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Columns in 2010

andJeff Kagan's Pick of the Week

 

 

by Jeff Kagan ~ Tech Analyst

Wireless, Telecom, IPTV, Cable Television, Health Care Analyst and HealthTech Analyst

Columnist ~ Speaker ~ Author ~ Consultant ~ Market Research ~ Industry Analysis ~ Advertising, Marketing and Public Relations

 

Jeff Kagan offers analysis, opinion and comment on news and announcements in the Wireless and telecom industry, the Healthcare industry including mHealth, eHealth, Wireless health, Mobile healthcare and other areas. He advises companies on brand awareness, PR and advertising strategies and marketing. He provides competitive evaluation, customer insight, market strategy, product introduction guidance, review and more. Click here for more information www.jeffkagan.com

 

 Analysis of high tech products and trends and the changes that are reshaping the industry

 

Jeff Kagan writes one of the most popular columns on E-Commerce Times (click here) which is part of the ECT News Network with 6 million readers and is carried on thousands of additional web sites. 

Jeff Kagan's PICK OF THE WEEK (click here) included at bottom of columns highlights something new, interesting and exciting he discovered and wants to share with you.

 

NOTE: Jeff Kagan shares his opinions in his column which are written from either an investor perspective, a customer perspective or an employee perspective. 

 

To learn more about Jeff Kagan visit www.jeffkagan.com

 

 


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Columns published in 2010 are below this list of headlines;

The Internet Taxman's Mouth Is Watering

Should Companies Focus on Investors, Customers or Workers?

How Best Buy Can Make a Comeback

    Pick of the Week: New Comcast Spectrum Service Being Tested

Crystal Ball Gazing: Guessing the Next Big Technology Phenom

    Pick of the Week: AT&T Ranks as Worst US Carrier

Black Friday vs. Cyber Monday: No Contest

    Pick of the Week: Verizon Wireless Introduces 4G LTE Service

How Cable Television Can Stop Losing Customers

    Pick of the Week: Cox Now Wireless

A Whiff of Trouble Brewing at Verizon

    Pick of the Week: Google TV, Apple TV

Trouble at Clearwire Could Spell Trouble for Others

Pick of the Week: Earthlink's Acquisition of ITC^DeltaCom

Where to Look for Wireless Innovation

    Jeff Kagan's Pick of the Week: CenturyLink's Prism TV Service

What's Next After Google Android And Apple iPhone?

Windows Phone 7: Will Microsoft Hit It Out of the Park This Time?

    Jeff Kagan's Pick of the Week: Clearwire Rolling Into NYC, LA and SF

Solving AT&T's Ballooning Problem

    Jeff Kagan's Pick of the Week: Apple's iPad From Verizon

The Drivers Steering Motorola's Comeback

Catching a New Wave of PR Opportunities

How Dan Hesse Is Reviving Sprint

Windstream and CenturyLink: Riding the Next Wave of Change

The Mountain Elop Has to Climb to Keep Nokia on Top

Choosing Your Favorite Smartphone Flavor

Intel, Infineon and the Winds of Change

Telecom and Wireless in 5 Years: Who Will Lead and Who Will Follow?

Healthcare's Great Wireless Transformation

Why AT&T and Comcast Are Changing Their Brands

Will the Blackberry Torch Save RIM?

AT&T Is Winning Its Catch-Up Race

Who in the Wireless World Is Philip Falcone?

Will Microsoft Finally Get It Right With Windows Phone 7?

Is Apple The New Toyota?

Wireless And Telecom Analyst Sees Big Industry Changes Coming

Is Nokia In Trouble As Apple, Google, Samsung And Other Smart Phone Makers Take Over?

UPDATE to article below on AT&T Changes Rates . . .

Cable TV Loses Customers To Competition And Poor Customer Service

What's Next For Qwest After Acquisition By CenturyLink?

AT&T Changes Rates Again On Wireless Data Usage From Smart Phones

Harbinger Will Compete With AT&T, Verizon and Sprint in Wireless Data Services, But Who Are They?

FCC Will Be Very Active Managing Wireless Industry Under Obama

Is Trouble Brewing With The AT&T and Comcast Brands?

Sprint, Samsung and LG Leading The Charge Toward Green Cell Phones

Why Google Pulled Their New Nexus One Cell Phone Off The Market

Why Is SAP Acquiring Sybase To Battle Oracle And IBM? Is It The Right Move

What Is Google Turning Into?

Nokia Investors May Want A New CEO, But The Path To Success Is No Secret

HP Acquires Palm And Notifies Wireless Industry They Will Be Next Big Time Player

Will Nokia Lose Their Number One Place? Leaders In Wireless Handset Market Changing. 

Is Sprint Recovering? It Appears So, But Slowly

Is Google Brand As Strong As We Think It Is With Nexus One Stumble?

Wire-line And Wireless Telecom Is Changing. What It Will Look Like Going Forward.

Why AT&T Is Re-Inventing Its Brand, Again?

Surprisingly Different Outlook For AT&T And Verizon As They Deal With Bad Economy

Is Verizon Wireless Better Than AT&T Mobility Like Their TV Commercials Claim?

Will Cox Succeed Entering The Wireless Industry?

Jobs Are Changing In Wireless, Telecom, Cable TV and Internet. How To Hang On To Yours.

What Are Tomorrow's Growth Opportunities In The Wireless Industry?

What Happened At Palm?

New Microsoft MSN Home Page Breaks Marketing Rules

Is rapid growth ending in the wireless industry?

Why Comcast Is Re-Branding With Xfinity?

Will Windows Mobile 7 resuscitate Microsoft?  

 


 

http://www.ecommercetimes.com/story/The-Internet-Taxmans-Mouth-Is-Watering-71553.html

http://www.ecommercetimes.com/story/71553.html

OPINION

The Internet Taxman's Mouth Is Watering

By Jeff Kagan

E-Commerce Times

12/30/10 5:00 AM PT

We have been fighting taxation on the Internet for a decade or longer. Today, we pay more taxes on it than ever, but we're still not where the government wants us to be. Lawmakers want to tax everything that is new and exciting. Not just the Internet, but all the new technology that we just love.

Taxes on all of the great new tech we just got? I was a guest on the Fox News show "Your World with Neil Cavuto" on Monday, and Brian Sullivan asked me about all the new taxes we better get ready for on all of our new holiday gifts. That's right. We better get ready for taxes galore.

In fact, it's worse than we think. Instead of just one set of taxes, if you download a program from one state and you live in another state, both states may tax you for the same thing. That's right, soon we may be paying enormous taxes.

That's right. Double jeopardy. Could it get worse? It could. If they can think of a way to do it, even more states may jump into each sale.

Maybe if you live in New York and you download something from Florida, you will have to pay taxes on every state in between since the signal traveled over lines through states. Maybe they could call it a "pass-through" tax. Doesn't anyone see we are getting carried away here?

Maybe you got an iPad, one of those cool new tablet computers, or maybe a smartphone, or one of those cool new e-readers. You were happy to just sit there and try to figure out how the darn thing worked. Log on and look through all the cool new programs you could download. Thoughts of how much it was going to cost you going forward weren't even dancing in your head yet.

All Things Bright and Taxable

Before you think the government is getting carried away, think about the changing industry. The lawmakers may have a point... to a point, anyway. They always charged taxes on phone lines. So many people bought so many phone lines in the 1990s, the government loved it.

Then, as high-speed DSL lines came, people canceled the extra lines they used to dial in on the computer. The number of local phone lines has been decreasing. People are using cellphones, VoIP and cable television phone service.

Not only do the phone companies hate this trend -- so do government officials. Fewer phone lines mean less in taxes. This is a trend that is growing, so they need to figure out how to solve the problem.

We have been fighting taxation on the Internet for a decade or longer. Today, we pay more taxes on it than ever, but we're still not where the government wants us to be. Lawmakers want to tax everything that is new and exciting. Not just the Internet, but all the new technology that we just love.

Enough Already

That means every time you buy something over the Internet, the federal and state and local governments want a piece of the action. Same with devices. That means new taxes on everything we buy will start popping up.

Not only that, but every state and local government is thinking about taxing. That means multiple taxes. I have read that means we could be paying 20 percent or more in taxes. That's incredible.

Taxing the Internet is bad enough. Double taxing from multiple states and local governments is worse. And taxing everything else that is new -- like iPads, smartphones and e-books -- is over the top.

I think we all understand the government needs to update itself and stay with the times. OK, maybe it needs to make up for lost phone lines, but it shouldn't cross over the line and get so greedy that it chokes off commerce. That could happen, if we are not careful.

The question we discussed on Fox News was right on target. Taxing is part of our society. We need police, firefighters, roads paved, military ready and many other tax-supported services as well. But at some point we have to ask, when is enough, enough? Someone has to say "stop."

--------------------------------------------------------------------------------

Jeff Kagan is an E-Commerce Times columnist and a wireless, telecom and technology analyst, author, speaker and consultant. Email him at jeff@jeffKAGAN.com.

 


 

http://www.ecommercetimes.com/story/Should-Companies-Focus-on-Investors-Customers-or-Workers-71516.html

http://www.ecommercetimes.com/story/71516.html

OPINION

Should Companies Focus on Investors, Customers or Workers?

By Jeff Kagan

E-Commerce Times

12/23/10 5:00 AM PT

AT&T is currently focusing on the investor. The customers and the workers are out in the cold. The comments that have been shared with me regarding AT&T's relationships with these groups are disturbing. One example is workers being told they get paid enough to work extra hours -- so either work or quit. Another challenge is gelling different company cultures.

Which should companies focus on first -- investors, customers or workers? This is a question we have asked and answered so many times, you would think the answer would be obvious. However, we always see companies either doing well or struggling because they just don't get it. A look at a few of today's winners and losers may reveal why this is so.

Sometimes a company has good results for several years, and its leaders think they are on the right path. Then they stumble. The problem was always there, but they didn't see it. When it hit them in the face, it was too late. When companies start to slide, they usually continue to collapse over the next several years until, if they finally figure it out, they make changes and start a long-term recovery. Here are a few examples.

Sprint's Story

Sprint (NYSE: S) is a company that was a strong No. 3 in the wireless space until a handful of years ago, when it started to collapse. Its focus changed. It was not on workers or customers anymore -- it was on investors. That worked for a while.

Sprint had numerous challenges, including that it was only a wireless company. It did not have a wireline business like AT&T (NYSE: T) and Verizon did.

Sprint tried to improve its stock price by doing deals with the cable television industry, which fell apart after a short test run. Then it tried once again to offer a 4G experience on its own, and that sent the stock into a free fall. After changing CEOs twice and working at it for several years, Sprint finally has pulled up from the free fall. It is no longer crashing. It has started its upward climb.

It still has a long way to go, and it is a bumpy ride, but the company is finally headed in the right direction. This process has taken several years and has given Sprint two black eyes that it will have to live with for a while.

Sprint focused on improving the customer experience and its employee relationships. It got a great rating from a consumer report recently -- a complete turnaround. Hopefully it will do its best to keep customers and workers happy, going forward. This repair is still in progress; however, as it continues, the company can perform well -- and that should keep investors happy.

AT&T's Blinders

AT&T is another interesting case study. It seems to be growing strong and doing well. That is the good part. The bad part is it has many unhappy workers and customers, and I think that is a sign of trouble brewing. It doesn't yet seem to care, because its leaders don't see the longer-term risk to the business.

In October I wrote a column, "Solving AT&T's Ballooning Problem", that seemed to strike a chord with many workers and customers. I got emails with so many more stories to write about that I could write a book. If AT&T does not change on its own, I have a feeling this will bubble up and become a problem for the company in the next few years -- not unlike Sprint's story.

AT&T is currently focusing on the investor. The customers and the workers are out in the cold. The comments that have been shared with me regarding AT&T's relationships with these groups are disturbing. One example is workers being told they get paid enough to work extra hours -- so either work or quit.

Another challenge is gelling different company cultures. Remember, the AT&T we see today is a brand new company. A few short years ago, this big company was really four smaller companies: SBC, AT&T, Bellsouth and Cingular. SBC started the big wave of mergers, and they all got together.

Each company had a different culture. Now they have one, and it is not pretty trying to squeeze it all together. This means many feel uncomfortable. That is natural after a merger. However, the company has a choice about what comes next. It can tell the workers to buck up or get out -- or it can recognize the problem and work to soften the sharp edges, to make it easier for everyone to fit in. So far, I hear the company is taking the wrong path. I would love to hear the other side too, but I have not.

Many customers have the same complaint. They say they no longer feel a connection to a caring company. Basically, customers who don't need any extra help are fine, but those who do require some attention feel like the company no longer cares for them. In fact, they feel like they are in the way. Solid relationships are starting to get shaky. Is that the way you want a customer to feel?

So far, the company is still doing strong business. However, I worry that at some point in the near future, the earth may start to crumble beneath AT&T's feet -- like it did at Sprint -- and enough damage will be done that it will have to just go down for a ride and fix the company afterward. I hope it doesn't get to this point. Their future is in its leadership's hands.

What's Working, What's Not

Verizon may be on the right path. There are several issues, but the company seems to care for its customers and workers, and that ethic has served it well. Because customers and workers are generally happy, the company is performing well -- and investors are rewarded.

Qwest (NYSE: Q) is a very small baby bell and it has been through the wringer in the last decade. Customers are not generally happy, because they feel like they are left behind the rest of the country. Qwest doesn't have a big wireless or television footprint, so while traditional telephone is shrinking, Qwest is not growing in other areas to make up the difference. In this case, all three groups are suffering. So customers, workers and investors are struggling.

CenturyLink already acquired Embarq and is in the process of acquiring Qwest. Windstream is a similar company. Both of these are growing through acquisitions. They look good right now. The question is, what happens when the acquisitions end? Where will growth come from? They are currently focused more on the investor side, and that is a concern. So far, they still look good, but the next few years will be interesting to watch as they and the industry completely change. Are they up to the challenge?

Apple (Nasdaq: AAPL) does a remarkable job of focusing on the customer and the worker, and that has kept the investor very happy. Walk into any Apple store, and you will find many happy and dedicated workers. You will also find the store packed with customers who are happy. Apple has its own problems, but its way of doing things keeps sales high and investors happy.

Google (Nasdaq: GOOG) keeps wowing the marketplace. Its workers and customers seem to love the company -- and because of that, the investors laugh all the way to the bank. So far, so good.

Motorola (NYSE: MOT) was a company that led the wireless handset business until the mid 1990s. That's when the networks switched from analog to digital, and Motorola didn't have handsets yet. Nokia (NYSE: NOK) did. It took the lead and has kept it ever since.

Now, a decade later, Motorola seems to be coming back -- partnering with Google and delivering cool new Android handsets. Customers love this. The workers are treated well. Now, finally, the investor is responding and winning with them again.

Nokia may be starting down the same path Motorola was on during the last decade unless it can update its brand and keep customers happy and interested. It has a good reputation, but it is not updated with the industry.

Handset makers like Samsung, LG, HTC and Ericsson (Nasdaq: ERICY), and equipment makers like Nortel (NYSE: NT), Alcatel-Lucent (NYSE: ALU) and Cisco (Nasdaq: CSCO) have similar opportunities and challenges in these areas. Who will do well, and who will struggle?

Season of Extremes

This is a teachable moment. Company after company is either doing strong business or struggling. Very few are in between. The reasons are obvious, but it is amazing to me how so few pay attention to the reasons.

You have to focus on the worker and the customer, and keep them happy. If you can have a strong business, then you will have a happy investor. If, however, you focus on the investor and let your workers and customer suffer, you will pay the price. It may take a while -- but when it hits, it will knock you for a loop for several years. Is that what you really want to struggle with?

The choice is clear. Focus on the customer and the worker, and you win. Focus on the investor, and you eventually lose. It's a simple equation. There are many issues, but this is a key one to get right. I only wish every company understood this.

I am thinking about writing a book on this very topic, and it is turning out to be very interesting. Drop me an email with your thoughts on what your company is doing right and wrong.

--------------------------------------------------------------------------------

Jeff Kagan is an E-Commerce Times columnist and a wireless, telecom and technology analyst, author, speaker and consultant. Email him at jeff@jeffKAGAN.com

 


 

http://www.ecommercetimes.com/story/How-Best-Buy-Can-Make-a-Comeback-71472.html

http://www.ecommercetimes.com/story/71472.html

OPINION

How Best Buy Can Make a Comeback

By Jeff Kagan

E-Commerce Times

12/16/10 5:00 AM PT

Comfort means a lot of different things. It means being in a store many times for many things, and feeling at home there. It means a comforting and welcoming feeling when you walk in. It means knowing the store puts your satisfaction above all so you will remain a customer. It means putting the customer's needs and wants first. The problem is, this is not Best Buy.

The consumer electronics marketplace is changing. Will this year be better or worse, stronger or weaker? So far, the reports of holiday technology shopping sound pretty strong this year, with a few bumps in the road. One big bump comes from Best Buy (NYSE: BBY), which delivered some disturbing news.

While the rest of the market seems to be strengthening, Best Buy is having problems. Why? Is it a Best Buy problem or an industry problem? And what can the company do?

I like Best Buy. I think it has a great concept and has grown strong over the years. The bad news is it seem to have run off the fast lane with its wheels bumping along off the track. The good news is if you look back over the last 10 to 15 years, this has happened before -- and Best Buy has come back. Its leaders are a creative bunch. Can they do it again?

When you walk into a Best Buy, it screams technology and electronics. The company had strong competition from Circuit City (NYSE: CC), and it eventually won. Circuit City closed in the last couple years. That should have meant Best Buy would have stronger sales. The problem is, it was not just a competitor, but the entire market that was changing. The same things that impacted Circuit City are now starting to affect Best Buy.

Not a Comfort Zone

Companies like Walmart and Target have strengthened their electronics departments. They now sell cellphones, laptops, big screen TVs and a lot of other tech that you used to have to go to an electronics store to buy. That is changing the marketplace fundamentally. Customers feel closer to these other giants, because they are there more often.

As customers can now easily buy electronics and technology from general companies like Walmart and Target -- at very low prices -- it is obviously putting enormous pressure on special electronics stores like Best Buy.

One area Best Buy seems to have missed is big screen television. It has a great number of sets, so that is not the problem. It has a great reputation, so that is not the problem. So what could be the problem?

Price and comfort.

Price is an obvious threat. Best Buy is not known as a low price leader like Walmart is. That will have to be fixed for it to remain competitive.

Comfort is something that I think plays a growing role and could be a more important threat if not quickly fixed.

Comfort means a lot of different things. It means a store that is close to where you live. It means being in that store many times for many things, and feeling at home there. It means wanting to reward your friends by doing business at your local store. It means a comforting and welcoming feeling when you walk in.

It means knowing the store puts your satisfaction above all so you will remain a customer. It means putting the customer's needs and wants first. It means making it easy to return or exchange items. It means so many different things it is hard to wrap your arms around it.

The problem is, this is not Best Buy.

Not the Only Game in Town

Best Buy was always the leader in the old model of electronics shopping, even though it didn't make customers comfortable. They had no choice, so they put up with it. However, the new model looks very different. Customers are starting to have choices among friendlier stores nearby. That is the threat. Customers no longer have to go to a specialized electronics store where they don't regularly shop and where they feel confused and intimidated.

As electronics and technology are increasingly being sold in stores that are more comfortable, that's where customers are choosing to shop.

To make a sale, you have to get the customer to walk in and want to spend. In the past, Best Buy succeeded in getting customers into the shop because it was one of the only games in town. Now that game is expanding, and other companies are playing. Best Buy obviously needs to go back to the drawing board and update its image and its brand.

Updating the Best Buy brand in the customer's mind is key. The image is wrong for today's rapidly changing marketplace. Keeping the same brand identity in a marketplace that no longer rewards that identity is suicide.

Wake Up and Smell the Coffee

This is a wake-up call for Best Buy to update its brand and solidify its customer relationships by improving the shopping experience.

Customers have to think it is as pleasant and easy to shop at Best Buy as it is at Walmart and Target. They have to feel comfortable. They have to want to visit. Today they don't. They have to come more often. It has to become their store.

Today it is becoming a real effort to shop at Best Buy. Since the other stores are not tech specialists, that should not be a problem. Best Buy could have a definite edge if it could blend its electronics expertise with the comfort customers get from shopping at their neighborhood retailers.

This is a slap in the face to Best Buy. I think it can recover from this problem, but it means reinventing its image and its brand relationship with the customer. This is an important moment in Best Buy's history. Will it recognize this problem and fix it like it has in the past, or will it eventually follow Circuit City to the big electronics graveyard in the sky?

Send me your thoughts.

Jeff Kagan's Pick of the Week

 

 

Jeff Kagan's Pick Of The Week: New Comcast Spectrum Service Being Tested

Comcast (Nasdaq: CMCSK) is testing something new: It's mixing television and the Internet together in a new and interactive service. Who knows whether this first test version will be successful -- but regardless, this is exactly the kind of thinking we have been waiting to see coming from the cable giant over the last decade.

A new competitive threat from the telephone companies and others may be the real reason, but whatever the reason, customers will benefit if it is successful.

Comcast has not made any announcements yet. This service is known as "Spectrum" to users in one test market, Augusta Ga. Inside Comcast, it is known as "Xcalibur." It has a lot of ground to cover before it becomes generally available, but it sounds promising.

The connection to the Web is not what you get on your computer. It only connects to things Comcast lets you connect to -- like movies, clips, social networks and the like. Not perfect, but a great start.

It lets users search live, on-demand programming and watch Web video through their TV.

Similar Internet programming has seen an explosive growth rate in recent years from companies like Netflix (Nasdaq: NFLX), Hulu and others. That is threatening Comcast and the entire cable television industry.

Cable companies are losing customers for the first time. They have to make some changes. The entire segment is very rough right now. Companies like Apple (Nasdaq: AAPL), Microsoft (Nasdaq: MSFT) and Google (Nasdaq: GOOG) are trying to break in themselves. This will eventually be an enormous opportunity.

One thing is for sure, things are getting ready to change.

--------------------------------------------------------------------------------

Jeff Kagan is an E-Commerce Times columnist and a wireless, telecom and technology analyst, author, speaker and consultant. Email him at jeff@jeffKAGAN.com.

 


 

http://www.ecommercetimes.com/story/Crystal-Ball-Gazing-Guessing-the-Next-Big-Technology-Phenom-71413.html

http://www.ecommercetimes.com/story/71413.html

 

OPINION

Crystal Ball Gazing: Guessing the Next Big Technology Phenom

By Jeff Kagan

E-Commerce Times

12/09/10 5:00 AM PT

As the years pass, waves of opportunity come faster. Today, social networks like Facebook, Twitter, LinkedIn and YouTube have swept in and quickly taken over. We hear about them so much, it seems they've been a dominant force in business for a long time. However, they are actually new companies. They didn't even exist five or 10 years ago. Suddenly, they are the names every investor and customer talks about.

Every opportunity has a life span. Think about its course like a line or a wave that goes up then it comes down again. Fortunes are created, then lost, then created again. New technologies replace old technologies, and then they are replaced by newer technologies. If you know what's coming next, and what point the wave is at, you can take advantage of these opportunities in your work or investments. Let me explain.

Over the years, we have seen this "lifespan wave" grow, then shrink, with many different companies and technologies. Then we watched the next and the next. It affects every company, every customer and every investor. Timing is key. Knowing when things are growing and then when things are shrinking is important.

Think about every opportunity like a curve going up then down again. Some waves are longer and others shorter. Some have a quick rise and a quick fall, while others take their time. One thing is consistent: They all rise, then they all fall. Some companies ride a single wave up, then down, then struggle. Other companies are fortunate and understand this wave and create a next wave to replace each as it gives way. Some do this well, and others don't.

Endless Waves

Let's look at a few examples. IBM (NYSE: IBM) introduced the Selectric typewriter in 1961. It rode that wave, and it kept growing for years. I once heard that the Selectric had a 75 percent market share. That was incredible. However, as technology changed, IBM also changed, multiple times. It also updated its brand, and the company today is known as a computer company. IBM rode each wave up and down again, but had another wave to follow each. It reinvented itself.

What will IBM look like in another 10 years? That is the question we have to think about. I don't know either, but if it continues to be successful, it will continue to reinvent itself and will not look the same as it looks today.

Motorola (NYSE: MOT) led the analog wireless handset business in early the 1990s. Then, when things turned digital, Motorola didn't. At that point, Nokia (NYSE: NOK) started to lead. Now, as we change to smartphones, other companies are leading the way -- like Apple (Nasdaq: AAPL) with the iPhone and Google (Nasdaq: GOOG) with the Android OS. And these are not even wireless companies. They are brand new into the wireless business. What will the wireless business look like in another five to 10 years?

As the years pass, waves of opportunity come faster. Today, social networks like Facebook, Twitter, LinkedIn and YouTube have swept in and quickly taken over. We hear about them so much, it seems they've been a dominant force in business for a long time. However, they are actually new companies. They didn't even exist five or 10 years ago. Suddenly, they are the names every investor and customer talks about.

Enjoy them today, because as quickly as they swept in, most will be replaced. What if five or 10 years from now we are not thinking about or talking about them much anymore? The tech wave may wash over them and new companies will rise and be in the focus.

Remember the early 1990s, when AOL and Prodigy were hot companies? Over the years, as tech changed, the marketplace moved quickly beyond them.

Then were search engines like Yahoo (Nasdaq: YHOO) and Web browsers like Netscape. They were also hot back then. Remember all the hype? Today, companies like these, if they are still around, are not important anymore. The marketplace has moved past them. Today, we focus on companies like Google, Apple, Facebook, YouTube, Twitter and others.

Consider what Netflix (Nasdaq: NFLX) is doing to Blockbuster (NYSE: BBI). What comes after Netflix?

Change Is the Only Constant

Long distance was huge in the 1990s. Companies like AT&T (NYSE: T), MCI and Sprint (NYSE: S) were strong and growing. We saw advertising everywhere. Today, the stand-alone long distance industry doesn't exist anymore. The baby bells won that battle. Companies like AT&T, Verizon and Qwest (NYSE: Q) were growing until the last few years.

Today, local phone services are no longer growing. The sector is shrinking, as new technologies and new companies like wireless and VoIP chip away at its core business. So what are local phone companies doing? They are selling television, Internet and wireless, and they are continuing to grow. They just look very different.

Like IBM, these companies have focused on new opportunities for growth. They rode each wave up and then down, and they always had a new wave to take the place of each old one, so they continued to grow.

Some companies successfully reinvent themselves, and others don't. That is key for long-term success. Some companies change and continue to grow. Other companies don't. New opportunities can charge in and change the marketplace. Some of them are longer-lasting, while others are just a flash in the pan.

Did you see Google coming? What about Facebook and other social sites like Twitter and YouTube? The big question is what is coming next? How do you know where to invest, work and shop? There are so many ideas and companies that try and fail. Who will ring the bell?

Some companies can change with the times. The local phone business is shrinking, but the part of the business that is growing is wireless, television and Internet. In that world, there is heavy competition from cable television firms like Comcast (Nasdaq: CMCSK), Time Warner (NYSE: TWX) and Cox. The telephone business looks much different than it did 10 years ago.

So what will the marketplace look like in a few more years? No one knows, but I can tell you it will look very different. Every few years, it changes. Who will lead? Some companies will still be here, some will struggle, and some will be gone. New companies will change the space again. New sectors -- like social networking has done -- will change the space.

These are the opportunities and the challenges you face. Can you see the future? Every company and every opportunity has a curve. Growing and then shrinking. Where on the curve is each? This is the important question you have to keep track of.

No curve lasts forever. Some last longer than others, but they don't last. The question is always what comes next? What will we be focusing on five or 10 years from today? What companies and what products? These are some of the important questions we need to think about as the industry continues to change.

Let me know your thoughts on what's the next big wave we'll be focused on.

Jeff Kagan's Pick of the Week

 

 

Jeff Kagan's Pick Of The Week: AT&T Ranks as Worst US Carrier

Consumer Reports says AT&T Mobility is the "worst rated U.S. carrier." On one hand, this is a major blow to the wireless giant -- but on the other hand, it's nothing new. AT&T has been winning this award for many years. The company has spent billions trying to improve its network, but apparently that wasn't enough.

I have been hearing about this same problem, year after year, for quite a long time. However, poor quality of service doesn't seem to hurt AT&'T -- not yet, anyway. Maybe because AT&T has the only network of the big three that allows you to take your phone overseas and still stay in touch. That sheds some light on the picture, but it's not all.

Consumer Reports surveyed 58,000 readers, and its results continue to point to the weaknesses in the AT&T network. The magazine found that Apple iPhone users were least satisfied with their carrier. Is the problem due to the carrier or to the device? That is the question, and we should soon have an answer when Verizon starts carrying the iPhone.

AT&T once again says it takes this seriously and continually looks for new ways to improve the customer experience. However, it has said this year after year, and it doesn't seem to get any better.

U.S. Cellular has what may be the best reputation in the United States, followed by Verizon Wireless which is the nation's largest carrier. Sprint Nextel, the country's third-largest provider, has improved over the last few years and is in the same ballpark as Verizon, which is impressive.

Consumer Reports says even though AT&T spent a fortune to improve its service, the customers haven't noticed it yet, and they gave them the lowest ranking on eight out of nine customer support, service and value measurements.

AT&T was the only carrier to show a substantial drop in its overall satisfaction score from a year ago, Consumer Reports noted.

This sounds pretty bad for AT&T, but will it affect its sales? Probably not. It hasn't over the last few years.

--------------------------------------------------------------------------------

Jeff Kagan is an E-Commerce Times columnist and a wireless, telecom and technology analyst, author and consultant. Email him at jeff@jeffKAGAN.com.

 


 

http://www.ecommercetimes.com/story/Black-Friday-vs-Cyber-Monday-No-Contest-71359.html

http://www.ecommercetimes.com/story/71359.html

OPINION

Black Friday vs. Cyber Monday: No Contest

By Jeff Kagan

E-Commerce Times

12/02/10 5:00 AM PT

There are benefits to Cyber Monday. First, you wake up whenever you want, sit in front of your fireplace in your pajamas with a steaming cup of coffee and your laptop on the couch under your warm blanket. Then just log on and shop. No lines, no traffic jams, no getting to stores only to find out they have sold out of the thing you went for. Instead, this is a ridiculously civilized way to shop.

All I wanted to do was save a little money. Is that too much to ask? We have been hearing about the holiday shopping season for months. Bargains galore are finally here. So I decided to try something I never tried before. I went to check out the Black Friday sales at the local stores the morning after Thanksgiving. Yes, before sunrise. Actually in the middle of the night. Someone should have braced me for what I experienced. This was a raw, shop-a-holic, food-fighting frenzy.

The same friendly and civilized stores I normally shop in changed. All of a sudden, it felt like a science fiction movie where all the normal shoppers were transformed into unrecognizable shopping beasts. Tearing each other apart to get their hands on that iThing or big-screen whatever. Would I survive? Bigger question, would I get the deal I was searching for?

This was my first early morning shopping spree. I wasn't sure what to expect, but I was licking my chops. I hung my credit cards on my belt in case I needed to put my hands on them quickly in some kind of a shopping quick-draw. I headed out into the night shopping jungle. And, yes, it was a jungle.

Too Curious for My Own Good

The normally quiet Office Depot (NYSE: ODP), Staples (Nasdaq: SPLS) and OfficeMax were all lit up and jammed.

Fighting my way past the GPS aisle, which was busy -- and the printer case, which was even busier -- to the laptop display, I looked but could not find the device they sent me an email about, offering it at a ridiculously low price. I was told it was not on display. Oh great, I thought. Wasted all this effort.

Instead, they gave me a voucher and told me to pay for it at the register and they would get it for me. I smiled and thought even though the stores were full of crazed shoppers, this should be easy. I went to the normally quite and quick registers only to find something my mind couldn't quickly process. A line. Not a regular line either. An obscenely long line.

I waited for almost an hour in that ridiculously long line just to buy the stupid laptop and save a couple hundred dollars. By the time I paid, the laptops were gone, but I had my voucher. Good thing. Got there just in time. They did have Starbucks (Nasdaq: SBUX) coffee and Dunkin Donuts at the door to help take the edge off the craziness inside. Didn't work, but it tasted great. Sustenance for what was to come next.

OK I have the laptop. The smart me would say run home as quickly as possible and take a hammer and nails and board up the windows and doors for protection. But the curious me stayed out and explored.

Mission Aborted

I found Best Buy (NYSE: BBY) an absolute zoo. The sun still wasn't up yet, but there were so many people I don't think I could have even found the items I was looking for. The flat screen TV's were all there like before, but the level of energy was bursting and there was not enough help for all the shoppers. Not their fault, they probably had every employee working that morning. I eventually left empty handed and in utter amazement.

Could you imagine if this was how shopping really was in America every day? Fortunately, it's only one morning every year.

The same craziness was at Target and Walmart near my home. They were bursting at the seams. The line was wrapped around the store before the doors opened. These are giant stores. Do you have any idea how many people that meant? Per store. I decided it was just too crazy to buy a flat screen TV, so I decided just to drive home. Some day I would get one, but not today.

