Wireless

Ericsson is slowly building its wireless business by scooping up parts of struggling Nortel.

Ericsson announced Wednesday that it has won a bid to buy Nortel Networks' North American GSM business for $70 million in cash. The Swedish communications giant went into the deal with a partner, Austria-based Kapsch CarrierCom, which itself spent $33 million to buy Nortel's GSM operations in Europe and Taiwan.

This marks the second major deal in recent months between Ericsson and Nortel. In July, Ericsson won another bid to pay $1.13 billion for Nortel's CDMA and LTE wireless technologies.

GSM (Global System for Mobile communications) is one of two technologies used for mobile phones. It's the standard in Europe and is dominant around the world, while CDMA (Code Division Multiple Access) is more common in the United States. In recent years, however, GSM has grabbed a larger footprint among North American carriers.

Ericsson already holds a strong slice of the global GSM market, especially in Europe, and has been eager to expand its grasp in North America.

On its end, Nortel has gradually been selling its wireless operations as a way to stay afloat in the midst of declining business and rising debts after declaring bankruptcy almost a year ago. On Tuesday, the company announced it would sell its Metro Ethernet operations to telecom equipment maker Ciena.

As part of the purchase, Ericsson will bring on more than 350 Nortel employees in North America. With the addition of Nortel's business and a recent deal with Sprint, North America will become Ericsson's biggest operation, said the company, jumping to 14,500 employees from just 5,000 at the beginning of 2009.

Ericsson noted that its entire North American business captured revenue of around $2.7 billion in 2008, mostly from sales of GSM and WCDMA (Wideband CDMA) equipment and services. Nortel's North American GSM business generated around $400 million in 2008.

No date was given for closing the deal, which is subject to the usual regulatory approvals in both the U.S. and Canada.

There's been a lot of talk in 2009 about the next generation of wireless technology, known as 4G wireless broadband, but the current generation of 3G wireless technology is far from dead.

For many wireless operators, especially those that have built their networks using the global standard GSM, the current 3G wireless technology called HSPA still has some legs left. And while many carriers are planning their 4G networks, hundreds of wireless providers throughout the world are also expected to upgrade existing network infrastructure with the latest versions of the 3G wireless technology to increase speeds and offer new services. And because these network speeds will match current 4G speeds, consumers will likely see no difference in capability.

For this reason, the next few years will likely continue to be all about 3G technology. And 4G services, where they will be available, will likely appeal only to niche audiences.

"The average consumer doesn't care about peak data rates or network acronyms," said Dan Warren, the GSM Association's director of technology. "They just care about the experience. They want to be able to watch YouTube or get live traffic updates on their smartphones. And they don't care whether it's a new network or a current network that is being upgraded."

Mobile operators around the world are seeing a huge growth in the amount of mobile data traffic across their networks. This trend is expected to continue as more consumers buy smartphone and jump onto the mobile Web. By 2014, mobile devices are expected to send and receive more data in one month than in all of 2008.

Three-quarters of this traffic will be attributed to Internet access, while nearly all the rest will be due to music and video streaming, the GSM Association recently said. The new usage patterns will put strains on carrier networks, and operators are planning now to keep up with demand. Already, AT&T, which is the exclusive carrier for the iPhone in the U.S., is struggling to keep up with the heavy data usage.

While 4G networks will certainly increase network speeds and capacity, these networks and the devices that can be used on these networks will not be built overnight. This is why many carriers who are looking to meet demands today are turning toward advanced 3G upgrades.

T-Mobile USA, the smallest of the major U.S. wireless operators, has adopted this strategy. The company is currently upgrading its existing HSPA network, which launched just last year, to HSPA Plus, the most advanced 3G technology available. It has already started testing the new service in Philadelphia. And the company expects to deploy the lion's share of its upgrade across its entire footprint in 2010.

Meanwhile other operators, such as Verizon Wireless and Sprint Nextel are looking toward 4G technologies.

