Friday Links: Verizon, Apple, Microsoft, Google, Foursquare, Facebook, AOL

Here are a few of the reports, articles and stories I found interesting this week.

Get ready for Verizon's 'Dream Phone'

The forthcoming Verizon iPhone will test those investments. As noted, wireless data usage on the device is a major burden on AT&T's (T) network; iPhone users who complain about AT&T service don't always realize how much they contribute to the strain, partly because the iPhone persistently reaches out to AT&T's towers, switches, and computers to grab data. While Seidenberg wouldn't comment on the iPhone specifically, he and Lowell ­McAdam, his operating chief and heir apparent, seem confident the Verizon network will hold up. McAdam points out that Verizon already carries a data hog of a phone, the Motorola Droid (which runs on Google's (GOOG) Android operating system), and that the average Droid user consumes more data than the average iPhone user.


IDC: Apple passes RIM to become No. 4 global mobile phone vendor

According to IDC's Worldwide Quarterly Mobile Phone Tracker, Apple's record quarter was enough to land it a fourth-place spot on the list of global mobile phone vendors, behind Nokia, Samsung and LG Electronics, BusinessWire reports. Though Apple has consistently been a top smartphone vendor, this marks the first quarter that Apple has cracked the top 5 list of global mobile phone vendors.


Ozzie's 'doomsday' memo warns Microsoft of post-PC days

Departing Microsoft executive Ray Ozzie's just-published memo is a "doomsday-ish" missive that calls on the company to push further into the cloud or perish, an industry analyst said today.

Ozzie, who replaced Bill Gates as Microsoft's chief software architect in 2006, is leaving the company, although Microsoft has not disclosed the date of his departure.

His "Dawn of a New Day" memorandum, which was dated Oct. 28, is an attempt to focus Microsoft's attention on the day when PCs will no longer rule consumer or business computing, said Wes Miller, an analyst at Directions on Microsoft, a Kirkland, Wash. research firm that specializes in tracking Microsoft.


AOL To Sell Pacific Corporate Park to CB Richard Ellis Realty Trust

AOL Inc. (NYSE:AOL) today announced that it has entered into an agreement for the sale of four office buildings it no longer utilizes and two undeveloped parcels of land on the East side of its Dulles campus to CB Richard Ellis Realty Trust for $144.5 million. As of October 29, pro forma for the sale AOL has approximately $750 million of cash on hand.

Foursquare Doomed? Facebook Places Has 7X More Users

On its "latest statistics" page, Facebook says "there are more than 150 million active users currently accessing Facebook through their mobile devices."

Does this mean Foursquare, the startup Facebook Places most closely copies, is doomed? It only has 4 million users. It had an offer to sell to Yahoo this summer for more than $100 million. Should CEO Dennis Crowley have taken the money and run?

Surprisingly, the answer to both those questions might still be "no."

What's going on in the Wireless industry?

The times they are a'changing. The structure of the mobile industry has been fairly static for a long time. The last big earth shattering events- the Sprint/Nextel merger and the rollout of 3G networks. There have been fad phones that have been super popular for a time, and there has been a definite shift in preference to smartphones, like the iPhone. But the basic structure has remained the same- big wireless companies offering limited phone choice, long term contracts and maximizing ARPU.

However, I'm now starting to see some datapoints that don't support this historical norm. Most of these are driven by customers that want more options and less costs, but some are being driven by technological change. And now rides in our friendly government regulators. Here is the story from Amol Sharma at the WSJ:

The Department of Justice has begun looking into whether large U.S. telecommunications companies such as AT&T Inc. (T) and Verizon Communications Inc. (VZ) are abusing the market power they have amassed in recent years, according to people familiar with the matter.

The review, while in its early stages, is an indication of the Obama administration's aggressive stance on antitrust enforcement. The Justice Department's antitrust chief, Christine Varney, has said she wants to reassert the government's role in policing monopolistic and anticompetitive practices by powerful companies.

