Telecoms

John Gapper

Nokia’s disappointing announcement this morning of a “strategic alliance” with Microsoft to create a “third ecosystem” in mobile phones put me in mind of the old Stealers Wheel song Stuck In the Middle with You:

Well I don’t know why I came here tonight,
I got the feeling that something ain’t right,
I’m so scared in case I fall off my chair,
And I’m wondering how I’ll get down the stairs,
Clowns to the left of me,
Jokers to the right, here I am,
Stuck in the middle with you.

Nokia, which used to dominate the global mobile phone market when there was hardly any such thing as a smartphone, has found itself in the worst place of all – stuck between cheap phones made in Shenzhen, and the high-margin Apple iPhone.

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John Gapper

Stephen Elop of Nokia surely wins the Lucy Kellaway prize for blunt speaking in a corporate memo when he warns that the Finnish company has a “burning platform”.

There are lots of things to admire in the memo in terms of clarity and the willingness of the new chief executive to spell out publicly exactly how dire Nokia’s crisis has become: Read more

John Gapper

The rise of Android, the open source smartphone operating system pioneered by Google, continues apace. According to figures from NPD Group, Android was installed in 44 per cent of all smartphones sold in the US in the third quarter, compared with 23 per cent for Apple’s iOS.

Apple has already responded by agreeing to Verizon, which has the most solid US mobile network, selling a CDMA version of the iPhone from next year.

The intriguing thing about the Android vs iOS battle is how closely it mirrors that between Microsoft and Apple’s past battle over PC operating software. Microsoft won on volume with Windows but Apple’s tight control of its OS operating system allowed it retain the quality edge. Read more

John Gapper

As Robert Andrews of Paid Content notes, the appointment of Stephen Elop as Nokia’s new chief executive included a Sarah Palin-esque moment in which he emphasised his natural links with the Finnish company because he is Canadian:

“That process has been greatly assisted by my heritage. As you may know, I’m a Canadian citizen, you may also know that Canada and Finland share the Arctic Circle, that’s something that holds me in good stead as I move forward.”

Depending on your point of view, this is either a laughable cover story or a highly inventive attempt to get around the fact that Nokia is reaching outside its Finnish roots and culture to rescue itself from its current malaise. Read more

John Gapper

Net neutrality was always a slippery concept, which may account for the fact that the New York Times and the Wall Street Journal have such different accounts of talks between Google and Verizon over the vexed subject.

For the NYT:

Such an agreement could overthrow a once-sacred tenet of Internet policy known as net neutrality, in which no form of content is favoured over another.

Contrariwise, according to the Journal:

The two companies have been negotiating with each other for months on a compromise on the thorny issue of so-called net neutrality – the principle that Internet providers such as phone or cable companies should not deliberately slow or block Internet sites or services.

The problem, and reason Google and Verizon have been talking to each other, is that no-one can exactly define net neutrality, and it would be devilishly difficult to draw up a law to enforce it, even if that were desirable (which I don’t think it is). Read more

John Gapper

Somehow, the announcements on the same day that Verizon is linking up with Google on mobile phones, and that AT&T will allow iPhone users to use Skype on its mobile network, feel significant.

There has been a long stand-off between US mobile phone operators and software companies that offer voice over internet services. Google Voice is the latest example of such services, which potentially save consumers money by allowing them, among other things, to make cheap international calls. Read more

John Gapper

There has been a lot of discussion about the degree to which the new Palm Pre, which is launched tomorrow in the US, is a make-or-break-device for Palm. But it is also vital for Sprint, the much-derided network that will sell the Pre exclusively at least until the end of the year.

I went along to a Sprint Nextel event in Manhattan this morning to hear Dan Hesse, its chief executive, describe the Pre launch as its “coming out party”. Read more

John Gapper

We are so used to the notion that the US lags behind the rest of the world in mobile phone use that it is a shock to be told it is no longer true.

I am in San Francisco at the leadership conference of the American Association of Advertising Agencies (now formally re-branded as the 4As) and have been hearing some interesting statistics. Read more

John Gapper

The Wall Street Journal has a story this morning suggesting that Google has stepped back from its support for network neutrality by suggesting to internet service providers that it puts technology at their facilities to cache its content locally.

