Verizon to announce iPhone offering today

According to multiple sources, including the Wall Street Journal, Verizon will formally announce later today the carrier will begin offering the Apple iPhone at the end of January. This will mark the end of AT&T’s exclusivity deal with Apple regarding the devices, but also represents a pivotal moment for both AT&T and Verizon in terms of Wall Street and network performance.

The impact to AT&T could be substantial given the network capacity and quality issues that subscribers have reported, leading to frustrations that could result in a switch of service providers. Quarterly churn numbers could jump significantly if there’s a mass exodus from AT&T, but that’s not likely. A vast majority of AT&T’s installed base of iPhone users are tied to family or corporate plans, making it more difficult to switch without prohibitive financial penalties.

The network capacity and quality issues caused by an overwhelming amount of data traffic on AT&T’s network could replicate themselves on Verizon’s network as well. While Verizon maintains their network is ready to handle the demand, there’s no guarantee and no way to predict what actual demand will be. For example, several studies have cited that Android users (the bulk of Verizon’s non-Blackberry smart phone portfolio) use more data than current iPhone users on AT&T’s network.

Perhaps the most significant difference (and differentiator) in the network offerings of AT&T and Verizon is the ability to talk and use data simultaneously – an advantage AT&T has leveraged in the marketplace since launching 3G services. This functionality is important to many subscribers, and may prove problematic for Verizon if the majority of potential new subscribers are not aware of the technology difference.

The most interesting metric to observe, if the announcement happens as planned, will not be the bleeding of customers from AT&T to Verizon – it will be the battle for market share between Android, Apple and RIM in the Verizon customer base.

Given the announcement is still pending, Telwares believes:

- Verizon will announce the iPhone with an unlimited data plan, attempting to lure dissatisfied AT&T users across carrier lines and attracting smart phone upgrades within their installed base of subscribers.

- Verizon will have 7 to 9 million iPhones in its subscriber base by the end of 2011.

- Verizon will not experience the network issues that AT&T has endured; all service providers are now beyond the shock factor of data usage from smart phones, and Verizon has the advantage of the lessons learned from AT&T’s deployment.

- AT&T’s quarterly churn numbers will be moderately impacted, but will not drastically impact stock price during 2011.

Telwares Mobility Leader Speaks on Handset Evolution at Interop

Telwares EVP Michael Voellinger will address the accelerating diversity in mobile handsets and operating systems at Interop New York, happening Oct. 18-22 at the Javits Convention Center. http://www.interop.com/newyork/conference/wireless-and-mobility.php

Voellinger will be a featured panelist in a thought leadership session titled “Darwin and the Handset: Who Survives?” from 11:30 a.m. to 12:30 p.m. on Thursday, Oct. 21. He will be joined by representatives from Research in Motion and Sprint on the panel, moderated by Michael Finneran, principal of dBrn Associates.

The session will tackle tough questions faced by enterprise technology executives:

• Which wireless platforms will survive?
• What will these look like going forward?
• How can the enterprise successfully plan the evolution of mobility given these shifting sands?

“Mobility is becoming an essential component of every organization’s IT strategy,” says Interop GM Lenny Heymann. “At Interop New York, we’ll explore perspectives and best practices from the leaders driving them in the marketplace.”

Telwares advises enterprises globally on technology, infrastructure, convergence, policy, sourcing and expense management. “The tremendous diversity between wireless devices and platforms makes mobility management extremely challenging for enterprise communication technology professionals,” Voellinger says. “Compounding these challenges, organizations must adapt and innovate as tech-savvy end users insist on bringing their consumer technologies into the workplace, and leverage those technologies to solve business issues.”

“Mobile diversity is one of the drivers of a new holistic approach by IT organizations,” notes Telwares CEO Charlotte Yates. “The collision of SaaS, cloud services and consumer-based technologies means today’s CIO needs to focus more on the alignment of business enablement and technology than ever before,” she adds.

Interop® drives the adoption of technology, providing knowledge and insight to help IT and corporate decision-makers achieve business success. Part of UBM TechWeb’s family of global brands, Interop is the leading business technology event series. Through in-depth educational programs, workshops, real-world demonstrations and live technology implementations in its unique InteropNet program, Interop provides the forum for the most powerful innovations and solutions the industry has to offer. For more information about these events, visit http://www.interop.com/.

Tiered Pricing to Eclipse Flat-Rate Data Plans

Flat-rate data plans are on their way out.

Carriers around the world will focus on creating new pricing models over the next three years, and many agree that tiered pricing is the most attractive option in mature markets, according to a survey by of 391 mobile industry executives from 55 countries commissioned by international law firm Freshfields Bruckhaus Deringer.