The law that covers such behavior, the Sherman Antitrust Act, has been used in the past against giants ranging from Standard Oil to Microsoft Corp. It lay essentially dormant during the Bush years, with the agency bringing no major case. The telecom industry is among several sectors now coming under scrutiny. Others include health care and agriculture.

The Justice Department is already cracking down on certain agreements. It recently filed an objection to plans by airlines in the global Star Alliance to cooperate more closely on international routes and fares. It has targeted payments large pharmaceutical producers sometimes make to generic-drug makers to delay cheap copies of medicines. In addition, Ms. Varney is investigating Google Inc.'s settlement with authors and publishers over its Book Search product.

The telecom review isn't a formal investigation of any specific company, and it isn't clear it will ever become one. The review is expected to cover all areas from land-line voice and broadband service to wireless.

One area that might be explored is whether big wireless carriers are hurting smaller rivals by locking up popular phones through exclusive agreements with handset makers. Lawmakers and regulators have raised questions about deals such as AT&T's exclusive right to provide service for Apple Inc.'s iPhone in the U.S. Big carriers say limiting exclusive deals would hurt innovation.

The department also may review whether telecom carriers are unduly restricting the types of services other companies can offer on their networks, one person familiar with the situation said. Public-interest groups have complained when carriers limit access to Internet calling services such as Skype.

Second, Apple is talks with Verizon about creating a CDMA iPhone. Verizon turned down the iPhone a couple of years ago. There is lots of speculation as to why. Now,

It cannot have escaped Verizon's notice that AT&T proclaimed in a widely circulated memo that the recent launch of the iPhone 3GS was the "largest order day in att.com history" and the "best ever sales day in our retail stores." AT&T sold a million of the new iPhones in 3 days. It took 74 days to sell a million iPhones when they were first launched in 2007.

With AT&T's exclusivity agreement due to expire in the next year, pressure is mounting amongst Verizon customers and shareholders for Verizon to come to some sort of agreement with Apple to offer the iPhone on their network.

Pressure is also coming from current AT&T iPhone users for Verizon to offer the device, as dissatisfaction with AT&T's coverage, and especially their DaVinci Code-ish billing practices continues to grow.

Third, the DC Metro is going offer wireless service to more than one carrier? I missed this news when it first came out in March, but I think it's so significant that I'm going to list it here anyway. As many of you know, the one mobile service that operated inside the Metro is Verizon, working off of a Bell Atlantic contract they first won back in 1993. Sprint was allowed to roam there recently, but a lot of DC people wouldn't switch away from Verizon because of the lack of service in the Metro (where a lot of suits spend a lot of time). As Rob Pergoraro says in a WaPo Faster Forward blog post:

I'm pleased and amazed by the news... although I'm not exactly an unbiased observer of this situation. I take Metro to work and to many non-work occasions, and being able to use my phone at those times -- to let my wife know that I'm on my way home, to answer a quick call from the copy desk, to scan through the latest updates on Twitter or Facebook, to check my e-mail, to look up the score of the Nats game -- is a major convenience.

And it looks like the rollout of the network will happen reasonably fast, according to WMATA's press release:

Twenty of the busiest underground rail stations will have expanded cell phone service by the end of this year and the entire rail system will be equipped by 2012.

I'm not sure what this all means but it feels like the the glaciers are starting to crack and shift. What do you think?

The World's Greatest Links...Right After My Brush With A Crazed Swine Flu

I'm just back from a week's vacation in Mexico with my lovely girlfriend and I haven't dropped dead of swine flu yet. Sadly, I'm spending this renewed gift of life weeding through emails in my Outlook inbox, fighting trojans on my home desktop, catching up on the news and trying to re-engage with the world.

BTW, if you get some time to spend in sunny Cabo San Lucas, I highly recommend it. Here is a picture of Medano Beach, the main swimming beach in Cabo. Very nice. Notice the lack of swine flu...