The Magic Hour

Later in the morning, I drove around to find other stores jammed -- like AT&T (NYSE: T) Mobility, Verizon Wireless and Sprint Nextel (NYSE: S). Customers were mostly interested in the smartphones, but there were still many interested in regular handsets, surprisingly. I guess many people have put off upgrading and see the holidays as a great opportunity.

The parking lots were overloaded. The streets were busy, like rush hour. There were people everywhere you looked. It was like a Steven Spielberg sci-fi movie, and it was only 6 a.m. What would the rest of the morning be like? It was crazy until around Noon, when the prices quickly and magically went back to normal. Phew. Society was instantly under control.

I remember an old "Star Trek" episode where the townfolk on some planet went wild until a certain hour -- then they suddenly went back to their normal, controlled selves. That was exactly what this Black Friday was like. It was a very strange place to be.

Every year, it keeps getting crazier and crazier. However something else may be starting to control the craziness.

Cyber Monday - Any Different?

Cyber Monday comes a few days after Black Friday. It is a more civilized way to grab those special deals.

There are benefits to Cyber Monday. First, you wake up whenever you want, sit in front of your fireplace in your pajamas with a steaming cup of coffee and your laptop on the couch under your warm blanket. Then just log on and shop. No lines, no traffic jams, no getting to stores only to find out they have sold out of the thing you went for. Instead, this is a ridiculously civilized way to shop.

I logged on and bought some gifts -- like GPS and other tech toys. It was so easy. Amazon (Nasdaq: AMZN) and all the other big name Internet stores, along with all the dot-com divisions of all the retail stores, like Barnes & Noble (NYSE: BKS), are all there waiting for you to log on and shop.

A few clicks later and you are done. OK, it takes a little longer than that, but it is much quicker than going out. After you make your purchase, you simply wait for what you bought to be delivered to your front door in a few days. Even the shipping fees of many stores have been waived.

This is like two completely different ways of accomplishing the same things. Which sounds better? What will the shopping experience turn into a few years from now?

This year, Black Friday was the largest ever, but that is actually not that big a deal. It was only 0.3 percent bigger than last year. The year before it grew also, but only 0.5 percent.

This year, Cyber Monday is growing faster than ever at around 20 percent. What is next? Will Cyber Monday be expanded to Cyber Week or Cyber Month? Why squeeze all the excitement into one day?

Silver Lining

The way things are now going, with expanding the holiday shopping season from Halloween to Christmas and skipping right over Thanksgiving, I would guess we will see these savings days expand and change over the next few years so the stores can cash in on this opportunity.

In fact, in a few years they may start the holiday shopping season right after Back to School -- around September 1. Don't think I am kidding -- I am serious.

During Cyber Monday this year, 107 million people were expected to shop, 88 percent of stores had specials and it's expected to be a US$32 billion dollar day. Not too shabby.

Ten years ago, this was all new. We shopped online, but we bought in person. That has been changing. Now we shop and buy online and in person. It's all getting mixed up.

Online revenue is up more than 16 percent over last year, and that was just for Black Friday. Cyber Monday is rapidly growing, while Black Friday is staying put. So will Cyber Monday kill Black Friday? Maybe. Companies like PayPal saw an increase of 27 percent in volume over last year, and they do their business online exclusively. That means people are buying more online, and that is the real secret of success.

There was a nice surprise. My mother took us out to dinner the other night to get us out of the house, and when we came back, the kids had set up a new flat-screen TV they all bought us. After thanking them all, I was suddenly very happy that my pre-dawn big-screen-TV shopping expedition flopped.

Jeff Kagan's Pick of the Week

 

 

Jeff Kagan's Pick of the Week: Verizon Wireless Introduces 4G LTE Service

Verizon Wireless will launch its next-generation 4G LTE service on December 5 at more than 60 airports and 38 markets. If you will be in Vegas next month for the Consumer Electronics Show, you can take a look.

The good news is it's available in all these markets initially. The bad news is the signal won't be all over town yet. When carriers start, the signal is just in the center of town and then expands over the next year or two.

Verizon Wireless plans a rapid rollout, so it should be everywhere within the next couple of years. You have to buy a new thingamajig to stick into your laptop to connect to 4G. If there is no 4G signal where you are, it will revert to 3G.

They say it is 10 times faster than 3G. They also say it is faster than Sprint's Clearwire (Nasdaq: CLWR) 4G and T-Mobile's 4G. That raises another question: Is there an official speed for all this 4G talk? Or is it mostly a marketing term meaning "faster," and that's it?

I think the carriers get themselves all in a tizzy about these details and the average customers really don't care. Call it "4G" and they are happy.

Bottom line: Verizon Wireless has always offered a good quality service and a fair price. This is the direction the entire industry is heading in. We should be as excited about this as when the networks upgraded from 2G to 2.5G -- then to 3G. It's the next natural step.

This means more data and faster. So you can watch TV on your phone and get a better picture. Things like that. It will matter more over the next couple years than it does today.

What about you, AT&T Mobility? When is your coming-out party? Later in 2011, I am told. Not first -- but I am sure they will have a big coming-out party too.

-------------------------------------------------------------------------------

Jeff Kagan is an E-Commerce Times columnist and a wireless, telecom and technology analyst, author and consultant. Email him at jeff@jeffKAGAN.com.

 


 

http://www.ecommercetimes.com/story/How-Cable-Television-Can-Stop-Losing-Customers-71331.html

http://www.ecommercetimes.com/story/71331.html

OPINION

How Cable Television Can Stop Losing Customers

By Jeff Kagan

E-Commerce Times

11/26/10 5:00 AM PT

One thing about the current model that's broken is that the cable television companies don't have the power to decrease the rates they pay to the networks. If the networks had to deal directly with angry customers, that market force would let the price-reducing power of competition work. This three-legged stool is the problem.

Competition has been increasing in the cable television world in recent years, and we have been expecting prices to come down, but they haven't. I have been scratching my head wondering why competition from satellite and telephone companies wasn't working. Well, it's taken years, but apparently the wait is over.

The cable television industry has finally experienced two quarters of significant customer losses, thanks to this new competition. If this continues, what does this mean for pricing going forward?

I think customers will love what is about to happen. Investors may not, initially, but if the companies handle it correctly, they could end up staying happy as well. However, that means the cable television industry would have to reinvent itself from the ground up. What are the chances of that happening? Chances are better today than ever, but the job ahead is enormous.

The cable television model is broken and has been for many years. The problem is there has not been competition, so we had to deal with it. However, now that competition is becoming reality, this is the best opportunity to fix the broken model and create a healthy environment going forward.

Prices Have Been Soaring

In recent years, we have seen competition increase from both satellite television services and telephone company IPTV services. As that developed, I expected it to force the cable television companies to lower rates. Surprisingly, they have not. Yet. The reason is they have not lost customers. In fact, they gained customers.

Cable television rates that customers pay have been going up, year after year. Prices have doubled in the last decade, and that upward price trend continues. There are many reasons. One is the cable companies have to pay to carry the networks' programming -- and networks continue to demand more and more.

One thing about this model that's broken is that the cable television companies don't have the power to decrease the rates they pay to the networks. If the networks had to deal directly with angry customers, that market force would let the price-reducing power of competition work.

This three-legged stool is the problem. We have seen cases in the last few years of cable television companies putting themselves on the customer's side and shining a light on this broken way of doing business.

Time Warner (NYSE: TWX) is one example. It has been running television commercials for its customers over the last year or so outlining the problem, and saying this is broken and needs to be fixed. This finally puts the company on the side of the customer in this battle.

It's doing this because it will keep losing customers if it doesn't fix this problem. Whatever the reason, at least it is finally on the customer side. It is a step in the right direction -- but has not yet helped lower prices.

New competition from phone companies and satellite companies should have pressured the companies to lower prices, but instead they keep charging more every year.

Separately, companies like Comcast (Nasdaq: CMCSK) started charging extra fees for digital boxes so customers could continue to watch basic cable channels. Switching to this digital mode costs the customer more. Before, customers who just wanted a basic service got around 100 channels. Now, suddenly customers who do this only get the first 23 channels.

To watch more they have to get digital converters. They get the first three boxes for free and pay for the rest. That means in many homes, a few TVs get all the channels, and the rest do not. That is a problem the customer must deal with, and for no benefit except a few extra channels.

Investors like this. Customers do not. There are always competing interests. It is up to the company to focus correctly so everyone wins. I think when the average company focuses on the investors, they are happy for the short term, but the customers are unhappy.

However, when a company focuses on its customers and workers, they are happy, and the company runs better and more profitably, and that makes the investors happy. Making everyone happy is the healthier way to go. Companies like Apple (Nasdaq: AAPL) who act this way traditionally have a very happy group of customers, workers and investors.

Competition Rears Its Head

Finally, competition is starting to work. Customers are now leaving cable television companies and switching to AT&T (NYSE: T) Uverse and Verizon FiOS, and to satellite companies like DISH Network and DirecTV (Nasdaq: DTV).

No one wants to see the cable television industry hurt. However, the cable television industryalso has to care about the customer. That has been the missing component.

Significant and ongoing customer losses will get the attention of the cable television industry faster than anything else. Does this mean prices will start to fall? Maybe, but maybe not. Remember -- the three-legged stool needs to be fixed.

As competition has increased over the last several years, I have been saying prices should decrease. They haven't. To make matters worse, the cable television companies were actually gaining customers every year.

Today, we see the pressure is finally beginning. Cable television companies are now starting to lose significant numbers of customers. If that continues, the cable television industry will have to rewrite the rules. Either that or continue to lose business.

We are in the early innings of a new game now. The cable television business has to be saying "ouch" for the first time. The market is finally starting to roar and let the industry know what it thinks.

That is all very healthy, even though it can be a bit painful when you want to watch a World Series game but can't because it is temporarily blacked out as the parties negotiate.

Customers have to be part of the game. Customers have to not only understand what is happening, but also stand behind the cable television companies while they battle with the networks and others in an effort to slow and stop increasing prices. If cable television companies don't have to worry about losing customers, they will be stronger during the negotiations.

The current model is that cable television companies raise rates and offer a few extra channels every year. However, the average customer still watches the same 10 to 15 channels. The cable television industry doesn't understand that adding more channels and charging more does not make it a better deal. It just makes it more expensive.

Or maybe they do understand, and this was just the way they dealt with price increases over the years. This model works until the customer stops buying. Then it has to be fixed. That time may be coming quickly.

Suddenly, there is competition in many markets. Suddenly, the economy is rough and people increasingly want to save money. Suddenly, there are other new services that are popping up like Google (Nasdaq: GOOG) TV and Apple TV and many more, taking us away from traditional television.

Does this mean prices will come down? To any logical thinker, the answer is yes -- but in this case, who knows? It has not been the case to date. The cable television industry has blindly continued to increase rates year after year.

Can the industry change itself, or will the government have to step in and help? It's always better when the industry fixes these issues on its own, but we just don't know yet.

Customers have finally had enough. Now, with new choices, they are making their move. This is a long-term problem. What happens next depends on how the cable television companies react. Will they become more customer-focused, or will they remain investor-focused? That is the next step we are all waiting to see.

 Jeff Kagan's Pick of the Week 

 

 

Jeff Kagan's Pick of the Week: Cox Now Wireless

Cox, the No. 3 cable television company in the U.S., has just introduced its own wireless telephone service. A few years ago, Comcast and Time Warner tried to get into the cellphone business. That flopped. They marketed the service wrong. Will Cox be successful where they failed? Don't know yet -- but the game is now on.

Cox's new campaign is titled "Unbelievably Fair." It is building its own network in certain cities, and reselling the Sprint Nextel (NYSE: S) network everywhere else. It is launching in Hampton Roads, Va., Omaha, Neb., and Orange County, Calif., to start.

I spoke with Stephen Bye, vice president of wireless for Cox, and he told me, "It's been a long journey, but seeing the response from our customers makes every step worthwhile."

I haven't tried the service yet, but Cox has a strong reputation for offering a good quality and fair price. Whether it will be successful or not depends on how it approaches the market. We'll have to wait see and hope this is a success story for the customers, investors and workers.

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Jeff Kagan is an E-Commerce Times columnist and a wireless, telecom and technology analyst, author and consultant. Email him at jeff@jeffKAGAN.com.

 


 

http://www.ecommercetimes.com/story/A-Whiff-of-Trouble-Brewing-at-Verizon-71261.html

http://www.ecommercetimes.com/story/71261.html

OPINION

A Whiff of Trouble Brewing at Verizon

By Jeff Kagan

E-Commerce Times

11/18/10 5:00 AM PT

Here are the recent stats: Verizon Wireless only added 997,000 new customers compared with 1.2 million new customers during the same period one year earlier. There was a 25 percent drop in third-quarter profit. Its net income dropped. Operating revenue dropped. And it won fewer new customers than AT&T Mobility. These are Verizon's own numbers.

Verizon has shown solid growth in recent years, but there could be signs of weakness in its quarterly numbers. I saw this a few months ago and decided to keep my eye on it. Maybe I am wrong. Maybe this is nothing. Maybe it is a temporary blip that won't keep repeating itself -- but something doesn't seem right. Verizon seems to be having some problems, especially compared with AT&T (NYSE: T). So what is happening, and should we be getting worried?

There has been so much change going on at the company recently, it can make your head spin. Among other things, it is getting ready for a CEO change -- from Ivan Seidenberg to Lowell McAdam. Recently, Verizon has been focusing on the smartphone segment of the cellular industry. It is also focusing on FiOS wireline service to provide television.

So what is wrong? [*Correction - Nov. 18, 2010]

Pale by Comparison?

I asked Peter Thonis, chief communications officer at Verizon, what the company would look like going forward. He said it has sold off a lot of the access lines and is now more heavily wireless and FiOS-centric than ever before. Verizon also believes cloud-based services are a large global growth opportunity for the company.

Going forward, it's all about innovation on smartphones, on FiOS, and with the cloud, Thonis said. That future sounds good if everything works out the way Verizon thinks it will.

So why is its performance starting to appear weaker rather than stronger? [*Correction - Nov. 18, 2010] True, not every company performs the same way. We have seen differences between companies like AT&T and Verizon, and others like Qwest (NYSE: Q) and Sprint (NYSE: S). Yet AT&T and Verizon have been on the same page.

The problem is that AT&T still shows strong growth. It started to focus on the smartphone segment years before Verizon did. That is why AT&T's smartphone sales are currently in the 52 percent range, while Verizon's are in the 37 percent range.

Do the Math

Here are the recent stats: Verizon Wireless only added 997,000 new customers compared with 1.2 million new customers during the same period one year earlier. There was a 25 percent drop in third-quarter profit. Its net income dropped. Operating revenue dropped. And it won fewer new customers than AT&T Mobility. These are Verizon's own numbers.

Marquett Smith is the company's new vice president of corporate communications. It's his job to keep Verizon Wireless top of mind in the marketplace. There are two areas he has to focus on: No. 1 is innovation -- giving customers what they want, before they want it; No. 2 is letting the world know. That's the job of Smith and Thonis.

I have known Thonis for more than a decade. Just met Smith. I have talked with them and like them both. Now we just have to see if they are up to the new challenge of the rapidly changing marketplace.

I am not saying there is a real problem yet, but something is not right. The point is that both Verizon and AT&T have shown similar growth until now. Is this something to be concerned with going forward, or will this problem heal itself? It may be too early to tell, but we should keep our eyes on it.

We are coming to the fourth quarter, which is the best quarter of the year for the wireless industry. Let's hope it is smooth sailing for Verizon, both on the wireline side and the wireless side of the business, and that this turns out to be just a blip that goes away.

I know investors, customers and workers want the company to continue to be a strong leader and will be watching. Let's hope this is doesn't become an issue for Verizon going forward.

Drop me an email with your thoughts on what is happening at Verizon.

Jeff Kagan's Pick of the Week

 

 

Pick of the Week: Google TV, Apple TV

So, you've been hearing about GoogleTV and AppleTV and want to know whether now is the time to switch? Should you cancel your cable television from Comcast (Nasdaq: CMCSK), Time Warner (NYSE: TWX) or Cox -- or your IPTV from AT&T, Verizon or CenturyLink?

The answer is no -- not yet. However, you can add these new services to what you already have.

Google (Nasdaq: GOOG) TV and Apple (Nasdaq: AAPL) TV don't replace anything you already have, but they will let you use your televisions instead of your cramped computer screen. This requires a change in thinking about the television and computer as separate devices.

Some features do look pretty good this way. You can also rent and stream movies, which may be the way we do things tomorrow instead of going to the Blockbuster (NYSE: BBI) video rental store.

Who knows? A few years from now, both Google and Apple may actually be in the television business over the Internet, but today they are not. So don't cancel your TV service.

Today, these new services allow you to watch video clips, or listen to music or view photos you have on your phone. I don't think these offerings are all that exciting or interesting yet, but you might want to sign up for them for the fun of it.

--------------------------------------------------------------------------------

*ECT News Network editor's note - Nov. 18, 2010: The original published version of this column included this statement: "One thing is it has quietly stopped moving into other states with its new FiOS television service. I regularly hear from customers in cities and states around the country who want this kind of competition and are upset over the slowdown. Why the change?" This statement was removed in response to a correction from Bob Varettoni at Verizon: "Our wireline network spans 12 states and the District of Columbia, and FiOS television and internet services are offered in all these states... so there are no other states for us to expand to."

--------------------------------------------------------------------------------

*ECT News Network editor's note - Nov. 18, 2010: The original publication of this article asked, "Why has it stopped rolling into other markets?" This question was removed in response to Varettoni's explanation above.

--------------------------------------------------------------------------------

Jeff Kagan is an E-Commerce Times columnist and a wireless, telecom and technology analyst, author and consultant. Email him at jeff@jeffKAGAN.com.

 

Original

http://www.ecommercetimes.com/story/A-Whiff-of-Trouble-Brewing-at-Verizon-71261.html

http://www.ecommercetimes.com/story/71261.html

OPINION

A Whiff of Trouble Brewing at Verizon 

By Jeff Kagan

E-Commerce Times

11/18/10 5:00 AM PT

Here are the recent stats: Verizon Wireless only added 997,000 new customers compared with 1.2 million new customers during the same period one year earlier. There was a 25 percent drop in third-quarter profit. Its net income dropped. Operating revenue dropped. And it won fewer new customers than AT&T Mobility. These are Verizon's own numbers.

Verizon has shown solid growth in recent years, but there could be signs of weakness in its quarterly numbers. I saw this a few months ago and decided to keep my eye on it. Maybe I am wrong. Maybe this is nothing. Maybe it is a temporary blip that won't keep repeating itself -- but something doesn't seem right. Verizon seems to be having some problems, especially compared with AT&T (NYSE: T). So what is happening, and should we be getting worried?

There has been so much change going on at the company recently, it can make your head spin. Among other things, it is getting ready for a CEO change -- from Ivan Seidenberg to Lowell McAdam. Recently, Verizon has been focusing on the smartphone segment of the cellular industry. It is also focusing on FiOS wireline service to provide television.

So what is wrong? One thing is it has quietly stopped moving into other states with its new FiOS television service. I regularly hear from customers in cities and states around the country who want this kind of competition and are upset over the slowdown. Why the change?

Pale by Comparison?

I asked Peter Thonis, chief communications officer at Verizon, what the company would look like going forward. He said it has sold off a lot of the access lines and is now more heavily wireless and FiOS-centric than ever before. Verizon also believes cloud-based services are a large global growth opportunity for the company.

Going forward, it's all about innovation on smartphones, on FiOS, and with the cloud, Thonis said. That future sounds good if everything works out the way Verizon thinks it will.

So why is its performance starting to appear weaker rather than stronger? Why has it stopped rolling into other markets? True, not every company performs the same way. We have seen differences between companies like AT&T and Verizon, and others like Qwest (NYSE: Q) and Sprint (NYSE: S). Yet AT&T and Verizon have been on the same page.

The problem is that AT&T still shows strong growth. It started to focus on the smartphone segment years before Verizon did. That is why AT&T's smartphone sales are currently in the 52 percent range, while Verizon's are in the 37 percent range.

Do the Math

Here are the recent stats: Verizon Wireless only added 997,000 new customers compared with 1.2 million new customers during the same period one year earlier. There was a 25 percent drop in third-quarter profit. Its net income dropped. Operating revenue dropped. And it won fewer new customers than AT&T Mobility. These are Verizon's own numbers.

Marquett Smith is the company's new vice president of corporate communications. It's his job to keep Verizon Wireless top of mind in the marketplace. There are two areas he has to focus on: No. 1 is innovation -- giving customers what they want, before they want it; No. 2 is letting the world know. That's the job of Smith and Thonis.

I have known Thonis for more than a decade. Just met Smith. I have talked with them and like them both. Now we just have to see if they are up to the new challenge of the rapidly changing marketplace.

I am not saying there is a real problem yet, but something is not right. The point is that both Verizon and AT&T have shown similar growth until now. Is this something to be concerned with going forward, or will this problem heal itself? It may be too early to tell, but we should keep our eyes on it.

We are coming to the fourth quarter, which is the best quarter of the year for the wireless industry. Let's hope it is smooth sailing for Verizon, both on the wireline side and the wireless side of the business, and that this turns out to be just a blip that goes away.

I know investors, customers and workers want the company to continue to be a strong leader and will be watching. Let's hope this is doesn't become an issue for Verizon going forward.

Drop me an email with your thoughts on what is happening at Verizon. 

Jeff Kagan's Pick of the Week

 

Pick of the Week: Google TV, Apple TV

So, you've been hearing about GoogleTV and AppleTV and want to know whether now is the time to switch? Should you cancel your cable television from Comcast (Nasdaq: CMCSK), Time Warner (NYSE: TWX) or Cox -- or your IPTV from AT&T, Verizon or CenturyLink?

The answer is no -- not yet. However, you can add these new services to what you already have.

Google (Nasdaq: GOOG) TV and Apple (Nasdaq: AAPL) TV don't replace anything you already have, but they will let you use your televisions instead of your cramped computer screen. This requires a change in thinking about the television and computer as separate devices.

Some features do look pretty good this way. You can also rent and stream movies, which may be the way we do things tomorrow instead of going to the Blockbuster (NYSE: BBI) video rental store.

Who knows? A few years from now, both Google and Apple may actually be in the television business over the Internet, but today they are not. So don't cancel your TV service.

Today, these new services allow you to watch video clips, or listen to music or view photos you have on your phone. I don't think these offerings are all that exciting or interesting yet, but you might want to sign up for them for the fun of it.

--------------------------------------------------------------------------------

Jeff Kagan is an E-Commerce Times columnist and a wireless, telecom and technology analyst, author and consultant. Email him at jeff@jeffKAGAN.com.

 


 

http://www.ecommercetimes.com/story/Trouble-at-Clearwire-Could-Spell-Trouble-for-Others-71214.html

http://www.ecommercetimes.com/story/71214.html

OPINION

Trouble at Clearwire Could Spell Trouble for Others

By Jeff Kagan

E-Commerce Times

11/11/10 5:00 AM PT

Looking at all these new companies -- Clearwire, Towerstream, Lightsquared -- the big unknown is whether this kind of wireless Internet technology will become a real competitive player or will struggle as a small timer, with the majority of customers sticking with the big guys. That is the question. The opportunity is real, but the road will be bumpy.

We have watched Clearwire (Nasdaq: CLWR) build its 4G wireless Internet service from scratch over the last few years. It has successfully won a few million customers and has looked like one of the hot new companies and technologies. But now it is suddenly struggling with the enormous investment costs and is throttling back on sales. Is this temporary or a real long-term sign of trouble? Does it affect just Clearwire, or does it also affect other newcomers -- such as Towerstream and Lightsquared, which does not even offer service yet.

I'll examine that question and then discuss EarthLink (Nasdaq: ELNK) buying ITC^DeltaCom -- a deal I consider interesting enough to tag "Jeff Kagan's Pick of the Week."

Clearwire's Competitive Challenge

What's happening with Clearwire is something we have seen in the past. The companies that start a segment are often not the companies that lead it years later -- for example, AOL and Prodigy in the Internet space. So what is the future of Clearwire, and what about the others following in its steps? Will they all suffer, or will they eventually lead?

Whether you are an investor, a customer or a worker, this is the question you need an answer to.

Clearwire sells the Clear service that allows you to connect to the Internet with a juicy and fast 4G wireless signal. It is run by Bill Morrow, who is its CEO. Clear works anywhere you are, whether you are in your home or office or at the park or even traveling. I tried it last year when it was still new, and it had limitations. When there was no Clearwire signal, there was no service. Since then, it has made arrangements with its parent company, Sprint Nextel (NYSE: S), to fall back to 3G service so there is almost always one signal or the other. Now it is much better.

When Clearwire launched its service in Atlanta, I was invited to the event. The new service competed with wireless Internet access offered by AT&T (NYSE: T) Mobility, Verizon Wireless, Sprint Nextel and T-Mobile. At that time, competitors were not able to offer connections that were as fast or as good. However they have improved their services and are now a bigger competitive threat to Clear.

One competitor comes in the form of femtocells, which you can use in your home or small business for fast wireless Internet service. Clearwire's competitors are also moving quickly to 4G themselves, so is the Clearwire edge fading? It's a solid service, but now the company has strong competition. What does this brewing trouble mean for Sprint Nextel, which is its largest investor?

Clearwire started out being special, but now it is just one of the competitors, and that makes its journey more uphill. What it will look like next year is the question. We just don't know yet. Will Sprint re-acquire it? Thomas Enraght-Moony, Clearwire's senior VP of marketing, has introduced a new and different approach that has been successful to date, but that also faces tougher competition going forward.

Towerstream's Growing Pains

Towerstream's story is similar. Jeff Thompson is its president and CEO. Towerstream offers a speedy 4G connection, but it targets business customers. Another difference is that it is stationary, not mobile. So it offers a high-speed connection, but it is not portable. It sounds more like the major wireless carriers' femtocell services.

Towerstream is still very small right now, but it is growing and still has access to the same opportunity. Big ideas will help this company continue to grow, but competition continues to increase from the big guys, making it harder.

Will it be still growing a year from today? That depends in large part on its marketing, quality and pricing. How can Towerstream position itself to be attractive against the AT&Ts, Verizons and Sprints of the world? That is its challenge. There are successful smaller wireless companies -- like U.S. Cellular and Cellular South -- so it can be done.

Lightsquared: Unknown Quantity

Then there's Lightsquared. I wrote about it a few times in the last several months, and I still just don't know. There are so many unanswered questions. This is a little known company in the formative stages, and it does not offer service yet. Word is it will start installing its network in the next month or so.

This company could be in a winning space, if it does everything right. That is challenging. If it becomes real, it could be a competitor. So far, there's no basis to judge it one way or the other. That is its problem right now. Plans take a long time to develop, but watchers have short attention spans.

Lightsquared is lining up significant funding and investors and partners. This is good. This means there are outsiders who have faith in the plan. It plans to offer some kind of wireless Internet service, similar to Clearwire and Towerstream, but it will also use satellites.

It will be a wholesale business. It won't deal directly with the end-user customer. Its customers will be carriers. The problem is that this company is so far just an idea. There's no telling whether it can make it in the market.

After it crosses one hurdle and builds a network, then it faces the same challenges of any other competitor: delivering good quality service, marketing to the potential customer, pricing wisely, meeting the competition and so on. The problem is it has no track record or experience.

Its not that the idea doesn't make sense. It does. However, it faces enormous competition. It will compete against the same big wireless carriers like AT&T, Verizon and Sprint, as well as with competitors like Clearwire, which itself is struggling now, and Towerstream.

There are so many things that all have to go right, and it is far too early to tell. With all that said, if successful, this could be a competitor one year from today. Lightsquared was started by Phil Falcone, who runs a New York City hedge fund, Harbinger Capitol Partners. My brother worked for Philip Falcone for a few years and says this is an idea he talked about for a decade.

If that is true, the plans must have changed several times. The wireless and Internet business was very different 10 years ago.

The opportunity is real, but the road will be bumpy. The customers are out there, but competition for them is growing.

Lightsquared has taken some solid steps to build a basic organization in recent months. Falcone hired Sanjiv Ahuja, the former chief of Orange (France Telecom's mobile unit), to head up the new company. That's good. Ahuja brough in Frank Boulben as CMO and Tom Surface as director of media relations. That's good.

So, looking at all these new companies, the big unknown is whether this kind of wireless Internet technology will become a real competitive player or will struggle as a small timer, with the majority of customers sticking with the big guys. That is the question. 

Jeff Kagan's Pick of the Week

 

 

Pick of the Week: EarthLink's Acquisition of ITC^DeltaCom

Atlanta based Internet Service Provider EarthLink is acquiring ITC^DeltaCom, a company that operates a fiber optic network of 16,400 miles and has around 32,000 business customers, mostly small and mid-sized.

The combined company will provide Internet and telecom services. The company will be based in Atlanta and run by Rolla Huff, EarthLink's Chairman and CEO, along with Joseph Wetzel, the COO of ITC^DeltaCom. They say demand for high-quality IP infrastructure is rapidly growing, and they see a significant opportunity. This deal should close in the next few months -- end of 2010 or early 2011.

I have followed Mindspring and EarthLink since their merger in the fast-growing days of this space. In the 1990s, companies like Prodigy, AOL and EarthLink were the leaders in the ISP space. Then larger companies with customer bases already in place moved into the space, like the local phone company or cable television company.

Since then, most customers bundle their Internet service with their phone or cable tv service. Growth at these ISPs has slowed significantly. They tried several things over the years, like selling BlackBerry pagers and cellphones and the like, but just have not cracked the code and been successful yet.

Will this new venture be successful for Huff and Wetzel? I met with EarthLink after its CEO Garry Betty passed away and before Rolla Huff took the reins. The company was on hold. Since then, it has been treading water and not really growing, although the quality of the service has continued to be admirable.

This idea may be the first forward-stepping idea that may work for Huff and the company. EarthLink is a good company with good people. Its investors and workers and customers would like it to continue to build and grow. Lets hope that is in the cards with this move.

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Jeff Kagan is an E-Commerce Times columnist and a wireless, telecom and technology analyst, author and consultant. Email him at jeff@jeffKAGAN.com.

 


 

http://www.ecommercetimes.com/story/Where-to-Look-for-Wireless-Innovation-71158.html

http://www.ecommercetimes.com/story/71158.html

OPINION

Where to Look for Wireless Innovation

By Jeff Kagan

E-Commerce Times

11/04/10 5:00 AM PT

The big players are not the real innovators. It's more fitting to think of them as "fast followers." They look for the ideas they think will work, or the ideas they need, but they are not the innovators. That crown goes to the smaller and lesser-known companies. If you want to know what the industry will look like tomorrow, check out what companies like U.S. Cellular and Cellular South are doing today.

When you think of wireless networks, which companies do you think of? Companies like AT&T (NYSE: T), Verizon Wireless, Sprint (NYSE: S) and T-Mobile, right? Next question: Which do you think are the marketing innovators in that same space? Would you believe it's not the big four? Instead, it is companies like U.S. Cellular and Cellular South.

I'll discuss why these two companies are the movers and shakers in the wireless industry, and I'll explain why CenturyLink's new Prism TV is "Jeff Kagan's Pick of the Week."

The Belief Project

Smaller companies can often be the source of some of the more interesting marketing ideas in the segment. Often these companies come up with some new ideas that the rest of the industry eventually follows.

Look at U.S. Cellular. New CEO Mary Dillon came to the company after rescuing McDonald's (NYSE: MCD). I remember the anchors on CNBC complaining about how the hamburger business was hurting. They brought in Dillon who, as their chief marketer, transformed the struggling fast food restaurant into a real winner again.

Earlier this year, when the U.S. Cellular CEO was scheduled to retire, the company brought in Dillon to take the helm. She has been quiet over there ever since, but in recent weeks has really shaken up not only the company, but potentially the entire industry, with a new idea.

She is introducing something called the "Belief Project." This is a reward program similar to the frequent flier programs at the airlines. When you spend money with them you earn points, which you can then cash in for a variety of things like merchandise or perhaps more minutes.

This has never been done in the wireless industry. U.S. Cellular is the first company to go down this route. The reason is it is not one of the big players. In order to get customers' attention, it has to offer more. It has to punch its way onto the map.

Lower rates were all the industry had seen from this sector in recent years. Good, but that didn't earn a spot in the customer's mind. However this "Belief Project" is a first. The company's new campaign, called "Wake Up," is designed to let the world know about it. This is fresh thinking from Dillon, a new marketing mind in the wireless space. This kind of thinking is a real wakeup call to the industry. This is starting to remind me of the good ol' days when MCI shook things up in the 90s.

The Small Innovate, the Large Follow

If this is successful for U.S. Cellular, I can see others jumping onto the bandwagon. Could we be seeing these same promotions from other carriers? I don't think the top players will follow -- not unless it starts taking serious business away from them -- but other second tier players may. Something to keep our eyes on.

Companies like Cellular South have also been first to market with many features. Remember last year when the major carriers started offering the flat rate, all-you-can-talk plans? They were successful and the customers loved it and the media wrote tons of stories about it, but did you know they did not start the idea?

