Wireless

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.

Google is derailing the GrandCentral Web site in order to get fully onboard its Google Voice train.

Google sent out an e-mail to GrandCentral users Saturday announcing that it will be closing down the GrandCentral Web site on December 31.

Google Voice, of course, is the new version of the GrandCentral technology Google acquired in July 2007. Under the service, people pick a phone number from Google Voice; when others call it, Google can ring all the actual phones a person uses and handle voice mail.

Google Voice is still in beta, but GrandCentral users have had the option to upgrade since last spring. Old messages, however, are still on the GrandCentral site, so Google strongly suggests "downloading any messages or contacts that you want to keep in the next 43 days," the e-mail read.

Perhaps this signals that Google Voice is nearing a public launch?

Earlier this month, Google announced its intention to acquire Gizmo5, an Internet telephony company it plans to merge into the Google Voice team. Gizmo5 is a Web-based VoIP client that lets you make phone calls over the Internet, similar to programs like Skype.

Sony is planning a new online store a la Apple's iTunes, but with a few twists.

Announced at a strategy meeting in Tokyo on Thursday, the new service will hawk music, movies, books, and other downloadable content geared for its various electronics, including TVs, mobile phones, music players, and computers.

The service, which Sony aims to launch next year, will link the company's devices and digital content that it produces--setting it apart from other online stores.

"That's the kind of combination that I think is not seen anywhere else," Kazuo Hirai, Sony executive vice president for networked products and services, said in an interview with the Associated Press. "That I think is where our core competence lies, and that's a differentiator for Sony."

Hirai also spoke about the new service with BusinessWeek, saying that it won't just sell products but also tap into social networking by letting people upload their own photos or videos and connect with each other.

"It's not just access content, stream it, and enjoy," Hirai told BusinessWeek. "What are your friends watching right now? There's a screen that says all the programming that's available. It highlights all the things that your friends are watching, for example. It's a community experience."

Called the Sony Online Service for now, it will model itself after the company's successful PlayStation Network, a free service that has captured 33 million registered users who download movies, access social networks, and grab games for the PS3 and portable PSP console. Hirai said that gamers will be able to access the new online service directly through their PlayStation Network accounts.

Of course, Sony has been down this road before in 2005 with its late Sony Connect music service. The aborted iTunes clone was done in by internal politics and a failure to connect with consumers, forcing the company to shut it down in 2007.

But with a new, more cohesive management team put in place by CEO and president Howard Stringer, Sony is hoping to avoid the in-fighting that helped kill Connect.

Sony needs a shot in the arm at this point. Though the company pioneered the portable music concept 30 years ago with its Walkman, it has struggled to compete in the Digital Age. Continuing a string of quarterly losses, Sony took a $292 million net loss in its recent second quarter. Despite cost cuts and layoffs, the company is projecting a total loss of $1.3 billion for the full fiscal year.

Nokia said Friday that a streamlining effort could result in the elimination of as many as 330 positions from its research and development staff, or about 2 percent of its global R&D workforce.

Microelectronics research at Nokia.

(Credit: NOkia)

The changes will likely hit up to 230 workers in the company's Oulu site in Finland and roughly 100 at its Copenhagen site. Nokia said it plans to offer voluntary severance packages to the affected workers and to find alternative jobs for as many people as possible.

The company currently employs more than 17,000 workers in its R&D business. It has 2,000 employees at the Oulu facility and 1,000 in Copenhagen.

Though Nokia still holds the top spot in the smartphone arena, its dominance has been eroded by competition from the likes of Apple and Research In Motion. A recent In-Stat report found that Nokia's share of the smartphone market had dropped to 35 percent in this year's second quarter compared with 50 percent in the prior year's quarter.

Another report from Strategy Analytics revealed that Apple had surpassed Nokia in cell phone profits during the third quarter, the first time that Nokia had fallen to second place.

Nokia's third-quarter results showed a net loss of $832 million, while sales dropped around 20 percent. Nokia Siemens, the network equipment maker run by Nokia and Siemens, has also been a drag on its owners, recently announcing its own layoffs and cost cuts as a result of its weak performance.

If you are considering buying a new BlackBerry, Android phone, or Netbook from Verizon Wireless, you better make sure you won't want to break your contract early, as the penalty for ditching your service before the end of the contract has just gotten a lot steeper.

But what does Verizon's move to increase early-termination fees mean for the rest of the wireless industry? That's a good question.

Verizon Wireless recently doubled its early-termination fee for what it calls 'advanced devices.'

(Credit: Verizon Wireless )

Early-termination fees are not new to the wireless industry. For as long as wireless operators have been selling and subsidizing cell phones, they've required customers to sign contracts. And they've penalized them for canceling their contracts early.

The phone companies say they must charge a fee to recover the cost if a customer quits his or her service early. These fees have angered many customers. Several class action lawsuits have been filed against cell phone carriers and some customers have won. Congress and the Federal Communications Commission have challenged the industry on this practice.

While it's very unlikely these fees will ever go away, as of mid-2008, all four of the major wireless carriers in the U.S. have been prorating their early-termination fees, so that customers near their end of their contracts don't pay the same fee as those just starting their contracts.

But now Verizon Wireless has shocked consumers and the industry by doubling its early-termination fee. Verizon representatives say it only makes sense that Verizon would raise this fee since it is subsidizing far more of the cost of sophisticated devices, such as smartphones.

In an effort to help consumers better understand these changes and to understand how other national wireless operators stack up, CNET has put together this FAQ.

How much is Verizon's new early-termination fee?
The new fee has been increased to $350 from $175.