One of the things I really don't like about vacations is coming back and having to go through hundreds of emails. Long ago, I had set up a number of rules on Outlook to manage the flow of emails and route them into various folders, but I ran out of space for new rules which resulted in my main inbox being overrun with spam, newsletters, etc. It took a lot of time to sort through them each day.

Today, on a whim, I created a new rule for the massive amount of emails I get from Twitter now. It worked! Has anyone noticed this? Is this some new upgrade from Microsoft? If so, I'm really happy. I'm going to be creating lots and lots of new rules from now on.

On a sadder note, I returned home to discover than my virus, trojan and spyware protected home computer had become infected with Virtumonde. I, being an experienced, spyware removal expert, spent many hours yesterday scanning, quarantining, deleting and repeating. No luck. Now, my computer has been taken over by the trojan and...get this...locked me out of my own computer. Looks like I'm going to have to do a repair installation of XP. Good times. I liked it better on the beach!

Here are some links I've come across yesterday and today that I've found interesting...

Om Malik shares some interesting stats of the usage of applications across PC, Mac and Internet platforms.

Microsoft has released the private beta of a slick looking emergency social networking thingy called Vine. Brier Dudley calls it Twitter plus Facebook on steroids.

I've read last year than super-hyped Dubai was going to be able to withstand a commercial and residential housing correction, now according to a story in the WSJ, not so much.

Those of us who own and love our PocketPC's tend to get snippy when people talk about how groundbreaking the iPhone is. Yes, the GUI is pretty slick but I've had a 3G touch screen smart phone for years and years now. It's not new. So, while I'm encouraged than Microsoft and Verizon are working together to continue to improve the experience, headlines like these, "Microsoft, Verizon in Talks to Launch iPhone Rival", drive me mad. Talk about burying the lede (emphasis added):

Verizon has performed well despite not having the iPhone. On Monday, the company reported solid first-quarter results in its wireless business, edging out AT&T in net customer additions.

Jeez.

Networx's First Big Deal- Qwest Down for the Count?

It looks like we have the first really big task order out of the Networx contract- $679m from DHS for Verizon. Here is the write up from FierceTelecom:

The federal government's Networx Universal project is finally yielding some revenue for telcos. The Department of Homeland Security awarded about $679 million worth of work from a $1 billion, 10-year contract to Verizon Communications, with potentially another $292 million from the contract going to AT&T as a back-up service provider. The DHS deal involves more than 5,000 employees and 22 different agencies. Verizon will consolidate multiple wide area network architectures on a secure IP infrastructure.

Perhaps the contract will be an ice-breaker between government agencies and the carriers authorized to bid on Networx Universal deals. Since carriers received authorization more than a year ago, very few Networx contracts have been drawn up. The telecom industry has been expecting that would change as this year plays out. The DHS deal is the largest Networx contract awarded thus far.

And here is some more indepth analysis from NetworkWorld:

Verizon Business has captured one of the largest federal network deals of 2008: a 10-year contract to provide managed network and security services to the U.S. Department of Homeland Security that is valued at $678.5 million. AT&T Government Solutions is the secondary provider for the project, dubbed OneNet, winning a 10-year contract worth an estimated $292 million.

Losing out on this much-anticipated deal was Qwest Communications.

If the government is going to split the deals between Verizon and AT&T that doesn't leave much business left over for Qwest, does it? Qwest is going to have to be more creative, more aggressive and bang the drum very, very loudly in order to get any kind of traction.

Trade Shows, Part 1 (CTIA)

Well, I've been on the road for the past couple of weeks. I traveled to Las Vegas for the CTIA Wireless trade show then to San Fransisco for the RSA security show. Both shows demonstrated the power and innovation that still drives the larger technology world today. I'd like to recap both shows in two posts.

First, the CTIA show in Las Vegas last week was compelling. There is a building transformation in the wireless from the current 3G level of broadband, features and applications to a newer "4G" model. There is still some uncertainty about which technology platform will power this new generation of wireless businesses: WiMax or cellular or some un-invented technology.

