Motorola's and Verizon Wireless' $100 million marketing campaign for the Motorola Droid seems to be paying off with strong sales that will likely result in more than 1 million devices being sold by the end of the year.
The Droid, the only smartphone currently on the market that uses Google Android's 2.0 operating system, is Motorola's second Android device and it's available only on Verizon Wireless's network. The device is turning out to be the hit phone of the season, thanks in large part to an expensive and extensive advertising campaign.
Motorola Droid
(Credit: Motorola)Neither company is reporting sales figures. But analysts say sales look good. The companies have likely sold between 700,000 and 800,000 Droids since the device was launched in early November, according to equity analyst Mark Sue of RBC Capital Markets.
"Verizon's big marketing push for the Droid is strengthening as we close in on the holidays, and following our round of checks, we believe about 700,000 to 800,000 Droids have been sold, making our hurdle of 1 [million] Motorola Droids achievable for 4Q09 [ending December 31]," Sue said in his research note. "Motorola, for its part, has done a good job on the production side, and our survey of over 100 stores indicates strong demand, limited stock outs, and very few returns."
John Stratton, executive vice president and chief marketing officer for Verizon Wireless, said when the device was launched in late October that Verizon would be pouring in more money to market this device than any other phone it has ever sold. And now it looks like the money has been well spent. From advertisements that specifically highlight the Droid to ones that focus on Verizon's extensive and reliable 3G wireless network, it's clear that the company has AT&T and the Apple iPhone in its crosshairs.
AT&T has actually sued Verizon over the advertisements about its 3G wireless network coverage.
Some Verizon Wireless stores, especially in major cities, are selling between 100 and 200 Droids per week since the launch in early November, Sue added.
The success of the Droid is good news both for Motorola and for Verizon Wireless.
Motorola comeback
For Motorola, the Droid represents a chance to make a comeback in the cell phone market. The iconic American company that practically invented the cell phone market has struggled for the past several years now. After the runaway success of the ultra-thin Motorola Razr in 2004, the company has been unable to come up with a hit phone. And it has steadily lost market share to other competitors, such as Nokia, Samsung, and LG Electronics. It's also ceded market share in the fastest growing segment of the market, smartphones, to newcomers like Apple and Research In Motion.
Motorola's mobile devices CEO Sanjay Jha took a bold gamble more than a year ago when he decided to dedicate the company's resources to building phones using the Google Android operating system. The Droid and the Motorola Cliq, which is exclusively sold on T-Mobile USA's network, are the first two Motorola Android phones to hit the market.
But Jha said the Google Android operating system will not only be used in high-end devices like the Droid, but it will also be used to power less expensive phones, creating a new tier of smartphones that will eventually replace the basic feature phone category. Jha said the company will launch at least 20 more Android devices in 2010.
The success of the Droid is an important first step in getting Motorola back on track. But equity analyst Ittai Kidron of Oppenheimer said in a research note Monday that sales of the Motorola Cliq are falling short of expectations. Motorola is expected to sell 1.5 million smartphones in the fourth quarter. And two-thirds of them are expected to be Droids.
Kidron said the Cliq is not selling well mostly because of issues with battery life. Motorola is supposedly preparing a software patch to fix the problem. But he also noted that T-Mobile appears to be losing interest in the device and is not marketing it heavily.
But T-Mobile says that the Cliq is doing just fine. And the carrier said that it's committed to marketing the phone through the holiday season.
"The Motorola Cliq is very popular among our highly connected customers and is the only device with Motorola's innovative Motoblur solution," a company spokesman said. "T-Mobile is excited about the Motorola Cliq for the holidays and continues to showcase it prominently in T-Mobile retail stores and with recent holiday deals."
Verizon's iPhone alternative
The Droid's success is also important to Verizon Wireless, the nation's largest wireless operator in the country. It is the first device that offers a true challenge to Apple's iPhone, which runs exclusively in the U.S. on AT&T's network. While Verizon has a strong reputation for its network, consumers often complain about its lack of cool phones. Up to this point, Verizon has mainly competed against AT&T and the iPhone with RIM's BlackBerry devices. But RIM's touch-screen BlackBerry Storm, which was first introduced a year ago, was largely a disappointment.
