a week in wireless


Purple turning blue

AWIW_09.09.11

It’s not big, and it’s not clever, but it is quite unusual. Certainly it’s not often that the Informer gets to write about the employment of blue language by top flight CEOs. But thanks to potty-mouthed Carol Bartz, that’s all about to change. Bartz was this week fired from her job as CEO of Yahoo, and took considerable umbrage at the fact; not least because the news was delivered over the phone.

Shortly afterwards, in an interview with Fortune magazine, she claimed that her bosses had “f***ed me over”. She added that chairman Roy Bostock didn’t “have the balls” to give her the boot face to face. There have been subsequent reports that a “non disparagement clause” in Bartz’ contract could have cost her $10m in payout dollars as she had undertaken not to say anything nasty about the Yahoos under such circumstances.

The Informer doesn’t know about you, but ten million dollars seems a lot to pay for a quick ‘f**k’.

Let’s stay with the topic of industry players spending vast sums of money shafting one another as we peer through the steamy windows of the handset community’s patent dispute free-for-all.

In response to Apple’s pursuit of Android vendors – the firm has more than ten ongoing cases against Samsung alone over Android product – Google has started to arm its vendor partners and send them in to battle. Taiwanese vendor HTC is suing Apple in the US having acquired nine patents from Google, which Google had only recently acquired itself from Palm, Motorola and Openwave.

So now HTC is claiming that the Mac, the iPhone, iPad and iPod all infringe patents that it has owned for about ten minutes. Not patents that it applied for based on research and development work that it had carried out at its own expense and from its own expertise. Patents based on work that someone else did, that got sold to another someone else, and then on to HTC.

What a grubby little business these patent plays are.  After all, if you were walking down the road and you saw the aftermath of a nasty road accident, would you bloody your own nose and throw yourself under the wheels of the smoking truck with a view to suing the driver?

The Informer’s buddy Malik Saadi, principal analyst at Informa Telecoms & Media put it well: “Initially, the goal of patenting was to protect innovation. Now, the target of patenting is to prevent innovation, because of this protectionism,” he said. “That is really bad for the industry. When you see companies just buying patent rights to use them in a legal battle against others – that really kills innovation.”

Meanwhile the ‘quietly brilliant’ HTC has also been in the news as the latest player to stand accused of surreptitiously tracking its customers through the handset’s location capabilities. Shortly after Microsoft found itself being sued over similar allegations, and as some 27,000 South Korean iPhone owners are trying their luck against Apple, HTC found itself making defensive noises over software updates that allow the OS to log user behaviour.

The firm said the functionality related to an opt-in service focused on error reporting and that there was Nothing To See Here.

In the battle of the operating systems, app downloads are a key indicator, so a new forecast from Ovum this week on likely sales for 2011 made for an agreeable diversion. The analyst firm reckons there will be 18 billion mobile app downloads during 2011, up 144 per cent on last year. The total is forecast to hit 45 billion in 2016.

Obviously vast numbers of these downloads are free, but revenues are on the up. Sales should hit $3.2bn this year, an increase of 92 per cent on 2010. By 2016 they should be up to $7.7bn.

And in good news for Google, 2011 should be the first year in which Android app downloads exceed those from Apple’s App Store—8.8 billion to Apple’s six billion.

Will the App Store get a bit of a fillip from the arrival of the next iteration of the iPhone? More stories were circulating this week that number five is alive, although O2 UK’s disembodied customer service typists don’t know anything about it. Vodafone UK have been telling customers that the phone’s arrival is imminent, while Deutsche Telekom is understood to be taking pre-orders for the unit in Germany.

In other handset news Nokia has allocated $10,000 for a competition to design a new signature ringtone. Expect that to be won by a man called Nero, who composed the ringtone on a fiddle.

Meanwhile, Blackberry vendor Research in Motion has faced calls from a shareholder to take its love to town, this week. Jaguar Financial, a Canadian merchant bank, has beseeched RIM to embark upon a “value maximisation process” (which is the kind of phrase that makes the Informer want to embark upon a “breakfast reproduction process”) that could involve either the sale of the firm or the monetisation of the RIM patent portfolio, as per the above.

Jaguar cited the collapse of the vendor’s share price from $149.90 in June 2008 to $29.59 last week as well as a loss in market share. The bank also expressed concern that RIM had failed to “develop the multi-purpose device that meets the requirements of today’s consumer landscape”. It seems there is no longer room for the specialist, in Jaguar’s view. Read more about this one here.