That's right -- companies like Cellular South were offering this kind of plan long before the big guys. In fact, when the majors finally jumped in, companies like Cellular South still had lower-cost plans in the market. Yes, they still offered lower prices than the big guys. AT&T and Verizon were still tops on the rates charged. Then Sprint with lower rates. And then Cellular South with even lower rates.

That's typically the way the wireless space works. Smaller players offer the new ideas that capture the imagination and get customers to pay attention. Some ideas work and some don't, but Jim Richmond, Cellular South's director of corporate communications, told me at the time that the company offered more in order to attract customers' attention. Apparently, that strategy has been working.

While the wireless industry continues on its fast-growth trajectory, it's important to remember that it changes rapidly as well. In fact, many of the changes don't occur where you may think they do. The big players are not the real innovators. It's more fitting to think of them as "fast followers." They look for the ideas they think will work, or the ideas they need, but they are not the innovators. That crown goes to the smaller and lesser-known companies.

So, if you want to know what the industry will look like tomorrow, it may be helpful to look at what companies like U.S. Cellular and Cellular South are doing today. 

Jeff Kagan's Pick of the Week

 

Pick of the Week: CenturyLink's Prism TV Service

CenturyLink is not only growing into the No. 3 baby bell by acquiring Qwest (NYSE: Q) after picking up Sprint's local phone business, Embarq, but also going where neither ever went before: TV. Well, actually, IPTV.

Qwest and Embarq did resell satellite television, but they did not offer their own. That's what Glen Post, CEO of CenturyLink, has said they will now do. This could be great news for the competitive marketplace, where cable television companies compete with local telephone companies and satellite TV companies for your television dollar.

That's right -- CenturyLink, one of those small local phone companies that few closely follow or know that much about, suddenly may become a real competitor to satellite and cable television service. What? You thought they were a small phone company?

No, I have not seen this new Prism service or been briefed on it yet, so I cannot actually recommend it until I do. I am not sure about all the details yet, but this digital TV could be just what the marketplace needs. The more competitors in the television space, the better. That's why CenturyLink's new Prism TV service is my pick of the week.

We have seen AT&T Uverse and Verizon FiOS in the market. They bring innovation and lower prices than cable, but that still hasn't lowered the monthly price of traditional cable.

What will? Don't know for sure -- but more competition won't hurt. It could only help, from the consumer perspective.

We are starting to see AT&T, Verizon and CenturyLink/Qwest offering television in competition with cable TV companies like Comcast (Nasdaq: CMCSK), Time Warner (NYSE: TWX) and Cox, as well as the Dish Network and DirecTV (Nasdaq: DTV) satellite TV providers. This should be good news.

It looks like the first few markets will be Fort Meyers Fla., Las Vegas, Jefferson City Mo., Columbia Mo, and La Crosse Wisc.

More on this after I see it.

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Jeff Kagan is an E-Commerce Times columnist and a wireless, telecom and technology analyst, author and consultant. Email him at jeff@jeffKAGAN.com

 


Whatís Next After Google Android And Apple iPhone?

By Jeff Kagan

Which wireless phone will rule? Five years ago if we asked this question we would have been kicking around networks names like AT&T Mobility, Verizon Wireless, Sprint or T-Mobile. We never really thought much about handset makers. If we did we would talk about strong brands like Nokia, Rim or assorted other handset makers. Today however the wireless marketplace looks completely different. Letís explore.

Today the leaders are companies like Google with their Android or Apple with their iPhone. These are not even wireless companies. Today itís all about smart phones instead of regular handsets. Who will win this new race we suddenly find ourselves on?

As an industry analyst over the last 25 years I have learned that the wireless and telecom industry completely changes every few years. Let me give you an example. Long distance. Ten years ago AT&T, MCI and Sprint were interrupting our dinner with telemarketing sales calls. Remember those? Today there is no more stand along long distance industry. A few years ago Verizon acquired MCI and SBC acquired AT&T and took their name. Poof the industry changed.

Five years ago even the wireless industry looked different. At that time the word iPhone didnít even exist. Today iPhone and Android rule the rapidly growing and changing industry.

Will they continue to lead this changing industry? Too early to tell, but I can say they wonít be alone. When Apple jumped in customers loved it and thought that was all they needed. However when Google jumped in they were successful too. In fact today they are outselling Apple. Smart phone customers love one or the other. If that is the case there is plenty of room for more OS.

The smart phone market is rapidly growing, but is still young and there is still plenty of opportunity and devices to sell. Different customers have different needs and like different operating systems. With that said there is plenty of room.

Palm for instance got everyone excited with their new OS, but it hasnít really moved the meter. RIM Blackberry recently introduced their new version. It was much better than the previous version. It will attract or keep many existing users and as long as it keeps getting better may continue to succeed.

Nokia has their own smart phone software called Symbian. Yes even a regular handset maker has a smart phone operating system. You didnít know that? That is because their brand says regular handset, not smart phone. They have actually been in the smart phone business before Apple and Google. They have to update their brand as well as their technology. Keeping the brand up to date is crucial.

Motorola was given up for dead years ago. Their brand was just about gone. However it has done a great job of revitalizing itself by working with Google and developing their new Droid phones sold on Verizon Wireless network. They are doing well and are now going to expand to other networks.

Microsoft is launching their new operating system called Windows Phone 7. They have actually been in the smart phone sector for ten years believe it or not. Yes they have been struggling trying to carve out a niche. They grew to about 10% market share, then when Google and Apple did their thing a few years ago Microsoft fell to 5% market share.

What is this new Microsoft OS like? That is the question. Will it be as good as Apple and Google? Will it be close like RIM? Or will it struggle like Palm? Early reviews say it is leap years ahead of the last version. That is the good news. However it may not be better than other popular OS in the marketplace.

If not then Microsoft can tinker with it and improve it and try to capture the number three space in the marketplace and grow from there.

You have to find the best operating system for your needs. Get all the features you need and use. All OS are not created equal. Some have features that others donít. Itís not all about putting music on the handset.

Sometimes its about other valuable features like the Memo Pad feature so you can carry the same info on your phone as you carry in your Microsoft Outlook email program. Most donít offer this. Some do, but not well. A few do it well. If that is what you need then your decision is easier than you think. Just consider devices that use that OS. See it is actually simple.

There are more OS in the market to day all trying to become the next star. Who will lead five years from today? Does it really matter? If you are an investor the answer is yes. However if you are a consumer the answer is no.

Donít follow everyone else because everyone has different needs or desires. Learn what you need and what you desire and find the right OS for you. It takes time up front, but you will be happy you did. And remember each is continually updated so what you use next year may be different than what you use this year. Wireless is rapidly changing and you just have to keep updated. 

Jeff KAGAN is a Wireless and Telecom Industry Analyst, Author, Speaker and Consultant. He has followed the industry for 25 years and has worked with many wireless and telecom, cable TV and IPTV, Internet, software and computer companies. Visit him on the web at http://www.jeffkagan.com



 

http://www.ecommercetimes.com/story/Windows-Phone-7-Will-Microsoft-Hit-It-Out-of-the-Park-This-Time-71128.html

http://www.ecommercetimes.com/story/71128.html

OPINION

Windows Phone 7: Will Microsoft Hit It Out of the Park This Time?

By Jeff Kagan

E-Commerce Times

10/28/10 5:00 AM PT

There are plenty of OSes in the marketplace that just are not cutting it. There is an opportunity, but it is up to Microsoft -- and how great Windows Phone 7 really is -- to determine whether it will succeed in the big way the company needs. Will this be the killer app Microsoft has been trying to create over the last decade?

Microsoft (Nasdaq: MSFT) has been trying to crack open the enormous opportunity in the cellular industry for a decade. CEO Steve Ballmer always says the company's software is terrific, but it has never seemed to move the needle. Could that be about to change? Microsoft is about to release its newest version, Windows Phone 7, and we are about to see.

This will be the one, according to Ballmer. Of course, he is one of the most optimistic people in the world -- so as nice a guy as he may be, I think it is important to dig a little deeper.

The mobile space is one of the most important opportunities for Microsoft to do well as it evolves. The company has led the computer operating system space forever, but the opportunities for growth and success are much different in 2010 than just a few short years ago. And going forward, they will continue to change.

As this evolution occurs, Microsoft will have to embrace and lead in at least one of the new segments in order to continue to grow. The mobile space is perfect, if it can crack the code. The space is young, and new leaders like Apple (Nasdaq: AAPL) and Google (Nasdaq: GOOG) are making waves.

Microsoft has been trying for a decade, competing against RIM and Palm and assorted other smaller players. It doesn't make its own devices. Instead, it makes the software that runs on different devices. In that way, it is like Google, with its Android operating system.

If Microsoft gets this right, it could be a rapid growth opportunity. Want proof? Just look at what's been happening in the last few years with the Apple iPhone and Google's Android OS. They are turning the wireless space on its head, and they are not even wireless companies.

Their success is proof that this space is ripe, and what Microsoft is trying to do can indeed be done. The next question is why hasn't Microsoft succeeded yet? After all, it got there first.

Room for Another Winner

The obvious answer is that its previous operating systems just didn't excite people. They simply didn't buy. Now the marketplace is changing. Customers are rewarding companies that offer what's new. In that vein, Microsoft will offer around 100 apps, I am told. Compare that to Apple's several hundred thousand Apps. Quite a difference.

Microsoft carved out about 10 percent market share in the mobile space over the last decade through sheer persistence, but that dropped to less than 5 percent after Apple and Google jumped in. The marketplace is starting to get excited to see what Microsoft's new OS can do.

Is there room for another success? Yes, there is. Whether Windows Phone 7 will be the next one is the question. There is reason to be hopeful, but what I am hearing so far sounds a little one way and a little the other.

When Apple jumped in with the iPhone, we asked the same question. Then, when Google jumped in behind it with Android, it began growing even faster. That is proof there is plenty of room for multiple great operating systems.

There are plenty of OSes in the marketplace that just are not cutting it. There is an opportunity, but it is up to Microsoft -- and how great this operating system really is -- to determine whether it will succeed in the big way the company needs.

One thing is for sure -- we will know pretty quickly. Within the first few weeks, we will get a good feel, and within the first few months, we will know for sure. Will this be the killer app Microsoft has been trying to create over the last decade?

These devices are not always successful right away. Apple was with its iPhone, but Google was not with Android. The first Android smartphone was available only through T-Mobile, and it was only a so-so success. A year or two later, Android hit the big time when a wave of new smartphones from multiple handset makers became available on multiple networks. Customers loved it. The media loved it.

BlackBerry led in smartphone sales over the last decade, but it is losing ground to the iPhone and Androids. RIM refreshed its BlackBerry OS. and the new version is much better -- but it is not as advanced as the others. It also has few apps. Palm's new software is better than what was previously available, and now it is announcing an even newer version, but it just doesn't capture the imagination of the marketplace -- and it's another company with few apps.

Could apps be one of the keys to determining whether Microsoft will be successful or not?

Samsung, HTC, LG and others are all trying to hit the magic spot. Sanjay Jha, co-CEO of Motorola (NYSE: MOT) says he will look at this new OS for upcoming models as well.

The first three devices running Windows Phone 7 are the Samsung Focus, the HTC Surround and the LG Quantum. One big attraction to a certain segment of the marketplace is its ability to access some Xbox Live features. That could be a very important draw.

Soon the Story Will Be Told

Microsoft has a lot of support. Andy Lees, president of the mobile communications business at Microsoft, says HTC has been a partner since it entered the mobile phone space a decade ago. Peter Chou, the CEO of HTC, and Jason Mackenzie, president of HTC Americas, have offered continued support.

Brand new president and CEO of T-Mobile, Philipp Humm, would like nothing more than a home run with Microsoft to start his new game. Similar sentiments come from Paul Cole, VP of product management at T-Mobile. Cole Brodman, the chief marketing officer at the company, is also hoping Windows Phone 7 will be successful.

There is a lot of excitement building, and Microsoft is really pulling out all the stops to make the Windows Phone 7 launch bigger and better. Will it work?

This OS will be on many phones and on many networks, including AT&T (NYSE: T) Mobility, Verizon Wireless, Sprint (NYSE: S), T-Mobile, U.S. Cellular, Cellular South and others.

I expect to see devices and operating systems all competing for a share of this exploding new market. Newcomers to the space like Lenovo and Dell (Nasdaq: DELL) -- and even Nokia (NYSE: NOK) and Motorola are good possibilities for Microsoft.

The first networks to carry Windows Phone 7 devices are AT&T and T-Mobile. This should prove to be a good, quick test.

The customers will tell us whether they love it. The media will write about it, and that will drive much of the story. Microsoft could finally start to grow again. Hopefully, it will hit the target this time. Microsoft is a good company that needs this new opportunity for growth.

After the Windows Phone 7 release, one of two things will happen. Either it will be a big hit, or it will not. If not, Microsoft will either work with passion and energy and roll out the next version, or it will not. We have never really seen this kind of energy from Microsoft, but that would be a good sign, Steve... hint, hint.

One thing above all, it must WOW the marketplace to win. The customers, the media, the investors, everyone. Its new version must be different and better than what is already in the marketplace -- not just better than previous versions. Today the marketplace is a take-no-prisoners battlefield. So far, it has done a great job lining up all the support.

I read Walt Mossberg's report in The Wall Street Journal last week. He was impressed, but does not think Windows Phone 7 is good enough to challenge Apple and Android. If that is the case, then Microsoft could learn what it needs to do and make the next version the "killer app."

So far, I am not convinced Windows Phone 7 will topple the iPhone and Androids, but it could come on strong. That would be very good for this first effort. A good place to start.

One thing I have learned is that Microsoft just does not give up. So now we wait for the release. Will this be the magic bullet? Will this compete head-to-head with the current leaders? We are about to find out.

 

Jeff Kagan's Pick of the Week

 
 
Jeff Kagan's Pick of the Week:
Clearwire Rolling Into NYC, LA and SF

Clearwire (Nasdaq: CLWR) has finally announced it will power up its WiMax service in New York City on Nov. 1, in Los Angeles on Dec. 1, and in San Francisco on -- well, they don't give a date for San Fran yet. After that, Clear plans to roll it out in Miami, Denver, Cincinnati and Cleveland by the end of the year.

Clear is offering its dual-mode 4G WiMax and 3G service, which roams on the Sprint network when WiMax is not available. It has an aggressive rollout plan.

Where available, it does offer a pretty good service. When it launched in Atlanta last year, I was invited to be present on launch day and offer comments to the media covering the story. I tried the service, and except for a few small problems -- like no service, in spots -- I was basically impressed.

It was a very fast connection in most places. At the time, there was no service in others, but that problem should be solved now with newer devices that automatically revert to Sprint's 3G network when Clear is not available.

I think Clear should have rolled out its service in media centers like NYC much earlier. Reporters would have used it, liked it, and written about it, helping to spread the word.

Today, Clear is available in 56 markets nationwide, covers 66 million people and has almost 2 million customers. This seems to be a successful idea, and we are starting to see competition coming from a smaller company called "Towerstream," offering similar services to business customers -- and a very new company called "LightSquared," is emerging, though it is not even selling services yet.

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Jeff Kagan is an E-Commerce Times columnist and a wireless, telecom and technology analyst, author and consultant. Email him at jeff@jeffKAGAN.com.

 


http://www.ecommercetimes.com/story/71079.html

http://www.ecommercetimes.com/story/Solving-ATTs-Ballooning-Problem-71079.html

OPINION

Solving AT&T's Ballooning Problem

By Jeff Kagan

E-Commerce Times

10/21/10 5:00 AM PT

When I talk with AT&T employees at every level, from various parts of the company, I hear the same thing. They want AT&T to thrive, but things have just not been right for the past few years. It's as though everyone hears a bad sound coming from the car, but no one is fixing the problem. Eventually, the fast-moving AT&T may break down on the side of the road.

I recently gave a speech to a group of AT&T (NYSE: T) executives in a university MBA program, and during the Q&A afterward I got a very interesting question about the future of the AT&T brand. It grew into an interesting and important discussion that I'd like to share here.

The questions after speeches this year were astounding. Talking with folks at events all around the country tells me AT&T may have a brewing problem it needs to address, and quickly. But to tell you the truth, I am not even sure the company is aware of it yet.

The conversation after my recent speech focused on important after-merger issues that have apparently been simmering among the workers over the last few years. I see this as a real threat that AT&T should address quickly before it causes trouble.

Let's pull the camera back for a moment to get a good understanding of the problem. The AT&T of today is not the same company it was just a few short years ago. In the 1990s, AT&T was the largest long distance giant. It acquired the largest cable television company and operated the largest wireless company as well.

Over the next several quarters, it realized the merger was not working, so it quickly broke the company apart, spinning off the wireless business and selling the cable television business to Comcast (Nasdaq: CMCSK). AT&T was losing its consumer long distance customers to the baby bells, so all it had left was a smaller business services company.

In the mid 2000s, SBC -- the smallest baby bell -- acquired AT&T, Bellsouth and Cingular. Suddenly there was a distinctively different company.

What's in a Name?

I remember getting a phone call from an SBC executive asking my opinion about the name. The company was trying to decide whether to keep "AT&T" or create a new name? I said there was no choice. The AT&T name and brand was tired, but was still the strongest and best-known brand in the industry. There was no choice but to keep it.

However, I said, the new company would have to update the old name. Revive it. Reinvigorate it. Give if a youthful energy and have it mean everything that was great, that is great, and that will be great going forward.

AT&T used to be a long distance company. Now it provides local services, wireless, Internet, television, and so on. Its competition has changed as well. It used to compete with MCI, Sprint (NYSE: S) and the baby bells, but now it competes with Comcast, Time Warner (NYSE: TWX) and Cox -- and every wireless carrier as well.

SBC's decisions and actions at the time of its transformation were terrific. It changed the name of the company to AT&T overnight. Its quick action was a brilliant move, and it made it look as though everything was completely under control. The company's leaders were hitting home runs. It was the start of a beautiful time of peace and harmony -- but something would start bubbling beneath the surface.

While the waters were calm at sea level, underwater things got increasingly chaotic. Tiny SBC had suddenly morphed into the very large AT&T. Everything changed -- and as I'm learning, it was not all for the better. "Overwhelming" became the catch-word for AT&T workers.

Over the last few years, AT&T has become larger, colder and much more distant to everyone -- including workers, investors, analysts and the media. That is a part of the problem.

The new AT&T started out as a glass that was half full a couple years ago, but is starting to become a glass half empty.

The major companies that were rolled into one have all been forced to change. They lost their senior executives, and the new and now very large AT&T was being run by the SBC execs -- and even many of them had changed, including the CEO that pulled all this together.

When this new AT&T was being formed, it was still run by longime SBC CEO Ed Whitacre. It is now run by CEO Randall Stephenson. Wrapping his arms around this enormous new company is obviously quite the challenge. I don't know if it could be done any better than it has been to date, but there are still problems that need to be fixed -- and quickly.

Turbulence Hasn't Settled

Temporary chaos is expected after every merger, but it's been several years since this one took place. I think one of the problems is that it was not just one large merger -- several large mergers were occurring at once. Remember, it was SBC acquiring AT&T, Bellsouth and Cingular, and suddenly putting them all under one roof.

The rugs of tens of thousands of workers were suddenly ripped from underneath them. They no longer knew the path to success. That uncertainty remains. Things are bigger and better from one perspective, but much worse from another.

I hear from customers in the old Bellsouth region that customer care has fallen. Bellsouth had the best reputation for customer care in the nation among the seven baby bells, but after being acquired by AT&T, all that has changed. Now customers are frustrated, which is becoming a bigger problem.

True, the industry is getting more complex, andcompanies are dealing with many competing and conflicting challenges -- but one thing is for sure: You have to give your customers golden care, or you will lose them. Customers have choices today.

The surface, things look under control, but chaos is starting to bubble up. The former SBC execs have to handle the immense pressure of a much larger job.

After moving the HQ from San Antonio to Dallas, the company has had little time to breathe and think over the last few years. Everyone has been under enormous pressure. It is starting to take its toll -- and it's still building.

I have heard from several employees that AT&T used to be a fun place to work, but no more. Now it's just tough. That lack of enjoyment and enthusiasm will hurt the company if it doesn't turn things around.

I've noticed the change personally over the years. I remember meeting Larry Solomon in the middle 1990s. He was head of corporate communications for SBC at the time. That was back when the company looked and acted differently -- more relaxed and closer with customers, employees, analysts and the media. There were seven smaller baby bells and three big long distance giants, and I worked with them all. It was a very exciting time for everyone. The sky was the limit.

Larry was one if the most approachable, nicest and most effective corporate communications persons in the industry. Don't misunderstand -- they all fall all over themselves when I email or call with a question, but SBC was noticeably attentive and responsive in many different respects -- better than most.

Cold and Distant

During the last few years, things have changed. I haven't talked with Larry in a long time. AT&T sends press releases and emails on a regular basis, but the valuable two-way communications have suffered. Unless it wants to reach out to brief me on something, I have very few communications with the company. It has become a fortress with tall, thick walls. Everything is very official.

When I have a question, I have to go through an annoying and time-consuming process rather than just sending a quick email and getting a quick answer. Very different.

Compare this to the other competitors, who still make sure they are very close with me, which is as it should be. Other analysts say the same thing. This approach makes our jobs much more difficult, and it may backfire on the company before long.

Apparently, AT&T workers have noticed this too. When I talk with the employees at every level, from various parts of the company, I hear the same thing. They want AT&T to thrive, but things have just not been right for the past few years. It's as though everyone hears a bad sound coming from the car, but no one is fixing the problem. Eventually, the fast-moving AT&T may break down on the side of the road, and then its leaders will start trying to figure out what went wrong, but it will be too late.

They are still flying high today. They are still executing well -- and if they can correct this problem, they will be fine. However, I have not seen any corrective action in the works.

The problem is that AT&T has lost so much in the process of changing over the last few years. Does anyone there even know it yet?

I understand what has happened. Things had to change at AT&T. The company quickly grew from the smallest to the largest baby bell, next to Verizon. It has a new CEO and a new HQ in a new city. Thanks to its new larger size, it has to digest the acquisitions and get everything under tighter control.

Maybe its executives can no longer have casual conversations like they did when they were part of the smallest company. Now that they are running one of the largest, they have reporters listening to every sound they utter and ready to write.

The world has changed for them too. However, distancing themselves from the marketplace may feel better in the short term, but it will eventually hurt them -- with their workers, their investors and their customers, not to mention the media and analyst community.

I think everyone wants to see AT&T do well. It impacts so many workers, investors and customers. This problem is solvable. However, it is real and it is getting worse. AT&T needs to recognize and fix it.  

Jeff Kagan's Pick of the Week

Apple's iPad From Verizon

Apple (Nasdaq: AAPL) has announced it will start selling its iPad through Verizon Wireless on Oct. 28, just in time for this year's holiday season. The loss of the exclusive must pinch AT&T to no end.

Pricing will be essentially the same. Verizon's offering includes a MiFi connector since the iPad is not yet compatible with its network.

The iPad is quickly growing in popularity, and I expect to see all of the wireless carriers bringing many similar devices to the market shortly.

--------------------------------------------------------------------------------

Jeff Kagan is an E-Commerce Times columnist and a wireless, telecom and technology analyst, author and consultant. Email him at jeff@jeffKAGAN.com.

 


http://www.ecommercetimes.com/story/71031.html

http://www.ecommercetimes.com/story/The-Drivers-Steering-Motorolas-Comeback-71031.html

OPINION

The Drivers Steering Motorola's Comeback

By Jeff Kagan

E-Commerce Times

10/14/10 5:00 AM PT

It worries me that Motorola is becoming so reliant on Google's Android. Motorola's success depends on this single lynchpin. As long as Google Android stays hot, Motorola can continue to build. Motorola is building its future around the exploding smartphone segment. That is the good news. However, putting all your eggs in one cart is always risky.

Motorola (NYSE: MOT) has been struggling for years to recapture its greatness. Suddenly, it seems to be on the right track, thanks to working with Google's (Nasdaq: GOOG) Android operating system and Verizon Wireless. There are so many issues to consider, but the main question today is what are Motorola's plans for the next few years, and what are the chances it could be on the verge of a longer-term recovery?

The marketplace changes quickly. Five years ago, Apple's (Nasdaq: AAPL) iPhone didn't yet exist. Three years ago, neither Google's Android OS. Today, both are leaders in the wireless handset smartphone space. That new reality is fueling many success stories in the handset maker community, while causing many leaders to squirm.

Motorola didn't always struggle. It was an industry leader for decades. In the mid 1990s the StarTac cellphone was the latest hit for the company until the networks suddenly switched from analog to digital.

When that happened, Motorola had two big problems. One was that it had no digital handsets to transition to; another was that its brand simply said analog. Not that it paid much attention to its brand at the time. After all, it saw itself as Motorola, King of the handset makers.

That attitude became a real problem. Motorola thought it was more important than it actually was. It thought the industry would not change, leaving it behind in the dust. Yet that is just what happened.

I tried to share this with Motorola several times, but the company's leaders just didn't want to hear it at the time. In the meantime, it continued further down the wrong path.

New Blood

Motorola eventually brought in a new CEO, Ed Zander, who had one success. It's too bad that didn't last. He came in when the company was launching its Razr. That was a terrific device, and it helped spur Motorola's recovery over a few years.

I remember everyone being confused at the time when I kept talking about how great that single device was, but emphasizing that my longer-term concern was what was coming next -- after the Razr rode the wave up and down like every product does? I saw nothing new coming next. No next wave.

There wasn't one. Motorola rode the Razr wave up and back down again over a few years. Then the company once again became mired in the mud.

As it was shrinking and dying, Motorola brought in another new CEO, Greg Brown, in an effort to save itself. The company also enlisted Dave Dorman to become chairman. Dorman ran AT&T (NYSE: T) until it was acquired by SBC a few years ago.

I knew both of these guys and had followed their past successes. I met Brown in the 1990s when he ran a business unit for Ameritech, one of the baby bells. I met Dorman several times in Atlanta and at AT&T HQ.

I decided these two were Motorola's best chance for success. Either they would find a way to turn this company around, or it would be time to grab the shovels.

They decided to break Motorola into two parts, and they brought in Sanjay Jha as co-CEO. Jha, who came from Qualcomm (Nasdaq: QCOM), has done a great job so far on the handset side.

In fact, the three of them do seem to be starting to turn the company around. That is the good part of the story. The next natural question is what is in the pipeline to keep the success waves coming?

Let's take a look.

Strategic Staying Power?

Google getting into the wireless phone business seems to be the single key to Motorola's newfound success. Originally, the Motorola brand was a tired leader in analog handsets. Then Nokia (NYSE: NOK) became No. 1 with its digital handsets and has kept that lead over the last decade.

As a matter of fact, today the marketplace is changing again with the Apple iPhone and the many smartphones running Google Android soaring in popularity. In today's marketplace, Nokia and RIM seem to be battling the same tech and brand problems Motorola dealt with in the 90s -- but that's another column.

Suddenly, Motorola is reinventing its brand and tying it to Google's Android. Its Droid devices have been very successful for Verizon Wireless.

So far, things look good. What is coming next? That's the question.

Motorola has a very aggressive rollout of many new devices planned over the next several months, according to Jha. Not only that -- it will also be selling those devices through a variety of wireless carriers. Perhaps AT&T Mobility, Sprint (NYSE: S) and T-Mobile? Motorola intends to have a device for every consumer's and every business user's wants and needs, offered by every carrier.

Aggressive plans. Working with multiple carriers spreads the risk. Good move.

The one part that worries me is that Motorola is becoming so reliant on Google's Android. Motorola's success depends on this single lynchpin. As long as Google Android stays hot, Motorola can continue to build.

Motorola is building its future around the exploding smartphone segment. That is the good news. However, putting all your eggs in one cart is always risky.

Get Well Wishes

Android has become the hottest mobile phone software in the industry. As long as this continues to be the case, the sun will shine at Motorola. However, the marketplace changes every few years. In just a short time, Android overtook the iPhone. What is next? Will it be a plus or minus for Moto?

Motorola is tying its success or failure very closely to Google's Android. If it softens, it will impact Motorola, and there may be nothing it can do about it.

The best plan would be for the company to widen its net. Build smartphones based on other OSes besides Google's. Perhaps it will. Jha said Motorola will consider Microsoft's (Nasdaq: MSFT) Windows Phone 7 operating system. He said the company plans to unveil 20 additional smartphones.

I remember meeting with Brown and assorted execs a few years ago at CTIA in Las Vegas. They were a group of determined leaders, but they didn't have a clue yet how they were going to pull the rabbit out of the hat.

Since then, two good things have happened. Jha has joined them, and Google's Android was born. They may be the way out of the darkness for the company after all these years.

So, Motorola's recovery story seems to be in the early stages, but it looks good so far. Next year will be important, as the company breaks into two. Can Motorola keep its eyes on the ball? Let's hope it learned the Razr's important lessons and can continue to build on success. Every Motorola investor, worker and customer hopes the company gets it right this time.

--------------------------------------------------------------------------------

Jeff Kagan is an E-Commerce Times columnist and a wireless, telecom and technology analyst, author and consultant. Email him at jeff@jeffKAGAN.com.

 


 

http://www.ecommercetimes.com/story/Catching-a-New-Wave-of-PR-Opportunities-70986.html

http://www.ecommercetimes.com/story/70986.html

OPINION

Catching a New Wave of PR Opportunities

By Jeff Kagan

E-Commerce Times

10/07/10 5:00 AM PT

Think about this. Between McDonald's and Burger King, customers have said Burger King makes a better burger, yet McDonald's keeps winning the race, staying No. 1 in sales and revenue. Why? Winning in PR is one key. A company doesn't have to have the best product to be No. 1. It is often a wave of the magic PR wand that gets results.

I just gave a speech to the Georgia Chapter of the Public Relations Society of America on the changing opportunities in the wireless and telecom industry. The response was terrific, but I could tell not everyone understood the changes occurring in the industry and the unbridled opportunity that is starting to appear.

I updated the group on the growing opportunities and the challenges that are starting to occur in the industry once again -- how it is changing now and what it may look like in the next few years; who the leaders are today and how that will change tomorrow; how to see the early stages of this new era and how to succeed in it.

Think about the wireless industry. Five years ago, Apple's (Nasdaq: AAPL) iPhone didn't even exist. Three years ago, neither did Google's (Nasdaq: GOOG) Android OS. Today, they lead the transformation of the wireless industry. Who and what is next?

The industry is transforming itself rapidly, in new and unpredictable ways. That is the threat and the opportunity. Could that show you what new clients to search for? Or if they are already clients, does it show you how to win for them and hang onto them?

Lightning Strikes Twice

Mary Dillon, the new CEO of U.S. Cellular, just made what may turn out to be a major industry-reshaping announcement. She came from McDonald's (NYSE: MCD), where she was the chief marketer during the last few years. She was very successful helping to turn that company around. Will she be as successful at the helm of U.S. Cellular?

She comes at this from a marketing perspective. This reminds me of the success MCI had in the 90s.

Dillon is introducing a brand new idea into the wireless space: the "Belief Project." This is a frequent flyer type program -- but for wireless customers, not airline customers. This was such a huge success in the travel industry, she wants to make lightning strike twice in the wireless world. "Wake Up" is the name of the new campaign to introduce it to the marketplace.

Will this be successful for U.S. Cellular? If so, will the idea spread to other wireless carriers? Too early to tell, but Dillon is the kind of person who could lead the industry forward. This is the kind of breakthrough thinking that we need to see more of as the industry continues to change.

The same challenges and opportunities exist now in wireline telephone, cable television and IPTV, Internet, VoIP, computers and more. It's around all the services and equipment, handsets and network gear.

The 1990s were a magical time in the PR industry. There were so many new and young companies with earthshakingly new ideas and they all needed help with PR. Then the early 2000s came, and the entire industry slammed into a brick wall.

That rattled the PR industry for many years. However, new opportunities have been developing over the last several years, and smart PR professionals are jumping in early.

Better PR Trumps Better Burger

Looking at the changing technologies, competitors, and regulations, it is easy to see that the next wave of opportunity is beginning to form.

This is the kind of marketplace where new companies will lead and existing leaders may falter. Over the years, I have been invited to visit with the leaders of many PR agencies, ad agencies and companies to share my thinking on this important topic.

Think about this. Between McDonald's and Burger King, customers have said Burger King makes a better burger, yet McDonald's keeps winning the race, staying No. 1 in sales and revenue. Why? Winning in PR is one key. There are countless examples, but you get the point.

I told the PRSA group it is as important to understand the changes reshaping the telecom industry as it is to understand the changes reshaping public relations.

If you are one of the few who understand what is happening, you could be one of the big winners in the next several years.

The wireless and telecom business looks very different today compared to a few short years ago.

Feeding the Beast

Companies like AT&T (NYSE: T), Verizon, Comcast (Nasdaq: CMCSK), Time Warner (NYSE: TWX) and Cox are firing on all cylinders right now. In addition, their public relations efforts are excellent. They are proactively pumping out press releases with all sorts of story ideas and information.

They feed the media and analyst beast. That is key. There are so many stories that have to be covered that writers don't have the time to do much more.

What about Qwest (NYSE: Q)? They are having trouble growing in comparison. They are now in the process of being acquired by CenturyLink, which also acquired Embarq, which was Sprint's (NYSE: S) local phone business. What new challenges and opportunities will CenturyLink face as it becomes the new No. 3 baby bell.