The Droid offers Verizon customers an alternative to the iPhone on the Verizon network. This fact could help Verizon retain some consumers who were thinking of leaving for the iPhone. But it might also attract new customers who are either disappointed with AT&T's service or have heard bad things about the network.
Verizon Wireless representatives say the Droid is certainly an important part of the company's device line-up.
"We are pleased with sales over the holiday weekend," Brenda Raney, a spokeswoman for the carrier said in an e-mail. "This phone clearly fits the needs of a number of customers who are excited about its availability on the Verizon Wireless network."
But if analyst data is to be trusted, it is clear that the huge marketing budget for the Droid is at least part of the reason why the device has been so successful. The HTC Droid Eris, another Android device sold exclusively on Verizon's network, is not selling as well as the Droid, Sue said in his note. The HTC Droid Eris went on sale the same day the Droid was launched, but with much less fanfare.
Part of the problem is the fact that there are many Android devices coming to market. And the number will only increase next year. The lesson from the success of the Motorola Droid is clear. If device makers and carriers hope for break-out success, then they will have to spend big on marketing.
In its attempt to redress the imbalance created by the latest Verizon ads, AT&T has hurriedly cobbled together not just one Luke Wilson ad, but several.
Curiously, one ad features precisely the same strategy as that of the latest iPhone advertising: reminding those who might still be on the fence, on the phone, or even on the lam that you can't simultaneously enjoy voice and Web surfing on the Verizon 3G network--and hence on the Motorola Droid.
So here we have Luke Wilson, still looking a little peaky and dressed in a difficult brown. Behind Luke, we have a man trying to use two phones (by implication, Verizon phones) to perform a task the iPhone will manage alone.
Some might find it entertaining that as his friend attempts to download something on one of his Verizon phones, he complains that it's all going rather slowly. Others might find this both true and funny.
AT&T hasn't merely paid Wilson a little more than 3G to make this comparison. Someone, somewhere, has, perhaps even wisely, said, "We need a map to counter Verizon's map."
So the writers hit upon the idea of a two-part extravaganza (this already aired during Tuesday's "Dancing with the Stars" finale), in which Wilson produces postcards from all the different American towns that really do--no, really--have AT&T 3G coverage.
Wilson says his job is to set the record straight, with respect to Verizon's vicious besmirching of the AT&T network. He tries his best. He tells us that AT&T covers 97 percent of all Americans--yes, 300 million people.
The AT&T map also seems far more filled-in and far more colorful than it appears in Verizon spots, though one suspects that local word of mouth might be rather stronger, in this instance, than national advertising. If you live in Spokane, Wash., for example, and you know someone there who has spotty 3G service on a particular network, that is far more powerful an influencer than any number of Wilson's postcards or Verizon's barbs.
It's enlightening, however, to discover that Wilson once dated someone in Tulsa, Okla., and it didn't work out. Did she catch him simultaneously calling and Web surfing? Perhaps we will never know.
Another iPhone worm has been spotted in the wild.
Unlike the previous exploitation, which merely changed a jailbroken iPhone's wallpaper to a picture of Rick Astley of "Rickrolling" fame, this new threat allows hackers to steal sensitive information.
According to security firm Sophos, which wrote about the exploitation after a Dutch ISP spotted it late last week, the worm attacks jailbroken iPhone and iPod Touch devices only.
The worm "uses command-and-control, like a traditional PC botnet," Sophos wrote in a blog post on Saturday to warn users about the exploit. "It configures two startup scripts, one to execute the worm on boot-up, and the other to create a connection to a Lithuanian server to upload stolen data and cede control to the bot master."
Jailbreaking, which has been around for about two years, is a hack that enables iPhone and iPod Touch users to download applications unavailable through Apple's App Store.
