Wireless

Many people I know are frightfully attached to their iPhones. They treat them as if they were a peculiar and exotic lover, one they can hardly believe they have managed to seduce.

The finely calibrated minds at Strand Consult have taken this analysis to a particularly simple conclusion: iPhone users are, the consultants say, really quite nuts.

The Strand thinkers released an opinion entitled "How will psychologists describe the iPhone syndrome in the future?." It focuses on the sorts of people who buy into Apple's great success.

Here's a flavor of the somewhat-skeptical nature of Strand's feelings: "Apple has launched a beautiful phone with a fantastic user interface that has had a number of technological shortcomings that many iPhone users have accepted and defended, despite those shortcomings resulting in limitations in iPhone users' daily lives."

The consultants' likening of iPhone buyers to kidnapped hostages may raise more than the eyebrows of many an Apple fanboy (fanperson?). Indeed, it already has the Mac world aflutter.

Is this evidence of an iPhone hypnotising a user?

(Credit: CC Gonzalo Baeza Hernandez/Flickr)

"When we examine the iPhone users' arguments defending the iPhone, it reminds us of the famous Stockholm Syndrome--a term invented by psychologists after a hostage drama in Stockholm. Here, hostages reacted to the psychological pressure they were experiencing by defending the people that had held them hostage for six days," Strand declared.

The implication is surely that Apple has mugged millions of people with its beauty, dragged them off to a very dark cellar in some barren land, turned them into slightly bonkers Barbarellas, and then recruited them as soldiers for the cause.

This is the sort of thing of which the Church of Scientology is normally accused. But for some strange reason, it's a rather chilling but pleasant shower to read something that isn't mere worship.

Strand claims that it closely analyzes the financials of mobile operators. And if you also happen to order its wonderfully free report "The Moment of Truth, a portrait of the iPhone," you will discover the 10 great myths about the iPhone. Here are just two: it doesn't attract new business for operators, and it is not a technologically advanced mobile phone.

I know you'll be rushing to read these fine tracts, and I feel sure that a couple of you might wish to drop Strand Consult a note. To encourage you a little, I'll warn you that Strand also seems to believe that some of you Apple customers are, well, liars.

The consultants put it quite sweetly: "In reality, the iPhone is surrounded by a multitude of people, media, and companies that are happy to bend the truth to defend the product they have purchased from Apple."

Apple customers are liars? The media too? Surely not.

AT&T 3G wireless customers in San Francisco had problems making calls, sending and receiving text messages, and accessing data on Friday evening.

AT&T spokesman Mark Siegel said that starting at about 4 p.m. PT on Friday afternoon, AT&T experienced a hardware issue in San Francisco that disrupted its 3G wireless network within the city. The hardware issue, which he did not elaborate on, was fixed by around 6:15 p.m. PT. And the 3G network has been working fine ever since, he said.

The problem did not affect AT&T's older and slower networks that use 2.5G EDGE or GSM technologies. This means that even though 3G service was disrupted, most customers' devices were able to switch to the slower networks to make calls and to send and receive data. Still, Siegel noted that AT&T detected that customers were having trouble accessing the 3G network, and the company quickly figured out the problem and resolved the issue within hours.

Even though their phones were likely switching over to AT&T's slower technology, many AT&T customers still noticed the issues, with many people reporting having problems with their 3G service on Twitter. Some of these customers said they were unable to access voice, data, or SMS messages at all.

Truth be told, the service disruption in San Francisco was not a really big deal. It affected a handful of customers. But at this point, any network problems, particularly in tech-savvy areas of the country such as San Francisco, only flames the fire of criticism that is heating up around AT&T's 3G service.

The disruption comes at a time when AT&T's reputation for 3G service is already tarnished. For more than a year, iPhone users have complained about dropped calls and poor service on the 3G network. The problems appear to be particularly acute in densely populated urban areas, such as New York and San Francisco.

Last week, Ralph de la Vega, head of AT&T's wireless business, admitted that AT&T is having problems in these cities. He said the company is working on resolving the issues.

De la Vega also admitted that AT&T is struggling to keep up with demand for data on its 3G network. And he alluded to adopting new "incentives" to encourage wireless customers to use less data.

Verizon Wireless, AT&T's biggest competitor, sees AT&T's problems as a golden marketing opportunity. And the carrier started running advertisements recently that highlight AT&T's lack of 3G coverage in some parts of the country. AT&T sued Verizon last month over the ads, accusing Verizon of misleading consumers.