Windstream has similar challenges and opportunities. It used to be Alltel, but spun off its wireless business. It is growing and will be in a strong No. 4 position.

I think the local phone business will split into two segments -- AT&T and Verizon in one group, and CenturyLink and Windstream in the other. That means two groups, each with a No. 1 and No. 2 player -- no Nos. 3 and 4.

You know what that means from a PR perspective, right? Gold.

CenturyLink and Windstream are doing well so far because of acquisitions and expansions of their services. However, they have never been active with PR. Now, as they rapidly move into the focus of media and analysts, will they successfully handle the new pressure well?

Either they will be actively putting information and story ideas into the marketplace to keep reporters busy, as AT&T and Verizon do, or these same reporters will be looking for their own story ideas. When they do that, the stories are often much more challenging.

Sprint was strong in the 90s but has had trouble during the last several years. It is fighting hard to repair and rebuild. It is taking a while, but as it continues to improve, it must put out good PR stories and ideas to keep the media following those helpful, rather than harmful, stories. It has begun to do so over the last year or so.

Nokia, RIM on the Ropes

Companies like Nokia (NYSE: NOK) and BlackBerry maker Research In Motion (Nasdaq: RIMM) face a significant challenge. Momentum has shifted to the Apple iPhone and the many Android smartphones. The marketplace has suddenly changed.

Nokia's Symbian OS is No. 1 worldwide. However, in North America, Nokia is known as a feature-phone maker; it's not a smartphone brand. It has two challenges: Update the technology, and update the brand.

As the marketplace is moving toward smartphones, Nokia is stalling. It has a new CEO, Stephen Elop. Does he understand the challenge the company faces to update the technology and the brand? Companies like Samsung, HTC and Motorola (NYSE: MOT) are seeing rapid smartphone growth.

What about RIM? It is a smartphone maker, so shouldn't it be in the catbird seat? Even though it still holds the lead in North America, the marketplace is suddenly changing, and it has not innovated. The iPhones and Androids are stealing the media thunder.

RIM's new operating system is an improvement, but it's not as impressive as Apple's iOS or Google's Android. RIM is launching a new tablet computer similar to Apple's iPad, but it targets the business market. Have Nokia and RIM seen their best days? Either they crack the code and recover, or they will continue to decline.

This is more than just building the brand -- it's also about updating the technology.

Magic Wand

There are many public relations and advertising opportunities bubbling to the top right now. Ideas that don't even exist today will be developed in coming years. Do you have the right ideas to help these companies?

Remember, the power of PR is often the crucial difference between whether a company makes it or not.

I expect a shakeout may start to change the equipment side of the industry as well. Companies like Alcatel-Lucent (NYSE: ALU), Cisco (Nasdaq: CSCO) and dozens of others will be involved, with many changes and acquisitions. There are too many competitors for the present marketplace.

Good PR is key during this transformation. Every company needs to get up to speed with its PR and advertising.

In the next several years, PR will play a renewed and important role. What innovations are coming next? Who will have the best products?

Success is about doing two things well. One is having the right -- and updated -- technology. New ideas. New thinking. Leading the industry. Two is having successful public relations and advertising strategies so you can let the world know.

A company doesn't have to have the best product to be No. 1. It is often a wave of the magic PR wand that gets results.

Who led yesterday, who leads today and who will lead tomorrow -- and why -- are the key questions. Apple and Google are transforming the wireless space; who and what is next? Are you ready to play in the big game once again? Tomorrow's leaders are developing right now.

--------------------------------------------------------------------------------

Jeff Kagan is an E-Commerce Times columnist and a wireless, telecom and technology analyst, author and consultant. Email him at jeff@jeffKAGAN.com.

 

 


 

http://www.ecommercetimes.com/story/70933.html

OPINION

How Dan Hesse Is Reviving Sprint

By Jeff Kagan

E-Commerce Times

Part of the ECT News Network

09/30/10 5:00 AM PT

When Dan Hesse got to Sprint, it was worse than he thought. Apparently, things were a mess at the nation's No. 3 wireless carrier -- and quickly getting worse. The perfect storm was gathering. Everything that could go wrong was going wrong. How could so much damage have come to this industry leader? The Sprint brand was taking a beating. Customers were leaving, causing pressure on earnings.

I first met Dan Hesse, the CEO of Sprint (NYSE: S), back in the mid 1990s and have since followed both his and Sprint's journey. Let me tell you the backstory of the battle Hesse is fighting to bring Sprint back to life. I will also share a few thoughts about where it is today in its recovery, and what we can expect going forward.

When I met Dan Hesse, he was running the AT&T (NYSE: T) Wireless business back in the days when AT&T was still the long-distance giant. I have been an analyst for 25 years, so I have met quite a few CEOs and senior executives. They all want to make themselves and their companies look good in front of me -- understandable. Over time, a few have stood out above the crowd. Real people. Honest. This is a good way to introduce you to Dan Hesse.

The AT&T wireless business at that time was vibrant and growing quickly. Remember the Digital One Rate plan? That was the first flat rate, all-you-can-talk plan in wireless, and it was created by Hesse. It changed the growth structure of the industry. Suddenly, people didn't have to count the minutes -- they just talked. It was a big success, and every other competitor, including Verizon Wireless, Sprint and T-Mobile, followed suit.

Around 2000, Hesse left to run a company called "Terabeam" in Seattle. Then, several years ago, he got a call from Sprint because it was spinning off its local phone business. It was renaming it "Embarq," and it needed a CEO. Embarq was Sprint's wireline business, which it spun off when they acquired Nextel.

When Hesse ran Embarq, the quiet and sleepy company seemed to wake up. There was energy there among employees, investors and customers for the first time in years. The marketing , PR and advertising were terrific. The company, which had been in the sleepy shadows of the national long-distance company, was starting to shine on its own.

While Hesse was reviving Embarq, Sprint was getting into trouble. It went through two CEOs and couldn't find its way out. Seeing how successful he was becoming with Embarq, Sprint called on Hesse for help. He became Sprint's new CEO in December 2007.

Perfect Storm

When Hesse got to Sprint, it was worse than he thought. Apparently, things were a mess at the nation's No. 3 wireless carrier -- and quickly getting worse.

During each quarterly earnings call, Hesse has been very open about the state of Sprint, from the moment he arrived through today. That was refreshing. Instead of a typical conference call, during which the CEO tries to put the best face on a rough situation, Hesse discussed the steps he and the team had taken to turn the company around and where they were in the process.

Hesse accepted the Sprint CEO job partially for the challenge, he said, because it required him to use the education, training and experience he had accrued over the past 30 years in the telecom industry. He sees business leadership as a vocation.

"A CEO of a major corporation can affect the livelihoods and quality of life of thousands of different people and families, like employees, vendors, shareholders, customers and the communities it serves," he told me.

After he got there, Hesse rolled up his sleeves; the operational problems were much greater than he expected.

The business trends at that time were heading in the wrong direction, and the negative trends lines were accelerating, he said. Churn was rising. Calls to customer care were double the industry average. Advertising was falling flat. The value of the Sprint brand was watered down. It had lost its relevance. Sprint had also lost its device innovation. The business was getting too complex, and Sprint was finding itself lost. Employee morale was in the dumps, and it was at risk of tripping its debt covenants.

Other than that, Dan said, they were hitting on all cylinders!

Any customer will tell you the problems came from letting customer service deteriorate. To save money, the company reduced customer care resources -- which in hindsight, was clearly a key mistake. It's no good to take longer to solve a customer problem. Call handle times increased, meaning the call abandon rates increased too. That means call volumes increased further when customers called back.

The perfect storm was gathering around Sprint. Everything that could go wrong was going wrong. How could so much damage have come to this industry leader? The Sprint brand was taking a beating. Customers were leaving, causing pressure on earnings.

Starting that first January, Hesse took a number of first steps to begin to repair the damage. He named a new leadership team and reversed the decision to have separate headquarters for Sprint and Nextel. He cut costs. Closed stores. Cut the work force. He introduced cultural imperatives that were the blueprint for how the company would get the work done.

Sprint focused on three clear priorities, which It still focuses on today: Improve the customer experience; strengthen the brand; generate cash. I think this is the kind of thinking every company should focus on every day.

Magnificent 7

To get the organization and culture aligned around improving the customer experience, Hesse created these Magnificent 7 steps, which I think would help every company:

1. Aligning Compensation and Rewards. Every employee's at-risk pay was based on reducing churn and calls to care, and generating cash. Every person, from the CEO to the mailroom clerk, was on the same formula.

2. Improving the Customer Experience. This was at the top of Hesse's weekly operations meetings with senior leaders.

3. Root-cause analysis/data. Sprint used the "reason codes" -- why customers were calling, as its root-cause analytic.

4. Accountability. Senior leaders were made accountable, reducing calls to customer care if their organization was the cause as identified by the "reason codes."

5. Project Leadership. Bob L. Johnson, Sprint's chief service officer, has done a terrific job, according to Hesse.

6. Simplify. At AT&T Wireless in the 1990s, Hesse learned with the Digital One Rate plan that customers would pay a premium for simplicity, so the company simplified its offers to the customer. It introduced the Simply Everything family of plans. It further simplified its business, and the sales and service process, by reducing the number of plan offerings by 85 percent.

7. Make it a brand principle, and live the brand. Sprint anchored its brand around value and simplicity; it launched the Ready Now program to help customers become comfortable and confident using smartphones, which reduces returns and churn. When it made improvements in the customer experience for two years, it launched the Sprint Free Guarantee -- the industry's only full, 30-day money back guarantee -- to encourage customers to give the company a try without the fear of making an irreversible commitment.

The company's careful financial management, led by its CFO Bob Brust, who was recently named CFO of the Year by Institutional Investor magazine, enabled Sprint to acquire Virgin Mobile USA to capitalize on the growing prepaid market, acquire iPCS to expand its network footprint, and to continue to invest in Clearwire in order to build out its 4G network.

It launched several interesting things -- like Overdrive, which creates a personal wireless hotspot, and the HTC EVO 4G phone, which is the first 4G phone in the market. It also launched the first "green" phones in the U.S. It used to offer cutting-edge devices, and that is what it is working hard to do once again, as well as being a leader in environmental responsibility.

Dan Dooley is the president of wholesale services. This title does not adequately tell you what he does, exactly. Dooley is the guy responsible for all the advanced services Sprint is getting involved with, Hesse said. So when you think about the future of Sprint, Dooley is right in the middle of the picture. This should be a very exciting area to follow going forward, both for the company's recovery and for the innovation.

Third Inning

Sprint has a lot of work ahead, but it just had a solid second quarter. It grew total wireless subscribers by 111,000, according to Hesse, driven by its best-ever postpaid churn of 1.85 percent. And it reported sequential stability in revenues, adjusted OIBDA and OIBDA margins, and strong free cash flow.

The American Customer Satisfaction Index -- the University of Michigan customer satisfaction study -- reported that over the past two years, Sprint's customer satisfaction not only improved far more than any U.S. wireless carrier, but also improved more than any U.S. company in the survey in any industry, period.

This was the big problem Sprint found itself dealing with, which it has finally wrapped its arms around and has been busy fixing. This improved performance shows it is on the right path, finally.

Sprint still has a long way to go, but as you can see, it seems to be working very hard putting the ship back on the right tack. It's a big job -- bigger than most realize. However, it does look much better today than it did a few short years ago.

During an analyst call, Dan Hesse used an analogy of a baseball game in the third inning, which is very helpful in understanding where Sprint is in the recovery. The first three innings are to stabilize the company. The next three are to get the Sprint brands to grow, and the final innings will be to become best-in-class in all aspects of its operations.

Sprint cannot say it has turned the corner yet, but it is improving on all these fronts. It is winning an increasing number of accolades from third-party sources; it has much happier customers; it has begun to reverse its losses; and its employees are reporting renewed optimism.

While this story is not over and recovery will likely take several more years, it does look like Sprint seems to be heading on the right path after several years in the darkness. Today is better than yesterday, and tomorrow will be better than today, said Hesse. Let's hope he continues to be right.

--------------------------------------------------------------------------------

Jeff Kagan is an E-Commerce Times columnist and a wireless, telecom and technology analyst, author and consultant. Email him at jeff@jeffKAGAN.com.

 


 

http://www.ecommercetimes.com/story/Windstream-and-CenturyLink-Riding-the-Next-Wave-of-Change-70887.html

http://www.ecommercetimes.com/story/70887.html

OPINION

Windstream and CenturyLink: Riding the Next Wave of Change

By Jeff Kagan

E-Commerce Times

09/23/10 5:00 AM PT

Companies like Windstream have always been focused on the consumer for telephone, but now they are also focusing on the business side and offering broadband services. These are first steps toward increasing their growth, and it seems to be working for them at this early stage. Will it continue as the industry changes?

I recently spoke at a Windstream meeting and helped them think about the changing industry and what's coming next. Preparing for that speech opened my eyes to how fast this company -- and, in fact, the entire industry sector -- is changing.

Windstream and CenturyLink are in the process of transforming themselves from two of the lesser known tier-two local phone companies to larger and more important competitors in the No. 3 and 4 spots right behind AT&T (NYSE: T) and Verizon. How successful and innovative will these rapidly growing companies become is the question. It may be time to start paying closer attention.

These companies have been growing in recent years, thanks to acquisitions. They are starting to punch their way onto the radar. They are suddenly much larger than just a few short years ago.

Ten years ago, these companies may have looked like smaller versions of the Baby Bells. Today, we see two distinct groups of telephone companies developing. One group is companies like AT&T and Verizon. The other group is companies like Qwest, CenturyLink and Windstream.

All About the Bundle

Group one offers all services and competes heavily with other wireless companies, cable television companies, and other local phone companies. Group two also competes with the same companies, but does not offer the same range of services, and the level of competition is more gentile.

Group two companies don't offer the same range of services as the Baby Bells. Example -- they don't offer their own television or wireless service. They resell other companies' services. It's a different model, but it seems to be working for them.

Losses due to competition are different too. AT&T and Verizon see losses to competitors of traditional telephone service in the 10-12 percent range. At the same time, losses for tier two companies are significantly lower. Windstream is in the 3-4 percent range.

That is very helpful to these companies. It gives them more time to think, build and transform. However, losses are still losses. That means they cannot be ignored. The companies need to focus on transformation and growth going forward.

I see the acquisitions continuing. That means these firms will continue to grow in size and scope for the next several years. However, the companies they are acquiring are also facing competitive pressure, so they must focus on growth strategies so they can earn more from each customer.

What that means is since they will be losing some customers to competitors no matter what, they have to earn more from the ones they keep. It's a simple goal.

That means they have to increase the size of their bundle. It's all about the bundle. They have to offer a wide range of services.

Companies like Windstream have always been focused on the consumer for telephone, but now they are also focusing on the business side and offering broadband services. These are first steps toward increasing their growth, and it seems to be working for them at this early stage. Will it continue as the industry changes?

All companies face the same pressure: Grow by offering more services to existing customers, or shrink.

Transformation Under Way

How they attack this challenge can be different. We see companies like AT&T and Verizon taking a similar route. We see companies like Qwest (NYSE: Q), CenturyLink and Windstream taking a different route. They can all lead to growth -- however, some seem to be struggling.

Over the last decade, we have seen the telecom industry completely transform itself. In fact, we are in the middle of a long-term remake.

Years ago, we saw the local phone companies compete with long-distance companies and win. They then acquired the long distance giants like AT&T and MCI.

Today, Baby Bells compete with Sprint (NYSE: S) and T-Mobile for wireless, and with cable television companies like Comcast (Nasdaq: CMCSK), Time Warner (NYSE: TWX) and Cox for the big bundle of wireline services.

Tier two used to be full of many smaller competitors that were below most radar screens until now. Suddenly, mergers have grown CenturyLink and Windstream.

Whether you are an investor, a customer or a worker, you have to start paying closer attention.

CenturyLink just acquired a local phone business called "Embarq," which came from Sprint. Now it is in the process of acquiring Qwest, the No. 3 baby bell. That will put it in the No. 3 position and give it Baby Bell status for the first time. How will it handle that new position?

Windstream used to be called "Alltel" before the company broke up a few years ago. The wireless Alltel was acquired by Verizon Wireless. The wireline business changed its name to "Windstream" and has been growing due to acquisitions. It is growing beyond the consumer space into the business and Internet space. So far, it looks strong. Will that growth continue, and will the company successfully move into new areas?

Fasten Your Seatbelts

Surprisingly, this is not being talked about much yet. Perhaps that is because it is not being written about much in the media yet. However, I think that is about to change. The media and the analyst community will start to pay more attention. These companies will start to be a focus of stories going forward. The changes they are going through will be transformative not only for them, but also for their entire industry segment.

They are still in the early innings of a new game. Not only are these tier two players changing, but the industry is changing as well. Remember a few years back, when SBC acquired AT&T, Bellsouth and Cingular and took the AT&T name? It was a small company suddenly thrust into a big company role. It struggled trying to fit, but it is now looking pretty good.

The same could happen here. These smaller companies will struggle as they become suddenly larger. It happens to every growing company. However, there is no reason they cannot have the same good result as AT&T if they start acting like the larger companies they are becoming.

Whether you know it or not -- and even whether they know it or not -- the music at the dance has changed. The slow dance ended, and now it's time to rock 'n' roll.

The media has spent a lot of energy covering wireless, but I predict it will start to cover the wireline side again. One of its first focuses will be on the suddenly larger and important competitors like Windstream and CenturyLink. Like I said when closing my speech: Buckle up, guys. The ride is about to begin.

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Jeff Kagan is an E-Commerce Times columnist and a wireless, telecom and technology analyst, author and consultant. Email him at jeff@jeffKAGAN.com.

 


 

http://www.ecommercetimes.com/story/The-Mountain-Elop-Has-to-Climb-to-Keep-Nokia-on-Top-70836.html

OPINION

The Mountain Elop Has to Climb to Keep Nokia on Top

 By Jeff Kagan

E-Commerce Times

09/16/10 5:00 AM PT

Nokia's new CEO, Stephen Elop, has a tough road ahead. He has to update the technology that Nokia makes. He has to make it hotter and sexier than ever, so it can stand up against the competition. He has to focus Nokia's sights on winning in a market that's already off to the races. Then he also has to update and expand the Nokia brand. Will Nokia allow Elop to lead in that direction? That is the question.

Will Stephen Elop, the new Nokia (NYSE: NOK) CEO, be able to turn the company around? That is the question. It all depends on what he does -- this is a big job. He has to focus on transforming not only the technology, but also the brand. He has to reinvent Nokia's image in the mind of the customer. Will it work? Will Nokia be able to re-energize with new leadership, or is it in the process of passing the torch to the next generation of competitors?

The company is foundering, and it has not been able to right the ship yet. That's the reason for bringing in Elop from Microsoft (Nasdaq: MSFT). Unfortunately, Microsoft has been struggling in the smartphone space as well.

First, it will be instructive to pull the camera back and take a look at the big picture. Nokia has been a success since the 1990s. Then its wheels fell off, and its struggle to get back on track has so far been unsuccessful. Where did Nokia go wrong, and what does it have to do to stay relevant in a suddenly different industry? Can it succeed?

Brief History

It all started in the 1990s when Motorola (NYSE: MOT) was No. 1 in the handset market. Motorola was a strong U.S. company that had been around for decades, making all sorts of communications devices for police and emergency workers. It was even in the mobile phone business years before cellular took off. Motorola eventually became the leader of the cellphone handset business as well.

Motorola led the handset market from the 1980s through the mid 1990s. Its last success during that period was the StarTac, an analog cellphone that looked similar to the communicator on TV's "Star Trek." Beam me up, Scotty. That was the first time consumers could get such a small and fun device for keeping in touch, and it was a big success.

Then something happened. The industry switched from analog to the first generation of digital, and the race changed overnight. By that time, Motorola had become fat and happy. It never thought the entire industry could -- or would -- transform until it was ready. The company's leaders thought they had plenty of time -- but they were wrong.

Gadget users liked being able to send and receive email and text messages, and even surf the Web.

Nokia quickly moved into the No. 1 handset manufacturer space while Motorola was still enjoying the success StarTac. Seemingly in the blink of an eye, Motorola lost its greatness. It was as though someone popped a balloon.

The Motorola brand said it was king of the analog wireless phone, and it led that space for a decade. Then the focus suddenly changed to the digital network.

The problem for Motorola? It wasn't there. Its brand said king of analog. The result was that it lost the lead. It quickly slipped to the No. 2 spot, and it continued falling for most of the past decade -- save for a brief success with the Razr phone in the early 2000s.

Motorola has been in the digital market like everyone else over the last decade, but its strength was not in digital.

That is one of the key problems for Nokia to fix before it's too late.

The Big Shift

Nokia, a little known company from another corner of the globe, held the No. 1 spot through the last decade. It focused its brand on phones for the new digital networks.

Everyone thought Nokia was bulletproof. However, if that was ever true, it's not any more. Nokia has been taking it on the chest for the last few years. That's the reason for the CEO change.

The industry is changing again -- just as it did in the 1990s, when Nokia rode the wave to the No.1 spot. It's morphing from a digital handset market into a smartphone market.

The upheaval started about four years ago, when Apple (Nasdaq: AAPL) introduced the first iPhone. It did much more than a regular smartphone -- RIM's BlackBerry -- and it was light years ahead of regular handsets sold by Nokia. Smartphones had been around for years, but their growth had been very slow. They were sold by RIM BlackBerry and Palm, and they accounted for about 15 percent of the mobile device market when Apple entered and changed the space.

Today, the smartphone sector is growing very rapidly, and there are many handset makers competing. AT&T Mobility focused on this opportunity years ago before Verizon Wireless, Sprint (NYSE: S) and T-Mobile even realized the next wave was coming.

Today, more than 50 percent of AT&T's (NYSE: T) new sales are smartphones. Verizon has woken up, and its smartphone business is now growing in the mid 30 percent range.

Suddenly, the realization is crystal clear that the young but rapidly growing smartphone segment is changing the marketplace. Sounds similar to the change that happened in the 90s, doesn't it?

Today's marketplace is all about smartphones. That means the leaders have to have the hottest new smartphone devices to choose from with all the cutting-edge features in order to WOW the customer.

That also means the phone maker's brand has to say "smartphone," or it's dead in the water -- and that is Nokia's weak spot right now.

Nokia's Challenge

Nokia's brand is in regular handsets, not smartphones. It has tried during the last couple of years to update its technology and its offerings, as well as update its brand.

So far, it has not worked.

RIM has challenges of its own. It was as successful as Nokia during the last decade, but RIM is a smartphone brand. It was a leader in the smartphone space until Apple decided to change everything and Google (Nasdaq: GOOG) followed with its Android mobile OS.

When people think of the "BlackBerry" brand, they think "smartphone." If that's the case, why is it struggling, like Nokia? RIM has lost roughly 30 percent of its stock price in the last year. Why?

The reason is its smartphone brand is considered over the hill. The new competitive iPhones and Android devices are the next generation, and they blow away the average BlackBerry, which reminds me of an old Ford. (I recall that Henry Ford said you could have your Model T in any color as long as it was black.)

Over the last decade, Nokia led the handset space, and RIM led the smartphone space. Suddenly, the smartphone space has changed. It is growing rapidly, and it is much sexier than it ever was. Suddenly, RIM looks tired. The new BlackBerry Torch and its latest operating system are light years better than what RIM previously had in the marketplace; however, they are not as good as the new devices and OSes customers continually hear about.

This is the mountain that new CEO Stephen Elop has to climb at Nokia: He has to update the technology that Nokia makes. He has to make it hotter and sexier than ever, so it can stand up against the competition. He has to focus Nokia's sights on winning in a market that's already off to the races.

Then he also has to update and expand the Nokia brand.

Will Nokia allow Elop to lead in that direction? That is the question. All this has to be done at a company that never really paid much attention to the business of branding.

Yet that is his job -- update the devices and update the brand.

It's a big job. Nokia has to surpass Apple and an army of Androids. RIM is trying to meet the same challenge and hasn't so far.

Has Nokia seen its best days? Or is there a great turnaround story brewing? Time will tell. Good luck, Mr. Elop.

--------------------------------------------------------------------------------

Jeff Kagan is an E-Commerce Times columnist and a wireless, telecom and technology analyst, author and consultant. Email him at jeff@jeffKAGAN.com.

 


 

http://www.ecommercetimes.com/story/Choosing-Your-Favorite-Smartphone-Flavor-70783.html  

http://www.ecommercetimes.com/story/70783.html

OPINION

Choosing Your Favorite Smartphone Flavor

By Jeff Kagan

E-Commerce Times

09/09/10 5:00 AM PT

I love smartphones, but I have not found the perfect one yet. I have tried countless devices for years. I come close, but I've never settled on the perfect phone -- and trust me, I have tried many. The good news is there are many great features to choose from. The bad news is they are all on different devices. Trying to find one device with all the features you love seems to be an impossible task. 

So many of you have asked how to pick the best phone, I want to share what I've discovered.

Smartphones used to be a small part of the market owned by RIM -- the maker of BlackBerry devices -- and Palm. Today it's a lot more complicated.

Several years ago, the smartphone sector changed when Apple (Nasdaq: AAPL) turned up the heat with the iPhone. Then along came Google's (Nasdaq: GOOG) Android operating system. Today there are many different handsets, made by many different companies, including Samsung, HTC, Motorola (NYSE: MOT), LG and others.

Floodgates Are Open

Suddenly, we're in the midst of a smartphone feeding frenzy, and it's getting more complicated all the time. The summer and the end of the year are when we see lots of new devices launched.

There will undoubtedly be many new devices hitting the market in the next few months, but three of the hot new devices that have come out this summer, all available on the AT&T (NYSE: T) Mobility network, are Apple's iPhone 4, RIM's BlackBerry Torch, and Samsung's Captivate, the version of its Galaxy S Android smartphone offered by AT&T.

What is most important to you -- phone calls or emails? Texting or surfing the Web? Listening to music or watching live television? First you have to decide what features you need -- then their order of importance. There are so many things we can do with our smartphones today. Different devices have different strengths and weaknesses. Your choice depends on what you need and want.

If you cannot find the perfect phone, you can at least get as close as possible.

Syncing Notes

There are so many features, but for me when I look for a smartphone I look for the MEMO PAD feature. If the feature is not there, I cannot consider the device for my use.

BlackBerry and Palm smartphones let you sync NOTES information stored in Microsoft (Nasdaq: MSFT) Outlook with the MEMO feature. This lets me carry around lots of different notes. They also sort alphabetically, which is important if you have many notes.

Android-based smartphones do not synchronize this information. So, as cool and new as these devices are, they don't meet my needs.

Many who don't need the Memo feature say they love these devices. They do work great, and they are the hottest-selling devices in the market today.

Still, choosing the best phone for you is not always a matter of whether it has a particular feature. Apple finally included the Memo feature on the iPhone, and it syncs with Notes on my Outlook. Since I love the iPhone -- lack of this feature was the only thing holding me back -- it should be perfect, right? Wrong. It doesn't sort notes alphabetically. That's like sitting at the table with a meal in front of you, but no fork.

If I only had a dozen notes, that would be fine. However, I have hundreds of notes -- and so do millions of others who would like to buy an iPhone. So if this feature is important to us, we still cannot consider an iPhone.

The Internet Experience

I have been using the new BlackBerry Torch during the last few weeks and have been very pleased. Whether you agree that the Torch is a great new device -- or not -- depends on what you think is important.

RIM's BlackBerry 6 OS is a significant improvement over version 5. Unfortunately, RIM misfired in a few key areas. Syncing took around 30 minutes with version 5. That was just too long. Version 6 syncs in a minute. Much better. The combination of touchscreen and keypad is also a plus.

Using the Internet is much slicker with the latest version also; however, it's missing some important features. Even though much improved, the BlackBerry mobile Web experience is still weak compared to the iPhone.

Every time you sync the iPhone with your computer, it updates all your favorites from your laptop. Every location in your favorites list is now also on your iPhone, and that makes life online so much easier. You can really get work done, quickly and easily. Apple offers the best Internet browser.

Email, Apps, GPS, Music

Email on all three of these devices is excellent and fast.

There are tens of thousands of apps available for devices running on Google's Android OS. That's not as many as the Apple iPhone -- it boasts hundreds of thousands -- but Androids are catching up. RIM still has a long way to go with app development. However, apps are not important to everyone yet.

GPS works great on all the devices and networks -- although it is still tough to talk and turn right at the same time. I still prefer a real GPS unit attached to the windshield, but at least you always have this feature when you need it.

Listening to music is easier on some devices than others because of the player and the amount of storage space. Some love Apple's iTunes, but there are other great players if that is crucial. Of course, this is not an important feature for the vast majority of smartphone users.

Set Your Priorities

Each person has different wants and needs. Make a list and stick to it. It makes choosing much easier.

Some of today's best-selling devices are powered by Google's Android OS. They seem to be everywhere. There's a variety of devices from several handset makers to choose from. Every major network -- AT&T, Verizon, Sprint (NYSE: S) and T-Mobile -- offers Android smartphones, and I expect the list of devices to keep growing.

If an Android got the Memo feature and could sync with Microsoft Outlook, then it could be perfect for me.

The Apple iPhone has been around for about four years, and the fourth version is now available. If Apple were to add one more feature -- like letting me sort my many memos alphabetically -- then it could be my perfect choice.

The BlackBerry Torch is a solid next-generation device for RIM, and if it could improve the Internet experience by letting me sync my Favorites from my laptop, I might consider it perfect.

Are you getting my point? There are so many items to consider on so many devices. The problem is finding all the features you want working well on one device.

So it all depends what you want. What features do you think are important?

Your list will be different from my list or your neighbor's list or the list from the salesperson at the store. Don't take a recommendation from anyone. Trust me. Do your homework on this yourself and you will be much happier.

Of course, if you are like my mom and dad, you may have no particular need except voice calling. If that is the case, I envy you. Then again, I would go nuts if I could not stay in touch so many different ways.

So take your time and sort through all the choices. Eliminate the ones that just don't meet your needs. Then you can more easily pick a device from a shorter list that you will really love using.

--------------------------------------------------------------------------------

Jeff Kagan is an E-Commerce Times columnist and a wireless, telecom and technology analyst, author and consultant. Email him at jeff@jeffKAGAN.com.

 


 

http://www.ecommercetimes.com/story/Intel-Infineon-and-the-Winds-of-Change-70742.html

OPINION

Intel, Infineon and the Winds of Change

By Jeff Kagan

E-Commerce Times

09/02/10 5:00 AM PT

We are moving into uncharted territory. Companies will either hit the jackpot, or they will just miss the party. Intel could be getting ready to reinvent the meaning of the chipmaker in the smartphone world. It could be getting ready to put "Intel" logos on every device. We may start to hear Intel jingles on television, and commercials for wireless smartphones on the radio.

Intel (Nasdaq: INTC) has focused solely on the computer business for so long, we forget it can pursue other avenues of growth as well. Tomorrow, all our devices will be connected and talk to each other and share information. In that new world, Intel has been looking around for another business to acquire to help expand its reach.

Suddenly, the smartphone and the tablet computer business seem like new and fast-growing opportunities that will be connected to everything else. However, Intel does not have a footprint in that space. So it has decided to acquire its way into the business by merging with one of the lesser known but important players, Infineon.

Infineon is in the chip business. Tomorrow, everything we have will be connected wirelessly through chips: our household and office telephones and appliances; our wireless smartphones. Our office machines, automobiles, televisions and refrigerators will be connected and share information.

Apps on smartphones will play a larger and more expanded role in giving us remote control over our lives. In fact, I see apps expanding beyond the smartphone to the computer screen, television screen -- even screens on the kitchen fridge or on the walls in other rooms. Just as we can now control our home's temperature or set a security alarm, we will soon be able to control an increasing list of other facets of our lives.

Everything Connected

Intel's acquisition of Infineon's Wireless Solutions business can give it a footprint in that new world. The only question is what took it so long? Many think it's already too late, but I think Intel has one of the strongest brand names in the business, and that will give it the chance to make this work. The next question is, will it work?

Infineon is a company already making smartphone chips and already doing business with Apple (Nasdaq: AAPL). Beyond those givens, the entire marketplace is open to it. These are the early days in an enormous growth opportunity. This is one of the companies that few had ever heard of, but it is important.

I see other mergers like this one ahead, involving companies wanting to cash in on the smartphone's success. Even larger than that is the early opportunity in the converged space, where everything is connected.

Today we use a variety of unrelated devices. Everything is separate. Tomorrow, everything will be connected in the "cloud." Everything will work together. All devices will share information. So when we add a name to our call list, it will be updated on every device automatically. We won't have to buy software and install it in our laptops or smartphones. It will just be there in "the cloud."

"The cloud" is an interesting story that we've been talking about for years. Finally, it is becoming reality.

A few weeks ago, Intel announced the acquisition of McAfee, the computer antivirus company. This deal will give Intel the ability to try and put a bulletproof vest on its chips, the company hopes. Every step it takes throws it into a new race with the bad guys.

