Wireless

This Roamobi handset is smaller than a credit card.

(Credit: Roamobi)

Correction at 10:01 a.m. PDT December 7: VMSP licenses will be sold at $41,200.

How will demand for mobile technology play out in developing countries? Mike Kellett and Joe Morgan are tackling this issue as they prepare to launch their global mobile platform at CES 2010.

Although their joint venture, IP2, isn't the first company to address the need for low-cost international cellular service, it's taking a different approach. "We have a system that doesn't depend on government intervention," says Mike Kellett, co-founder of IP2, based in the U.K.

IP2 will launch a cellular service based on the concept of VMSP, or virtual mobile service provider. Anyone can start a VMSP and sell services and handsets. Usually, a license to operate as a local mobile service provider can cost up to $5 million, but IP2 will be selling VMSP licenses for only $41,200.

The handsets provided by IP2, which are smaller than a credit card, will be priced at $25. Communication between subscribers will be free, along with incoming calls in more than 50 countries. Short codes, text messages, and voicemail retrieval will all function in IP2's internationally based mobile service.

"We want to empower local companies to become VMSPs," Kellett said. "We feel that this will be supported by NGOs and local government, allowing them to become local players in the mobile industry."

Participating NGOs might loan a local enough money to purchase phones and prepaid minutes to become a micro-dealer. Locals who wish to subscribe to the service would contact a dealer or a micro-dealer to obtain a phone and SIM card.

The service would be marketed by word of mouth, as selling the phone service on the Internet eliminates the opportunity for locals to financially benefit from the program, Kellett explained. "We'd like to step backwards to the ordinary man who has no means to sell but face-to-face."

Micro-dealers will manage their business through a text messaging system. Sending a message to an IP2 short code would engage them in an automated dialogue, allowing them to view their balance or transfer money, for example.

IP2's cellular service vies to connect developing and developed countries. Kellett suggests that refugees attempting to contact relatives or small companies making worldwide business deals will benefit from an international service that doesn't charge for roaming and works on a prepaid model.

Contemporary services like 3G, 4G, and Wi-Fi aren't available in developing countries, as most still run on GSM and 2.5G networks. "Our product allows anybody in the developing world with an old phone to have international mobile service," Kellett said.

After 10 years of research and development, Kellett and Morgan will launch the IP2 product under the brand Roamobi. At launch, the service will readily support millions of international subscribers.

Finally, some good news from Nokia.

On Wednesday, the world's largest maker of cell phones said it expects sales volumes of mobile handsets to increase 10 percent in 2010 from 2009, as the market rebounds from a worldwide recession.

"Going into 2010, the overall mobile-devices market is stabilizing, and it is growing more in the areas where Nokia has competitive advantages," Nokia's new chief financial officer, Timo Ihamuotila, said in a statement.

Nokia said its worldwide market share of 38 percent would remain unchanged next year but that the company would increase revenue by focusing on stabilizing pricing on handsets. The average selling price of Nokia's phones had slipped over the past year. In the third quarter of 2009, the company's average price for a handset was 62 euros, or about $94. That was price was stable, compared with the previous quarter, but it was down from 72 euros during the same quarter a year ago.

This past year has been a tough one for Nokia and the rest of the cell phone industry. Nokia was hit hard by the economic downturn, as consumers put the brakes on spending. And for the fourth quarter of 2008, it saw sales drop 19 percent during the quarter, compared with the same quarter in 2007. And the company's profit fell about 69 percent.

Nokia slashed its annual forecast for 2009. And to cope with the deteriorating economic situation, it also announced that it would reduce about $905 million from its budget. Much of the cuts resulted in thousands of workers losing their jobs.

Besides the economic downturn, Nokia has been facing increasing competition from companies such as Apple, with its iPhone, and Research In Motion, with its BlackBerry devices. And now the company is facing even more competition in the smartphone market from Google Android phones, which will hit the market en masse in 2010.

Even though Nokia launched a new smartphone in 2009, the N97, the company still managed to lose market share in the high-end smartphone category.

Nokia says it's made improvements to the Symbian operating system that is used to power its high-end phones. But as the market gets more crowded with devices, it won't be easy to compete against popular iconic devices such as the iPhone. What's more, Nokia still hasn't managed to crack the U.S. market, the fastest-growing one for high-end handsets.