Google has struck back by denying that this idea – which would help to speed up the rate at which internet users can access web pages and video from Google and YouTube – is either a change of its stance, or a breach of net neutrality principles. Read more

John Gapper

What happens when you try to use a Canadian device on a German network at an event held by a Finnish mobile phone company in Brooklyn? Forget about it.

That was my experience this morning when attending Nokia’s annual capital markets day in my home city (OK, it’s a borough of New York these days, but it’s still a city to me). I could not get a decent signal on my T-Mobile BlackBerry.

That reflects on the spotty mobile phone coverage one gets even in big US cities, but it also seemed to symbolise something about Nokia’s struggles in this market. Read more

John Gapper

I agree with Fred Wilson about the challenge Research in Motion faces in improving on the BlackBerry Curve. I use a Curve and it feels like a near-perfect combination of size, weight and practicality, despite not being a 3G device.

That sounds dandy for RIM, but it brings with it a problem: its efforts to improve upon the Curve – and match the iPhone – feel vaguely doomed. I have a bad feeling about the BlackBerry Storm and the BlackBerry Bold is nice but not compelling.

My feeling about the Storm – the supposed iPhone rival that BlackBerry has just brought out in the US in combination with Verizon – is based on two things. One was holding the device for a couple of minutes and the other was David Pogue’s memorably dismissive review in the New York Times.

Mr Pogue went through all the problems with the device but simply playing around with one for a minute or two was enough for me. It felt too heavy to keep comfortably in my suit pocket and too complex and unintuitive to use. Read more

John Gapper

I suppose you can’t argue with the market but I do wonder about the price Motorola has paid to lure Sanjay Jha from Qualcomm to become chief executive of its troubled mobile phone division.

Mr Jha apparently wanted to be the chief executive of a public company – and doubted whether Paul Jacobs was going to move over at Qualcomm – but his pay and benefits package is reminiscent of a private equity deal.

Motorola plans to spin off its mobile phone arm and, if it does, Mr Jha gets to own 3 per cent of the company. If it does not, he will be paid $30m to compensate him for his time and trouble. His entire package is estimated as being worth up to $94m. Read more

John Gapper

You win some and you lose some has always seemed to be Virgin’s business model. In the case of Virgin Mobile USA, the pre-paid phones venture of Sir Richard Branson’s Virgin Group, it has been mostly the latter.

Virgin Mobile USA has put in a spectacularly bad performance since its US initial public offering in October. It floated at $15 a share and closed yesterday at just over $2 a share. It has dropped steadily since the IPO and last week lurched downwards on a gloomy earnings forecast. Read more

John Gapper

A follow-up to my earlier post on competing mobile telephone standards in the US. As it happens, just after I wrote, Verizon Wireless announced that it will test a GSM-compatible technology known as Long Term Evolution for its next generation mobile technology. The FT story can be read here.

This raises the interesting possibility that the US will end up converging on GSM standards rather than CDMA technology for fourth-generation mobile networks. AT&T and T-Mobile have already adopted GSM technology and Verizon’s decision, if it goes through, would leave Sprint as the odd one out.

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John Gapper

Jim Surowiecki, the astute financial columnist of the New Yorker, wrote an article that I admired in Wired magazine five years ago, arguing that the US approach to technology standards for mobile phones was superior to that of Europe.

Essentially, Surowiecki said that the European approach of mandating a single technology standard in GSM had shut down technological progress, while the US decision to allow GSM to compete with other standards, including CDMA, had allowed the best technology to win.

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John Gapper

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Column on the Financial Times comment page Read more

Bluetooth_headsetI remember some years ago talking to an American friend who was visiting London and was astonished to find everyone walking around talking into a mobile phone. What is the point of this craze? she asked. Why should people need to keep talking in this bizarre way?

We know where that ended up. Americans followed Europeans into the mobile phone craze and are just as prone to whip them out at any opportunity now.

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