Sophos wrote that the worm attacks users on several ISPs, including UPC in the Netherlands, Optus in Australia, and T-Mobile in several countries worldwide. Worse, the worm spreads faster on a Wi-Fi connection than a 3G connection. Users with affected devices might notice extremely short battery life while on Wi-Fi. According to Sophos, that's mainly due to the worm engaging in "so much network activity."
When a device is infected, it's assigned a unique number so that the attackers can easily pinpoint a single device. It also looks for authentication systems that use SMS, better known as mTANs. mTANs are frequently used by banks that send an SMS message with a password to mobile phones, allowing people to log in to their online accounts, Sophos wrote.
In essence, this threat is serious.
Sophos recommends that people with infected iPhones and iPod Touch devices restore them back to Apple's most recent firmware update. For now, there is no other way to fix the problem.
Don Reisinger is a technology columnist who has written about everything from HDTVs to computers to Flowbee Haircut Systems. Don is a member of the CNET Blog Network, and posts at The Digital Home. He is not an employee of CNET. Disclosure.
When you've lost the first round in your case against Verizon's persistent and persuasive mockery, who do you turn to?
Luke Wilson, that's who. After all, he starred in "Legally Blonde" and, well, "Jackass Number Two."
Actually, Wilson is lovable. Truly lovable. Perhaps if he'd dressed down a little and Justin Long had suffered an interminable hiatus hernia, Wilson might have got the part of Mac, the Microsoft Mocker.
Instead, he has the slightly more difficult task of persuading the folks who adored him in "Old School" that AT&T's 3G will serve them well on the 3.10 to Yuma.
The creators didn't give him much of a script, as I suspect they wrote it a couple of lattes and a shot of bourbon before this opus was filmed in what looks like the empty space above Victoria's Secret in Santa Monica, Calif.
Luke is forced to stand before a board and prove that AT&T has the fastest 3G network, lets you talk and surf at the same time, and offers you more apps that feature people making strange noises, half-clothed women, and animals that smile when you touch the screen. (Disclosure: slight exaggeration)
Sadly, it all looks a little analog. Luke looks as if he'd prefer to be surfing, as he really doesn't have the tools to make you believe what he's being paid to say.
His hair looks as if it's been hurriedly greased with Czech lard and his face offers a certain hemorrhoidal mien as it offers a little jape at the end of the spot. Yes, a jape about Verizon beginning with "V" and AT&T not beginning with "V." That rumbling you can hear is the collective guffaw from Verizon Central.
Verizon is hurting AT&T with its clinical, delighted unpleasantness. And I fear that before "Legally Blonde 2: AT&T's Revenge" can possibly be effective, the iPhone carrier needs to dramatize its argument rather better than the gospel according to Luke.
U.K. wireless carrier Orange just started selling the iPhone, and it is trumpeting first-day sales numbers for the device.
(Credit:
Apple)
The carrier signed up 30,000 people with a new iPhone contract on Tuesday, its first day selling Apple's smartphone, according to a post on Twitter from a member of Orange's marketing department.
While 30,000 isn't necessarily a lot, compared to the "hundreds of thousands" of iPhones AT&T sold in its first weekend selling the iPhone 3GS in the United States, it's not bad for being the second carrier in a much smaller country, where the iPhone 3GS has been available for four months.
Until Tuesday, wireless provider O2 was the exclusive carrier of the iPhone in the United Kingdom. Orange currently has 16 million mobile customers, compared to O2's 22 million. Incidentally, Orange's experience as the second carrier of the device in a country would seem to make a decent case for Apple releasing the iPhone to more than one carrier in many other countries, including the United States.
The numbers were far more impressive than the iPhone's debut on China Unicom's network last week. China's first crack at selling the iPhone was by most accounts disappointing, with 5,000 units sold over the first four-day period.
Of course, China Unicom is dealing with factors Orange is not. Besides having to sell the iPhone without Wi-Fi connectivity, China has to contend with something U.K. and U.S. carriers largely do not: a vast market for iPhone knockoffs, or gray-market phones.