Today only a couple of Nokia's higher-end smartphones are subsidized and sold through U.S. carriers. This is a major problem, considering that the vast majority of American cell phone users buy subsidized devices in exchange for service contracts. The iPhone is currently selling for as little as $99 with a two-year contract from AT&T. Meanwhile, the Nokia N97 costs more than $500 at full retail.

Nokia has also been focusing a lot of effort on building up its services business. The company is building a marketplace and selling services through its Ovi online portal, which enables cell phone consumers to buy music, videos, and navigational maps.

The company is expecting to generate 2 billion euros in sales next year from its services unit. And it expects to grow this number in 2011, when it's expected to have more than 300 million active Ovi users. It plans to maintain a focus on applications for its phones, targeting net sales from its services unit of 2 billion euros or more in 2011 from an expected 300 million active users by the end of 2011.

Meanwhile, Nokia's joint venture with Siemens to sell telecommunications equipment has also been struggling. In October, the company was hit with a 908 million euro goodwill write-down on the business unit.

But Nokia now believes that the Nokia Siemens venture will also gain market share in 2010, even as the communications infrastructure market is expected to be flat in euro terms from the previous year, Nokia said.

(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.

Despite increased publicity over the dangers of texting while driving, many teenagers (like many adults) have yet to get the message.

A third of cell phone users aged 16 and 17 admitted to texting while driving, according to focus groups and a report released Monday by Pew Research. For the report, "Teens and Distracted Driving," Pew surveyed 800 kids aged 12 to 17 about their cell phone use in the car. Teens 16 and 17 years old were asked about their role as drivers, while younger ones were questioned about their experiences as passengers.

Of all teens surveyed, 75 percent said they own a cell phone and 66 percent of those text. Half of teens 16 and 17 who own a cell phone said they've talked on the phone while driving.

Among passengers, 48 percent of teens 12 to 17 said they've been in a car while the driver was texting, and 40 percent have been in a car when the driver used a cell phone in a way that put everyone in danger.

Though some teen drivers said they only text at a red light or will hand the phone over to a passenger to text, others didn't seem to care about the risk.

Pew found one high school boy who said he thinks texting while driving is "fine," adding, "I wear sunglasses so the cops don't see [my eyes looking down]." A high-school girl admitted that she texts "all the time," and that "everybody texts while they drive...like when I'm driving by myself I'll call people or text them cause I get bored."

(Credit: Pew Research)

Many teens expressed concern about being in a car while the driver is talking or texting on a cell phone, noted Pew. But in several cases, the driver was the teen's parent.

"I am concerned because when my mom drives she talks on the phone a lot so she is still alert but she can get kind of dangerous," reported one young teen. Another boy said, "Yeah [my dad] drives like he's drunk. His phone is just like sitting right in front of his face, and he puts his knees on the bottom of the steering wheel and tries to text."

This latest Pew research confirms a deluge of other studies about the dangers of cell phone use while driving. One study by the VirginiaTech Transportation Institute found that truck drivers who texted were 23 times more at risk of a "crash or near crash event" than "nondistracted driving."

A Vlingo survey from May discovered that 26 percent of mobile phone users said they texted while driving. A test conducted by Car and Driver magazine showed dramatically slower reaction times by two drivers who tried to brake while texting.

Early Pew research from 2006 (before texting became widespread) found a quarter of adult cell phone owners felt that using their phone compromised their ability to drive.

Certain states, such as California, Connecticut, and Oregon have passed laws banning texting or talking on a mobile phone while driving. The U.S. Senate is currently looking at a bill that would give federal dollars to other states who pass similar laws.

In late September, Transportation Secretary Ray LaHood held a summit to discuss the issue of distracted driving. Around that time, President Obama signed an executive order banning federal workers from texting while driving.

Pew's Internet & American Life Project conducted its survey of 800 teens last summer. Pew and the University of Michigan also held nine focus groups with teens 12 to 18 between June and October to discuss the issue of driving and cell phones. Pew's results included the findings from both the survey and focus groups.

Ever wander into one of those Verizon or AT&T stores, attempt to have a conversation with one of the smartly dressed salespeople, and whisper to yourself, "What kind of emotionally awkward humans end up working in a place like this?"

Well, I have good news for you.