All-you-can-eat data plans are damaging carriers’ ability to increase revenue, the survey concludes. Mobile operators will move towards usage-based pricing models to relieve network congestion and fund next-generation networks.

Application downloads are expected to be a key revenue driver, ahead of voice and video downloads in mature markets, the law firm’s study finds.

It’s the latest data point in a long string of market activity that points to service providers better monetizing and managing their networks, Telwares mobility experts say.

It’s also another clear indicator that demand patterns are shifting to data-driven services, even traditional voice components. In part, this is being expedited by cheaper, better, faster devices capable of delivering a rich end-user experience, the application ecosystems wrapped around those devices and platforms, and the very real need for better management of available bandwidth.

While mobile data costs are a significant expenditure, Telwares continues to advise large enterprises that clear business objectives, a strong roadmap for technology adoption and change, and an aggressive sourcing and management strategy across relevant IT categories are all key elements in successfully leveraging mobility.

RIM and Nokia Fight Back after Apple Press Conference

Apple CEO Steve Jobs had to know he was opening a can of feisty worms when he accused RIM, Nokia and other handset manufacturers of the same antenna design flaw that’s haunted the launch of Apple’s iPhone 4.

Users report dropped calls and weakened signals when holding Apple’s iPhone 4 a certain way. Jobs defended the phone at a July 16 press conference and offered free “bumpers” to prevent signal disruption.

Jobs tried to deflect criticism by characterizing antenna problems as a challenge faced by the whole wireless industry, and then pointed to alleged similar flaws with the BlackBerry Bold 9700, HTC Droid Eris and Samsung Omnia II.

It took only hours for RIM to defend its BlackBerry antenna design:

“Apple’s attempt to draw RIM into Apple’s self-made debacle is unacceptable,” say RIM co-CEOs Mike Lazaridis and Jim Balsillie in an official statement posted on Crackberry.com. “Apple’s claims about RIM products appear to be deliberate attempts to distort the public’s understanding of an antenna design issue and to deflect attention from Apple’s difficult situation.”

“RIM has avoided designs like the one Apple used in the iPhone 4 and instead has used innovative designs which reduce the risk for dropped calls, especially in areas of lower coverage,” Lazaridis and Balsillie continue. “One thing is for certain, RIM’s customers don’t need to use a case for their BlackBerry smart phone to maintain proper connectivity. Apple clearly made certain design decisions and it should take responsibility for these decisions rather than trying to draw RIM and others into a situation that relates specifically to Apple.”

Nokia also fought back with a statement. As reported by Engadget:

“We prioritize antenna performance over physical design if they are ever in conflict,” Nokia says. “Antenna performance of a mobile device/phone may be affected with a tight grip, depending on how the device is held. That’s why Nokia designs our phones to ensure acceptable performance in all real-life cases, for example when the phone is held in either hand. Nokia has invested thousands of man hours in studying how people hold their phones and allows for this in designs, for example by having antennas both at the top and bottom of the phone and by careful selection of materials and their use in the mechanical design.”

It’s unlikely that we’ll see the end of the antenna scandal soon. In the meantime, Telwares’ mobility experts urge enterprises to take the same measured approach to deploying the iPhone 4 as they would any other brand, carrier or platform. There’s no fundamental need for a change in direction for any enterprise evaluating the merits of deploying the iPhone to its user community.

Telwares instructs enterprise organizations that have already deployed the iPhone 4 to closely scrutinize their commercial agreements with AT&T to determine device support from multiple channels, how they can approach implementing the remedies Apple has outlined with minimal business interruption and the contractual implications where the need to terminate specific services exists.

Defensive Jobs Hosts iPhone 4 Press Conference

The iPhone 4 “antennagate” scandal has been blown out of proportion, Apple CEO Steve Jobs insisted when he took the stage at an Apple press conference held today to address complaints about the device.

Users report dropped calls and weakened signals when holding the phone a certain way. Jobs countered that more than 3 million iPhone 4s were sold in the three weeks since the iPhone 4 launched, and that it’s received the highest customer satisfaction rating of any iPhone or any smart phone, Engadget reports.

Antenna problems are a challenge faced by the whole wireless industry, Jobs says, as he pointed to alleged similar flaws with the BlackBerry Bold 9700, HTC Droid Eris and Samsung Omnia II.

Jobs also acknowledged that iPhones use a faulty algorithm to calculate signal strength. But even the updated algorithm in a forthcoming software update will show a signal strength decrease when the phone is held the wrong way.