Needless to say, there will be much fighting and scrambling over the next five or more years between the big carriers (Verizon, AT&T, T-Mobile, Sprint) as well as other technology players (Microsoft, Google, etc). All these shifting parts made for very interesting conversations...

...and it also made for an enormous trade show. The CTIA filled up two whole halls at the Las Vegas Convention Center.

I'll post some pictures when I get back home...

WiMax Redux?

According to a story in the Washington Post, the Sprint-Clearwire partnership are in talks with several large cable operators (Comcast and Time/Warner) about a joint partnership to finally build a national WiMax network, and presumably market it to cable subscribers.

Google and Intel are also sniffing around the partnership. I wonder how this affects Google's efforts to claim the old UHF bandwidth for a free, ad driven wireless network. (is that the hedging of bets I hear?)

More importantly, it will be compelling entertainment to watch these big elephants dance around and jockey for advantage, while the wireless behemoths, AT&T and Verizon consolidate their positions and throw up barriers to entry to the marketplace...

The Walled Garden Crumbles...a little

Well, here is some interesting news...Google is having an influence already in the mobile industry. Verizon announced today that it will start allowing third party apps and any phones on its network and will reach out and open its network to developers.

Here is the story (WSJ- subscription required): Verizon Wireless to Offer Open Access to Network

Verizon has been known historically as the toughest carrier with regards to protecting its walled garden, so this is some pretty major news. Think Microsoft is excited? Check out their quote:

"Microsoft is very excited to see Verizon Wireless make such a bold move to satisfy the demands of wireless customers," said Peter Knook, head of the company's mobile communications business.

I've had a Microsoft Mobile powered phone (a XV6601) on Verizon for years now and have been a generally pleased costumer. Apple's genius at rolling out a average product with great design and great marketing is well-known. It continues to amaze me how slow Microsoft and its carrier partners are to trumpet the capabilities of its devices.

But Google announces Andriod...and wow, do things start to get moving.

Walt Mossberg Raises the Red Flag of Revolution

A colleague of mine pointed out to me an interesting blog post by Walt Mossberg this morning:

http://mossblog.allthingsd.com/20071021/free-my-phone/

A shortsighted and often just plain stupid federal government has allowed itself to be bullied and fooled by a handful of big wireless phone operators for decades now. And the result has been a mobile phone system that is the direct opposite of the PC model. It severely limits consumer choice, stifles innovation, crushes entrepreneurship, and has made the U.S. the laughingstock of the mobile-technology world, just as the cellphone is morphing into a powerful hand-held computer.

Up until the 1970s, when the federal government intervened, you weren’t allowed to buy your own landline phone, and companies weren’t able to innovate, on price or features, in making and selling phones to the public. All Americans were forced to rent clumsy phones made by a subsidiary of the monopoly phone company, AT&T, which claimed that, unless it controlled what was connected to its network, the network might suffer.

Well, the government pried that market open, and the wired phone network not only didn’t collapse, it became more useful and versatile, allowing, among other things, cheap connections to online data services.

I suspect that if the government, or some disruptive innovation, breaks the crippling power that the wireless carriers exert today, the free market will deliver a similar happy ending.

At the SIIA Changing Landscape seminar on mobility last month, D. P. Venkatesh pointed out that Apple is a odd choice to lead the anti-oligarchy charge. It's model is based on it owning the entire software stack to the exclusion of anyone else. Although, Apple just announced that they will eventually allow third party programs, this seems like too little to late. After all, my three year old PocketPC (on Verizon, widely acknowledged as the "worst" carrier in terms of openness) easily allows third party applications.

Now, switching it from one carrier to another might prove a challenge...

However, Walt's economic instincts are correct. More competition will bring more innovation, and greater value at lower prices. And you can bet that the carriers will fight tooth and nail to prevent that from happening...