To the 4th power: WiMax vs. LTE
Two technologies dominate the 4G landscape: WiMax and LTE. In the WiMax corner is a company called Clearwire, which is backed by Sprint and Intel, as well as the nation's biggest cable operators, Comcast and Time Warner Cable. The company is currently building its network and has 13 cities up and running with service.

In the LTE corner is the rest of the wireless industry, including at least 50 mobile operators worldwide that have already committed to LTE plans, trials or deployments. The first LTE networks, including one being built by Verizon Wireless here in the U.S., are expected to be rolled out next year. NTT DoComo of Japan and TeliaSonera of Sweden have also committed to deploying LTE next year. That said, major network expansions aren't expected until at least 2011.

One of the problems that 4G carriers will face is that initially their networks will be islands of service. And it will take years for operators to blanket the country with their services. For example, Clearwire has mostly deployed its service in cities, such as Baltimore, Philadelphia, and Chicago. Verizon will likely do the same thing with its LTE network. And then the networks will spread from there. Verizon expects to launch 25 to 30 with 4G service in 2010.

Another problem 4G operators face is a dearth of new devices. Clearwire's WiMax service has been available for more than a year in some cities, and it still only offers USB modems, PC cards, subscriber modems and WiMax-enabled laptops. So far no one has started selling mobile devices, such as WiMax embedded phones. In fact, in January Nokia, one of the initial eco-system backers of WiMax, canceled its N810 WiMax Edition tablet. More devices aren't likely to be developed until the network is more extensive. Sprint is offering a dual-mode service that allows laptop users to switch between its 3G mobile broadband service and the 4G WiMax service, where it's available. But the service is only available for laptops.

As for LTE, no devices exist today because no LTE network exists. Since most of the world's wireless operators will likely use LTE for their next-generation networks, it's a fair bet that there will eventually be a plethora of LTE devices. And carriers, such as Verizon, will likely embed dual-mode chips that work with 3G networks, too. But given the fact that new wireless technology first shows up in laptops and then moves to phones, it's unlikely that consumers will see any LTE-enabled mobile devices for at least another 18 months to two years. And after that, it could take many more months to fill the pipeline.

Meanwhile, there are already 1,600 HSPA-enabled devices on the market, including smartphones, Netbooks, and laptops, according to the GSM Association. There are currently 321 HSPA networks across 120 countries worldwide, and 285 of these networks are commercially live, supporting more than 167.5 million connections.

And while Clearwire reported it added 173,000 new WiMax subscribers in the third quarter of 2009, the GSMA reports that more than 9 million new HSPA connections are added globally every month, with about 1.3 million of these connections coming from the U.S.

The need for speed
Of course, it's true that current 3G technology is considerably slower than 4G networks. Today's 3G technology, whether it is HSPA or EV-DO, offers typical download speeds of between 400 Kbps to 700Kbps. But the latest version of HSPA, called HSPA Plus, offers average download speeds between 4 Mbps and 6 Mbps. This is the same download speed range that Clearwire's WiMax service offers today.

It's difficult to compare these speeds with LTE, since there are no commercial deployments of LTE. But some experts say average speeds for LTE will initially exceed the 4Mbps range. Some people are expecting the service to offer average speeds around 15 Mbps to 20 Mbps.

Because there is little difference between WiMax and HSPA Plus in terms of speed, many operators are opting to invest in upgrading their networks to this technology while they plan for their eventual LTE migration. The GSMA says there are now 56 networks globally deploying HSPA Plus. And 28 of those networks are now live.

T-Mobile USA, as mentioned earlier, is one of them. AT&T initially indicated it was looking into HSPA Plus, but the company has more recently backed away from those claims. Instead, the company has said it is upgrading to a different version of HSPA called HSPA 7.2. AT&T's chief technology officer, John Donovan, said at the CTIA Wireless trade show last month that AT&T will start its LTE upgrade in 2011.

Mark Siegel, a spokesman for the company, said AT&T is keeping its options open.