I think we may see several more strategic acquisitions by the company as it reinvents itself and prepares to grow over the next decade or two. One thing is for sure: Intel could look like a completely different and much-expanded company in a few years.

New Marketing Model?

With this acquisition, Intel wants to participate in the growth of the wireless smartphone sector as the first step. Will this work? It will take several years to find out, but the plan sounds good so far. There are a lot of questions, however.

For instance, will Intel want to change its marketing of the chips? Let me explain what I mean. Go into any store that sells computers and look around. You will see "Intel" stickers on some devices. That adds value and increases the likelihood you will buy that computer and pay more. That's the partnership and value Intel provides over other chipmakers.

How will that translate to the wireless space? That is not the way the wireless world works -- not so far, anyway. When we go into a wireless store and look at the devices, we pay no attention to the maker of the guts of the device. We just look at the device itself. We pay no attention to logos like "Intel" on laptops.

Will Intel be able to change the way smartphones are marketed? Will it start putting "Intel" logos on the devices? Will it sell more devices because of that? At this point, I would say no, because the marketplace does not operate that way.

Of course, as the smartphone sector matures, and as companies like Intel enter it, that may indeed change. If Intel wants to spend the money and effort it would take, it is possible it could be successful and change the marketing model of the industry.

If not, it may be able to still do well as a quiet participant in the wireless industry -- the same way Infineon is now. Would Intel be happy with that? I would say no. I don't see Intel being quiet. It's just not in its blood. It has to be the leader, not just a participant. The next steps will be interesting to follow.

And Now for Something Completely Different

We are moving into uncharted territory. That is exciting and dangerous. Companies will either hit the jackpot by being exactly where the industry is shifting to, or they will just miss the party.

Intel could be getting ready to reinvent the meaning of the chipmaker in the smartphone world. It could be getting ready to put "Intel" logos on every device. We may start to hear Intel jingles on television, and commercials for wireless smartphones on the radio.

The smartphone business has changed in recent years with Apple and the iPhone and with Google (Nasdaq: GOOG) and its Android OS. Why not with Intel and its smartphone chips?

Either way, the Infineon acquisition looks like a solid opportunity for Intel at this point, although it is important to realize that many of these deals that sound good when they're inked just don't pan out. Sometimes, the two teams don't get along. Sometimes, the leaders lose their fight. There are many reasons.

It will be a while before we know if this was a successful move for Intel. However, I don't think Intel is done yet. Expect to see other acquisitions. Some of these may indeed change and expand the way we think of Intel: still a chipmaker, but now in the rapidly growing smartphone and tablet business -- and whatever is coming next.

What other company will Intel and others be interested in acquiring? We are seeing this wave of acquisitions and mergers pick up steam. The next several years will be a busy time in the industry as it changes and expands and starts to look like a very different place. It's almost like looking through a cloud.

--------------------------------------------------------------------------------

Jeff Kagan is an E-Commerce Times columnist and a wireless, telecom and technology analyst, author and consultant. Email him at jeff@jeffKAGAN.com.

 

 


 

http://www.ecommercetimes.com/story/Telecom-and-Wireless-in-5-Years-Who-Will-Lead-and-Who-Will-Follow-70697.html

OPINION

Telecom and Wireless in 5 Years: Who Will Lead and Who Will Follow?

By Jeff Kagan

E-Commerce Times

08/26/10 5:00 AM PT

For telecom and wireless companies, the marketplace is changing. Today, some firms are doing well while others are struggling. The job of the CEO is to lead the way through the competitive minefield. It's difficult, but it is necessary. The industry will transform. It will become a completely different place over the next few years.

This is one of the times of the year that wireless and telecom CEOs invite me to speak at an upcoming meeting of directors or executives or employees or customers. Over the years, I have learned they have one of the toughest jobs. First, they have to accurately see the changing industry. Second, they have to understand how their company must change. Third, they must bring everyone else up to speed.

I love this time of year, because it gives me the opportunity to talk with others to help them better understand the changes reshaping our world and what they must do to stay hot. They face opportunities and threats. Either they catch the wave, or it will pass them by. Doing nothing is not an option.

Some companies have done a good job in recent years, while others have lost their way. Many people don't understand. They see their company performing well and believe there's no way they could fall off the success track. However, this is exactly what happens. While these companies take years to recover, the rest of the industry rushes by.

Today's Telecom Stories

The telecom world has changed. The seven baby bells have merged into three, and they are no longer all on the same path. AT&T (NYSE: T) and Verizon have taken similar paths -- growing, merging with other bells, expanding offerings, and competing in a variety of sectors. They compete in the bundle of telephone, wireless, Internet and television with their IPTV U-verse and FiOS. What about tomorrow? Many wonder what will they look like in another few years.

Qwest (NYSE: Q), the third baby bell is on ,a different track. It is struggling in comparison -- almost frozen in time. It is a telephone company. It offers Internet. It does not own or operate a wireless or television service. It resells. Recently, CenturyLink announced it would acquire Qwest. What will this company look like going forward?

At the same time, cable television companies like Comcast (Nasdaq: CMCSK), Time Warner (NYSE: TWX), Cox, Cablevision and others have been trying to transform themselves. Some of their efforts have worked, while others have not. They are successfully offering VoIP telephone and Internet and competing with the local phone companies for consumers. They tried to sell wireless phone service but failed. Now they're investing in and reselling Clearwire, the high-speed wireless Internet service.

In the Wireless World

The wireless carriers have changed over the last decade as well. Some are doing well while others are struggling. They switched from analog to digital, and now they are focused on wireless Internet. Some are part of a larger company that offers a complete bundle, while others are standalone providers. There is a definite difference in the performance of these groups. The industry changed during the last five years toward smartphones. What will these companies look like a few years from now?

Sprint (NYSE: S), the third largest wireless company, had a full collection of services, but it spun off its local phone business several years ago. Called "Embarq," that company did not really flourish either. It was acquired by CenturyTel, and the merged entity became CenturyLink. Sprint's new CEO has been working hard to get the carrier back on track and has made some progress.

Now Sprint is also investing in and reselling Clearwire, in a growing number of cities. This seems to be working so far. Today it looks strong. However, the world is changing along with the industry. What will Sprint look like going forward?

T-Mobile has fallen off the growth path and seems stuck in the sand at present. A few years ago, it saw other carriers focus on Internet access, so it also started down that path. That was the right move, and it saw a burst of growth, but it is slowing once again for a number of reasons. It can recover. Will it?

The wireless business in general is strong and growing, but success is not there for all.

Mobile Device Mania

The handset business has become completely different over the last few years. New smartphone players like Apple (Nasdaq: AAPL) with the iPhone and Google (Nasdaq: GOOG) with the Android operating system are dominating the space.

Smartphone makers like Samsung and HTC are rapidly growing. Nokia (NYSE: NOK), Ericsson (Nasdaq: ERICY) and LG are struggling to change focus. Motorola (NYSE: MOT) seems to be a little stronger. How will this business change over the next few years? Who will lead?

Cellular South happens to be a smaller, standalone wireless carrier, but it is doing well to date. So is Global Crossing. It has grown and transformed over the last few years. LightSquared could be a new name to watch if it successfully enters the market. What will they all look like going forward? There are so many companies to consider.

The Locals

Another category that's suddenly worth paying closer attention to is second-tier local phone companies. Historically, this segment of smaller companies has been sleepy, but mergers in recent years have propelled it onto the radar screen.

CenturyLink and Windstream are two companies that are punching their way onto the map, but to keep growing tomorrow, they must change.

Change for these companies will come in two areas. One is what they are doing now -- acquiring other companies. This increases their size and launches them into the big time. They have done well in this area, so far. However, that just gives them size, not growth.

Growth is the second area, and their plans for that are not yet clear. They have to figure out how to grow their business. What they do over the next few years is key. They must find new ways to increase their revenues.

CenturyLink is acquiring Qwest. It will become the third-largest local phone company in the U.S. This gives it sudden size and that is good, but what about growth? There are lots of new pressures for it to manage. What will it do next in order to grow?

Windstream started life as Alltel, which broke itself up into two companies. Windstream was the wireline company, and Alltel was the wireless company that recently was acquired by Verizon.

The wireline company has been growing recently through acquisitions. This has increased the size and strength of the company, and it is healthy so far. The question is, what is next? How will it continue to grow?

It faces increasing pressure from competitors like cable television and wireless companies.

Growth can come from a number of areas, like moving to an IP network, or offering a wireless or television service to make a larger bundle. There are numerous paths for growth, but it must choose, it must transform, it must market well, and it must succeed.

Through the Minefield

There's a wide mix of companies -- some are successfully transforming, while others are struggling. The next several years will be a defining time for all of these companies.

Who will lead, and who will follow? The competitive marketplace is changing. Today, some companies are doing well while others are struggling. The job of the CEO is to lead the way through the competitive minefield. It's difficult, but it is necessary.

So with my autumn calendar filling with speaking dates, I will visit with these companies and share these thoughts. I will learn the direction of the industry and the companies. I will share what I learn with you here.

One thing I do know right now: The industry will transform. It will become a completely different place over the next few years. Then again, it is already a completely different place from just a few short years ago.

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Jeff Kagan is an E-Commerce Times columnist and a wireless, telecom and technology analyst, author and consultant. Email him at jeff@jeffKAGAN.com.

 


 

http://www.ecommercetimes.com/story/Healthcares-Great-Wireless-Transformation-70650.html

Healthcare's Great Wireless Transformation

By Jeff Kagan

E-Commerce Times

08/19/10 5:00 AM PT

If pharmaceutical companies and physicians can harness the power of wireless devices, they can communicate with patients from the moment a prescription is written, using proven tools like educational starter kits delivered via email, live prescription reminder outreach calls, and interactive voice response messages that provide prescription information and lifestyle tips.

About 15 years ago, I had an office next door to Barry Green. At the time, our businesses had nothing in common. I was a wireless analyst and he was in healthcare. I recently got a call out of the blue from Barry asking for my help in evaluating an opportunity. When I took a look at what he was doing, I realized the world has changed dramatically. Suddenly, our previously unrelated businesses of wireless and healthcare were crashing together.

This is true not only for healthcare, but also for many other industries as well. They are all angling to transform themselves in the new wireless world we find ourselves in today. There is enormous opportunity and risk, but companies cannot avoid this new world and survive. Let me explain.

In Barry's case, the plan is to create a service that uses the wireless networks to help doctors and patients and pharmaceutical companies keep in touch and to improve the relationship. To help patients better understand the importance of their prescriptions. To help them give real-time information and feedback to their doctors so they can be monitored more closely.

Better Quality of Life

Nearly 50 percent of people who are following prescription medication regimens don't stick to their physicians' recommendations. This leads to more than 47 billion related hospital visits and US$177 billion in direct and indirect costs to the U.S. economy each year.

One of the main causes of this problem is lack of communication. When deciding on a specific medication for a patient, a doctor needs to become a medication coach, communicating the information that individual needs in order to understand how the medication works and why it's the best choice. But who has that kind of time?

If the pharmaceutical company that distributes the medication has educational initiatives and materials available to help the doctor provide the necessary information, it makes the job that much easier. And that guidance allows the patient to feel empowered and in control.

Research shows patients who feel fully engaged in their medication treatment will comply with their physicians' recommendations and will take the medications that are helping them enjoy a better quality of life.

In the 20 years since the issue of non-compliance has come to light, no one has been able to find a practical solution that will allow pharmaceutical companies and physicians to deliver the information patients need directly into their hands on a regular basis to encourage their compliance.

Times have changed.

Change or Become Irrelevant

Today, those in the wireless and healthcare worlds can work together. Virtually everyone has a wireless device. If pharmaceutical companies and physicians can harness the power of these devices, they can communicate with patients from the moment a prescription is written, using proven tools like educational starter kits delivered via email, live prescription reminder outreach calls, and interactive voice response messages that provide prescription information and lifestyle tips.

Now is the time to jump into this billion-dollar, virtually untapped, opportunity.

Pharmaceutical companies are seeking partners who can help them develop and implement compliance programs that will not only allow them to enhance the care that physicians are providing to patients, but also build brand loyalty.

Suddenly, this blending of the wireless and healthcare industries makes enormous sense.

This is not only a cutting-edge solution to an age-old problem, but also an opportunity for growth -- for the wireless carriers, the doctors and pharmaceutical companies, and for Barry's business.

All this good news means new threats to the status quo. Suddenly, companies that compete are faced with updating the way they do things, or they will become irrelevant as patients increasingly choose partners who use this cutting-edge solution.

Engines for Growth

This is an amazing new opportunity that is emerging today. Wireless can and will redefine industry after industry, as each figures out how to leverage this new opportunity and risk.

Wireless carriers have people whose job it is to help wireless blend with other industries and take advantage of the enormous opportunities.

I have talked with Glenn Lurie, president of emerging devices and resale at AT&T (NYSE: T) Mobility and Consumer Markets, who says a whole new world of opportunities is emerging, giving every industry a wireless approach to improve and transform its business.

Marquett Smith, VP of corporate communications at Verizon Wireless, and Tony Lewis, its VP of open development, are involved with this healthcare initiative. They see this as one of the biggest industry-reshaping opportunities of the next several years.

Dan Dooley, president of wholesale solutions at Sprint (NYSE: S), agrees that new opportunities like this will be the real growth engines going forward.

The positions these people hold didn't exist a few short years ago -- that is how quickly this is occurring.

One of the biggest challenges for people like Barry Green is to get together with people like Glenn Lurie, Marquett Smith, Tony Lewis and Dan Dooley to make this magic happen.

In addition, there is a similar opportunity for manufacturers and developers of mobile technologies -- smartphones, other handheld devices, and the platforms they run on -- like Apple (Nasdaq: AAPL), Google (Nasdaq: GOOG), RIM, HP (NYSE: HPQ), Nokia (NYSE: NOK), Samsung, LG, Motorola (NYSE: MOT), Sony (NYSE: SNE) Ericcson, HTC and others. They will all be players in this new game.

This is an overwhelming opportunity -- and it is getting hot today. It cannot be ignored. Confusion is not a reason to sit it out. It's these leaders who will change industry after industry.

Mobile Apps and the Smartphone Revolution

Growth in wireless is changing. It used to come from signing up new users. Today, most everyone in the U.S. marketplace who wants a cellphone, has a cellphone.

Competition is moving into other areas. These companies compete against each other as they try to win business from the carriers. That is why we see the smartphone revolution exploding. App store inventories have risen from a few hundred apps just three short years ago to a few hundred thousand today -- and they're still growing rapidly.

Apps will continue to evolve. Many today are pointless fun, but in the future, there will be many more important apps with features that help give us remote  control over our health, our finances and our lives.

Growth in wireless will also come from this area of transforming other industries by helping them reach new customers and prospects in new and innovative ways.

Over the next few years, the number of smartphone users will grow to more than a billion. The mobile app market will grow from almost $2 billion in 2009 to almost $16 billion. To put things in perspective, we are only at the very early stages of this opportunity.

How will all these technology changes impact this new segment of medical communications? How will it, in turn, change healthcare? According to Barry Green, "the medical experience will look very different over the next few years" -- perhaps making our previous healthcare look as old-fashioned as those doctors in Norman Rockwell paintings. They look quaint, but who would really like to go back to those times?

I am in the wireless and telecom business, not healthcare. However, it is very interesting how these two previously unrelated fields are now overlapping. This is just the beginning. No one wants to be left behind when the wave of change passes. That means now is the time to jump in and splash around, before the real heat of competition begins.

--------------------------------------------------------------------------------

Jeff Kagan is an E-Commerce Times columnist and a wireless, telecom and technology analyst, author and consultant. Email him at jeff@jeffKAGAN.com.

 

 


 

http://www.ecommercetimes.com/story/Why-ATT-and-Comcast-Are-Changing-Their-Brands-70601.html

OPINION

Why AT&T and Comcast Are Changing Their Brands

By Jeff Kagan

E-Commerce Times

08/12/10 5:00 AM PT

A new wave of competition in the marketplace has begun. The phone companies' IPTV services and satellite television companies like DirecTV and DISH are competing with the cable television industry for the big all-or-nothing bundle. It's a battle for the whole consumer. The space will change completely over the next several years, and this changing marketplace represents an incredible opportunity and threat for every competitor.

After giving a speech, I was asked a question that got me thinking. Many of you may be wondering about this too. AT&T (NYSE: T) and Comcast (Nasdaq: CMCSK) have two of the strongest brand names in the business -- so why in the world are they both suddenly changing them? What are we, as customers and investors, not aware of?

AT&T's new brand is "Rethink Possible" and Comcast's is "Xfinity." One is a brand remake, and the other is a master brand remake, which means changing the name and brand of the company in the consumer mind and marketplace. Over the years, I have worked with most of the competitors, and I have seen this happen before. Let me explain what is happening and whether it will work for both companies. I think my answer may surprise you.

First, a bit of history. One decade ago, some of the seven baby bells that are now AT&T, Verizon and Qwest (NYSE: Q) (which is now merging with CenturyTel), started selling a television service called "Americast." Imagine that, we thought, television from a phone company.

Writing on the Wall

The phone companies saw the writing on the wall back then. Americast put them into competition with the cable television companies, which at the time were many small companies. Then the baby bells started merging, so TV was put on hold.

Next, the cable television companies made their move. Seeing what the phone companies did, and after merging into fewer and larger companies like Comcast, Time Warner (NYSE: TWX), Cox and Cablevision, they started offering VoIP telephone service over the Internet. That let them compete against the bells.

Recognizing that threat, phone companies recently started to offer their own IPTV television services, like AT&T U-verse and Verizon FiOS. After they ironed out the kinks in the first few months, the quality was excellent, and these services are becoming a real competitor to cable TV.

Then the cable television companies wanted to get into wireless and started reselling cellphones from Sprint (NYSE: S). That was a flop. Next, they partnered with Sprint to bring Clearwire into existence, and now they sell a wireless Internet service.

So the new wave of competition in the marketplace has begun. The phone companies' IPTV services and satellite television companies like DirecTV (Nasdaq: DTV) and DISH are competing with the cable television industry for the big all-or-nothing bundle.

It's a battle for the whole consumer.

The space will change completely over the next several years, and this changing marketplace represents an incredible opportunity and threat for every competitor. The industry is turning into something very different -- a place where every competitor offers everything, and where we choose one company and say goodbye to the rest.

This is the big battle we are watching unfold.

Making New Rules

I like what Comcast CEO Brian Roberts says when he talks about changing the company and the industry in customer's mind and reaching out to them in new ways. He sounds like he understands the changing opportunities and threats to his business. He is trying to change the cable television side.

You may say competition seems healthy and strong, so why change the brand when things are so good?

To understand the reason you have to pull the camera back and look at the big-picture changes that are reshaping the industry. In the emerging new industry, these companies want to win the coming battle.

Customers, employees and investors don't understand what is happening yet. They are confused, to put it mildly.

Going forward, each side will lose some customers, but each will enjoy increased earnings from those who remain and buy more services. The same thing is happening to phone companies, cable television companies and wireless companies.

This is a new marketplace where we choose one and say goodbye to the rest. That is the reason for this update in brand strategy.

The master brand today means many different things from 10 years ago, so this new thinking is correct. The question is how to bring the rest of the world up to speed.

The timing works better for some than for others. Let me explain.

First, realize the brand update taking place at AT&T and Comcast will likely occur at most competitors. This is just the start.

As with everything else -- timing is key. AT&T and Comcast know the industry is changing, and they want to be first to create a new competitive framework in which they can lead. They figure other competitors will follow and play by the new rules they set up.

That's their dream. That is the reason for the sudden launch of a rebranding war by these two companies.

However, to rebrand, timing has to be right -- and at this point, timing looks better for AT&T than for Comcast, although the cable television company cannot wait.

Pushing a Boulder Uphill

Remember the comedian Lily Tomlin from the 1970s television show "Laugh-In"? She played Ernestine, the telephone company operator. She would say, "one-ringy-dingy, two-ringy-dingies, oh yes gracious me, to whom am I speaking?" Week after week, she would play on people's disgust with their local phone companies' full-of-themselves attitude. At that time, local phone companies had no competition, and the customer suffered.

However, since the early 1990s, the phone companies have reinvented themselves and built their new brand and have been continually improving the experience for customers. Because of that effort, they are now rewarded with a loyal customer base.

Now, cable television companies are starting to go through the same change.

In the mid 1990s, the "Seinfeld" television show had Kramer dealing with the cable company in the same way. He was upset with them not showing up, so when he set the next appointment for service, he never showed up, just to show them. That too was a comic way of relating to the way most customers in America feel.

During the last few years, cable television companies have seen competition coming, and they have finally been improving their service and repairing their image in the marketplace. They have made real progress.

We used to have to wait a week or two for a service call, then take the entire day off of work and sit around the house waiting. Today, they try and make an appointment for a specific time. Comcast even has television commercials saying how much they now care.

Comcast has realized the industry is changing, and it has to change with it in order to lead. It has started to make the right moves. However, customers don't recognize improvements early on.

Changing the Comcast brand before the customer is ready to accept it is like pushing a boulder uphill. It is much slower and harder and may not work.

That is the difference between the two companies. I think AT&T and the phone companies in general have been doing this longer and have a better relationship with the customer and are pushing the brand-change boulder down the hill. Comcast and the cable television companies, on the other hand, are early in the process and are pushing uphill.

I would normally say the cable television companies should wait to change their brand. However if they do, they will miss this industry-changing opportunity to lead.

It is a tough position for Comcast to be in. The company itself caused the problem, however, by its treatment of the customer over the years. That needs to be improved on now. It simply takes time to change the mind of the customer.

So, like I said in answering the question after the speech, I would like to be wrong about this. Like everyone else, I want all competitors to be as successful as they can be as the industry continues to change. Healthy competition is good for customers, investors and workers.

However, it is important to swing the bat at just the right moment if you want to hit the ball out of the park. In today's changing world, timing is everything -- and that's especially true for an industry undergoing transformation.

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Jeff Kagan is an E-Commerce Times columnist and a wireless, telecom and technology analyst, author and consultant. Email him at jeff@jeffKAGAN.com.

 


 

http://www.ecommercetimes.com/story/Will-the-BlackBerry-Torch-Save-RIM-70554.html  

http://www.ecommercetimes.com/story/70554.html

OPINION

Will the BlackBerry Torch Save RIM?

By Jeff Kagan

E-Commerce Times

08/05/10 5:00 AM PT

One thing I noticed at the Torch event was new for RIM. It was put together to generate lots of energy, but I did not sense the kind of excitement I expected. This was RIM's attempt, but it is just a quieter personality. More business-oriented. That has served the company well over the years -- and there's nothing really was wrong with that approach -- but things are changing.

Research In Motion (Nasdaq: RIMM) held an unusual meeting in New York City on Tuesday. What was unusual was that it held the meeting. This is very unlike RIM. It introduced a new device called the "BlackBerry Torch 9800" and a new operating system.

This is RIM's next-generation device, which has both a touchscreen and keypad. It has a newer and better Web browser and other features, and it looks hot. The new OS is perhaps the most important part of the announcement. It tries to leapfrog the company to the front of the line. The question is, will it? Will this device catapult a stumbling RIM back onto an exciting growth path?

This is being written right after the event, so I have not had the chance to use the device or OS yet. More will come on that at a later date. This is about the announcement and what it means going forward for Research In Motion, AT&T (NYSE: T) Mobility, customers and investors.

This finally answers the question we have been asking RIM co-CEO's Jim Balsillie and Mike Lazaridis. What is next to help put RIM back on track?

A Marketplace Full of Winners

It's important to realize that no one wants RIM to struggle. Everyone wants the company to succeed and for everyone to benefit. However, it has not really innovated in years. That may not have been a problem over the last decade, but ever since Apple's (Nasdaq: AAPL) iPhone and Google's (Nasdaq: GOOG) Android OS hit the market, things are changing quickly.

Will the Torch and BlackBerry 6 successfully compete against the Apple iPhone and Google Android? I think there are a variety of different customer groups in the marketplace that want different things. Choice has been limited. They could either by an Apple iPhone or... well, that was it. Then Google introduced its Android OS, and a slew of smartphones followed, notably the Droid on Verizon Wireless. More choice. Now RIM is introducing another device and operating system. Even more choice.

The more different devices there are to choose from, the happier the marketplace will be. Yes, I think this device and OS will be attractive to the RIM customer who may have been thinking of leaving for one of the company's competitors. That's now less likely to happen.

Will this save every RIM customer who was thinking of leaving? No. Some are attracted to the Apple or Google brand, and some just want to change. However, there are plenty of RIM customers who would have left, but now won't because of this new device.

So, I see this as less about winning customers from other device makers, and more about expanding the marketplace and giving customers the ability to find the exact device they want.

As the marketplace matures and expands, it becomes more customer-oriented than company-oriented. I don't see it being full of winner and losers. Instead, I see it full of winners; it's just that some win more than others. I also expect to see more devices from companies like Dell (Nasdaq: DELL) and Lenovo -- and others as well.

Less Buzz Than Hum

One thing I did notice at the RIM event that was new for RIM. It was put together to generate lots of energy, but I did not sense the kind of excitement I expected. This was RIM's attempt, but it is just a quieter personality. More business-oriented. That has served the company well over the years -- and there's nothing really was wrong with that approach -- but things are changing.

Going forward, if RIM wants to compete in the consumer marketplace, it has to learn to be bigger and bolder and more in your face. It has to attract attention from customers, the media and investors. It has to continually innovate.

Will this new OS and device help RIM increase its falling market share? Good question. I do think this will help it reduce its rate of loss. It will let them hang on to more customers. However, growth is a different story. It could happen, but we will have to wait and see. It is less certain.

RIM needs to look at this as the first of many steps to become the new company we are all expecting it to become. It attempted that a few years ago with the Storm but flopped.

RIM has not updated itself in years. Not since the Storm. Will it be more successful this time? That is the question we are all asking. This should not be a singular event. RIM needs to continue this new high-profile way of doing things.

What This Means for AT&T

I think AT&T sees this as a big win. It doesn't compete against Apple and Google like RIM does. Instead, it does business with all of them and competes against Verizon Wireless, Sprint (NYSE: S) and T-Mobile. So, this just gives AT&T more ammunition to win customers.

Ralph de la Vega, the CEO of AT&T Mobility, was at the event, and he said this will just make both RIM and AT&T Mobility stronger in the marketplace -- but for different reasons. RIM now has a cutting-edge device to help it compete in the marketplace, and AT&T has another great device for the lineup customers get to choose from.

It's all about more choices, said de la Vega. Whatever the customer wants, AT&T will be able to offer it with this new RIM device, in addition to the Apple iPhone and several Androids.

As for RIM, this gives it a new tool to attract young customers who may have been lured away by competitors. This is just what the company needs. However, it is only a partial victory. It needs to continue down this path.

RIM could even start to see growth again if it were to continue to reinvent itself -- that is, if this is just the first in a string of similar innovative approaches to the new marketplace.

So, while this was definitely cutting-edge for RIM in comparison to Apple and Google, it was just not over and above. For customers who like RIM and want to stay, this gives them a reason to stay. However, I don't think the other companies are worried about losing business to RIM.

Investors are wondering what is next. I think this is a good first step but not the complete answer. This is a story more about helping RIM slow losses rather than gain new business -- at least today. This will keep RIM in the game.

It sounds strange to wonder what is next when this is so new, but that is my question. That was Motorola's (NYSE: MOT) mistake after the hot Razr. Nothing next.

RIM needs to build its app store to attract new customers. It doesn't have enough Apps yet to attract the larger youth community, but it may be able to carve its own app niche. Not every customer cares about apps, though. Many are happy with the basics. This device looks like it has that covered.

I think it's fair to say that I like RIM and want it to succeed, but that means it has to wake up, innovate, and remain interesting to the customer. So I think this is a great next step from RIM. Hopefully, this will be one in a series of steps that will help the company shake off its old stuffy attitude and grow again and regain its greatness. We'll see.

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Jeff Kagan is an E-Commerce Times columnist and a wireless, telecom and technology analyst, author and consultant. Email him at jeff@jeffKAGAN.com.

 


 

http://www.ecommercetimes.com/story/70509.html

http://www.ecommercetimes.com/story/ATT-Is-Winning-Its-Catch-Up-Race-70509.html

OPINION

AT&T Is Winning Its Catch-Up Race

By Jeff Kagan

E-Commerce Times

07/29/10 5:00 AM PT

AT&T focused on smartphones before it was cool. Before everyone else did. Many thought it was nuts. However, that is the direction the industry is now heading in, and it is paying off for AT&T. Nuts may be good. AT&T is about to start realizing the payoff from its heavy network investments, and millions of customers are about to start feeling a lot happier about their carrier.

AT&T (NYSE: T) Mobility and Apple (Nasdaq: AAPL) iPhone have been successful together, but every coin has two sides. The other side has been a wireless data logjam. Could that problem finally be getting under control?

AT&T has been working very hard to do just that, said Ralph de la Vega, AT&T mobility and consumer markets president and CEO, at last week's Fortune Brainstorm Tech Conference in Aspen, Colo. Improved connectivity should already be evident. If that is true, millions of AT&T smartphone customers should be very happy starting about now.

AT&T has twice as many smartphones as its next nearest competitor, De la Vega tells me, and it carries about 50 percent of the mobile data traffic  in the U.S., according to its own estimates.

Could that be true? The nearest competitor is Verizon. Wireless carriers including Sprint (NYSE: S), T-Mobile, Cellular South and others all split the other 50 percent. I searched for corroboration and found AT&T has 53 percent of the smartphone market, while Verizon has 35 percent.

Is that possible? If so, that is quite an accomplishment for AT&T. That means these data logjams must be a happy problem for AT&T to have -- but they are still a problem. The company has been running as fast as it can to keep up with demand, and now it might be starting to work.

Staying Ahead of the Curve

So far this year, AT&T has invested billions of dollars to increase the capacity of its wireless data network, just to keep up with growing demand. It knows there are certain choke points -- for example, parts of New York City and San Francisco, due to the massive numbers of smartphone users logging on simultaneously.

I met Ralph de la Vega about fifteen years ago when I was giving a speech in Naples, Fla. I have followed him ever since and realized a long time ago that he is honest. If he says something, then it must be true.

In fact, several months ago, he openly talked about the problems AT&T was having with capacity due to the iPhone's success. At last week's conference, he said New York has worked to double the capacity of the network in the last couple months. That's quite a turnaround.

Every coin has two sides, and this is the other side of the success coin -- the high demand on the network that other networks do not yet face. De la Vega says AT&T sees a huge demand, and it has been working to increase capacity -- and at this point, the work is mostly done.

Remember, however, this game is not over. It will last for many more years. Sometimes there will be bottlenecks, and sometimes there will be plenty of capacity. It is important that AT&T -- and, in fact, every network -- stays ahead of the curve as new smartphone customers keep pouring in.

Soaring Smartphone Sales

So where did the problem come from? Over the last several years, AT&T has been ahead of its competitors with smartphones and fast wireless data connections. I remember talking about this several years ago.

Sprint has also been pretty strong in wireless data services. Verizon and T-Mobile did not really focus on this opportunity until recently. They just did not have any really exciting handsets to attract users. However, over the last year or so, we have seen Verizon Wireless expand its wireless data footprint with Droid devices and other smartphones.

Across the industry, smartphone sales are continuing to explode. Smartphone sales have outpaced traditional cellphone sales during the last couple of years.

That means during the next 12 months, the number of smartphones in the hands of customers across the industry will surpass the 50 percent mark. That means there will be more smartphones than traditional phones in the marketplace.

That's big industry-reshaping news. Every carrier sees this trend and is cranking up its smartphone marketing. There is much opportunity, but there is also much challenge.

All handset makers are shifting their focus to smartphones also. Google (Nasdaq: GOOG) breathed life back into Motorola's (NYSE: MOT) lungs and it is snapping back with the Droid on Verizon. RIM is said to be reinventing their BlackBerry, which is absolutely necessary to stay competitive. Microsoft (Nasdaq: MSFT) could finally be hot with its upcoming Windows Phone 7 due out in a few months. Samsung, HTC and LG are also showing strong smartphone growth.

Nokia (NYSE: NOK) and Ericsson (Nasdaq: ERICY) are both struggling trying to shift their brands from plain old handsets to smartphones. Can they do it? If not, we will see a leadership shift.

The brand is key here.

Nuts May Be Good

Yesterday, the brand meant cellphones. Today the brand means smartphones. Does the brand say to the customer "this is a great smartphone maker" or network? It has to, going forward, to remain competitive.

This is a major industry shift that is rapidly occurring, and not all companies are ready.

There are several reasons AT&T has the lead now in the smartphone war. It started focusing on smartphones years ago, before other carriers. Its advances in wireless data networks, its focus on selling many different smartphones, and of course the Apple iPhone are more reasons for its success.

AT&T focused on smartphones before it was cool. Before everyone else did. Many thought it was nuts. However, that is the direction the industry is now heading in, and it is paying off for AT&T. Nuts may be good.

Apps are exploding too. They are the little programs that customers download to their phones and use on the wireless data network. Apple's App Store has grown from a few hundred at launch a few short years ago to a few hundred thousand. That's incredibly rapid growth.

That's where the traffic jams come from. We see the younger Android Market growing just as rapidly and other smartphone makers are heavily promoting app development too.