In the race for mobile phone profits, Apple has overtaken Nokia, according to figures for the latest quarter.
Apple earned $1.6 billion in the third quarter from the iPhone, outpacing Nokia's $1.1 billion cell phone profit to grab the top spot among all mobile phone vendors, said research firm Strategy Analytics on Wednesday.
(Credit:
Strategy Analytics)
This is the first quarter that Strategy Analytics has seen Apple surge past Nokia in mobile phone profits, according to Alex Spektor, the author of the research, who spoke with CNET News.
The contest between Apple and Nokia for top phone profits has been tight in recent months. ... Read more
I'm sure you've heard of Apple's App Store for the iPhone. But have you ever heard of an independent mobile app store called GetJar?
No? Well, that's not surprising. The tiny company now based in Silicon Valley has done virtually no marketing. And yet in the nearly five years it's been around, the company has managed to build the second largest application store front for mobile phones in the world, likely making it the biggest mobile app store you've never heard of.
The privately held Getjar claims it has nearly 57,000 applications in its store, making it second only to Apple in terms of total applications. Apple just announced this week that it now has more than 100,000 applications in its store.
Google's Android Market, which launched earlier this year has more than 10,000 applications. Research in Motion's BlackBerry App World has just more than 2,000 applications available today, according to estimates.
Since Getjar's virtual store went live in early 2005, about 650 million applications have been downloaded. And momentum has been growing. For the month of October, Getjar executives say the company saw its users download 55 million applications, which is a 267 percent increase over the same month a year ago when 15 million mobile applications were downloaded. And the company says that it has more than 300,000 registered developers uploading applications to its site.
Meanwhile, Apple's much-hyped and heavily marketed iTunes App Store, which is nearly twice the size of Getjar, as of September had more than 2 billion app downloads since the store was launched in July 2008. And executives at Apple recently said the company had 125,000 developers on its roster. By comparison, the Android Market has had an estimated 40 million downloads since it went live earlier this year.
GetJar got its start not as an application store but as a beta testing Web site for mobile developers. GetJar founder and CEO Ilja Laurs had started the site to allow developers a way to test their applications on a variety of handsets.
"Originally, we were trying to help developers who couldn't get access to certain phones for testing," he said. "But then developers came to us and asked if they could use the site to also distribute their applications."
And so the GetJar application store was born in early 2005. At first, the site attracted mostly hard-core mobile application fans. But over the years, word of the site has spread, and users all over the world come to GetJar to download different applications.
Unlike most of the other application stores that have been announced recently, GetJar's store offers mobile applications for almost any phone.
"With the GetJar store, consumers don't have to worry about whether they have an Android phone or a Java phone," said Patrick Mork, vice president of marketing for GetJar. "They don't need to know which model Nokia they have. We take the fragmentation out of the equation by auto-detecting what apps can run on which phones and offering consumers those applications."
The way it works is that GetJar is able to detect the type of phone a wireless subscriber is using when they connect to the GetJar mobile Web site. It can also detect the type of phone used from the regular Web site using a wireless subscriber's phone number.
A screen shot of a GetJar download page for the Facebook shortcut link.
(Credit: GetJar)Based on this information, GetJar is able to direct app shoppers to the applications that will work on their phones.
"If there is a BlackBerry app available and you are using a BlackBerry you will get that application," Mork said. "But if you're on a feature phone, you'll likely get a shortcut link."
This is yet another important differentiator for GetJar. Unlike device or operating system specific app stores, such as Apple's App Store or Android Market, GetJar also provides millions of consumers using basic feature phones an app-like experience, even if a specific application hasn't been developed for their particular phone.
For example, GetJar has worked with Facebook to provide a downloadable shortcut link that leads to the Facebook mobile Web site for wireless subscribers who are not using a smartphone for which a special Facebook application has been developed.
While the link is not really a native application for that specific device, the link appears on the phone's menu and provides access via the phone's browser to a mobile Web site. For consumers, the experience is very similar to that of a native application that has been downloaded to a smartphone.