"We are trying to stay flexible in how we increase 3G speeds as we transition to LTE," he said in an e-mail.

This means that T-Mobile is likely to be the first major U.S. carrier to compete against Clearwire's WiMax service.

T-Mobile has been criticized for entering the 3G market in the U.S. late, but the company has been working aggressively to catch up. At the beginning of 2009, T-Mobile could reach about 100 million people with its 3G wireless service. By the end of the year more 200 million people will have access to its network, according to Neville Ray, senior vice president of engineering operations for T-Mobile.

By contrast, Clearwire's WiMax service currently reaches about 30 million U.S. residents. And the company plans to reach about 120 million by the end of 2010.

As for subscribers, Clearwire said that at the end of the third quarter of 2009 it had about 555,000 subscribers, which includes people who have subscribed to the service via its partners Sprint, Comcast, and Time Warner, which are reselling the service. T-Mobile finished the third quarter with a total of 33.4 million customers.

"We have been rapidly expanding the reach of our network over the past 12 to 18 months," Ray said. "And in 2010 we are looking to jump ahead with a leading 3G experience. The only thing that will come close are data sticks from Clearwire. And their service is limited geographically."

Ray said the HSPA-Plus strategy allows T-Mobile to better compete against AT&T and Verizon, because it allows T-Mobile to stretch its 3G investment while still offering faster and more ubiquitous coverage for consumers.

"We may have been a little late to the 3G dance," Ray added. "But clearly the mobile data explosion is rapidly growing today. And our plan for 2010 will put us in a leading position to handle these demands."

T-Mobile USA hasn't said for certain that it will use LTE when it eventually builds a 4G wireless network. But considering that its parent company in Europe, T-Mobile, has committed to using the technology, it's a safe bet the U.S. affiliate will as well.

Ray said for now it's better for T-Mobile to leverage HSPA's existing device ecosystem. The company is already offering several devices, such as the Motorola Cliq, the HTC myTouch, and the Samsung Behold that are equipped with the faster HSPA 7.2 technology. And he said that T-Mobile expects to have HSPA Plus handsets on the market in 2010.

"Because there are a large number of operators throughout the world upgrading to HSPA Plus, it's already on the device roadmaps," he said. "This means we can bring the advanced 3G experience to consumers in mobile devices in 2010. And that is not the case with either LTE or WiMax."

The next generation of wireless may be on its way, but it's a slow road. In the meantime, consumers will likely get more out of faster 3G networks, such as T-Mobile's network than the budding services from Clearwire or Verizon Wireless. It will certainly be a fun horse race to follow.

Nokia announced Tuesday that it will lay off about 220 employees from its R&D division in Japan, a bit more than 1 percent of the company's worldwide R&D workforce.

The layoffs are part of the company's efforts to align its global research & development operations with new products. Nokia Siemens Networks, the network equipment maker owned by Nokia and Siemens, will not be affected by the reorganization, said Nokia.

Just last week, Nokia said that it will slash 330 positions in total from its R&D units in Finland and Copenhagen as part of the global revamp.

Though Nokia is still the world's leader in smartphone shipments, it has been undercut lately by competition from Apple and Research In Motion. Recent reports have pegged a decline in market share, while Nokia's third-quarter results showed a net loss and lower sales.

eBay is playing virtual Santa this holiday season with a free "Deals" app for the iPhone that leads consumers to the better buys on the auction site.

eBay Deals

(Credit: eBay)

Launched Tuesday, eBay Deals is designed to deliver a stream of the best deals on the site from across hundreds of millions of listings. Like eBay Mobile, the company's regular iPhone app, Deals lets you search, shop, and pay for your items from your iPhone or iPod Touch.

All featured deals spotlight items with no bids, no reserve price, free or fixed-rate shipping, and less than four hours remaining to bid.

You can browse deals across eight categories, including apparel, computers, electronics, and collectibles. If you spot a deal you like, just tap on it, and its listing pops up where you can watch it or bid on it. Not crazy about the current deals? Just shake your iPhone or iPod Touch, and a new set of deals appears.