That means countless smartphone customers are increasingly downloading apps and sucking at the wireless data network. Too much demand at one time causes bottlenecks. What's the old saying? It's the leaders that take the arrows. That is definitely the case here. Lessons can be learned here. I hope competitors are paying attention. This battle will be waged for years.

It sounds as though AT&T is getting ahead of this demand curve. That means customers will have better service. If Ralph de la Vega is accurate, the bottlenecks should be disappearing because of AT&T's network investment.

If that is the case, millions of users should be much happier logging in from now on. Let's hope he is right. Lets hope other competitors have learned important lessons to be prepared. And lets hope as this battle is waged for the next several years, the carriers can stay ahead of the demand curve.

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Jeff Kagan is an E-Commerce Times columnist and a wireless, telecom and technology analyst, author and consultant. Email him at jeff@jeffKAGAN.com

 


 

http://www.ecommercetimes.com/story/Who-in-the-Wireless-World-Is-Philip-Falcone-70460.html

Who in the Wireless World Is Philip Falcone?

By Jeff Kagan

E-Commerce Times

07/22/10 5:00 AM PT

Never count Falcone out. I have been impressed watching him over the last several years. The industry continues to change. Winners today are doing new things never done before in wireless. An outsider can indeed be successful in this space by targeting a new opportunity and attacking it in a new way so that it doesn't have to really compete in a traditional sense. That takes moxie, which Falcone seems to have in boatloads.

This is an interesting story that no one is really talking about yet. If all goes according to the plans of Philip Falcone, Harbinger Capital Partners will turn into the newest competitor in the wireless industry.

"LightSquared," as the new venture will be called, will offer a wireless data service that sounds a lot like what Clearwire is doing. It will also compete with AT&T (NYSE: T), Verizon, Sprint (NYSE: S) and T-Mobile on the wireless data side of their businesses.

Clearwire seems to be doing well at this early stage in its buildout. So what are the odds that Harbinger will be the next successful company in the wireless space? It has no brand name, but it does have someone who likes to try new things and succeed.

If I were writing my next book on this man and company and opportunity, I would say this is one of the most interesting stories we have seen in the last 10 to 20 years. What happens next has everyone guessing.

New Ball Game

A few years ago, my brother worked with Phil Falcone, founder of Harbinger and leader of its investment team, but I never heard of this venture. This opportunity could be very large over the next several years as the wireless data business in general continues to change and grow rapidly.

We are watching the Apple (Nasdaq: AAPL) iPhone and Google (Nasdaq: GOOG) Android and others transform this business. Apps are one of the fastest-growing segments. They numbered in the measly hundreds a few short years ago, but there are a few hundred thousand today, and the category is still growing.

The wireless industry itself is transforming. It used to be a race to sign up first-time wireless phone customers. Today, nearly everyone who wants one has one. So growth comes from different sources. Carriers compete against each other. They compete on wireless data traffic , and they will compete on advancing new wireless opportunities.

The space is changing. New brand names are ruling. There's the Apple iPhone and theGoogle Android; Clearwire, Dell (Nasdaq: DELL), Lenovo and others will jump in as well.

Harbinger has aggressive plans, but can there be room for such a new player that no one has ever heard of? It is possible, perhaps, if the firm follows the right steps.

The question is how well does a private hedge fund in New York City called "Harbinger Capital Partners" understand the intricacies of the wireless data business? Isn't Harbinger in the investment business? What does it know about the satellite or wireless industry? About relating to millions of customers?

The worst-case scenario if this does not work is that Phil Falcone can sell his new wireless properties to any of the existing competitors. So, meaningful loss does not seem like it is a possibility here -- even though loss is always a possibility. Who knows? That could be the plan all along.

Cable television companies like Comcast (Nasdaq: CMCSK) and Time Warner (NYSE: TWX) failed when they tried to offer Sprint wireless phones a few years ago. How will Harbinger do better with no retail experience and no customers?

That's what many are asking, and it is a good question. We have watched the industry change and transform itself over the last decade or two -- except all the innovation has come from solidly wireless companies and networks.

Even the new competitor Clearwire was started by Sprint and has companies like Comcast and Time Warner selling its service to their customers. Now we have a newcomer at the party. Harbinger is not a wireless company. It is not even a technology company.

It makes nothing. It sells nothing. It is a hedge fund -- a very successful company, but one that has nothing to do with wireless technology or the wireless industry. And it has no customers.

New Rules

Apple and Google are not wireless companies -- that is true. Still, they already have millions of customers to market their new wireless phones to, and they do it very successfully.

However, Harbinger has no customers using other services whom they can persuade to try their new wireless data service. This plan seems to have a lot of challenges.

That said, never count Falcone out. I have been impressed watching him over the last several years. The industry continues to change. Winners today are doing new things never done before in wireless. An outsider can indeed be successful in this space by targeting a new opportunity and attacking it in a new way so that it doesn't have to really compete in a traditional sense.

That takes not only moxie, which Falcone seems to have in boatloads, but also marketing knowledge and expertise. What he's got in those areas is less clear.

Phil Falcone recently hired Sanjiv Ahuja, the former chief of France Telecom (NYSE: FTE) mobile unit Orange, to head up this new company. That may indeed be a benefit. Ahuja brought in Frank Boulben as CMO. They are quietly and quickly building a team.

However, the challenges are big and many. Then again, so are the opportunities. Harbinger will have to hire many very experienced senior executives to have a chance at making this work. We don't know where they are in this area yet.

Harbinger has not told the world details of what its plans are yet, because it is a private company. It sounds as though it plans to create a high-speed wireless data network in the United States. It wants to use its recently acquired SkyTerra, a mobile satellite communications service that allows communication via satellites instead of cell towers.

Falcone is now trying to get more large investors. Does it plan to be a satellite provider, or mix that with building a wireless data network? There are more questions than answers at this point in the process.

Many are asking this question: Does Harbinger plan to build a real company and be a real competitor? Or is this just the first step in a larger investment plan -- i.e., create something of value, then sell it to another company for a large profit? We don't know yet whether Harbinger will become a real brand name in the wireless space.

Wireless is a hard game to win -- even for brand names in the business. Look at Sprint's and T-Mobile's challenges in recent years, and Comcast's and Time Warner's fumble. All we can do is speculate at this point. So stay tuned -- this could be getting interesting.

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Jeff Kagan is an E-Commerce Times columnist and a wireless, telecom and technology analyst, author and consultant. Email him at jeff@jeffKAGAN.com.

 


 

Will Microsoft Finally Get It Right With Windows Phone 7?

July 19 2010

When new mobile phones are introduced they usually send me one to play around with and compare to others in the marketplace. More times than not they are just newer versions of something in the marketplace, but not really WOW. Once in a blue moon the device and operating system blows me away. Its happening more often these days.

Apple did with the first iPhone. Totally new thinking. Google did with their Android, a strong competitor. There are several others coming from non-cell phone companies like Lenovo and Dell.  Samsung, LG, HTC, even Nokia and Motorola are in that same space. The stage is being set for more of these breakthrough products and operating systems.

Microsoft entered the cell phone space with their mobile operating system years ago, and while I expected them to have a really successful product, it just never happened. Every version of their operating system I tried was better than the last, but they were all just too confusing. It required too much work to do anything. Too many steps.

It was like they tried to squeeze a little laptop into a mobile phone. It just didnít work. I have learned over the last several years that just about everyone had the same complaints. There are many Microsoft fans that want a good OS, but the company just keeps missing.

Now Microsoft is about to launch their next generation. They call it Windows Phone 7. Will it be successful this time? There is no way to know for sure until it is in the marketplace, but it may indeed ring that bell that Microsoft has missed for so many years.

Mobile operating systems are growing up. They are doing so many exciting things in new ways. As it gets more complicated it is so important to make the OS easy to use.

This is PhD technology. Push Here Dummy.

Want to make a call, press the phone icon. Want to check email, press the icon. Want to surf the web, well you get the point.

That was the problem with previous versions of Microsoft OS. Instead of easy buttons you had pull down menus like on your computer OS. While that works on the computer, it does not work on the cell phone.

Perhaps the screen is too small. Perhaps we are not thinking the same way on the different devices. On a computer we are focused on the keyboard and the screen. On a phone we are doing whatever else we are doing and we pull it out of our pocket to make a quick call or check email. We require simplicity on our phones.

Letís hope Microsoft hits a home run this time. It is a new marketplace with many new competitors. It sounds easy, but obviously it is very difficult to create an easy remote control for something that does so much. The company needs to think like a cell phone maker and not a computer maker. These are two completely different mindsets.

Microsoft has one of the strongest brand names in the business. They should be able to carve out a respectable niche. However they have missed time after time in recent years.

The market is growing and the opportunity is huge, if they can get it right this time and produce an OS that people love to use.

Microsoft will be unveiling their long awaited new Windows Phone 7. I have said they need a complete re-do and this seems like they did just that. Something customers will love right out of the box. Will this latest version of mobile phone software be that good? Letís hope so for Microsoft, for their investors, and for their customers.

 

 


 

http://www.ecommercetimes.com/story/Is-Apple-the-New-Toyota-70410.html

OPINION

Is Apple the New Toyota?

By Jeff Kagan

E-Commerce Times

07/15/10 5:00 AM PT

If the iPhone 4 antenna fiasco is the only major quality problem Apple has -- and if it apologizes and doesn't cross this bridge again -- the company can recover pretty quickly. However, if it doesn't, it will have a problem like Toyota that will live on and eat away at its brand name. At this point, Apple will have egg on its face either way. The question is, will it regain customers' love and respect?

Over the last 10 to 15 years, Apple (Nasdaq: AAPL) has done a remarkable job of creating cutting-edge devices that have won the hearts of their users. It forged a special bond with customers and investors that other companies want but don't have. It seemed to be bulletproof.

Suddenly, Apple may have a chink in its armor. The new iPhone 4 seems to have real problems with reception. The question many are asking is this: Will Apple become the next Toyota? It's too early to say -- but so far, things don't look good.

Let me say that I have developed the utmost respect for the company and its ability to wow the marketplace with products that were better than customers dreamed over the last decade. However, this new reception problem seems to show a company that has grown too quickly and may have lost its focus -- as did Toyota.

That loss of focus let a new device enter the marketplace that obviously had not been tested well enough. If you hold the device and touch the lower left corner, according to reports, your signal strength drops and you can even lose calls.

Simple Fix?

One fix that seems to work is a rubber-like edge around the device that keeps your hand from actually touching the antenna. If this works, it is a problem with an easy solution -- but it's still a problem that should not have happened.

Even Consumer Reports said it couldn't recommend the iPhone 4 because of the glitch.

These are the early stages of what could develop into a larger Toyota- and Lexus-type debacle for Apple, and it could happen very quickly.

Whether this has a happy ending depends largely on what Apple does next. Will it continue to ignore this obvious problem, or will it fix it and apologize for the goof?

State of Denial

Toyota denied it had a problem for a long time. Then it apologized and said it would make sure it did not happen again. If the problems had stopped then, I think Toyota would have recovered quickly. Unfortunately, every few weeks we hear of more problems. Just last week, we heard of problems with Lexus and Toyota engines.

Instead of continuing to focus on quality, Toyota changed and started to focus on growth -- and that was the problem. Many things started to go wrong.

Despite mounting evidence to the contrary, let's just say this is not a real problem. Let's say Apple did everything right, but for some reason became the victim of an avalanche of bad publicity. What should it do next to save its brand?

The only things Apple can do now are 1) apologize for the problem; 2) supply a free fix for the problem; and 3) promise to do better so that this will not happen again. Then it has to make sure it lives up to its promises.

If this is the only major quality problem Apple has -- and if it apologizes and doesn't cross this bridge again -- the company can recover pretty quickly. However, if it doesn't, it will have a problem like Toyota that will live on and eat away at its brand name.

At this point, Apple will have egg on its face either way. The question is, will it regain customers' love and respect -- or will angry customers continue to pound the company? It is Apple's choice.

This Time, It's Not AT&T

AT&T (NYSE: T) does not seem to be a part of this problem. AT&T Mobility has taken its share of criticism in recent years due to overwhelming demand on its network in certain spots around the U.S., in large part due to the iPhone. However, this is not a network issue -- it's a device issue.

Apple took its eyes off the ball. Like Toyota, it had a great reputation for quality products, but it may have gotten arrogant and blown it. It happened to Motorola (NYSE: MOT) in the 1990s.

In recent years, Apple has become insular. It is virtually impossible for outsiders to communicate with the company -- unless you're one of the lucky recipients of the occasional email reply from Steve Jobs himself.

Apple customers did not like this state of affairs but they put up with it, largely because the company seemed like it always tried. Could the iPhone 4 problem change that perception in the minds of customers and investors?

This story is still in the early stages, but whatever happens to Apple in the long term depends on the next steps the company takes. This is a real public relations problem. Apple has incurred real damage to its previously unsinkable brand.

This damage can be quickly repaired if Apple does the right thing by apologizing and fixing the problem now -- and if other problems don't follow on its heels.

Whether Apple remains at the top of the list of companies that customers adore depends on what it does next. Everyone is watching.

--------------------------------------------------------------------------------

Jeff Kagan is an E-Commerce Times columnist and a wireless, telecom and technology analyst, author and consultant. Email him at jeff@jeffKAGAN.com

 


 

Wireless And Telecom Analyst Sees Big Industry Changes Coming

June 30 2010

The wireless, telecommunications and technology industry is going through a major transformation. In the next several years it will no longer look like the industry that we have watched and know.

The leaders will change. New ideas that we have not even tried today, and new companies to offer them may not even be on the radar yet.

What will tomorrow look like? Where should you invest, be customers of or work for? The right choice today will make you happy and successful. The wrong choice will leave you miserable, cutting your losses and looking for an exit. Weíve been there before.

This is not the first time this has happened. One decade ago the telecom industry looked much different. There was a long distance industry with companies like ATT, MCI and Sprint leading the way. The wireless industry was analog meaning you could make a call and that was it. No wireless web. The web was new and email was in its early stages.

Telephone companies offered telephone service and did not compete with cable television companies. Customers had to buy separate services from separate companies in separate sectors. We were customers of different companies for local, long distance, wireless, Internet, cable television and so on.

The Telecommunications Act of 1996 was the rules going forward for local and long distance companies to compete. That is the world we thought was going to exist today.

Today the industry looks much different. Within the first few years of competition, the local phone companies won. Think about it. There is no more long distance industry. The separate industry sectors have combined. Today you can buy all the services from one company like ATT, Verizon or Qwest. CenturyTel is acquiring Qwest and it will be interesting to see how things change for that company.

Today local telephone companies compete against the cable television industry. Companies like Comcast, Time Warner, Cox and Cablevision offer the same similar bundle of services.

Today you can shop at one company and buy all your services. Telephone companies offer telephone, wireless, Internet and television. Cable television companies offer telephone, Internet and television, but no wireless. They tried wireless by partnering with Sprint a few years ago, but failed.

Clearwire is a new company with a new wireless high speed Internet service for your laptop. Unfortunately they are only in thirty-odd cities and many of them are not the big cities. They may grow in importance.

So what is changing now? Look at the last four years. Apple has transformed the wireless smart phone space with the iPhone. They are not even a wireless company, yet today they are on fire in the wireless space.

Google is not a wireless company, but they are building right behind Apple and offering their Android service, over a number of networks and make by a number of handset makers.

Dell is a computer company, but now also has a smart phone. Lenovo said they will follow. All of a sudden the wireless industry is being led by non-wireless handset makers.

Companies like Nokia which once led are now shrinking because their brand does not cover smart phones. Samsung, LG, HTC are all trying to be successful in the smart phone space. Motorola is actually making headway partnering with Google Android.

Past leaders like RIM and Palm are also at a pivotal place. Apps, those little programs you install on your iPhone have grown from a few hundred just four years ago, to a few hundred thousand. That is amazing growth.

Most employees, investors and customers just donít know what to make of all this change. They find it difficult to keep up with this level and number of industry reshaping events.

Ten years ago we didnít know this is where the industry was headed. Four years ago we never heard of an iPhone.

So where will we be in another five years or ten years? We think we know, but we donít have a clue.

Much of what this industry will look like in the next several years depends on what is happening today in the marketplace, in Washington DC with the FCC and Congress, where the opportunities will be and who will be competing.

The number one question we have to answer is how do we keep the industry innovation in high gear, while protecting the consumer at the same time. We have to walk very carefully through this minefield. We donít want to blow the legs off this fast growing and changing industry with overburdening and restrictive regulations and taxes.

 


 

Is Nokia In Trouble As Apple, Google, Samsung And Other Smart Phone Makers Take Over?

June 16, 2010

Nokia has warned the marketplace of problems. If you have been reading my column you will realize this is no surprise. This is exactly what I have been warning about over the last couple years. Letís look at what is next for Nokia and for the entire industry?

The wireless marketplace continues to grow and to change. It is now moving away from regular handsets and going toward smart phones. While Nokia has a strong brand in traditional handsets, the problem is they do not in smart phones. They have been trying, but they have not yet successfully updated their brand. If they can update they can be a contender. If they cannot, what is the future for Nokia?

The cell phone industry has been changing continually over the last 25 years. Motorola led in the beginning since the 1980's. Then lost their way when the network changed from analog to digital in the 1990's. A small company called Nokia built their brand on handsets using the digital network. They have built their brand successfully over the last decade and have been in the lead.

However now the wireless marketplace is changing again from handset to smart phone over the last few years. Smart phones like RIM and Palm ruled the small segment. It grew to 15% market share and there were a few hundred Apps, but it was a small segment.

Then a few years ago two things happened. Apple introduced the iPhone and the networks introduced their unlimited wireless data plans. That goosed the marketplace.

Suddenly everyone started to use these smart phones. Suddenly every wireless handset maker jumped in. Suddenly Apps grew from a few hundred to a few hundred thousand. Growth and success has been incredible in the last 3 - 4 years. Depending on the carrier smart phones has grown from around 15% to around 50% or more and the growth continues.

The bad economy also played a role causing the regular handset marketplace to languish. Smart phone sales on the other hand are exploding.

The problem with Nokia is their brand. Customers think of Nokia as a good company that makes good plain old handsets, not smart phones. There is still a market for these phones, but that is shrinking. The growing segment is smart phones and they are not a player in that space. Not yet anyway.

They have tried to update their brand, unsuccessfully. I have been saying for the last few years in articles and speeches that Nokia was in trouble unless they could become a player in the smart phone market. They are a minor player, but they just cannot capture the attention of the customer.

RIM has the same problem. They led the smart phone battle with their Blackberry, which was the greatest until the next generation of smart phone came.

Now who do you think of when you think of smart phones? Its not Nokia or Rim. Instead it is companies like Apple and Google. And they are not even handset makers. Then there are others who are trying to change their brand and are having some success like Samsung, LG and HTC. Even Motorola is rebuilding by partnering with Google on their Android. Then there are newcomers like Dell and Lenovo who may grow to be players in this space too. As well as others we will see enter the marketplace over the next few years.

The marketplace is changing again. Smart phones are the new story. Whether Nokia can recover depends on whether their can update their brand and effectively compete with newcomers that are capturing the imagination.

What will the marketplace look like in one year, five years and beyond? That is the question we all want the answer to.

 


 

Cable TV Loses Customers To Competition And Poor Customer Service

June 8, 2010

Year after year for the last several decades we have complained about cable television service. When we called them for service we were told they would be there next week somewhere between 8 am and 7pm. That meant weíd have to take the day off of work to sit in the house and wait for the cable guy to come because if we were not there when they arrived weíd have to reschedule and wait another week. Thatís if they showed up at all. Cable was King. Cable television companies felt no need to worry. Customers had no choice. Until now.

Suddenly the local telephone company is selling a competitive service. It is called IPTV. AT&T sells Uverse and Verizon sells FiOS. These services are such good quality and offer so much more in features that they are now winning customers away from the cable television industry.

Reportedly 5 million households have cancelled their cable television service and given their business to the phone company or satellite television. Cable television customers dropped to around 63 million from 68 million, between 2006 and 2009. That is a turn of events that has the cable television companies scrambling for a fix.

The last several years we have watched the telecommunications industry completely remake itself. We used to do business with both companies, because we had no choice. However an increasing number of customers are getting a choice.

First the cable television companies started offering phone service over the Internet and they were winning customers from the phone companies. Now the reverse is happening as local phone companies are winning business from the cable television companies.

Isnít competition a beautiful thing?

Competition is good for everyone, customers and companies. It improves the quality. It lowers the price. It increases innovation. Customers start to love what the company does instead of complain about it. Investors love this in the marketplace. It is healthy.

We have seen the cable television companies win customers from phone companies a few years ago. Now we are seeing the local phone companies winning customers of their own from the cable TV companies.

This was expected. I have been saying for the last several years that 10 to 20 % of the customers on each end will quickly give their business to one side or the other. The battle comes when the vast middle is fought over.

So winning customers is a very interesting situation, but it was expected. Over the next year I think we will start to see advertising and marketing change. This is a very good thing for customers.

Just look at what we are seeing so far. The cable television industry knows they have a problem. They are advertising their new responsiveness to the customer. They say they will be there quicker when you need them, and give you a few hour window, in advance. That is a complete turnaround for the cable television industry.

The reason is competition. If you can leave and go to the competitor if you are unhappy, suddenly the company takes very good care of you. AT&T, Verizon, Qwest, DirecTV and Dish Network are the competitors who are changing the industry and forcing the cable television companies to improve.

In the 1990ís the TV show Seinfeld, Kramer tried to get back at the cable company by telling them heíd be there between 9am and 1pm then he didnít show.

The same thing happened with local phone companies back in the 1970ís. Remember Lily Tomlin from the TV show Laugh In? One ringy dingy, two ringy dingies, oh goodness gracious this is Ernestine the operator from the local phone company, to whom am I speakingÖ honk, honk.

These were some of the funniest skits on television because we could all relate to the lousy service we got from the phone company.

Well today the phone companies give excellent service. Why? Competition. They started competing with the long distance giants in the 90ís, and they eventually won. SBC and Verizon acquired the long distance giants AT&T and MCI in the early 2000ís. Now they are larger, more successful and competing with a new threat, the cable TV companies.

At the same time cable television customer satisfaction ratings have been among the lowest of any industry followed. The American Customer Satisfaction Index said the four largest cable TV operators averaged only 59 (from 1 to 100) since 2004. That is worse than other industries that we also complain about.

So this is nothing new. We have learned competition is a beautiful thing. Suddenly the marketplace has changed. Suddenly the customer is first, not the company like it has always been.

The cable television companies like Comcast, Time Warner, Cox, Charter Communications, Cablevision and others are learning the painful lessons the phone companies learned 20 years ago. Isnít it great to finally get a caring voice on the other end when you call your cable television company for service?

This is only the beginning. The cable television industry has a lot to learn. They have to retrain their workers. They have to re-write their mission statements. They have to recreate themselves. It will take some time, but at least they are now headed in the right direction for customer, investors and workers.

Isnít competition a beautiful thing?

 


 

Whatís Next For Qwest After Acquisition By CenturyLink?

June 7, 2010

Why has Qwest been stuck while AT&T and Verizon are successfully remaking themselves? This isnít the way it started. Qwest was changing the world ten years ago. What happened and why has this company been struggling ever since? The bigger question is what is next. How will the company change after the acquisition by CenturyLink?

In 1984 AT&T was broken up into one big long distance company and seven regional local phone companies. Qwest started out life as one of these. Names changed over the next decade or two. It was called US West before they changed in the late 1990ís. They started out being a simple local phone company then decided to expand and merge with a long distance company and transform themselves. The future looked bright for the company. Then the bottom fell out and the company has been struggling ever since.

They brought in a new CEO Dick Notebaert. He ran one of the other baby bells, Ameritech out of Chicago until it was acquired by SBC who changed its name eventually to AT&T. His job was to save Qwest, which was in the process of imploding.

Notebaert had two jobs. One was to stop the bleeding, which he did. The other was to grow the company, which he did not. He retired in 2007 and was replaced by Ed Mueller as CEO. Everyone watching this hoped for the best.

The hope was Mueller would help the company grow. Unfortunately that wasnít the case.

We have seen many mergers over the last decade. There are only three baby bells now. AT&T and Verizon are the two largest. They both merged with other baby bells. They have grown into the two largest local phone giants, the two largest cell phone networks, the two largest IPTV providers competing with the cable television industry. They have transformed themselves and are growing rapidly.

Qwest on the other hand is not. They do not own their own wireless business. They resell Verizon. They do not own their own IPTV service. They resell a satellite television service.

In essence they are the same company they were several years ago. Competitors like cable television companies are taking customers and they are not taking any away themselves like AT&T and Verizon are doing.

Why canít Qwest grow and change like other baby bells? That is the question we have been asking for years.

Now the company is being acquired by CenturyLink. This is a small local phone company who has been rapidly growing through acquisitions. They are now acquiring Qwest which will make them a baby bell.

Now the future depends on what this company does. Will it remain the same, just part of a larger company? Or will it change course like AT&T and Verizon?

The bottom line is we donít yet know. We have not closely followed CenturyLink, but we will now going forward.

Will they continue to acquire companies? The thinking is yes. Who is next? There are no more baby bells for sale. There are other smaller ones scattered across the landscape from coast to coast. That is likely.

What about wireless? Do they see wireless being important going forward? Is a wireless company in their sites? If so who? Maybe Sprint, T-Mobile or one of the smaller ones? There are few wireless carriers left. They too have gone through a wave of consolidation.

We donít have the answers yet. They may not either at this time. Weíll have to wait and see. First they have to finish the acquisition of Qwest. I would not expect anything new until after the acquisition.

It will be interesting to see what happens next to customers, services, investors and workers. What changes and what stays the same. Will this new company grow into a competitor, or will they just continue to serve customers, as is, just a larger version of who they were before.

The future could be bright, but we just donít know yet. It will be interesting to watch the next inning in this game play out.

 


 

AT&T Changes Rates Again On Wireless Data Usage From Smart Phones

June 3, 2010

This price change was expected from AT&T, Verizon, Sprint and T-Mobile. AT&T was just the first company to pull the trigger. Something similar happened a few years ago when every major competitor jumped in and introduced their unlimited data plans. Why all the changes?

Back in the 1990ís it was a simpler world. A cell phone was just that, a phone. Then the networks changed from analog to digital and set the groundwork for todayís wireless data revolution. At the time speeds were slow and all we used the handsets for was emailing and text messages. However over the last decade speeds increased and new features were introduced.

The problem was smart phone sales and wireless data usage was growing too slowly. Customers were just afraid to get a giant bill so they avoided using the features. Not that there were that many features to actually use yet.

So the industry decided it was time to goose the growth. They introduced their unlimited plans a few years ago and suddenly smart phone sales went through the roof. Some of that was thanks to Apple with their iPhone, but smart phone growth has been on a steep upward climb ever since. Wireless Apps jumped from a few hundred just a few short years ago to around 150,000 now and it is still growing.

If wireless data capacity was unlimited then price changes might not be necessary. However when we all jump onto our new smart phones and use them we can clog the networks and slow service for everyone. So networks must continue to pour billions of dollars into their networks to stay just ahead of the demand curve.

In that world AT&T says roughly 2% of users are very heavy users and are negatively impacting the service for everyone else. So they just decided to move away from their unlimited pricing.

This was expected as we have heard of the problems caused by heavy users and also heard of the changes that were coming over the last many months from other carriers.

So AT&T was the first to jump in and change the rates. They say the new rates will actually cost the average user less. That means 98% of customers will pay less. Not bad. That also means the 2% that over use the networks will have to pay for what they use. That also seems fair. That way everyone should see improved quality.

When the unlimited plans went into affect it all happened quickly. Now with this move away from unlimited plans I expect we will hear from Verizon and Sprint quickly too. I think Sprint will be last so they can undercut everyone else by a few dollars a month as they now do.

The result should make the experience better for everyone. The reduced usage from some heavy users will free up capacity and take the heavy load off the network making usage easier for everyone.

This is not the first price change in wireless data. We have seen several over the last decade. And it will not be the last. I expect prices and plans to change regularly, every few years, as the number of users increase and what they do online changes.

Remember ten years ago we only used these phones for phone calls. Today we send email, text message, surf the web and use Apps. Tomorrow we will watch television, movies, have video calls and more. This takes enormous wireless data bandwidth. Usage patterns will change.

Just like the networks introduced their unlimited plans and wireless data usage increased dramatically they also suddenly had a new problem. A few users were over using the network. So they had to have a correction they didnít foresee. This will happen over and over again. It is the process of building a very fast growing industry.

 


 

Harbinger Will Compete With AT&T, Verizon And Sprint In Wireless Data Services, But Who Are They?

May 29, 2010

The wireless industry changes every few years. Evolving from analog to digital to smart phones to wireless data. We see Apple iPhone and Google Android capturing the headlines and now the next big unknown, Harbinger.

Who? The only company I know by that name is a privately owned hedge fund in New York City called Harbinger Capitol Partners owned by Philip Falcone. My brother worked for them a few years, but left them almost two years ago. Itís the same company. You may ask, arenít they in the investment business? What do they know about the satellite or wireless industry?

Thatís the question many are asking. We have watched the industry change and transform itself over the last decade or two. Except all the innovation has come from solidly wireless companies and networks.

Even the new competitor Clearwire was started by Sprint. Now suddenly we have a new world opening up. Non-wireless companies like Apple and Google are capturing the headlines and at the top of the industry growth curve. These are not wireless companies, but suddenly they are on everyoneís mind.

Now we have a new comer to the party. Harbinger is not a wireless company. It is not even a technology company. They make nothing. They sell nothing. They are a hedge fund. A very successful company, but nothing to do with wireless the wireless industry and has no customers.

Even Apple and Google have millions of customers that they can then market their new wireless phones to and they do it very successfully.

However Harbinger has no customers who use other services who they can convince to try their new wireless data service. So this seems to make little sense.

With that said, who knows, maybe they can be successful. After all Clearwire also started from scratch, but it has many heavy hitter companies helping them with customers like Comcast, Time Warner and others.

Phil Falcone just hired Sanjiv Ahuja, the former chief of France Telecom SA mobile unit Orange to head up this new company.

This is all speculation because they are a private company and have not discussed yet what their plans are, but it sounds like they plan to create a high-speed wireless data network in the United States. They are acquiring SkyTerra, a MSS company which means Mobile Satellite Communications Services. This allows communications with satellite instead of cell towers.

Are their plans to be a satellite provider, or mix that with building a wireless data network? There are more questions than answers so far.

That is the question many are pondering today. How serious is this company about getting into the wireless data business? How do they intend to compete with AT&T, Verizon, Sprint and T-Mobile? Are they going to do something new like Clearwire?

Are they planning on breaking out of the investment business and being a real wireless competitor? Will we start seeing television commercials at dinnertime on this new service? If they do how well will they compete starting from scratch? Will they have a good quality service, priced competitively, will they market and advertise it well. Will they attract customers who like the service and stay? Will they build a real company?

Or is this just the first step in a larger investment plan? Create something of value then sell it to another company for a large profit?

So the bottom line question is, will they be a competitor or not? We donít know yet.

This is not a public company. Rather this is a private firm. Therefore we donít have to know anything they donít want us to know. They are keeping this close to the vest for now.

So all we can do is speculate. There has been some speculation, but not a lot so far. However they seem to be making the moves that say they will become a competitive force. They hired a known CEO. They are acquiring a company. These are steps in the right direction. However we donít know, and wonít know anything until they are ready to talk more. So all we can do right now is stay tuned.

 


 

FCC Will Be Very Active Managing Wireless Industry Under Obama

May 27, 2010

All I can say to the wireless industry is brace for impact. The industry has seen unbelievable rates of growth over the last several years because government did not stand in the way. That translated into jobs, investments and a rapidly growing industry.

This good news is not just from the big wireless carriers and handset makers, but also thousands of smaller companies punching their way onto the map in a healthy and growing industry. Just look at all the App makers in the marketplace. There were less then 500 four years ago. Today there are more than 150,000 apps. Thatís incredible growth.

There is a growing variety of companies involved with the wireless revolution thanks in large part to the success and rapid growth of smart phones over the last several years.

Will that change now that the government has decided to take a heavier hand approach with the FCC? The writing is on the wall.

Has the last ten years been perfect? No. There has been plenty for regulators and competitors to catch the companies on and to fix. One example is Early Termination Fees. Until the last few years they were unfair. Customers had to pay the same full charge whether they cancelled one month or 23 months into a two-year contract. That was not fair.

However in recent years the carriers have recognized this and fixed it. Now ETF's are fair for the companies and fair for the users. Could it have happened quicker? Yes, with a heavy-handed approach from the government. Just like the one gearing up for battle now.

There are other issues like that one in a competitive and rapidly changing marketplace. The problem with government trying to manage the growth is government moves much more slowly than the industry.

That causes gridlock. And that is not healthy for jobs, investments or growth.

There is no perfect solution. Both have advantages and disadvantages.

A heavy-handed government approach would handle things that are not working well more quickly, but would also slow down all the innovation and job growth and investment opportunity.

The other choice is a light-handed approach, which allows the industry to grow much more rapidly, which provides incredible industry growth. However it takes too long to fix unfair items.