"Facebook didn't have a strategy for developing applications for Motorola Razrs and Samsung Instincts" Mork said. "So they teamed up with us to get around that problem by providing short cut links. It's really not an app. But the beauty of it is that it allows any company to play in the app game from a shortcut."
And for brands, such as Facebook, the shortcut increases their mobile presence. Before it started working with GetJar, Facebook would get between 100,000 and 150,000 downloads per week from its mobile site. After the shortcut, links were available on the GetJar site and on Facebook's site, Facebook started to see 1.5 million mobile downloads per week, Mork said.
But GetJar does have some limitations. One major limitation for consumers in the U.S. is that GetJar cannot offer applications to most phones operating on Verizon Wireless's network. The reason is that Verizon uses a closed platform called BREW on many of its phones. And there is no way for third-party application developers to create applications for these devices without going through Verizon's BREW approval process. But BREW is a legacy platform for Verizon, and newer smartphones on Verizon, such as BlackBerry devices and the new Android phones, will be able to access applications from GetJar.
GetJar also doesn't explicitly serve apps to iPhone users, again because the iPhone platform is closed. But iPhone users can use the GetJar store to discover new applications and GetJar can redirect those users to the Apple App Store, where they can download the applications.
Yet another limitation is that GetJar does not offer developers the ability to charge for applications. The company has not yet figured out how to bill for these applications. Instead, application developers can monetize their applications by incorporating advertising into the application or using the app on GetJar to up-sell consumers to a more robust application in a different application store.
But GetJar does allow developers to promote their applications, and the company has developed a marketplace so that developers can bid for top promotional spots on the Web site. GetJar gets paid based on how many users download these applications. Most other application stores today do not offer developers a way to promote their applications, which makes it difficult for smaller developers to get their applications noticed.
While there is no question that Apple dominates the mobile application market today, Mork admits that Apple's push into applications has been a boon for GetJar, and likely for other app stores.
"It's undeniable that Apple has had a positive effect on our business, especially in the U.S.," he said. "But we don't really compete with Apple. Still, it's clear that the mass market is just starting to catch on. And that is largely thanks to the success of Apple and its App Store."
Motorola Droid
(Credit: Motorola)Data tethering is coming to the new Motorola Droid in 2010, a Verizon Wireless representative has confirmed.
This is great news for people who would like to use the Droid to connect their laptops to Verizon's 3G wireless EV-DO service. Tethering will not be available on the new Google Android phone when it hits stores on Friday. But Brenda Raney, a Verizon Wireless spokeswoman, said it is scheduled to be added next year.
The ability to tether or use a smartphone as a modem to access the Internet on a laptop is a differentiator for the Droid, which will be offered only on Verizon Wireless' network. The Droid's chief competitor, the Apple iPhone, is exclusively available on AT&T's network and does not offer data tethering, an issue that has frustrated many customers ever since the phone was introduced. AT&T executives have promised the feature is coming, but it hasn't come yet. Mark Siegel, a company spokesman, said the feature will eventually be offered on the iPhone, but wouldn't specify when.
That said, AT&T offers tethering on all its smartphones, except the iPhone, Siegel said. And that capability costs an extra $30 a month on top of the data service for the smartphone that customers already pay each month.
Verizon Wireless also offers tethering on most of its other smartphones. Verizon calls its service Mobile Broadband Connect. And it charges corporate smartphone customers who pay $44.99 per month for data service an additional $15 for tethering. For smartphone consumers, who pay $29.99 a month for their service, Verizon charges $30 a month to tether. And for customers who have feature phones with a voice service only, the company charges $49.99 to tether the device to a laptop.
All of Verizon's Mobile Broadband Connect plans are limited to 5GB of data per month. And customers are charged 5 cents per megabyte for overage.
The other two major U.S. wireless operators have either outlawed tethering altogether--or they will soon. T-Mobile USA doesn't allow tethering on its network, which caused Google earlier this year to remove a tethering application from the Android Market.