Ricky Gervais, who made David Brent perhaps the most painfully sympathetic character in modern television in the original BBC version of "The Office," has been asking himself the very same question. "Phone Shop" a new British sitcom, enjoys Gervais as its script editor (he reportedly took one look at the idea and volunteered his involvement). The pilot airs Friday evening on Channel 4.

"Phone Shop" will explore the life of salespeople in a soul-sucking mall cell phone shop.

(Credit: Channel 4)

Unlike "The Office," which gained existential pleasure from the old-world business of paper manufacture, "Phone Shop" is set in a mall cell phone store.

The pilot episode follows the troubles experienced by trainee salesman Christopher, who has to sell a cell phone by 6 p.m. as part of his one-day trial.

Clearly this series will reside in the emotional halfway house that has just two difficult residents--comedy and tragedy. And one wonders just what impression will be left by the arduous task of pushing yet more portable technology on a populace that bristles with sensory overload.

I am deeply concerned that the cell phone business will not come out so beautifully in "Phone Shop."

You see, The Independent quoted Angela Jain, head of the E4 Channel, which has bought the series. And beneath her words I sense a little cackling: "Everyone's got a mobile phone and has had some encounter in a phone shop. It's also about those difficult dead-end jobs that everyone has at least once in their lives."

So the Droid and the iPhone are being pushed by people in dead-end jobs? What has become of our brave new, smartphoned world?

Motorola is looking to sell its business for TV set-top boxes and network equipment for about $4.5 billion, according to a Wall Street Journal report Wednesday.

The newspaper cites people familiar with the matter who say Motorola is in the early stages of finding a buyer for the business unit. Potential buyers include private-equity firms and competing equipment makers.

Motorola representatives declined to comment, citing a company policy not to comment on speculation or rumors.

The company has three major units: mobile devices, enterprise mobility, and home and networks mobility. And all three business units have been struggling over the past year. It had planned to spin off its mobile-device unit, which makes the company's cell phones, but that plan was put on hold when it became clear that the company wouldn't be able to find a buyer. In the meantime, it brought in co-CEO Sanjay Jha, who has been trying to revive the ailing mobile-device business.

Motorola, once the No. 2 handset maker around the world, got into trouble after the company couldn't come up with a hit phone to replace the popular Razr. And over the past two and half years, it's been fighting an uphill battle in the high-end smartphone market against newer players such as Apple and Research In Motion.

About a year ago, Jha reset the company's focus, and Motorola committed itself to building phones using the new Google Android operating system. The first of these phones, the Motorola Cliq, which is being sold on T-Mobile USA's network, and the Motorola Droid, which is being sold exclusively in the United States by Verizon Wireless, went on sale this fall.

So far, reviews have been good. And the Droid, in particular, has gotten a lot of attention. Motorola expects to launch another 20 Android devices next year.

While prospects for the mobile market are improving, the company is still losing money in this division. For the third quarter of 2009, sales for Motorola's mobile-handset business dropped 46 percent to $1.69 billion, and it lost about $183 million, compared with a year-ago loss of $840 million.

Motorola's enterprise mobility unit, and its set-top box and networking-gear division, have been keeping the company afloat for the past couple of years. But now there are signs that these businesses are also hitting hard times.

During the third quarter, revenue in the enterprise mobility business was down 13 percent to $1.77 billion. Still, this division generated a net income of $306 million, down from $403 million a year ago.

Motorola also saw declines in its home and network mobility business. This business unit includes TV set-top boxes and wireless-networking equipment. This business unit posted the most sales for the company during the quarter, bringing in $2.01 billion. But this figure was down about 15 percent from the same quarter a year ago. In addition, the company's profit was about $199 million, down from $263 million during the third quarter last year.

Motorola blamed the slip in profits on a decline in sales of home entertainment devices to cable and phone companies. That said, the division still remains Motorola's most profitable.

Even though sales and profits may be down this year for the TV set-top box and networking business, the division is still attractive to potential buyers. The main reason is that Motorola has very strong market share in the set-top box market, where it competes head-to-head with Cisco Systems' Scientific Atlanta brand.

The Wall Street Journal article said private-equity firms Texas Pacific Group and Silver Lake Partners are interested in the company. And it's likely that Motorola competitors such as Samsung Electronics, Huawei Technologies, Nokia Siemens, Pace, and Ericsson may be interested in this business to bulk up their presence in the U.S. market.