AT&T has dropped its lawsuit, but the publicity around the tiff has likely not endeared AT&T to its customers, nor has it painted the company in a favorable light to anyone considering becoming an AT&T customer.

Meanwhile, AT&T claims in its own ads that it has the fastest 3G wireless network, a notion Verizon disputes. Earlier this year, Verizon also filed a lawsuit against AT&T claiming that the company was not being truthful in its advertising. But Verizon has also decided to dismiss its complaint.

The biggest problem for AT&T is that it is the only carrier in the United States that offers the most data-friendly and data-hungry mobile phone on the market: the iPhone. Analysts say users of the Apple smartphone consume five to seven times more data per month than other wireless subscribers.

AT&T has been upgrading its network to add capacity to keep up with demand, but for many consumers, the upgrades have not solved their service problems. AT&T recognizes more needs to be done. It has launched a new application for the iPhone that lets users report service problems. And the company is urging the Federal Communications Commission to find more wireless spectrum to auction off. But these solutions will take years to implement.

In the meantime, AT&T is faced with a major dilemma. It must continue to market the iPhone and all its bandwidth-hungry applications in order to continue growing its subscriber base, but it also needs to curb data usage until its network can handle the additional load.

In short, AT&T is in an impossible situation. If it backs off on its marketing, it risks losing Wall Street's confidence. If it continues to add new iPhone users, and its service suffers for it, it risks alienating its customers. And then the company may find itself spending the next several years repairing a severely damaged reputation.

It's no secret that Windows Mobile has hit a rough patch as the iPhone and Android-based smartphones have take center stage. Recent statistics from AdMob shows that Windows Mobile market share of Web surfing was way down during the past 12 months--more than 70 percent year over year.

Any number of people postulate that Windows Mobile will be dead, some say as soon as 2011, unless Microsoft figures out a way to not only make the operating system better but to convince users that they should care.

On the New York Times Bits blog, Steve Lohr wrote earlier Thursday on analyst Mark Anderson's comments suggesting that Microsoft abandon their consumer efforts entirely--that the company has lost the battle for consumers:

Except for gaming, it is 'game over' for Microsoft in the consumer market. It's time to declare Microsoft a loser in phones. Just get out of Dodge.

I'm not a huge fan of Windows Mobile, but Microsoft certainly can't give up on smartphones and really has no alternative but to make a big move in the mobile operating system space. And Windows Mobile is not nearly as bad as many people think--if you don't believe me, check out these results from mobile blog jkOntheRun.

I recently toyed with Windows Mobile phones at both Verizon and AT&T stores and I could absolutely see the appeal of the common desktop functional paradigm if I were a Windows user. But consumers are fickle and don't want to add an OS decision into their buying process. They just want the phone and its applications to work and be easy to use.

There remains a huge opportunity for Microsoft to take its dominant position and make Windows Mobile truly great, even if it means walking away from the status quo. And while that's not typically the Microsoft way, the company has shown with Bing that it can make those kinds of decisions (as well as less-positive choices.)

There are two very simple moves Microsoft could make that would not only shake up the whole market, but also build a path for the future:

... Read more

Correction made December 9 at 7:51 p.m. PDT: An earlier version of this story incorrectly stated that AT&T had announced a tiered pricing plan. The company is considering incentives to curb heavy wireless data usage.

AT&T wants its iPhone users to use less wireless data, and it may consider new pricing models to curb users' data usage as it tries to keep up with growing demand.

At an investor conference in New York on Wednesday, Ralph de la Vega, AT&T's head of wireless, said the wireless operator is considering incentives to get consumers to reduce their data usage.

De la Vega said 3 percent of smartphone users are consuming 40 percent of the network capacity.

"We're going to try to focus on making sure we give incentives to those small percentages to either reduce or modify their usage so they don't crowd out the other customers in those same cell sites," said de la Vega according to a transcript of the conference. "And you'll see us address that more in detail."

He went on to say that most consumers aren't aware which applications use a lot of bandwidth and which do not. For example, email does not consume a lot of bandwidth, whereas streaming video and audio do consume a great deal of bandwidth.

"What's driving usage on the network and driving these high usage situations are things like video, or audio that keeps playing around the clock," he said, according to the transcript provided by AT&T. "And so we've got to get to those customers and have them recognize that they need to change their pattern, or there will be other things that they are going to have to do to reduce their usage."