But the degradation is slight, Jobs maintains: The iPhone 4 drops one more call per 100 than the iPhone 3GS. Only 0.55% of iPhone 4 users have called AppleCare to report signal degradation, and 1.7% of iPhone 4s have been returned – a decrease from the 6% of iPhone 3GSs returned.

Apple will attempt to combat the negative publicity by giving away free cases to mitigate the antenna problem and issue refunds to users who bought the cases proactively. Users can also return the iPhone 4 for a full refund (and no restocking fee) within 30 days of purchase. Jobs indicated he thinks AT&T will refund money spent on its service contracts when users return iPhone 4s.

Here’s the bottom line for enterprises: There’s no fundamental need for a change in direction for any enterprise evaluating the merits of deploying the iPhone to its user community, according to Telwares’ mobility experts.

The issues and challenges faced by some end users on the iPhone are not drastically different than any other brand, carrier or platform. The same measured approach to deploying any enterprise technology still applies and is not altered based on the data available today.

Telwares instructs enterprise organizations that have already deployed the iPhone 4 to closely scrutinize their commercial agreements with AT&T to determine device support from multiple channels, how they can approach implementing the remedies Apple has outlined with minimal business interruption and the contractual implications where the need to terminate specific services exists.

Android Grows Market Share, Others Drop in Popularity

Google’s Android was the only smart phone platform to grow its U.S. market share during the three months ended in May, according to a study released July 8 by Reston, Va.-based comScore, a digital marketing intelligence firm.

As many as 234 million Americans age 13 and older used mobile devices as of May. More than 49 million of those mobile devices were smart phones – an 8.1% increase from the previous three-month period, comScore finds.

Android’s market share increased to 13% from 9% in the prior period.

The open-source platform was developed by the Open Handset Alliance, a group of 71 technology and mobile companies that includes Google, HTC, Sprint and Motorola.

The recently announced Android 2.2 (code named “Froyo,” short for frozen yogurt), features updates like portable hotspot functionality, support for Adobe Flash within the Android Browser and improvements to Android Market.

RIM remained the smart phone platform market leader in comScore’s study (with 41.7% of the market), followed by Apple (24.4%) and Microsoft (13.2%). Palm trailed with 4.8% market share.

Aside from Android, each smart phone platform lost between 0.4% (RIM) and 1.9% (Microsoft) of its market share. But the declines don’t reflect a shrinking of the market; comScore says the smart phone market overall continues to grow.

comScore notes its data doesn’t reflect the impact of Apple’s iPhone 4, which launched in June. (Click here to read Telwares’ analysis of iPhone 4.)

Samsung is the top handset manufacturer in comScore’s study (22.4% market share), followed by LG (21.5%), Motorola (21.2%), RIM (8.7%) and Nokia (8.1%).

NTP Sues Apple, Google, HTC, LG, Microsoft and Motorola

The company that sued BlackBerry maker RIM for patent violation and incited enterprise panic in 2005 is at it again.

Richmond, Va.-based NTP Inc. filed suit July 8 against Apple Inc., Google Inc., HTC Corp., LG Electronics Inc., Microsoft Corporation and Motorola Inc. in federal court. NTP alleges the six companies infringed on eight of its wireless e-mail delivery patents and wants the companies to pay licensing fees for using the technology.

There’s precedent from NTP’s suit against RIM: The BlackBerry maker was found to have willfully infringed NTP’s patents and the verdict was affirmed on appeal. RIM paid NTP $612.5 million to settle its patent infringement lawsuit in March 2006, which included a perpetual, fully paid license going forward.

If the court finds NTP’s new claims to be valid, the six manufacturers and developers named in the suit must pay the fees or cease use of the technology.

Telwares believes settlements and fees are the most likely outcome. As in the RIM case, NTP has little interest in stifling smart phone sales or use; its revenue will come from licensing fees.

So enterprises shouldn’t worry about losing their iPhones, Android handsets or Windows Mobile phones. The real question is whether licensing fees will increase device and service costs for enterprises, according to Telwares experts.

NTP is a privately held intellectual property firm and claims its founder, the late Thomas Campana Jr., invented wireless e-mail in 1990. NTP already has licensing agreements with RIM, Good Technology Inc., Nokia Inc. and Visto Corporation.

“Use of NTP’s intellectual property without a license is just plain unfair to NTP and its licensees,” says Donald Stout, NTP’s cofounder, in the company’s press release. “Unfortunately, litigation is our only means of ensuring the inventor of the fundamental technology on which wireless e-mail is based, Tom Campana, and NTP shareholders are recognized, and are fairly and reasonably compensated for their innovative work and investment. We took the necessary action to protect our intellectual property.”