But analysts warn that selling this division now could hurt Motorola's turnaround effort. RBC analyst Mark Sue told Reuters that Motorola needs the set-top box and networking business to help fund operations for the mobile-device business.

"(The mobile-device business) hasn't really recovered fully yet, so it would be a little too early to cut off the lifeline," he said to Reuters.

The Wall Street Journal said investment banks JPMorgan Chase and Goldman Sachs are advising Motorola on the possible sale.

Helix Wind's The S322 vertical wind turbine

(Credit: Helix Wind)

Helix Wind announced Wednesday that it's beginning a trial run in Southern California to see if its wind turbines might be useful for powering cell phone towers.

The manufacturer is becoming known for its small vertical-axis wind turbines that can generate electricity with winds as low as 10 mph, as well as its unique business model to finance them.

The pilot program, conducted in conjunction with cell phone tower operator Core Communications, will experiment with whether the turbines powering cell phone towers could also generate surplus energy to sell back to the energy grid.

If they generate enough surplus power, small wind turbines could provide a new source of income for cell phone tower operators as well as a new power source.

Helix Wind's turbines, which will be installed in early 2010, will run for up to three months before being re-evaluated.

According to statistics provided by Helix Wind, there are approximately 3,500 cell phone towers in Southern California, and another 1,000 expected to be added in the next five years to cover consumer growth.

Perhaps you are impressed with pilots who stealth-bomb unsuspecting parts of America. Like Texas.

You know, the pilots who frighten horses while delivering an explosive new device to American soil--the Motorola Droid. Well, perhaps, then, you are male.

Somehow, viewing Motorola's televisual covert activities leaves one with a troubling instinct that the Droid brand will be somewhat different from the iPhone. Somewhat more male, to be precise.

One of Apple's most brilliant and constant talents is to make its brand and the design of its products appeal equally to both sexes.

Apple's music is often sung by women. Apple's humor, in, for example, the "Get a Mac" spots, is the sort of subtle digging that makes men feel clever and women feel relieved that they don't have to spend even 30 seconds with a belching oaf.

In many ways, the Apple brand is the perfect toy boy. Looks young and lovely, lots of wit and versatility, and has just the right amount of muscle for other men to admire.

The Droid, on the other hand, seems to be setting itself up to be the peculiar love child of a union between Chuck Liddell and The Rock. It's strapping on its parachute and it's ready to thrust a fist in your face and a bomb into your back garden.

Is it any wonder that the cowboy in this new Droid spot stammers: "What in the world is that?"--as if he has just set eyes on an alien monstrosity whose GPS is on the blink?

The Droid, so far, is so male that the horses have bolted and the natives are in shock. It's a pillager that has already gouged vast craters out of American soil.

Will women gravitate to its charms? Or is Motorola carving an image for the Droid that consists entirely of chewing tobacco and gunning to the top?

Can a boy's toy take on the toy boy? Can one possibly wait until Friday?

With the Moto Cliq, it matters what's inside.

(Credit: Motorola Cliq)

On Call runs every two weeks, alternating between answering reader questions and discussing hot topics in the cell phone world.

In the age of iPhone, Google Android, and Palm WebOS, a funny thing has happened on the way to the cell phone store. Though handset design has long been the focus of cell phone development, hardware manufacturers appear to be shifting their attention. Software is now taking center stage as companies struggle to distinguish their touch-screen devices from their competitors, and companies aren't being shy about this new focus.

The shift really hit home in September when we met with Motorola following the introduction of its Android-powered Cliq. As my colleague Tom Krazit wrote at the time, Moto CEO Sanjay Jha was clear that his company is resting its comeback attempt on its signature MotoBlur software. Jha characterized MotoBlur as more than software, but also as "emblematic of the shift towards software and the Internet as the main features in a modern mobile phone."

From a company that developed some of the most iconic cell phones in history (hello, Moto Razr and Startac), Jha's words were surprising. Software has always been a part of phones, but it has rarely defined them. Unless you were a smartphone buyer deciding between Windows Mobile and BlackBerry, most customers bought a phone and used the manufacturer's standard operating system without a thought. Sure, more savvy users had their strong preferences, and Verizon tried an abysmal standardized interface on its handsets, but elements like thin designs, colored faceplates, and messaging keyboards got the most attention.