Anyway, that’s enough about the handsets, as there’s plenty of ill-feeling doing the rounds among the network operators at the moment, too. Agent provocateur 3UK has been getting involved once again, with accusations that its competitors and distant market leaders are conspiring to delay the nation’s next-gen spectrum auctions as they have plenty of headroom to play with thanks to existing allocations. 3 has no such luxury and wants to get its hands on some fresh airwaves, in a bid to grow its business.

Naturally Vodafone, O2 and Everything Everywhere were hand-on-heart mortified at such an accusation, and gave it a large “Moi?”. Vodafone and O2 spouted blah about active engagement and bringing 4G services to customers, while EE said it wanted the auction as soon as possible.

UK regulator Ofcom rather burst the bubble by pointing out that none of the operators would be in a position to deploy LTE networks until 2013 at the earliest, so a possible resetting of the auction schedule from the first quarter of next year to the first half shouldn’t really matter a fig.

Similar issues are ongoing across La Manche, as well. The 4G auction is due to begin on September 15th but market newcomer Iliad has been trying to delay the process, claiming it didn’t treat all players fairly. Iliad’s beef is that payment for the licences is required up front and, lacking the adequate conkers for such an outlay, it would prefer to pay in instalments. No dice, said the French Conseil d’Etat.

Over in the US they’re forming an orderly queue to file suits against AT&T in relation to the carrier’s proposed £39bn acquisition of T-Mobile. At the head of the line is Sprint Nextel, which has cited the US Clayton Act, a piece of US competition legislation, in a suit that claims the deal would be illegal.  Sprint’s action is very much along the same lines as the Department of Justice suit that served as its precursor. AT&T is “disappointed and surprised”. Which is kind of a dilute version of “shocked and saddened”.

Focusing on internal rather than external reorganisation this week was Spanish incumbent and Latin American heavyweight Telefónica. The firm has moved the furniture around this week, creating four new divisions as part of what it called “sweeping changes” designed to “reinforce the operator’s status as a global player and leader in the digital environment.

And the “digital” bit is key; it’s Matthew Key, in fact. Key, previously head of Telefónica Europe (which in the old world didn’t include the flagship domestic operation), now heads up a digital services unit that consolidates the firm’s various forays into areas such as e-health, cloud and M2M.

The restructure also brings the Spanish operation, which has suffered along with the domestic economy, into a wider operating organisation. Under the new regime, Telefónica’s operating companies will be grouped into two units; Europe and Latin America. Figures from Informa Telecoms & Media’s World Cellular Investors for Q211 put the total operator subscriptions for properties where Telefónica holds a stake at 220 million in the Americas and 111.3 million in Europe. The firm also has minority stakes in several African operations, China Unicom, Telecom Italia and Portucal’s TMN. For more details, go here.

Finally this week, some good news for the Christians (not the band with the bald bloke in it, the actual Christians). UK retailer Phones 4U ran an advert around Easter time with a cartoon Jesus appearing to endorse their pricing on Samsung Android product. This caused offense among the followers of Christ in the UK who, let’s face it, have a fairly easy time of it where religious prejudice is concerned. Anyway, they got the advert banned.

A contrite Phones 4U gave a statement that blew all the valves out of the Informer’s Balls-o-meter. The firm said that it had wanted to create a “light-hearted, positive and contemporary image of Christianity relevant to the Easter weekend.” Yeah, right.

The marketing guys were sitting in the office with their skinny lattes wondering what to do to try and flog a few more mobiles, when one of them said: “Hey, just go with me on this one, but what say we create a light-hearted, positive and contemporary image of Christianity relevant to the Easter weekend?” It doesn’t really ring true, does it.

There were only 98 complaints, but they were enough. Half of them probably came from Apple UK, pointing out that a contemporary Jesus would almost certainly prefer the iPhone.

Take care

The Informer


One comment

  1. reginhild 09/09/2011 @ 7:52 pm

    In the US in 2007, the high court ruled that source code itself is not a patentable thing (to infringe upon software, you have to copy the idea behind it); and separately that any marketed device that is found to be an improvement upon a patented concept cannot be said to infringe upon that concept. These were huge victories for open source developers who, as a result, could be allowed to see up close how commercial software is structured and create better software that supersedes the commercial concept. Rendering something obsolete is not copyright infringement.

    It seems to set a good precedent for patents in a way to counter the stifling of innovation that seems to be the norm in litigation these days.

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