If you spot a deal that may be better for someone else, you can e-mail it or share it via your Facebook or Twitter account.

Besides browsing eBay's virtual aisles, you can search for your own deals by entering a product name, category, and price range. You can save your customized search results to return to them later.

Starting Friday, eBay will also be unveiling a "12 Days of Deals" feature promoting a new promotion each day until December 8. Friday's deal will offer Samsung's N120 Netbook.

"As the world's leading online marketplace we have insights into how people really want to shop...and they clearly want to shop on their phones," eBay Marketplaces President Lorrie Norrington said in a statement.

Though designed for the mobile crowd, eBay's daily deals can also be found online at the auction site's Deals page.

eBay has been busy lately sprucing up its mobile auction site for the holidays. The vendor recently added social networking to its eBay Mobile app, letting you share a listing through e-mail, Facebook, or Twitter.

Since its launch in 2008, eBay's mobile app has been downloaded more than 5 million times, said the company. With a purchase made every two seconds, the company said, more than $500 million worth of items are likely to be traded through eBay mobile this year.

It seems that Apple doesn't respect Verizon's Droid phone quite as much as it does Microsoft's PCs. But two new ad spots, launching Monday evening, come as close as Apple has done thus far to directly attack the allegedly do-it-all robotphone.

The Droid, you see, went after Apple in its teaser campaign with some telling remarks and the hearty claim that Droid does what the iPhone doesn't. Then Verizon decided it would be fun to knock both the iPhone and AT&T's spotty 3G coverage with its "Misfit Toys" concept.

AT&T has already replied by hustling a hastily-dressed Luke Wilson into directing a few resentful pins at Verizon's effigy. However these new ads, while entirely in keeping with the iPhone tone and style, end with a line that expressly assaults the doings of Droid--or rather, its alleged non-doings.

Both ads focus on the iPhone's ability to allow you to use voice and data capabilities simultaneously over the AT&T network. By asking gently at the end of each spot "Can your phone and your network do that?" Apple is bursting what it sees as the inflated stealth bombing that accompanied the launch of the Droid.

Apple iPhone Ad - Did You See My Email? from Arik Hesseldahl on Vimeo.

Apple iPhone Ad - What Time's The Movie? from Arik Hesseldahl on Vimeo.

These ads don't mention the Droid or Verizon by name. But the fact that Apple has decided to address its rivals, however obliquely, suggests that one can look forward to more accusations, more bickering, and more attempted one-upmanship.

'Tis the season of goodwill, after all.

AT&T launched a prepaid wireless broadband service on Monday, following the lead of competitor Verizon Wireless.

Pricing for the new AT&T DataConnect Pass plans are the same as what Verizon Wireless is charging. Customers can pay $15 for a daily pass with a data usage cap of 75 megabytes. A weekly plan costs $30 and allows for 250MB of data usage. And the monthly plan is $50 and offers 500MB of usage.

While AT&T and Verizon Wireless have offered prepaid cell phone service for years, up until now the companies have required customers sign a contract for their wireless broadband services. Wireless broadband services allow users to connect their laptops to the Internet via the carriers 3G wireless network. These services have mostly been targeted at business users.

As these big phone companies move mobile broadband services into the mainstream, they are expanding their payment options to attract more consumers. But for many consumers in this tough economic environment, taking on a new contract and monthly service fee is simply too much. As such, the prepaid model is now moving to these services as well.

Prepaid niche players, such as Leap Wireless and Virgin Mobile, have recognized the demand for prepaid wireless broadband services, and they are already selling services to address the market. Leap Wireless offers an unlimited usage plan for $40 a month. And Virgin Mobile, which is now owned by Sprint, offers a $60 plan that has a usage cap of 1 gigabyte for a month.