AT&T has been struggling to keep up with demand for wireless-data usage on its network. The iPhone, launched more than two years ago, has revolutionized mobile Web usage. The device, which was built more for accessing the Net than making calls, can access more than 100,000 applications, many of which use the mobile Internet.

iPhone users on average consume five to seven times more data per month than average wireless subscribers, according to analyst firm Sanford Bernstein. And all this usage is clogging the network, causing many iPhone users, especially in large cities such as New York and San Francisco, to experience dropped calls, slow 3G service, and issues connecting to the network at all.

AT&T has been reluctant to admit that there is a problem, but recently, the company has acknowledged that problems exist. According to The Wall Street Journal, de la Vega admitted that New York and San Francisco have been experiencing service issues. And the company recently launched an iPhone application that allows users to report service problems.

AT&T has been upgrading its network to the next generation of 3G wireless service to increase network capacity. But now the company is saying it needs to actually curb usage in order to get a handle on demand.

De la Vega didn't provide specifics about how the company would actually get consumers to use less data. But he said that a usage-based pricing model may be considered in the future.

"I think longer-term, there's got to be some sort of a pricing scheme that addresses the usage," he said. "But that's going to be determined by industry competitive factors, regulatory factors and customer [successes]."

The idea is that usage based pricing may actually deter consumers from using high-bandwidth applications. Unlike voice service, which is already tiered, wireless-data service is charged at an all-you-can-eat flat rate. iPhone users select a voice plan, then pay an extra $30 a month for unlimited data usage. By contrast, AT&T has limited the amount of data that its wireless-data card users can consume each month to 5GB. After that limit has been reached, customers who use the AT&T network to access the Net from their laptops get charged more based on their usage.

But asking iPhone users and other smartphone subscribers to cut back on their data usage may be somewhat unrealistic, and it could actually stifle innovation and development of the mobile Internet.

AT&T seems to realize that this is not a long-term solution. And not only is the carrier upgrading its network, but it's also asking the Federal Communications Commission to find more spectrum to auction off that can be used for wireless-data services. Jim Cicconi, senior executive vice president of external and legislative affairs for AT&T, said in a separate interview with CNET on Wednesday that something needs to be done to deal with the flood of wireless-data traffic.

Cicconi and AT&T's CEO Randall Stephenson met with FCC staff members earlier this week to discuss the spectrum issue.

"Clearly, there is a looming crisis that needs to be addressed when it comes to spectrum availability," Cicconi said in an interview at his office in Washington, D.C. "Wireless-data usage is growing far faster than anyone had expected. And if we don't do something soon, we will run out very fast. And then we will have to start telling wireless customers that they can't do all the things they want to do with their devices."

FCC Chairman Julius Genachowski has made freeing up more spectrum a top priority. And he has already proposed that the FCC look into taking some spectrum away from TV broadcasters to give to wireless operators to deliver more wireless-broadband services.

Naturally, the TV broadcasters oppose such a proposal.

Verizon Wireless, AT&T's main competitor, has already amended wireless-data pricing for its low-end phones in an effort to squeeze out more revenue from users. But drastic changes in data pricing could scare off some customers and curb smartphone adoption altogether.

If you were watching Florida impersonate a headless chicken against Alabama Saturday, you might have been aware that Luke Wilson, AT&T's disarming new pitchman, had also lost his head.

For the game was interrupted by Wilson's need to talk, with his filmic features and without.

The battle between AT&T and Verizon has been peppered by startling doses of objectivity. So to demonstrate the clear, obvious, incontrovertible fact that Verizon's 3G is but a Wendy's-stuffing, cake-loving, 15-beers-a-night slob when compared with AT&T's Usain Bolt, Wilson performs a side-by-side that would put the Pepsi Challenge to shame.

On AT&T's 3G, Wilson, finally not dressed in a painful shade of tree bark, downloads himself with the speed of an unfaithful, burglarizing vicar fleeing from the press.

When he tries using the Verizon 3G, which AT&T declares is very much slower, Wilson is up to his neck in it. There is no time to bring his head into the picture.

Naturally, AT&T's hope is that Wilson's charm will encourage people to use their hearts at least as much as their heads. No one using the latter will really believe he is using Verizon's 3G to materialize his headless self.

So smartphone seekers will be left trying to decide between a network that is allegedly everywhere, but is slow, and one which, according to critics, isn't remotely everywhere, but is faster and, oh, has that supposed digitally clueless pageant queen of an iPhone.