And Sprint Nextel, which did allow tethering for its smartphones, is now disabling it. The blog Pulse2 confirmed earlier this week that Sprint executive David Owens said that the carrier will no longer allow data tethering on its network starting in 2010.
The reason that wireless operators are wary about allowing subscribers to use their phones as wireless broadband modems is because they are afraid that the traffic generated from the millions of customers using these phones to connect their laptops to the Net will cripple their networks.
AT&T admits that its iPhone users, which get unlimited data usage for $30 a month, consume more data on the network than other smartphone users. And there are already signs that iPhone data use is putting strains on AT&T's network, as millions of iPhone and 3G wireless users complain of poor service, especially in metropolitan areas.
But banning tethering likely won't stop people from illegally turning their phones into modems. There are many crafty smartphone users who will likely jailbreak their phones to enable the functionality. And it's hard for the carriers to actually block the service.
As Apple and Research In Motion have won a greater share in the Wi-Fi handset market over the past year, Nokia has lost share.
Though Nokia is still the leading vendor for dual-mode smartphones (Wi-Fi and cellular), its market share dropped to 35 percent in the second quarter, compared with 50 percent in the same period a year ago, according to a report released Monday from In-Stat.
The report "Wi-Fi in Mobile Phones: Dual Mode Becomes the In Thing" tracked the major Wi-Fi phone vendors, including Nokia, Apple, Research In Motion, HTC, and Samsung. Among those, Apple has enjoyed the greatest growth in market share, from 3 percent in the second quarter of 2008 to 20 percent in this year's second quarter.
Market share for both RIM and Samsung has also weakened the past few quarters, though less so than Nokia's. RIM's 15.7 percent chunk of the market for the second quarter of the year was down from its first-quarter high of 17.6 percent. Samsung's share has been relatively flat but usually dips a bit from the first to the second quarter, notes In-Stat.
In sheer unit volume, Nokia has done well the past few quarters, with 9.3 million Wi-Fi handsets shipped in the second quarter of the year compared with Apple's 5.2 million shipments. However, Nokia's shipments have dropped since the first quarter of 2008 when it saw 12 million units fly out the door. Over the same period, Apple, RIM, and HTC have seen their shipments grow.
As the No. 2 Wi-Fi handset vendor, Apple has also outsold third-place RIM in dual-mode phone shipments, says In-Stat. Though RIM still has a larger market presence, not all of its Blackberry devices include Wi-Fi. HTC and Samsung rounded out In-Stat's list as the fourth and fifth top Wi-Fi handset vendors, respectively.
(Credit:
In-Stat)
The report also detailed the growth of the Wi-Fi smartphone market overall. The industry shipped 37 million handsets in 2007, and 103 million units in 2008. That rise is because of several factors, notes In-Stat, including greater functionality, lower prices, and carrier promotions. Initially targeted to the business market, smartphones are also now an entrenched hit with consumers, which In-Stat attributes to the success of the iPhone.
Wi-Fi handset shipments are expected to rise just 25 percent to 128.4 million units for 2009. That compares with a nearly 180 percent jump in 2008.
But In-Stat sees gains ahead. By 2010, the growth rate is likely to climb to 43 percent. Though that rate may not be sustainable, it should remain strong in the coming years. Wi-Fi will also become more prevalent in mobile phones. This year, 11.5 percent of handsets include Wi-Fi; by 2012, that figure will grow to 25 percent, predicts In-Stat.
To compile the report, In-Stat relied on its own data as well as interviews with Wi-Fi equipment vendors.
It was bound to happen. AT&T is suing Verizon Wireless over its "There's a Map for That" advertising campaign.
When I first saw the advertisements on TV, I thought for sure that AT&T or Apple would file a lawsuit claiming the advertisement was too similar to the iPhone's "There's an App for That" slogan.
I was right about one thing. AT&T is suing Verizon. But I was wrong about the reason behind the suit.
AT&T's beef isn't over the wording of the "There's a Map for That" slogan. Instead the company claims that Verizon is misleading customers into thinking that AT&T subscribers are not able to use their phones in areas where the carrier does not offer 3G wireless coverage.
