interface in real-time, including incoming calls, outgoing calls, text messages and photos. Login to your web account, and you can see all of your events spread out on a horizontal time line. The events can be sorted by day, week or month. Over a year, you can see how you could easily flip through the timeline like you would a physical photo album, which hasn’t had an equivalent in the mobile world.

The hardware comes in two different forms. The Kin 1 and the Kin 2. The Kin one is a vertical slider and looks a bit like the Palm Pre and can be handled easily with one hand. The Kin 2 is a horizontal slider with a full keyboard. The Kin 2 has a 8 megapixel camera, capable of shooting HD video, unlike the Kin 1, which has a 5 megapixel camera and can’t shoot in HD.