Will these new prepaid offerings be enough to entice consumers to sign up for 3G wireless broadband service? That's a question yet to be answered. But AT&T, especially, should be careful what it wishes for. The company's 3G wireless network is already overburdened with iPhone users' heavy wireless data usage.

Apple's App Store has been a runaway success, but it's also been mired in controversy due to the application approval process. The company, however, isn't making apologies for its stringent gatekeeping and insists it's acting in the best interest of its customers.

(Credit: Apple)

"We've built a store for the most part that people can trust," Phil Schiller, Apple senior vice president of worldwide product marketing, told BusinessWeek in an interview posted Monday. "You and your family and friends can download applications from the store, and for the most part they do what you'd expect, and they get onto your phone, and you get billed appropriately, and it all just works."

Schiller offered BusinessWeek a breakdown of app rejections. Of the applications sent back to developers, about 90 percent are due to technical issues and simply need code tweaks to make the apps work properly.

About 10 percent are rejected because they try to steal personal data or try to help someone break the law or because they contain content that Apple considers inappropriate, BusinessWeek reported.

About 1 percent are turned away for reasons that fall into gray areas, Schiller told BusinessWeek.

One of Apple's latest run-ins with a developer was over the use of Apple product images in Rogue Amoeba's audio-streaming app called Airfoil Speakers Touch. After three-and-a-half months of back and forth over an update for the already-live app, Apple is apparently going to let the company resubmit the app update with the product images intact as originally submitted. However, the ordeal has apparently soured Rogue Amoeba on future development for the App Store.

"At this time, we have no plans to return to the platform," Rogue Amoeba CEO Paul Kafasis told CNET on Monday. "Apple has corrected one small problem with their review process. But the platform as a whole still has many issues that need to be addressed before we consider it a viable place for our business to commit resources."

The App Store currently has more than 100,000 third-party applications available for download. Apple has reported more than 2 billion downloads since the online store opened in July 2008.

Dell and China Mobile on Monday offered up more details about the Dell Mini 3i smartphone, which will be going on sale in China later this month.

Dell's Mini 3i smartphone

(Credit: Dell)

The Android-based device, Dell's first smartphone, will support e-mail, instant messaging, and both MMS and SMS messaging. It will include Bluetooth and GPS capabilities and a Mini USB connector, and will accommodate Micro SD cards up to 32GB.

The quadband GSM/EDGE phone weighs 105 grams and includes a 3-megapixel camera with zoom, auto-focus, flash, video capture, and photo-editing capabilities. The touchscreen has a 640x360 resolution. Dell had already confirmed earlier this month that the Mini 3i would have a 3.5-inch high-definition screen.

Under the hood, the device is running China Mobile's OPhone software, a customized version of Google's Android operating system.

Like other Android phones, the Mini 3i will provide access to an online store, in this case, China Mobile's Mobile Market, where people can download apps, games, wallpaper, and ringtones. Users will be able to run different widgets on the home screen to keep on top of the news, weather, stock prices, and sports scores.

Dell said it has been collaborating with China Mobile for about a year on the development of the phone. The two companies teamed up earlier in the year to integrate a 3G data card for Dell's Inspiron Mini 10 netbook for the Chinese market. With more than 500 million customers, China Mobile is the world's largest mobile service provider, according to Dell.

Dell was initially mum on details when it first mentioned the Mini 3i about 10 days ago. But the company did reveal that China Mobile and Brazil's Claro would be the first global providers to carry its new smartphone.

Like China Mobile, Brazil's Claro boasts a huge subscriber base, with 42 million customers in Brazil alone. By selling the Mini 3i through both providers, Dell can potentially capture a much larger mobile audience than it could through any U.S. carriers.

Arriving in China Mobile stores by the end of November, the Mini 3i will shortly thereafter be sold directly from Dell. For those interested in color schemes, the Mini 3i will be available in Red Passion and Oiled Bronze--the image below shows the Red Passion treatment:

Dell Mini 3i smartphone

(Credit: Dell/China Mobile)

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.