Mobile

Verizon’s smartphone direction still chasing AT&T?

Verizon is apparently planning a total smartphone blitzfor the holidays, including the already-discussed Droid from Motorola, but also according to rumor, a new HTC Android smartphone and perhaps a third model as well.

The Verizon moves are, we think, are calculated to make things complicated for AT&T and Apple with the iPhone for the holidays. A multiplicity of models at various sizes and price points makes sense at this stage in the market, but there is no question Apple still has the cachet that other smartphones have so far been unable to match.

We think all of these smartphone wars are a signal that whatever the FCC might do with wireless net neutrality, operators are committed to the mobile web.

Mobile web has “senior” appeal

Mobile web use is actually growing fastest among seniors, according to a recent report. While much of this is due to the very low adoption rate there (3% of mobile web users are over 65), part is also likely due to the fact that applet-based or widget-based web tools are easier for seniors to navigate and more directly linked to their needs.

Research has tended to show that older users use the Internet more narrowly, “by rote,” and thus may be less interested in the range of things that you can do on broadband than with the specific need to find a restaurant or store, for example. This means that a wireline broadband appliance tuned to provide at-home information like TV schedules, health information, etc. might induce more seniors to adopt broadband at home.

Policy clues surface as FCC hits its stride

The FCC is hitting its stride in regulatory policy terms, primarily relating to the issues of next-gen voice. In one matter, the FCC has already asked Google for specific details on Google Voice, in response to AT&T filing a complaint that the service was really a regulated voice service and was discriminating against open call routing to exchanges with high reciprocal compensation rules.

Now the FCC’s chairman is making it clear that his FCC thinks mobile services are the really hot regulatory issue. Genachowski applauded the AT&T decision to open its mobile network to VoIP services and the Verizon Wireless partnership with Google. He still feels that mobile services aren’t necessarily as competitive as the FCC would like. The knotty issues for mobile are the application of net neutrality and the question of open handsets and handset subsidies.

Google Voice, Apple, AT&T and the FCC: The flap continues

Google has released some information that suggests that Apple’s statements to the FCC in July about blocking Google Voice were not correct, and the rumor is that even more damning information is available at Google for release should Apple not reconsider its position.

Apple claimed that its “rejection” of the Google Voice application was for look-and-feel reasons, but the Google release suggests it was explicitly because Google Voice competed with basic Apple/AT&T functionality, something the FCC would likely rule on.

This issue could bite both Apple and AT&T because an actual false statement to the FCC would be bad politics, at the minimum. We say this because it’s not clear whether the FCC really has authority over Apple and handsets. The FCC would have to contend that Apple was simply a stalking horse for AT&T interests in this case, and AT&T is within the FCC’s jurisdictional web.

Motorola’s Android phone: good but compelling enough?

Motorola has launched the Cliq smartphone, its first Android operating system model and one that offers users a kind of “mashup” launch page called Blur (not much marketing zip) that consolidates social network, email, and IM into a single page.

Motorola has been a major laggard in the smartphone space, and it’s now teaming with T-Mobile for the Cliq launch, since T-Mobile has the longest history with Android phones. There are also some international prospects for Cliq, but the problem is that the gadget doesn’t have any really compelling benefit and thus may not be enough to pull through a lot of additional sales for Motorola.

We think the Android choice is smart. Nobody but Apple, Blackberry and Palm can hope to sustain a developer program on their own these days. The problem is that Motorola has waited so long that it’s going to be incredibly hard to differentiate its announcements from the pack.

Smartphones drive wireless, Android updates in pipeline

Whether smartphones clog cellular networks or not, they’re in demand as flagship elements of engagement with the consumer. They also help reduce a provider’s churn and let the provider churn opponents instead.

No wonder, therefore, that Sprint will be launching the HTC Hero smartphone in October. Sprint already has an exclusive on the Palm Pre, but the HTC Hero is the first Android device Sprint has deployed and only the third deployed in the U.S. (the other two are offered by T-Mobile).

Google is also rushing upgrades to Android. There are three in the pipe, and we hear the first is imminent. We’re told by two providers that discussions are underway to do away with voice-only pricing and standard handsets for new customers and instead move to an integrated plan.

Both Verizon and AT&T already require data plans for smartphones, and smartphone pricing is likely to sink to the point where making them the only customer option becomes practical. When? It won’t happen till 2011 in our view.

FCC on wireless: Defining competition is task one

The FCC voted unanimously to move both of its wireless investigations to the formal Notice of Inquiry phase, but it is clear that (as usual) the body is divided along party lines regarding just what might be done.

Democrats think the industry has competitive issues and Republicans do not. Their differences seem to us to come out of the definition of “competition.” Republicans want to define it as having multiple wireless provider choices available, while Democrats define it as having relative freedom and flexibility to exercise handset and service options without being locked into a single provider.

In short, the “mobility” of customers is a concern of Democrats, and that may be a harder point to cover in a regulatory sense.

Service provider capex takes off in second half 09

Service providers are planning to increase their capital spending in the second half of the year, according to a number of financial industry and media sources. The exact percentage of increase and the way it will be distributed among vendors hasn’t been reported.

But our current data suggests providers will spend between 18% and 40% more in the second half of the year than the first, that spending will be balanced so wireless gets about 35% more than wireline, and that edge and metro networks will get a bigger boost than deeper core (in large part because the former groups were cut more in 1H09). As we’ve noted before, we expect most of the money to be spent between mid-September and the end of the year.

Sony Ericsson pins handset hopes on new president

Sony Ericsson named a new president, the former head of Ericsson’s U.S. operation, in the hope that management changes can reverse the course of the company’s continued handset market share losses.

The venture was established with the hope of galvanizing the Ericsson handset business, but so far it hasn’t worked at all, largely because it missed the smartphone revolution. That simple truth embodies the problem that Bert Nordberg will face. You can’t rewind history simply because you change CEOs, and the smartphone space is very crowded today.

We’re of the view that it will take a major effort and a lot of missteps by competitors for Sony Ericsson to pull things out at this point.

Comcast appeals FCC traffic management order

Comcast has decided to appeal the FCC’s order for the cable giant to stop metering P2P traffic, even though Comcast ceased that practice even before the FCC order was issued. The goal of the company is to test the FCC’s net neutrality principles, which since they were not contained in an FCC rulemaking/order, are likely not to have force of law.

The move, which is supported by some other ISPs, may well backfire on the industry because an FCC decision that did not, in fact, have enforceable net neutrality principles (which the agency has long said it did) would certainly result in the introduction of legislation. That might be far more restricting, and it might open other issues as well.

We said when this order was issued that Comcast would be foolish to appeal it, and Comcast appears to have been just that.