So what it the solution? Someplace in the middle sounds good doesn't it?

However that is not in the cards. During the Clinton Democratic presidency the FCC was heavy-handed. During the Bush Republican presidency the FCC took a light-handed approach. Now during Obama Democratic presidency the FCC is signaling a heavy-handed approach once again.

We know what this means. We have seen it before. So my advice to companies in the industry, brace for impact. The next several years will see growth, however not at the same rate we have seen.

If you are looking for a job or investment in this rapidly growing industry, it will still grow, but not as rapidly. The best solution would be to find someplace in the middle. That may just make too much sense however for todayís environment in Washington DC.

 


 

Is Trouble Brewing With The AT&T And Comcast Brands?

May 21, 2010

Once upon a time AT&T was the strongest brand name in telecom, and the rest of the world for that matter, but that was more than a decade ago. Comcast also has the strongest name in cable television in the US market. With such strength why are they now both reinventing their brand with the Rethink Possible from AT&T and Xfinity from Comcast?

One rule we all know is you donít mess with a brand unless you really need to. If it is successful you donít want to confuse the marketplace.  So what is the problem? What are their challenges or opportunities? Will this succeed?  And what does this mean for the companies and the brands moving forward?

First it is important to realize the telecom world has changed dramatically over the last decade. We still call it the telecom industry or the cable television industry, but those are old names that no longer really describe this is a new world that is developing.

Is AT&T a company that just sells long distance, or does Comcast just sell cable TV? No of course not. That described them a decade ago. During the last several years we have seen them expand in every direction. They are no longer competing in one sector. Today they are very large companies trying to successfully compete in a variety of sectors. The way we measure success has to change. That is one key reason for the change in brand strategy.

What if a company is very successful in one segment like telephone, but not as successful in another segment like television or any other combination? Today for a company to be successful they need to be that way in all their main categories, telephone, television, wireless and Internet. Consumers and business markets double the confusion. 

The industry has changed. Telecom is no longer the same place it was 10 years ago. Back then AT&T competed with MCI and Sprint for long distance, and Comcast was a much smaller plain-old cable television company who didnít compete with anyone.

The last decade has completely transformed both of these companies and blended the industries. Just like I said in an interview several years ago, before long these two different industry segments will blend. We wonít call one a cable television company and the other a local phone company. They will be head to head competitors. That is what this change is leading to.

Not only just these two companies, but the entire industry is going to have to address this. That means companies like Verizon and Qwest who is merging with CenturyTel, and Time Warner, Cox and Cablevision face the same pressures. I think we will see them change their brands at some point soon also.

At the same time the industry itself is changed. The challenges, the services, the competition, the market and the opportunities are all new and different. This industry is just as exciting as it was ten years ago, but it is very different.

To make matters worse, it will be just as different five to ten years from today. This is a moving target. Remaining a leader means changing before the industry and leading the way. Frankly this change at AT&T and Comcast took longer than I thought, but now it is occurring.

The AT&T brand has changed. Ten years ago it was the smallest local phone company SBC. Then about five years ago after a series of mergers with AT&T, Bellsouth and Cingular it became the largest in just a few short years. After adopting the AT&T brand they calmed down and let a few years pass.

Now it is time to change things once again. Time to take off the old jacket and put on the new. The curtain came down and the set was being changed over the last few years. Now the curtain is coming up and the next act is starting. Itís a whole new world. Not just for one of them, but for the entire industry.

They are setting a new stage for the next several years. These are no longer the kind of companies we remember. They are not just phone companies or cable television companies. They are competitors. More than that they are larger and offer everything and they compete. We used to do business with both, now we can choose one and say goodbye to the other.

Ten years ago the same company may have had more customers, but they bought fewer services. Today these companies have fewer customers, but they buy more services. The model of the industry is changing. The way we measure them has to change.

This impacts investors, customers and workers. So that is why the brand is changing. They know what is going on is bigger than the average customer can understand under the old way of thinking. So the best way to change the thinking is to expand the brand.

AT&T is still keeping the master brand, but the talk is not about the old company of the 1990ís, or even the new one of the 2000ís. Today the talk is about the company they are turning into.

This gets confusing because the service is not the same for all customers. Only some of their customers can buy television today. However every year that passes we will see more and more.

So AT&T is trying to change the thinking in the marketplace. Trying to get the customer to take the branding visors off and expand their vision. The only way to get customers used to thinking this new way is to start talking about it.

Thatís what AT&T is starting to do. Same with Comcast and their Xfinity transformation. Customers see ads on television as they try to change their image. What will the other competitors do, and when?

This is a tall order. To change the brand and the meaning of the company in the customers mind as the industry changes. You want to time this right. Lead the change, not follow. We have seen many new products and services during the last several years. That will continue. We may not yet know what the next hot item will be, but we do know it will be under a changed brand.

 


 

Why Google Pulled Their New Nexus One Cell Phone Off The Market

May 17, 2010

Google first stuck their toes in the water in the cell phone business with Android on T-Mobile. They were moderately successful and hoped by involving more handset makers and networks they would be more successful. So several months ago they jumped in and made a big splash. Then they introduced their own phone called the Nexus One. What has happened since is very interesting with an important lesson for both the company and for us.

They upgraded Android and put the new version on multiple handsets from various manufacturers like Motorola and HTC. They started working with multiple networks. They even worked with Verizon to brand their own version and called it Droid. Things were getting exciting. A little confusing, but we could handle that.

Everyone who worked with Google loved what was happening, until Nexus One. They pulled a fast one and introduced their own handset. At the time I said that might be the straw that breaks the camels back.

I said this device might be the best thing since sliced bread, but it may fail for a few very simple reasons. After only a few months on the market Google just announced they are taking it off the market.

Why was I so sure this would not work?

We all remember how Google broke the rules in Internet search and won. At the time the Internet was new, and changing, and they offered the same thing that Yahoo and MSN offered, but faster and better. Customers were waiting for newer and faster versions.

Since then they have expanded beyond that traditional search engine on the Internet. They have been successful at all of their efforts, on the net. They are number one on the net.

Now Google wants to jump into another industry and transform it. They want to own wireless going forward the same way. The problem is they are not having the same success.

One reason is the cell phone business is not new. It has been around for over 25 years. It has changed and matured in the market along with a couple hundred million customers. We are all partners in this adventure.

The online world was brand new and changing quickly when they jumped in. Customers did not have a strong idea of what the industry was, as it was quickly changing. That was a good marketplace for the change they brought.

However the cell phone business is long past that point.

It is already solid in the mind of the customer. Apple was successful with the iPhone because the smart phone market was already in place and had grown to around 15%.

People understood smart phones. A segment of the marketplace could appreciate the changes Apple brought to that segment.

Then Google jumps in. They are actually very successful with Android so far. Thatís because these devices are sold the traditional way, in stores, so customers who are shopping for smart phones can see and touch and try and compare. There is plenty of room for Apple and Google and other competitors in that space.

The Nexus One is none of that. When it was introduced it sounded big, but quickly we started seeing nervous Android partners who were now also competitors.

Who knows, it could be the best device on the market, but it wonít sell because it is only sold on the web. There are plenty of early adopters there, but thatís not how people buy cell phones generally speaking. They have to visit a store and touch the actual device and compare it.

Thatís how they buy. They want to compare it to what they already own, to other new devices. They want to try pressing the keys and see how easy it is to switch programs.

Google forgot, or maybe didnít understand that cell phones are not all created equal.

Recommendation. If Google wants to change the industry, or a slice of it, they should get into the wireless industry with their popular Android. Then after they build their brand in the space the can begin to transform it for their own customers. 

Currently Android is selling faster than the iPhone. How long is the question. When the iPhone was new it sold faster too. At some point sales levels might be the same.

Is Nexus One gone forever? I think Google pulled it off the market now and may indeed reintroduce it down the road when their brand is further developed in the mobile industry.

The company has a good attitude. They thought they would come charging in and transform the wireless industry.

When they didnít we learned two important things.

- One, they wonít be successful at everything they touch, at least not at first try, and

- Two they pulled this off the market quickly.

That is the sign of a company and group of executives who may be in tuned enough to actually make it in these new businesses.

This reminds me of MCI in the 1990ís. They too had so many ideas bubbling around. They brought them all to market. Some were successful and others were not. Successes stayed and failures were pulled quickly. No one was scalded. The attitude was right on. Looks like what we just witnessed with Google.

It will be interesting to watch their next steps. One more thing. Perhaps when they do bring this back to life, the will give it a name that sounds like a cell phone instead of hair conditioner. Just a thought.

 


 

Why Is SAP Acquiring Sybase To Battle Oracle And IBM? Is It The Right Move.

May 13, 2010

Every segment of the technology industry has been reinventing itself in recent years. Companies and competition look much different going forward than they did looking back. Large companies like SAP have softened in recent years as competitors like Oracle are winning. So what will SAP do in order to recapture their strength and growth? Acquire? Maybe. Will it be successful is the next question.

This is a new and bold SAP. We have watched many acquisitions over the last 20 years. Perhaps one third are successful and result in improvement. Another third result in a larger, but still struggling company. The last third does not work at all and would be better off never happening.

Which of these will this SAP acquisition of Sybase be? We wonít know for a few years. It will take at least a year for the deal to be closed and the companies to be sorted out and blended. Then it depends on what SAP does going forward.

It also depends on what competitors like Oracle and IBM do going forward. They now are aware that SAP is turning into a larger and potentially fiercer competitor. What will they do to solidify their relationships with their existing customers, and to sweeten the pot for new prospects?

These are the important questions we donít have an answer for yet.

We have seen many similar acquisitions. Most were not worth the effort. What will SAP do to make sure they are one of the success stories?

We all know how different groups think and operate. Investors want to know whether stocks will be up or down and place their bets accordingly. Competitors want to know whether this will be a fierce new competitor they have to prepare for or whether it will be irrelevant to the marketplace. Customers want to know what the company will look like a few years down the road to make sure they are where they want and need to be in order to grow their businesses most effectively. Workers want to know because every industry has ups and downs and people want to work for one of the winners for their own personal reasons.

The simple fact is we donít yet know, and wonít know for at least the next year or two.

Remember in the 1990ís when AT&T, after competing for years with MCI and Sprint, and after the Telecom Act of 1996 decided to reinvent itself? It acquired TCI the big cable television company and turned them into the largest provider in that market. Add to that their growing wireless business, their long distance business and their new local phone business.

There was a time when that occurred that we all thought this was the creation of one of the largest and strongest brand name telecom competitors to ever exist. They seemed bullet-proof and growing faster than we could fathom. It was a big success.

Thatís what we thought anyway. What happened surprised everyone, and quickly.

Within the next year or two the company started to crumble. They were losing consumer long distance customers to the baby bells. Their stock price was not rising so they thought they should separate the business into units and let each perform on its own.

Then one by one they spun-off the huge business units like wireless and cable television. What was left after a few short years was a small and struggling business services company. Thatís it. The huge and successful AT&T was suddenly a very small and almost insignificant business services company.

That was a complete shock to the telecom system and it happened so quickly.

So lets not put the cart ahead of the horse and think that if SAP is acquiring Sybase it will be a success. It may. Then again, it may not. Lessons learned from the past show its smart to take a more measured approach going forward. Letís see how the company changes, for better or for worse.

 


 

What Is Google Turning Into?

May 12, 2010

What business is Google in? We used to think it was a search engine. Way back in the beginning when they started, roughly ten years ago, they were. In the last several years it has been transforming itself and getting into many new businesses. Their strategy is not just to compete, but to transform a business, or at least a part of it and to lead like they did in search.

Google jumped into the search space when there were a number of large search engines doing just fine. The Internet was still new and companies like MSN and Yahoo were the leaders. That's when this new, small company with a big idea decided they can punch their way in. OK fine, there is plenty of room, everyone thought. Come on in, the waters great.

That was just a few short years ago and suddenly Google has changed the search world and taken the lead. Their claim to fame was its speed. It would give loads of search information almost as soon as you hit the return key. Others took a few seconds on every page.

When there was no alternative we accepted this, but when Google changed the expectations of the customer the industry changed and they were suddenly in the focus of search customers.

The company grew up thinking of creating a new model, and they did. How do they make money? Ads. They have a world-class search engine, doing the job better and faster than existing competition, but they give it away. That attracted huge numbers of users who saw ads on top and on the side. Everybody wanted to be part of this amazing success story. It gave advertisers new ways of reaching out.

In addition it changed the rules of the ad game. Internet advertising was the next big wave. Everything was changing. Things that worked on broadcast or print did not work here. 

So Google knows what customers want and how to give it to them and has been growing like crazy. That is the American way right? But Google is not satisfied. They want more. They want to put their thumbprint on other industries.

The question we all should be asking is what will Google do to these industry segments? Will they cause the entire industry to rethink the way it charges and does business?

Remember when an industry is starting no one really knows what to expect. It takes the early competitors to shape the industry. What is being sold or offered, and for what in return?

Then once the lines are drawn in the sand the competitors and the customers know what to expect. Entire industries are built on this model. The model could have been different if it was set up differently in the beginning. However usually only one model works. The early birds set the rules of the game.

Google doesn't play by the rules of business that we have known. They do not see the rules of the industry they want to move into and figure out how to structure their company and their offer to compete.

Instead they take on the bigger job of re-inventing the industry, at least one slice of it, and then leads. They have no intention of getting into a business as just one of the players. They see themselves as a leader and will be a leader in an industry or not get in, period.

That's what happened with their search engine. That's what happened with other Google products over the last few years. That is what is happening with their entry into wireless.

There are two parts to this new strategy. One is Android, which is the software they put on a variety of handsets. It's not a Google handset, but they do play a large roll. That is very successful so far.

The other part is their own handset called Nexus One. This has not been a big success in its first few months since launch.

So what is next for the company and the handset? I think Google is currently re-thinking the opportunity. It is still too big to walk away from, but perhaps the wireless industry is strong and fast growing enough with a lot of key competitors and the game will be harder than they originally thought.

Same thing happened when companies like Comcast and Time Warner entered the wireless space, failed, and exited. They did things their way, and they failed.

I think Google intends to stay in wireless, they just need to rethink the opportunity and the best way to grow in it as a leader.

Perhaps they will have to market and advertise, which is a different concept for the company who does not have to do that in their core search business.

Remember what Google is. It is a search company and they earn income from advertisers. Period. Everything they do plays off that fact. Drive customers to choose a Google search product on a variety of different devices, and sell ads to companies.

This is a company that likes to reinvent strong industries with big results. However no one company hits the bulls-eye every time. I remember when MCI was so successful in the 90's. They had several home runs. However they also had more strike outs than I can remember. At the end of the day all we remember are the hits.

Google won't be successful at everything they touch. They will have hits and misses, but it is still one of the most successful and exciting businesses to watch.

This company is growing so fast and is so profitable I think we can expect them to continue morphing into other businesses and changing the model of industry after industry. I do think they will be successful in wireless, but like Tiger Woods, occasionally they don't hit a perfect game.

 


 

Nokia Investors May Want A New CEO, But The Path To Success Is No Secret

May 11, 2010

Nokia faces their toughest challenge to date. One decade ago it was a small company when Motorola ruled the wireless industry. Then Motorola wasnít there when the industry changed from analog to digital and lost their number one position to Nokia who has ruled ever since. Now the industry is changing again, from ordinary cell phones to smart phones and Nokia has no brand recognition in this new area. Will the company expand their brand and survive or will they get lost in the dust like Motorola did last decade.

The economic recovery seems to be smiling on many smart phone makers, but Nokia is missing it. If we take a closer look at the industry some companies are recovering while others are not. The companies in the smart phone sector are doing very well, while the companies in the ordinary handset sector are struggling.

Nokia has built their name and their brand in the ordinary handset market and that is not doing well. The smart phones are selling strong, but no one thinks of Nokia as a smart phone marker.

That is their challenge.

Nokia has to expand their brand to include what is hot today. Companies that are leading that charge are Apple with the iPhone and RIM with the Blackberry. Samsung and LG and HTC are also doing well, but the media and customer attention seems to be on Apple. Now Google is getting into the mix. These are the two major brands that may be the king of the hill going forward, along with new entrants like Dell and Lenovo and whoever is next.

Suddenly the wireless industry is changing. It is growing and new companies are taking the lead. What does that mean for the existing leaders like Nokia? The company still has roughly 40% of the marketplace, but that is getting ready to change quickly unless they can update their brand and remain strong going forward.

The company has tried several times over the last couple years with limited success. They just cannot attract the kind of attention either from the customers or the media. Their smart phones may be good, but are plain vanilla. Nothing exciting. No headlines.

The problem is the brand. Nokia does not have sizzle like we see with Apple and Google.

Does this mean Nokia is lost? Not yet, but the writing is on the wall. They still have time to recover before it is too late. It all depends on what the company does going forward in coming months to update and expand their brand in the smart phone sector and what it can do to generate lots of media attention.

This is a good company with quality products. Itís just that the marketplace changed so quickly it left them behind in the dust. Success or failure is in their hands. This is no longer a matter of developing the next cell phone. This is now a new race in the smart phone sector and it is changing quickly.

 

 


 

HP Acquires Palm And Notifies Wireless Industry They Will Be Next Big Time Player

May 4, 2010

Most people are not aware of this, but HP has already been one of the players in the handset side of the cell phone industry over the last several years. Why didnít you know? There are several reasons, but one, the company has done a poor job introducing anything worth talking about, so far, and two, they have done nothing to build their brand

That may be about to change. HP and Palm have announced they intend to merge. Along with all the other changes going on in the industry this could be a big one.

This merger could both give Palm the money they need to stick around and compete, and give HP an important brand name in the cell phone space, and more specifically the smart phone segment of that space, along with the new webOS that has been so applauded over the last year since it was introduced.

What plans does HP have for Palm going forward? We donít yet know and perhaps even HP does not know, but the potential could be transformative for the company and even the industry if it is done right. We have seen the cell phone industry completely reinvent itself over the last several years.

Suddenly the top players and the names in the news are not the more traditional cell phone names like Nokia, Samsung, LG or even RIM, Sony Ericsson, Motorola or HTC.

Instead new, non-wireless names are top of mind like Apple and Google. Dell and Lenovo are also getting into the business. The industry is transforming itself over the last few years and I expect we will see more non-wireless companies entering the mix.

With all that change HP is one of the players, but they have so far done nothing to be noticed in a big way. In the wireless industry you are either big-time or no-where.

This acquisition of Palm could put HP on the map in a big way, at least for the short-term. It depends what they do next.

The wireless business is unlike most others. Even Apple has to advertise and market like crazy. If HP continues to be quiet, the value of Palm will be limited. However if they do turn up the volume they could indeed become an important player in the changing space, and quickly.

There has never been a better time for the company to do this since the industry is in flux again. The industry has gone through several major transformations over the past 15 years. It will likely continue and go through another a few years from now. The industry is constantly evolving.

However this new wireless industry focused on the smart phone market looks like it will be important and will likely create new leaders in the space.

Wireless networks like AT&T, Verizon, Sprint and T-Mobile always seem to remain important. That is because there are no other networks. However there are many handset makers and that is where the excitement is coming from these days.

What changes could HP make to itself and to the industry going forward? Most importantly they can focus on building and expanding their brand in this new smart phone sector of the business.

On one hand HP is fortunate they donít have a strong brand to change, which makes it easier for them, but they must begin building immediately before the opportunity slips through their fingers.

They can also let Palm continue to build and grow its business by mixing in the thinking from HP. They can also use the Palm and webOS technology to help build their name in the business. They also have the power to reinvent the industry and the company with this new technology.

Palm didnít because they are not a company that has ever focused on marketing and branding. HP could change that.

All of this can happen quickly if they know what they are doing.

The question is will they? Will they take advantage of this enormous opportunity? Do they know what to do next? If they want to be important in wireless going forward they have to do things differently than they have in the past, which did not have very good results so far.

We will see what HP and Palm does over the next several months and quarters with regards to changing technology and thinking. Will it be a big transformative change, or more of the same and not top of mind after several quarters? Weíll have to keep our eyes on the company and hope for the best.

 


 

Will Nokia Lose Their Number One Place? Leaders In Wireless Handset Market Changing.

May 1, 2010

We are watching wireless history repeat itself. Just like in the 1990ís where suddenly the leader in handsets changed, we are watching the same thing happen today. In addition the entire line-up of companies changed during the last 10 years and we may be watching the same thing starting to occur once again. 

The wireless industry has been growing and evolving. Every few years it seems like it becomes and entirely new space. In the 1990ís Motorola was number one and everyone else struggled to catch up. Then the networks switched from analog to digital and Motorola wasnít ready. They quickly lost their footing and a small company called Nokia took the lead with their digital devices. They have been growing and held onto that lead ever since.

Several changes since then have occurred and Nokia kept the number one spot. However, the wireless industry is transitioning once again and even though Nokia is still number one for now, it is struggling to keep up and continue to matter with customers in this new world of smart phones.

Ever since the networks converted to digital the carriers like AT&T, Verizon, Sprint and T-Mobile have tried to get customers to use digital Apps. There were a few hundred and they were on smart phones. Smart phones were a small, but growing segment of the market. Yet Apps, which were a good idea just never caught on in a meaningful way.

Device makers like RIM with their Blackberry and Palm let customers use Apps, but there just was not that much demand.

Then suddenly Apple entered the wireless space with their iPhone a few years ago and changed everything. Suddenly millions of Apple customers were buzzing around and interested in everything this new iPhone could do.

Suddenly the App market jumped from a few hundred to around 150,000 in just the last three and a half years. Suddenly every smart phone maker jumped in with their versions of devices that do more than traditional wireless phones. Suddenly the economy tanked and the only people still buying phones were the smart phone customers.

All of a sudden the cell phone business was flipped on its head.

Suddenly Apps are important and growing very quickly. Suddenly the demand for smart phones keeps going up. Suddenly traditional leaders like Nokia are struggling to matter as the marketplace changes once again.

Donít get me wrong, Nokia is still number one with roughly 40% of the market, and that is huge, but with the current direction of the industry and their standing in it, the question is for how long?

The same thing that happened to Motorola last decade could be getting ready to happen to Nokia now. Back then the marketplace went from analog handsets to digital handsets and now from handsets to smart phones.

In this new world who will lead? We have seen non-wireless companies enter and do well so far. They are changing the wireless playing field. Companies like Apple and Google are already competing. Companies like Dell and Lenovo are entering. Others will follow.

The leaders of the industry are changing again.

Today they are Nokia, Samsung, LG, and suddenly Research in Motion is now number four, with Sony Ericsson in number five position. Motorola isnít even in the top five anymore even though they have done well recently with their Droid smart phones partnering with Google. HTC is there also to round out the top seven.

This is different from just a few months ago. Suddenly smart phones are everything and in that world RIM is a player. Palm can be too and when they merge with HP they may just try and show it. Also I expect Google to work up to the top of the list pretty quickly. Add to that the many others entering the space. 

What will the list look like one year from today? I believe it will look completely different in companies and the order.

The question is what about the current leaders?

What about Nokia, Samsung and LG. There is real pressure on these cell phone makers. Samsung and LG have actually grown with a healthy curve over recent years because they are solidly in the smart phone business and their brand says so.

Perhaps they face a threat as the marketplace continues is transformation. Perhaps if other non-cell phone companies are as successful as Apple they will push their way into the lead above these more traditional companies.

These are the questions we are wrestling with as the industry changes, again.

Will these current leaders evolve into leaders in the smart phone space? Will they update their brand so customers will connect with them in that area? Or will they start to fade from the dominant position they currently have as traditional cell phones are beginning to fade being replaced by smart phones.

It could go either way and will be interesting to watch unfold over the next year or so.

Stay tuned because the industry is in the middle of another major transformation and we donít yet know the winners. One thing we do know is the list of top handset makers may look much different one year from now and the devices and technologies certainly will.

 


 

Is Sprint Recovering? It Appears So, But Slowly

April 29, 2010

Several years ago growth among the top three wireless networks looked very similar, strong. Then something happened at Sprint. They started softening. Bill Esrey was the CEO when the company was at the end of its strong run. The next CEO Gary Forsee tried to help the company by merging with Nextel, partnering with the cable television companies like Comcast and Time Warner, and several other changes. However instead of wild success for these big moves, the company continued to crumble.

Sprint is the number three wireless player in the United States, but they are strictly wireless. They are not a baby bell and do not offer a variety of other local phone services or Internet or television. Perhaps that has something to do with Sprints weakness. However listening to Verizon and AT&T their wireless operations are not tied to their wire line side. So why was Sprint having so much trouble?

They eventually brought in Dan Hesse as CEO. He successfully ran AT&T Wireless years ago, then spent a few years running a company called Terabeam and then he was hired to run Embarq, which was the local phone company Sprint spun off when it acquired Nextel.

Confused yet? There was a lot of movement during those years. Dan Hesse came to Sprint and spent several months trying to get his arms around the industry, the company, the challenges and the opportunities. He started making some serious moves. It looked as though the company was on the right path to recover.

Then the economy tanked. That threw Sprints recovery plans down the drain where they have been spinning over the last several years. What is the problem at Sprint? Will it ever recover?

Funny thing, we may be seeing the beginnings of the recovery at Sprint. No the results are not showing up as positive yet, however the bad results we have seen over the last several years are showing up as slower and weaker.

Sprint has been losing customers over the last several years. Bigger competitors like AT&T and Verizon have been the winners. Sprint has tried to reinvent itself by focusing on other areas like prepaid and helping other industries like automotive where they work with Ford putting the Internet on the dashboard.

We have expected to see some kind of recovery at the company over the last several years. They play a major role in the success of Clearwire. They were the first with the new Palm devices. They have all the great RIM Blackberry devices. They have an assortment of great phones and network services. Sprint was first with a camera on the phone and music too. Somehow they fell off the success track. And it is taking them way too long to recover, but it may look like they are starting.

I donít think based on past performance we can expect a rapid recovery. However the company does seem to be making progress.

I have tested Sprint phones to AT&T and Verizon and a number of others. The quality and reliability is there, as it has always been. That is not the problem. The innovation is there. That is not the problem. Even the customer service complaints are much better.

Generally speaking customers are happy at Sprint. The customers they lost may not have been happy, however Sprint still has tens of millions of customers. Remember when we say happy customers, the entire industry does not have really happy customers. People complain about wireless all day long. However Sprint customers at this point are not that different than AT&T or Verizon.

It is still losing customers, but according to this quarter the numbers are much fewer than in the past. They are slowing the loss. That is the good part.

Now if they can continue that momentum. If they can turn the cornerÖ if they can start growing again, perhaps we can watch Sprint actually start to rebuild itself. Maybe investors will start to smile on the company once again.

Just sit back and watch, but donít hold your breath because from what we have seen it will take a while. However for now, at least they seem to be heading in the right direction after all these years.

 


 

Is Google Brand As Strong As We Think It Is With Nexus One Stumble?

April 27, 2010

It looks like Google finally stumbled with their new Nexus One wireless phone. This is an important branding lesson for Google and for the rest of us. Its not that Google cannot be successful in the wireless world, just look at Android, but it does mean that no one, not even as successful as Google, can control a market. The market has a mind of its own. So your goal is to deal with the challenges and understand the market and the opportunities it presents.

Google has built their brand successfully over the last several years. They have grown into an online monster beyond simple search engines where they started. Remember when Google entered the space? The talk was how it was so good because it gave quick results. Since then the company has successfully grown into business after business, online. They have become one of Americaís success stories.

One reason they were successful is they were in at the early stages of a new technology called the Internet. People had a blank space in their mind. They were creating a pegboard in their mind, which described the industry. Without that framework nothing made sense because there was no way to compare or judge success.

We enjoyed search engines from companies like Yahoo, but the space was new and Google jumped in with their quick search and started making real waves.

When an industry is new you help the customer create a frame of reference in their mind from which they can compare. Compare important parts from non-important parts. Compare winners and losers.

Thatís where Google won over the last several years. They are the king, online. However now they want to move into and take over other industries like wireless. This is a much tougher nut to crack.

Not impossible though. Look at Appleís success with the iPhone. The iPhone changed a segment of the wireless industry and as such it opened new opportunities for a lot of other companies. Look at all the other smart phone handset makers and App providers.

The wireless industry has been around for around 25 years. It was the same place as always until Apple changed it about four years ago. They created the new framework in the mind.

Now customers compare anything new in wireless to the iPhone. That is good for Apple, but much harder for Google.

Google can be successful, but they have to play by the rules. They can either compete in the wireless space in general, or they can compete in the smart phone space supercharged by Apple a few years ago, or they can create another category.

Their mistake was jumping into wireless and assumed the world would follow. They had the benefits of the Google name and past success. They had favorable press. They had much buzz. It seemed everything was working in their favor.

However now we hear Google is not happy with their limited success in wireless. Android is fine. The problem is their Nexus One.

Android puts Google software on others devices like Motorola or HTC. The Nexus One however is the first attempt for Google to become its own handset maker like Apple. Actually the Nexus One kicked their other handset partners in the teeth when launched. They saw themselves both partners with and competing with Google. But that is another story.

Google tried to do too much too soon. The marketplace was just reworking the brain model they had of the wireless industry trying to fit in the new Google Android. That seems to be working fine. Not as strong as Apple, but still respectable.

However when Google at the same time confused the marketplace and created a new handset called Nexus One, that was too much.

What is the Nexus One? What does this mean? When launched I said it sounded like hair gel. Apparently hair gel and cell phones donít mix well. Is it the name that is the problem? It plays a role, but is not the only problem.

The main problem is Google misjudged the marketplace. They thought they were bulletproof. They thought anything with a Google name would be successful. That was a youthful mistake full of arrogance.

Now they know the marketplace has a mind of its own. So the question now is what is next? There is still an enormous opportunity in the wireless world for Google. I think they need to throttle back and rethink their entry.

Perhaps they should create a new category. Google is first an advertising company. The rest of what they do supports their ad business.

Position the phones in that area. They can be the first in that brand new area. Over the last fifteen years we have seen many similar models tried and failed. Many companies have given away free long distance if customers would listen to an ad every couple minutes. Sounded good, but did not work.

So Google really has to create a new way for customers to think about wireless. Will they take over? No. If successful it will only be a part of the wireless industry. However that could be just what Google needs.

They want to create a wireless handset that customers will use not only to make calls, and not only to surf the web, but somehow to interact with Google and their advertising world and open up enormous new opportunities.

However they should do this the right way. A lot of companies are watching Googles next step. Are they a partner with or a competitor to carriers like AT&T, Verizon, Sprint and T-Mobile, and handset makers like Nokia, Samsung, Ericsson, LG, Motorola and HTC. All of a sudden this is getting to be an interesting game.

This first effort was strike one for Google. Expect them to stay in there and get ready for the next pitch.

 


 

Will CenturyTel Acquire Qwest And Become The Next Big Baby Bell?

April 26, 2010

CenturyTel and Qwest announced their intention to merge. Why is that a big deal? Well among other things, that suddenly means a very small company will suddenly become a large Baby Bell like AT&T and Verizon. Will that work?

First a bit of history. In 1984 the giant AT&T was broken up by the US Government into one big national long distance giant called AT&T and seven Baby Bells which offered local phone service around the country mostly to larger and mid size cities. There were also several hundred smaller local phone companies in smaller markets around the country.

In the mid 1990ís the seven started to merge. Today AT&T and Verizon are giant Baby Bells that each cover roughly half the US market. Qwest is the third and smaller one. It is still the same size it was when AT&T was originally broken up. It was US West, but about a decade ago changed names and added long distance.

CenturyTel was one of the very small local phone companies, not a larger Baby Bell. They are now changing their name to CenturyLink. Beyond the name change they are growing rapidly over the last couple years.

Last year this small company acquired Embarq, the nations fourth largest local phone company. It was actually Sprintís local phone business until they spun it off and changed the name to Embarq a few short years ago.

So as of that merger last summer suddenly CenturyTel became the fourth largest local phone company in the country. So far they are handling it well. The Embarq network was also in smaller markets around the US so the match was good.

However Qwest is different. They are a Baby Bell. Sure they are still small. Sure they did not expand like AT&T and Verizon and grow through mergers. Sure they are still the same small company they were in the beginning. Sure they do not operate their own wireless network.  They resell Verizon Wireless. Sure they are not building their own television operation like AT&T Uverse or Verizon FiOS. Instead they are reselling the satellite television service of DIRECTV.

However they are still a larger company, a Baby Bell. One of the largest local phone companies in the country, offering service to larger cities like Denver.

Can CenturyTel, a smaller company successfully take on this massive task? That is the question we have to ask. No one yet knows. All we can do it look at the current marketplace and take an educated guess.

CenturyTel is not exactly like AT&T and Verizon. They donít operate their own wireless network or television service. Then again, Qwest has not done this either. Actually these two companies do look more alike today than they would have 5 years ago.

Perhaps this can work. Perhaps they are not done growing through mergers yet. There are other wireless carriers in the marketplace they could work with. They could continue to re-sell Verizon Wireless services. Or perhaps they could acquire a wireless network.

I know nothing about this, but for arguments sake there is a wireless company out there that may make sense. Sprint. They were the company that owned Embarq before they spun it off. They are family of sorts.