Does this fee apply to all Verizon phones?
No, it only applies to contracts associated with the purchase of what Verizon calls an advanced device, such as a smartphone or Netbook at a reduced price. This change only applies to new contracts that started on or after November 15. For customers who signed a contract before November 15, the old $175 early-termination fee applies when they choose to end their contract early. This means that new Droid customers who bought their phones the first weekend it launched will not be required to pay the $350 ETF if they terminate service early.

Verizon and the three other major phone companies have been prorating their early-termination fees. Will this fee be prorated?
Yes, Verizon will continue to prorate the early-termination fee over the life of the contract. The rate will decrease by $10 each month of the contract. Verizon's previous prorate rate was $5 per month.

What about for non-smartphones or feature phones that run on Verizon's network? What is the early-termination fee for those devices?
The fee for non-smartphones will remain the same, $175. And the rate will decline by $5 a month during the contract.

Why is Verizon changing its policy now? It seems like it is just being stingy.
The company says that the $175 early-termination fee was set long before people were walking around with expensive, sophisticated, mini-computers in their pockets. The new early-termination fee more fairly reflects higher costs associated with advanced devices due to their more complex chip sets, microprocessors, and licensed software that perform more functions than other phones, the company claims.

Is there any way to avoid an early-termination fee or contract?
Yes. First, early-termination fees only apply if you cancel your service before the contract ends. But you also don't need to sign a contract if you'd rather not. But without a contract, customers will pay full retail price for the devices.

Verizon says it offers the option to purchase all its phones with either a two-year contract, one-year contract, or month to month, which requires people to pay full retail price for the phone. For example, the new BlackBerry Storm 2 is $179 with a two-year contract. But the phone would cost $539 without a contract. The new Motorola Droid is $199 after a rebate with a two-year contract. And it is $559 without a contract at the full retail price.

Verizon also offers prepaid wireless phones and service, which allow customers to buy their phones and add minutes of use in advance.

What about other national wireless operators? Have any of them announced they are following Verizon's lead?
So far neither AT&T, nor Sprint Nextel, nor T-Mobile USA have said they plan to raise the early-termination fees on their smartphone devices. An AT&T spokesman said he couldn't speculate on what the company might do in the future, but for now, the company is sticking with its current fee.

T-Mobile USA's spokesman didn't elaborate, but simply said the company has no plans to raise its rate right now.

Sprint Nextel also said it wouldn't raise its early-termination fees, and it criticized Verizon for doing it.

"We have no intention of matching Verizon's new ETF," said Sprint spokesman John Taylor. "We think the decision to double the early-termination fee just on smartphones doesn't make much sense. Why is Verizon trying to disincentive people from buying smartphones? We want people buying smartphones and using more data."

How much do these other national wireless operators charge for their early-termination fees?
Sprint 's early-termination fee is $200. The company reduces that fee beginning in the fifth month of the contract. Then the fee goes down $10 a month until it reaches $50.

AT&T's early-termination fee is $175 and it decreases by $5 for each month of your contract.

T-Mobile USA's early-termination fee schedule is a little more complicated. As of June 28, customers with a one-year or two-year contract with T-Mobile will see their early-termination fee drop from $200 to $100 if they end their contract with 91 to 180 days remaining on their agreement. If they end a contract with fewer than 91 days left on it, they will pay a termination of fee of $50. For customers who terminate their service in the last 30 days of their contract they will either pay the $50 fee or their standard monthly charge, depending on which one is cheaper.

Do these other carriers offer no-contract options?
Sprint allows some of its phones to be purchased for full retail price without a contract. However, the Palm Pre, which went on sale in June, requires a two-year data plan.

Sprint's prepaid brands Boost Mobile and Virgin Mobile USA also offer customers prepaid options that don't require a contract. And phones are purchased at full retail prices.

AT&T allows some phones to be purchased at full price without a contract, but phones such as the Apple iPhone must be purchased with a two-year contract and a $30 a month data plan. AT&T also offers prepaid phones.

T-Mobile USA also offers customers who don't want a contract different options, including T-Mobile Prepaid phones and plans, FlexPay, and month-to-month services including its new Even More plans.

Its Even More Plus plan allows customers to purchase any phone in T-Mobile's device lineup and sign up for a month-to-month rate plan without signing a contract. Customers pay full retail price for the phones, but have the option to purchase their phones using an Equipment Installment Plan over time until the phone is paid off.

For example, a customer purchasing the Google Android myTouch smartphone would pay $150 for the phone with a two-year contract. But with the Even More Plus plan, the customer would pay $400 for the phone with no contract. If the customer wanted to use the Equipment Installment Plan, he or she would pay $20 a month for the phone over 20 months.

Cisco is offering a free iPhone app that will allow people to get customized alerts on new security threats and other information for safe Web browsing.

The app, which will be available on Friday in the Apple iTunes store, provides information about new malware signatures, bulletins for how to mitigate against threats, ways to see if particular Web sites are compromised, as well as links to podcasts and videos.

The Cisco SIO To Go iPhone app gets its information from the company's Security Intelligence Operations (SIO) system which gathers information in real time from 700,000 sensors located at customer sites, ISPs, and other sites around the world. The data from the disparate sources allows Cisco engineers to do threat correlation to detect Internet attacks and spam campaigns.

The app is designed for professionals and security geeks, not the average consumer, said Michael Weir, Cisco security marketing director.

"I can make it applicable to my needs and the security needs of my [enterprise] network," he said.

The Cisco SIO To Go iPhone app offers information about the safety of particular Web sites.

(Credit: Cisco)