It's not quite George Clooney vs. Brad Pitt, is it? It's more, well, Luke Wilson vs. Owen Wilson.

Perhaps you have already become used to Verizon's Droid tossing names at the iPhone like an 8-year-old boy behind his teacher's back.

However, the latest ill feelings directed at Apple's little cutey seem beyond even anything heard in an elementary school.

In a new TV spot, Droid asks an important question: "Should a phone be pretty?" To which many sane people would say "yes," and many emotionally challenged beings made of metal would say, "Huh? What?"

Its answer--the latest in its presentation of the Droid as a robotphone--is to hurl metallic-tasting custard pies as if the Apple store was a state fair.

"Should it be a tiara-wearing digitally clueless beauty pageant queen?" belches the ad's rhetoric, clearly referencing the iPhone, while wrapping the pie in a question.

I know many Socratically-inclined Apple fanpersons will object to the notion that beauty is only skin deep. But they will surely rail against the mere suggestion that the iPhone is digitally clueless.

Of course, this ad implicitly suggests that the Droid is, well, one of Cinderella's sisters, which might well affect its abilities to entice certain sectors of the populace.

Actually, the suggestion is more than implicit, for the deeply hirsute voice declares: "Is it a precious porcelain figurine of a phone? In truth, no."

So do you wait for a design that is pretty and is, as this ad so elegantly puts it, "racehorse duct-taped to a Scud missile fast" or do you have to compromise?

I know they say you can't have everything in life, but surely there must be some very attractive engineer out there who can give us everything in a few square inches of cell phone.

If you thought that all wireless carriers know just how good their competitors' networks are, you might be suffering from a dropped conception.

In a recent speech to the Association of National Advertisers, posted on the AdAge Web site, Verizon Chief Marketing Officer John Stratton explained that his company couldn't get hold of any good data on just how reliable AT&T's network is. So it commissioned a third-party survey, one that seems to have sent it giddy with joy.

"What we saw, we sort of suspected, but it was almost astounding," he said.

So almost astounding, in fact, that Stratton said the company canned its fourth-quarter holiday campaign, which had already been produced but not yet aired (and presumably did not mention AT&T), and began mapping out its besmirchment of its rival's alleged network deficiencies.

"There was a bit of fact here that needed to be expressed aggressively to the marketplace," he added.

The bit of fact, which AT&T feels has been stretched into the part of the bookstore entitled "fiction," revolved around the accusation that AT&T's network has more holes than your average chunk of emmental.

The new Verizon ads seem certainly to have stirred a girding of loins in the marketplace and perhaps helped sales of the Droid, which are approaching 1 million.

Stratton added that because people are using cell phones in so many more ways, the strength of a company's network will be an increasingly important factor in consumer choice.

Strangely, he said nothing about Verizon one day offering the iPhone on its network.

There again, with the agility the company showed in producing the anti-AT&T ads so quickly, perhaps they're already shooting some happy Verizon iPhone ads. You know, just in case. You know, somewhere in Fiji, perhaps. You know, with the money they're saving now that AT&T has dropped its lawsuit against the map ads.

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.

(Credit: Phandroid)

Oh, you knew someone was going to do this. So let's just get it over with. And though some might think of this as a battle between the Droid and the iPhone for the nation's morality, let's be open-source about it: someone's trying to make a lot of money from cell phone porn.

A company with the obtusely childlike name MiKandi has launched a mobile app store that will exclusively cater to adults whose brain food consists of content that reflects their age. Yes, the sort of stuff some prefer to refer to as porn.

MiKandi's publicity material naturally avoids this term, referring to the more PC phrase "adult only." However, there is a little kink in its offering. According to Android fanperson site, Phandroid, the MiKandi Market apps only work with Android phones and not with Apple's more morally minded handsets.

Cupertino steadfastly sticks to its policy of refusing to allow apps filled purely with adult content, though some might dispute whether its definition of "adult" isn't occasionally a little idiosyncratic.

Not for a moment would one suggest that Verizon or Motorola or the deities at Google are necessarily in favor of porn apps. However, MiKandi is attempting to take advantage of the fact that the Android system is more open than the iPhone's.

So while the Android Market itself doesn't offer porn, nothing on your Droid phone prevents you from using MiKandi's services. The wise people at Phandroid do, however, offer stern warnings about MiKandi's workings.

Despite attempting to use MiKandi's services, purely for scientific purposes, Phandroid failed to actually secure access to any mature content. Remember, children, this sort of thing will always be a somewhat risky business.