In the suit that AT&T filed Tuesday in Atlanta federal court, AT&T describes how Verizon's ad campaign shows maps with white spaces, which it claims misleads consumers into thinking that AT&T has no wireless coverage in particular areas of the country.
But that is not the case. The white spaces actually indicate where AT&T does not have 3G wireless access. It doesn't indicate that AT&T has no wireless coverage. In fact, in most parts of the country, AT&T has a 2.5G Edge network.
AT&T doesn't dispute the fact that its 3G wireless service is not in every region of the country indicated on the map. But the company says that the advertisement makes consumers believe that AT&T has no service in those areas, which implies that subscribers can't use their phones at all in those regions.
"Contrary to the misleading message conveyed by Verizon's advertisements, AT&T customers can fully use their wireless devices outside of a '3G' coverage area and undisputedly have coverage in areas depicted by the white or blank spaces on the maps used in Verizon's advertisements," AT&T said in its complaint.
AT&T also asserts in its complaint that it is "losing incalculable market share, invaluable goodwill that it has spent billions of dollars to develop among consumers, and the significant investment it has made in its wireless network."
AT&T is not asking Verizon to stop its ad campaign entirely. And it's not asking its rival to change the wording of its advertising. What AT&T wants is for Verizon to stop showing maps of AT&T's 3G coverage areas that it claims mislead customers into thinking they can't use their phones in non-3G areas.
AT&T has asked for a temporary restraining order against Verizon so that it cannot benefit from the ads while the companies await a permanent injunction.
Verizon Wireless, which is owned jointly by Verizon Communications and Vodafone Group, said AT&T's suit is without merit. The company has said that the ads clearly state that voice and data services are available outside 3G areas.
"The ads are serving to inform customers where the coverage critical to operating a smartphone is available," said Brenda Raney, a Verizon Wireless spokeswoman. "Considering their limited 3G coverage, our competitor should examine whether they are misleading customers with their fastest 3G network claim."
Motorola Droid
(Credit: Motorola)The hard-hitting advertising campaign and AT&T's lawsuit are just the latest signs that competition in the U.S. wireless market is reaching a fever pitch. More than 89 percent of Americans already subscribe to a cell phone service, according to the CTIA. This means that for wireless operators to grow, they must lure new subscribers from competitors.
Verizon Wireless and AT&T control the lion's share of the wireless market as the No.1 and No. 2 operators in the country, respectively. Sprint Nextel and T-Mobile USA are the other two main national carriers. Sprint has steadily been losing customers for several quarters. And T-Mobile has been unsuccessful in becoming a major threat to the big two operators.
As a result, the rivalry between the two largest wireless companies, Verizon and AT&T, is heating up. Verizon has historically had a very good reputation for having a reliable network with broad network coverage. But even with a strong network, the company has lacked cool phones, which consumers have complained about.
Meanwhile, AT&T's network has had a mediocre reputation at best, but the carrier is the exclusive wireless operator in the U.S. for Apple's iPhone. And despite the fact that subscribers have been complaining about poor service and spotty coverage on AT&T's network, new subscribers are still flocking to the carrier to buy the popular iPhone. In the third quarter, AT&T reported it had signed up a net of 2 million subscribers. Verizon signed up 1.2 million new subscribers for the same period.
But now Verizon is about to launch a phone that many analysts believe could give the iPhone a run for its money. The Motorola Droid, which uses Google's Android operating system, goes on sale Friday. And since the phone was revealed to analysts and product reviewers last week, it's been getting high marks.
Verizon's top marketing executive John Stratton said the ad campaign for the new Droid will be the biggest Verizon has ever launched. But he said that the company will focus more on what the Droid can do and less on what other devices or competitors cannot do. One thing is clear, the battle for wireless subscribers is likely to get nastier.
As a consumer, I hope this intense competition eventually leads to better services, cooler devices, and lower prices. But we'll just have to wait and see. Right now, it just looks like a war of words.