All of these various pieces are bubbling together in the big pot called the changing telecom industry and they are cooking. 

It is possible CenturyTel could be interested in merging with a wireless company if they think it is important going forward? There is not pressure to move quickly on that yet because their biggest competitors, the cable television industry also tried reselling Sprint wireless and failed so they pulled out a few years ago.

Going forward the question is will CenturyTel and cable television companies like Comcast, Time Warner and Cox successfully get into the wireless business? And if they do will they own their own network or resell?

However these steps are getting a little ahead of ourselves. Today we have to think about the current merger between CenturyTel and Qwest. Yes or no? That is the question.

Currently Qwest has not grown much in the last several years so the question is will this new deal be better for the customers and the shareholders than the stand-alone company? Is this a risk or a sure thing? Who will benefit and who will be hurt, if any?

The debate will go on over the next several months until the approval or denial is given.

 


 

Wire-line And Wireless Telecom Is Changing. What It Will Look Like Going Forward.

April 20, 2010

Ever since AT&T was broken up into seven baby bells and one long distance giant in 1984 the telecom industry has been changing. Over the last 25 years we have seen several different industry shifts capture the headlines. Today the industry is in the middle of yet another transformation. Letís look at the forces that are re-shaping it and what the industry will look like going forward.

If you are a customer, an investor or an employee you have to know the direction of change and what is coming. Letís break the industry and the companies into segments and look at each separately because every company has parts that are growing and doing well, and other parts that are not.

Look at the telecom industry in separate buckets. There are actually more than these basic bundles, but these are the important main categories for now. Wireless, wire line, Internet and television.

The wireless part of the business is the fastest growing, however it is now starting to go through some major changes. Until now the carriers battled among each other to win new customers. Today there are fewer new customers, so growth going forward is in new areas.

One is winning existing customers from each other. We will see advertising and marketing battles discussing strengths and weaknesses. Currently Verizon is waging a battle against AT&T on the quality of 3G coverage.

Is it successful? I remember a similar campaign years ago and that was much more successful. Today people know the major carriers all offer excellent quality. They also know each has strengths and weaknesses. So whether a carrier is better or worse is different for each customer.

This kind of advertising does not hold value for customers any more, but that does not stop Verizon from running it or AT&T from responding to it. Thatís the ad game.

Another is wireless Internet and data. In the late 1990ís the networks were transformed from analog, voice-only devices to wireless data powerhouses. People started doing email and sending text messages. They started taking pictures then sending them to each other. They started watching video clips, then live television and movies. They started using GPS and reading books on their devices. Regular cell phones are giving way to smart phones.

During the last few years, people are using their cell phones more than regular phones. We have seen wireless Apps become wildly popular. When Apple launched the iPhone a few short years ago there were only a few hundred Apps customers could use. Today there are around 150,000 apps. Thatís an incredible jump and it continues to grow.

Suddenly Google is also competing in the wireless space with their Android and Nexus One phones. These are not even wireless companies. This is only the beginning of this new area of the industry. Expect much more in coming years.

Going forward there are new opportunities starting to be chased down on the wireless sector.

The wireless industry is focused on bringing other industries into the wireless revolution. Sprint is working with Ford to bring the Internet to the dashboard and AT&T working with power companies to help them read meters without sending people out in cars. Industry after industry is an enormous opportunity for growth in coming years.

The wireless industry sees enormous opportunity, but the marketplace is getting tougher to crack with the soft economy. Many customers are looking to cut costs. Smart phones are still growing in part of the marketplace. In another part customers prefer fewer extra services and a lower bill.

Post-paid was always the growth engine and pre-paid was the service for the customer with bad credit. Pre-paid was more expensive, but at least it provided a phone to the customer. Today that is changing. Today many people are choosing pre-paid for many reasons. The economics of the plans have come close to post-paid making them more attractive. Customers who use their phone less can save money. Pre-paid devices are more basic, but that is what many customers want. Not everyone wants a powerful iPhone or Nexus One. Some just want a phone.

Companies want to drive customers to more expensive data plans, but increasingly customers are driving themselves to cheaper plans. Prepaid is going mainstream. Itís not just for bad credit anymore. Now it is for the cost conscious customer. This segment should continue rapid growth.

Expect the pre-paid side of the business to start rolling out more juicy devices allowing customers to surf the web and send email and text messages easily. As they get better phones carriers will advertise and market and entice pre-paid customers to spend more.

The carriers sniff out new opportunities and the customers sniff out the best deals. Until the economy improves this trend will continue. The new-ness of all these wireless devices is still cool to many customers, but is considered a toy they can do without if they have to.

The wireless industry is starting to compete with the wire line world. Remember as wireless high speed Internet connectivity increases, and as wireless carriers offer devices that allow customers to connect their various computers and laptops, many think to themselves why also have a separate wire line telephone and Internet DSL or cable internet service? Two services cost more so expect to see more changes.

On the wire line side telephone companies are successfully rolling out television services, but not as quickly as we expected. The quality of the service seem excellent according to companies that rate these things. AT&T is continuing to roll out their Uverse servies, but Verizon said they will throttle-back on rolling FiOS television service out to more markets.

Is this a temporary measure during the bad economy or is this Verizon saying they are not happy with the results and are pulling out?

They have invested enormous sums to bring this to reality so I cannot imagine they will not be moving ahead, but we have to watch and wonder. Wonder if it will come back for Verizon, and wonder whether this is only Verizon or whether we may see something similar at AT&T in coming months.

Television from the telephone company has been an excellent source of competition in a few markets for the cable television companies like Comcast, Time Warner and Cox. However we have not seen costs reduced yet which was expected. What does this mean going forward?

Regular phone service at phone companies is on the downside. Ten years ago if we wanted to make a phone call we used a phone company period. Today we have lots of choices. Cable companies offer an Internet phone service called VoIP. Plus all the wireless providers are still growing. In addition there are services like Skype and Vonage which are stand-alone companies offering telephone over internet. There are many choices.

This means the future of the local phone line continues to shrink. It will still be around for a long time, but is not growing. When will the shrinking stop? It will not go down to zero. It will stop somewhere. Where and when is the question? We wonít know the answer for a while and telephone company investors bite their fingernails.

The telecom industry is in transition. It actually has never stopped since the mid 1980ís. Today is only a snap shot in time. Knowing the direction is key whether you invest in, work for or are a customer of any of these companies. Keep your eyes open. The marketplace will look completely different a few years from now. What companies and technologies will lead is the only question.

 


 

Why AT&T Is Re-Inventing Its Brand, Again?

April 12, 2010

Didnít we watch AT&T re-invent their brand just 5 or 6 years ago? How often does a company have to reinvent itself in the marketplace? Apparently if you are one of the leaders in an industry that has been continually reinventing itself the answer is often.

As the industry continues to change, and as the services change, and as new competitors enter the space, it is vital that companies update their corporate image. 

To understand what is happening letís pull the camera back and take a look in the longer term historical perspective of the changes that are reshaping the telecom industry.

First was the big bang in 1984, which started it all. The break up of AT&T into one big national long distance giant and seven smaller regional local phone companies called baby bells. Thatís around the time when MCI and Sprint became competitors. At that time the wireless business was brand new and just starting out and the Internet wasnít even on the radar yet.

Then in 1994 we started talking about the Internet. That was only sixteen years ago. It was brand new to the consumer marketplace and it was just words. No graphics or pictures or movies or anything, just text.

In the mid 1990ís AT&T reached its peak. It was the largest long distance giant in the country. It looked bulletproof. It offered telephone, wireless, Internet and it even acquired Telecommunications Inc (TCI) and became the nations largest cable television provider.

Thatís around the time when the baby bells started offering their television service called Americast. It was a very good service, but was put on the back burner when the bells started merging later in the 1990ís.

Thatís when the wireless industry changed from analog to digital beginning the its revolution. It wasnít an instant success. In the early 2000ís the wireless business was still trying to figure out how to convince customers to use their data services.

The Telecommunications Act of 1996 was a revolution. It was the rules of competition between the local and long distance companies. It was not about wireless or Internet, just about phone. Thatís what we thought the world would look like going forward.

We were wrong, but did not know that at the time.

That new world lasted several years, but then the bottom quickly fell out of AT&T and the rest of the industry changed as well.

 

The baby bells won the battle over the consumers and AT&T lost. It didnít take long. The writing was on the wall. After losing consumers to the baby bells for local, AT&T was at the end of its rope. We didnít realize it, but that may have been AT&Tís last gasp as the company they were.

It quickly sold the huge cable television business to Comcast making them number one in cable television.

AT&T also spun off their wireless business called AT&T Wireless. The new company kept the same name, but was a different company.

All that was left of the once giant company with the most valuable brand name was a much smaller business services company. The marketplace just couldnít wrap their arms around the fact that AT&T was pretty much gone.

SBC, one of the baby bells acquired them in the mid 2000ís. SBC changed its name to AT&T. That was the beginning of the re-birth of the phone giant. In a similar move, Verizon acquired MCI. 

So the new AT&T was born, and it looked impressive, but was confusing. This changing industry and changing company was too confusing to explain, but Iíll give it a try.

First, a smaller and weakened AT&T was acquired by SBC, a baby bell from San Antonio Texas. The company changed its name to AT&T. SBC was originally the smallest baby bell of the bunch in 1984. It grew from the smallest to the largest by acquiring many companies including AT&T, Bell South, Ameritech and others.

Suddenly AT&T was re-born. At the time I remember telling people this was too confusing for the marketplace. I said in a few years we wouldnít even remember this mess. At that time people will just think AT&T is the same company it always was. They will forget.

That new large company also owned a part of Cingular with Bell South, but now they also acquired Bell South so they really owned all of Cingular.

That was one of those brilliant and successful names and brands in the business. It gained top billings quickly. The kind of brand that should stick around right? Wrong.

Next step, Cingular acquired AT&T Wireless. That was the business that AT&T spun off. What name would they take going forward?

Eventually AT&T decided it needed a brand new identity and changed the name of Cingular to AT&T Mobility. Getting dizzy yet?

With all this water under the bridge just a few short years ago the company decided to take a break from the name-that-company game.

In the few years since, the wireless industry has transformed itself, again. Four years ago Apple jumped into the business with iPhone. They started with a few hundred Apps and now they offer around 150,000 Apps. Thatís an incredible leap and opportunity and it is just the beginning.

That started a revolution. Smart phones are growing and taking over. Now Google is jumping in with their Android devices.

 

Suddenly non-wireless companies are leading the wireless handset business. Suddenly Apps are a big business when just a few short years ago the networks could not figure out how to get customers to try these things.

The direction of the wireless industry going forward looks much different than it did just a few short years ago. One thing that is different is if most US based customers already have a cell phone where will growth come from? 

Plenty of places even though we donít all recognize what is happening yet.

A few examples are Sprint working with Ford to put the Internet on the dashboard. Or AT&T working with power companies to read meters wirelessly, saving money on meter readers. There are many examples.

Suddenly the marketplace is different with new competition from many companies like Comcast, Time Warner and Cox.

With all of this new-ness going forward, now is the right time for companies like AT&T to re-think who they are and change their brand in the marketplace?

This signal of AT&T updating their brand shows we can also expect these companies to stay busy reinventing themselves. They will be painting the new background so we can understand what the world looks like going forward.

Pegboard.

Customers donít understand big changes early on. When a new competitor comes into an existing space the customer already has a pegboard in their mind. Their understanding of the industry and the opportunity is already in their head and it is up to the new competitor to fit into that space.

However when a new space is introduced, like what AT&T is trying to do now, the customer doesnít have a pegboard in their mind yet. They struggle trying to create a framework where everything starts to make sense again, and where they can start hanging ideas on.

The first company to get to the customers mind and present that framework wins that first important battle. They can create the environment that makes them look good. That is the same place that others will have to compete in.

So that is where we are right now.

AT&T is launching their campaign that will create the new thinking going forward. At the same time we can be sure Verizon is also working with their creative group on their next moves. 

Since they will come in after AT&T the question is will they work within AT&Tís new idea for the industry, or will they create their own? I bet they will create their own, but will look similar to AT&T. That way they can both sound like they are tops in their own world.

One thing is for sure, this industry is one of the healthiest and most rapidly change. New competitors can pop up anytime like Apple and Google. Other entire segments can disappear like long distance. The industry keeps reinventing itself.

What will telecom look like going forward is the question. We can tell a few years in the future, but beyond that no one knows yet. Itís just the way this industry works.

The future of the industry is like what they say about the weather, if you donít like it stick around and it will be completely different.

 


Surprisingly Different Outlook For AT&T and Verizon As They Deal With Bad Economy

April 6, 2010

AT&T and Verizon are the nations two largest local phone companies, and they are both heading down the same path of innovation and competition, so why are there suddenly two completely different outlooks?

They both offer local phone service, and over the last decade or two have expanded to long distance, Internet, wireless and recently are moving into television with either Uverse or FiOS service. Until lately we thought they were on a parallel successful course.

However recently we have been seeing them begin to part ways. First Verizon talked about throttling down their FiOS activity, which was very disappointing for those customers eagerly awaiting the new service to switch from cable television.

Now AT&T jumps in and talks about investing one billion dollars into their network to provide more services to their customers. Thatís a total of four billion since 2006. They donít seem to be slowing down.

Whatís the difference? Is AT&T doing well while Verizon is struggling? I would not have thought so. Until very recently I thought the two companies were bearing the weight of the soft economy very well.

Is there a real difference brewing? Is AT&T doing something right while Verizon is doing something wrong? Will we see these two companies on completely different tracks one year from now? Or is it something else like simply the attitude going forward where one company has a positive expectancy and the other has a negative one.

If the problems are real and are here we should know about it so we can follow the changes. This is important for customers, investors and employees.

If the problems are not real, and these are just two different approaches to dealing with an economic slowdown we should also pay attention because this would be a great learning experience for every business, large or small.

So much of success is dependent on the real nuts and bolts of an offer, a business and an economy.

However another key ingredient of success is attitude. Whatever you believe is what you will achieve. Positive or negative.

I have witnessed this many times. In fact I would say a positive attitude has to come first. Without that the company will go nowhere. Then to keep the flow going there has to be a there-there. A real and great quality product or service. Without that success will be short lived like the sudden bang of a firework.

Itís like a hot fudge sundae. There is ice cream, then hot fudge, then whip cream and maybe a cherry on top. The sundae is the ice cream and hot fudge, but the whip cream and cherry puts it over the top. Both are important to attract the customer, but the sizzle is what can turn something ultra-successful.

A positive attitude is the whip cream and cherry on top of the sundae. AT&T seems to have both while Verizon seems to be selling just the ice cream and hot fudge.

So far other wire line companies like Qwest or Comcast, Time Warner and Cox or wireless companies like Sprint or T-Mobile have not taken sides yet. This is a battle between the big two companies.

AT&T and Verizon donít compete with each other in most areas for wire line services, but they do compete head-to-head in wireless in virtually every market across the US.

It will be very interesting to watch and learn how these two successful companies, who took similar paths until now, will fare going forward.

 


 

Is Verizon Wireless Better Than AT&T Mobility Like Their TV Commercials Claim?

4-5-2010

We have watched the wireless carriers like AT&T, Verizon, Sprint and T-Mobile battle each other for years. The industry changes every few years and advertising and marketing messages that were used in the 1990ís should no longer work, but that does not stop these giants from swinging them around like giant old swords. 

Do they still work?

National television advertising shows Verizon has resurrected the claim their network is better than AT&T. In response AT&T is answering the threat and making some challenges of their own.

Who is right? 

The simple answer is both. Ask anyone in advertising and they will tell you to promote your strengths and leave out your weaknesses. That is exactly what both sides are doing. It may make a great ad war, but the customer getís confused.

When this type of marketing first started years ago it may have had more of a basis in fact, but today as the carriers have spent billions upgrading and strengthening their network and all have excellent quality.

If AT&T has had a problem in recent years it may be because of the explosion of the iPhone. This problem is simply caused by too many customers and too much success, too quickly.

Generally speaking the average customer gets good quality from all providers.

The details are a little murky and come from the fact that the wireless industry is constantly changing. Networks are upgrading on an ongoing basis to improve performance tower-by-tower across the United States.

Over the years we have watched network upgrades from 2G to 2.5G to 3G and now 4G. The mistake comes if customers hear a carrier offers 4G they think it is that way network wide.

That is not true. The advanced features are only available in the markets that have been upgraded. That means different cities and even different places within a city have different standards.

It depends where the market is, and where in the network you are standing. The upgrade starts at some center point in a city and they advertise and market so people think they are everywhere in the market.

However most of the footprint in that market is still the previous version. Then they work to upgrade and expand the footprint, but it takes a few years. This is the same in markets all across the country.

It is often possible to have different network coverage strength as you drive around town. What is not fair is telling customers a city or an area is upgraded when only one portion is as they take years to spread the upgrade around the entire area.

The wireless experience is different from person-to-person, area-to-area, even within a particular city. You may have a great experience with one carrier, but your parents may have a lousy experience with the same carrier just a few miles away. How could that be?

A wireless network is only wireless for a short distance between your cell phone and the nearest tower. At that point it becomes a wire line call. The connection you have with the tower can be different based on a number of factors like how close you are, or is that tower an upgraded technology. These are the key differences.

If you are close, have no interference, and have a strong signal your connection will be much better experience than someone who is farther from the site, or is inside a building and have weak signal strength.

An example is when we visit the beach. At home we have strong signal from all the networks, but not at the beach. Only AT&T gives me a full strength signal there. Verizon and Sprint have just one bar and a weak signal.

How could that be? They all have towers on the island. Verizon and Sprint also have excellent quality networks on the island.

However for where I am standing only AT&T gives me strong signal. If I was on the other side of the building another network may have stronger signal meaning that would be best for me. The experience is different depending where you stand.

Thatís the secret to choosing.

So check coverage strength and compare. Donít just listen to advertising and hope. Where do you spend your time, at home, the office, shopping? The best way to find the best carrier for you is to test in every area you are.

During the first few weeks take it everywhere you go and keep your eye on the signal, and be exact.

You can always cancel your service with no penalties within the first few weeks. Make sure you know how long the return period is and then test your heart out.

It would be better if all the carriers would let you take a phone with you for a few weeks so you can compare signal strength and speed everywhere that you will go. That is how I learned of the differences since I have multiple test devices from all the major networks.

Most people think quality is the same for everyone. It is not. So to determine which phone and network is best for you pay less attention to the advertising and do a real life comparison. You will be much happier you did.

 


 

Will Cox Succeed Entering The Wireless Industry?

 4-2-2010

After years of preparing for this, Cox is getting ready to pull the trigger on their newest offering, wireless phone service. The cable television company has been working on this over the last several years. Will they be successful? The industry has changed during the last few years making it more complex for the company. In addition there are several key areas they need to get right. If they do, then they have a chance.

When they started planning for this move the wireless industry was a different place. Smart phones only made up 15% of the marketplace. Things were pretty predictable.

Then the Apple iPhone appeared a few years ago and the industry hasnít been the same. Suddenly smart phones are rapidly growing and have around 50% market share. To make matters more interesting they are expected to reach around 80% in the next few years.

This means the marketplace will completely transform itself since Cox decided to go wireless.

Larger cable television companies like Comcast and Time Warner have failed in their wireless phone efforts of the last several years. Why did they fail and what will Cox do to improve their chances of success?

Cox has been a good company and has happy and satisfied customers. They are one of the companies who care about their customers and investors. They face relatively few complaints compared to other larger cable television companies. However that is no guarantee of success.

The industry has changed and the stakes have risen during the last few years so they have to do everything right. There is so much to consider. Is Cox prepared?

The marketplace is changing. The Apple iPhone, the Google Android and many other new smart phone handsets are growing rapidly. Where will Cox fit in? Will they capture media attention or will they be a quiet competitor? Unfortunately quiet often means invisible. Look at Palm in comparison to iPhone and Android. That is one key question.

Another is marketing and advertising. That was one key problem with Comcast and Time Warner. They offered their phones as an add-on for cable television customers. However wireless customers like to be marketed to directly. Even phone company Qwest has trouble selling wireless service as an add-on to their regular phone service.

Compare that to AT&T and Verizon who offer wireless as a stand-alone device and service. They market and advertise it separately from wire line services. So how will Cox market and advertise and position this new offering? That is another key question.

Their success or failure depends how well they get the word out. How they market and advertise. Companies have to present their services the way customers want to buy it otherwise the product will whither and die on the vine. It has already happened many times, in the wireless space.

Todayís wireless marketplace is even sharper than it was just a few short years ago. The focus today is in on different things smart phones do and how they compete.

To capture the imagination you have to capture the headlines. This is a very loud business. The challenge is tougher than ever to be heard.

Suddenly we are seeing non-wireless companies like Apple and Google get more headlines than traditional players.

So where will Cox fit in? How will they market ad advertise? How much media attention will they generate? Will they offer a primary wireless device in the customer mind or will it be an add-on to a cable television bill? These are all very important questions that will make the difference between success and failure.

Cox has always been an impressive company. They care about their customers and provide good quality at competitive rates. Is that enough?

However wireless as an industry is changing. What will it look like in another five years? Will Cox be able to compete in that marketplace? We have watched many succeed and many more fail over the years. It will be interesting to watch this next chapter in the changing wireless industry unfold.

 


 

What Are Tomorrowís Growth Opportunities In The Wireless Industry?

3-25-2010

The wireless industry is changing. It has been over the last 25 years and continues to reinvent itself. It is currently in the process of transforming and you may not recognize it over the next five years. What will it look like going forward?

First it is important to recognize that we really cannot tell the direction of the industry beyond the next several years. So much depends on new technology, government involvement, and where new demand takes us. However the change over the next several years will be amazing.

So much of this change will impact the workforce in wireless. It is important to know the direction the industry is heading in. To know where we were, where we are today, and where we are heading tomorrow to make sure you are in the growing part of the business.

Over the last few yearís smart phones are rapidly taking over the handset market. Just a few short years ago smart phones were a smaller segment for business users led by companies like Rim Blackberry and Palm. Then about 4 years ago Apple jumped in with the iPhone and suddenly smart phones are the fastest growing part of the industry with tens of millions of devices being sold to consumers as well.

Once the consumer marketplace got on board something else happened with smart phones. The App stores exploded. There were just a few hundred Apps until the iPhone a few years ago. Now there is somewhere around 150,000 and still growing rapidly. The App sector is suddenly becoming very large and very strong. Todayís apps are new and fun, but tomorrowís apps will do important things for us like activate our home alarm and change television channels.

During the last few years many competitors like Nokia, Samsung, LG, Motorola, HTC and others are jumping in with their devices and they keep getting better and better.

Even Google is getting into the wireless space working with many handset makers on the Android platform. They are even rolling out their own Google handset and may transform the industry the way Apple is doing.

Microsoft Windows Mobile is also proving to be a successful player. Dell computer is also entering the wireless space.

Suddenly some of the biggest names in the wireless industry are not wireless companies. What will that mean for growth going forward?

Sales of regular handset sales have slowed during the last year or two thanks to the economy. Smart phones are exploding however. What does this mean for the industry?

In the beginning the smart phone sector grew from 5% - 15%, but suddenly it is growing to the 50% level and even greater. Some carriers like AT&T that focused on the smart phone category over the last few years may be as high as 60% - 70%, however the carriers donít discuss numbers in detail.

At this point I would say the best guess is the marketplace will look like an 80-20 split over the next several years. 80% will be smart phones and 20% regular handsets. Regular handsets will get smarter. They will do simple tasks like sending email and text messages and even search the web for basic functions. However there are still two definite groups.

Currently in the US the smart phone marketplace is about 40 million and is expected to exceed 125 million over the next few years. Truthfully I expect it to surpass that as it approaches the 80% of the marketplace area.

As I said before we donít know what the industry will look like 10 years from now. This projection is over the next several years. Beyond that who knows.

Until now the competitors like AT&T, Verizon, Sprint, T-Mobile and others focused on several areas for growth. One of those areas is becoming less relevant. There are very few first time cell phone users anymore. There are almost 300 million phones in the United States. Some of us have more than one, but still you can see how the marketplace is pretty full. There are very few first time customers left.

Now the companies are competing with each other for the existing customers. That is healthy for the consumer because carriers focus on services and price and keeping customers happy and delighted. In this marketplace wowing a customer is still magic.

The next big opportunity is the wireless web. That is exploding thanks to the smart phone market. As much as we love todayís new smart phone apps, they are just the first course in a very long meal. In other words it only getís better.

Some new opportunities may not last as long as we think. An example is the Netbook computers. When they came out I didnít get it. They are still selling and I still donít get it, but I would predict they are a limited opportunity and may not even continue at some point.

Suddenly carriers are successfully selling wireless access points so your laptops can get Internet access without plugging the laptop in. Will these last or will they be short lived?

One of the really new and very exciting areas of growth for the industry isnít even being talked about much. Wireless carriers are working with other companies and industries to drag them kicking and screaming into the wireless century.

This is an enormous opportunity for the entire industry. The networks have dedicated people in place to tap this new opportunity. This is a great opportunity going forward.

In the same pattern, wireless opportunities will expand in other industries. Other companies will need wireless specialists to bring their own wireless future online.

This is part of todayís wireless story. It continues to grow and change very quickly. Yesterdayís opportunities are slowing down, but tomorrowís opportunities are just catching steam. Being able to tell which of tomorrowís opportunities will be long term is the challenge. Making sure you continue to work in the segment that is growing is the challenge for all.

 

 


 

Jobs Are Changing In Wireless, Telecom, Cable TV And Internet.

How to hang on to yours.

3-22-2010 

Itís becoming obvious that jobs in the wireless and telecom industry are changing. Hanging on to yours is on everyoneís mind. Customers love all this new technology, but that is just one side of the coin. The other side is where the industry jobs are and that is changing. The question everyone has is, how to stay employed?

In recent years we have seen the entire industry transform itself. One example is long distance, which no longer exists as a separate industry. There are no hard numbers, but I would say hundreds of thousands of workers lost their jobs in recent years.

Another example is traditional phone lines are shrinking as customers switch to competitorís services like wireless and VoIP and cable television phone.

One more is that television is changing as cable television now competes with telephone companies IPTV. Customers have more choice than ever.

All of these changes mean countless jobs are lost and added and these are just a few of the many areas in the rapidly changing industry. Every sector in the industry is transforming itself. Parts of the industry are growing while other parts are shrinking, and the same with companies. 

The industry looks different from ten years ago and will look just as different ten years from now. To protect yourself, make sure you are on the right side of your company, and that your company is on the right side of the industry.

If you work on the wrong side of your company, or if your company competes on the wrong side of the industry then it may just be a matter of time before your number comes up and you along with many others are cut.

This is the harsh reality everyone in the industry faces. It is especially hard today when replacing jobs is tough because of the economy.

How do you protect yourselves from this harsh reality of the changing industry? This other side of the bright and shiny industry we have been watching develop over the last several years as products like the Apple iPhone and Google Android transform the smart phone space in wireless. 

Just 5 years ago it was companies like Palm and Rim Blackberry that led in smart phones. Now Palm is struggling to reinvent itself while Rim, even though it looks strong in comparison, is not selling new devices at the same pace as companies like Apple.

The marketplace continues to transform, and that means the job market changes. If these are the new rules, then letís play to win.

To get a real and objective look at the changing industry letís pull the camera back and look at the industry as a whole, and your position in it.

An example is look at companies like AT&T and Verizon. They seem like big strong companies and if you work there you are safe right? Wrong.

If we take a closer look only some jobs are safe. Others are at high risk. What am I talking about? Take a look yourself.

Have these companies laid workers off? Yes they have laid-off many in recent years and are continuing to do so. Who is being cut? These companies have several sectors. Itís not like in the 1990ís when a local phone company was in the local phone business, period.

Today they are in various industry segments like local and long distance telephone, wireless and cellular, regular and smart phones, high speed internet, and IPTV which lets them compete with cable television.

Parts are growing and other parts are shrinking. Example, television is growing. This is a smaller part of the company, but is growing rapidly. Internet is a growing business, but no longer as rapidly as other parts. Wireless continues to grow rapidly, however the wireless sector is broken into various smaller sectors and only the new sectors are fast growing.

Are you working in the fast growing sectors? They are different than they were just five years ago. There are countless examples of growth opportunities. Some are older and slowing down, while others are newer and gearing up.

Then there are other parts of the business that are slowing down. Shrinking. Consider local phone lines. We think local phones companies have a solid business. Not anymore. 

Ten years ago if you wanted a local phone line you called your local phone company, period. Today you have many choices from companies offering wireless, VoIP and cable television to name a few who offer local phone service.

So local phone companies may be growing, but not all the services they sell. Which side of the house do you work on?

Year after year we have seen them cut workers. On the other hand we have also seen them add workers to other parts of the business. Unfortunately they donít move people around. Each section needs certain skills.

So you should be focused on modernizing your skill sets so you can move rather than be cut. And move before your section is cut is the best bet.

This new reality is the same for every company in every industry including cable television, wireless, Internet, television, telephone, business and consumer.

Everyone is at risk and everyone has new opportunities if they are prepared. Companies like Qwest, Sprint, Comcast, Time Warner, Cox, T-Mobile and Cellular South and many others have sides that are growing and other sides that are not.

Take a look at the part of the company you work for.

- Is it growing or shrinking?

- How severely?

- Are they at the beginning, middle or end of a wave of growth or shrinkage?

- Are they losing or adding workers?

These are some of the key barometers you need to keep your eyes on.

Donít go to work every day and hope they management will keep your job safe. That is not their responsibility. They have to keep the company profitable and growing. If that means cutting workers in a slowing area, then thatís what they do.

You have to look out for your own position in the company and the industry. If your job is at risk, there are countless new opportunities either within your existing company or with other companies. Learn what they need, then learn what you need to fit, and consider a move.

Timing is always key. Waiting until your entire section is laid off means there will be many similar people with similar skills all looking for the few jobs that are left. Take the reins and ride this horse now, when you are in control. It will have a much happier ending.

 

 


 

What Happened At Palm?

If They Change Their Strategy Palm Could Still Win

3-21-2010 

Palm keeps swinging, and the crowd keeps cheering, but as we go through inning after inning they keep missing, swing-after-swing. So what is the problem?

Itís not customers. They love it and want the carrier to win. Itís not the technology. Palm updated it with webOS, which everyone seems to love. The problem seems to be that industry changed over the last few years and the company just cannot compete and grow the same way other big brand name leaders in wireless are doing.

Palm is an interesting company with an interesting story behind it. They developed the first smart phones in the US market back in the 1990ís before anybody every heard the name smart phone.

Palm didnít start life as a phone. In the 1990ís it started as an electronic data organizer letting you take your calendar, address book and to-do list with you. Then they added a flip up antenna and it started checking email and pages. Even better. Then they added a phone and like magic it started the smart phone revolution. It was one of two leaders in the new space.

RIM Blackberry was also going through its own transformation from a wireless pager, to an organizer, then getting email, then phone calls. Starting out as two separate devices these companies did not originally compete, but as they added messaging, email and phone calls started to compete. They owned the smart phone space back then. Of course the smart phone space was not what it is today. It was a small segment of a few percent of the US market.

The smart phone segment grew to 5%, 10% then 15%, but basically stayed the same until about three years ago when Apple jumped in with the iPhone. Through the years rapid innovation that captured the imagination was the rule. Palm was still a leader, but there was a bump in the road. Their devices were as easy to use as ever, however innovation seemed slow at the company.

The Palm Treo and the Centro were two very good devices with loyal customers. Palm had a loyal customer base. They were a leader at the time, however thatís when things started to slip. About three or four years ago other competitors started to innovate rapidly and captured the media attention. Month after month new technology poured into the marketplace, but Palm stayed the same.

They knew something had to change. They rapidly rolled out new products that looked hot, but did not use the Palm OS. That was their magic sauce. Without it, the device was just ordinary. The new devices started using a Windows Mobile OS. This was much more confusing compared to the simple and easy to use Palm OS, which was Palms trademark.

Palm knew they had to do something dramatic.

CEO Ed Colligan brought in Jon Rubinstein to help turn the company around. Two new captains on the bridge. They developed new devices (the Pre and Pixi). These were great devices with a remarkable new OS.

The Palm brand soared last year.

Many customers and in the media seemed to love it. Could the bad times be over? Everyone hoped for the best for this historic company.

However we are recently hearing about Palm softening again.

How could that possibly happen? One reason is the marketplace has matured and grown and changed over the last several years as Palm was struggling.

Apple jumped in with the iPhone between three and four years ago and transformed the smart phone space. Suddenly this new generation of smart phones were selling rapidly to new customers. Other handset makers like Nokia, Samsun, LG, Motorola, Sony Ericsson and HTC developed their own new devices.

Even newer competitors like Google jumped into the market with their own new Android devices, which started to supercharge the market energizing companies like HTC and Motorola.

Google even came out with its own branded handset. The smart phone marketplace is rapidly changing and growing. In fact it is exploding.

When Palm started their re-make, the smart phone space was the same as it always was. In that world Palm would have been a big hit. However when then re-entered, change was occurring and now the industry has exploded with new technology and companies competing, making lots of noise and changing the industry.

All of a sudden this completely new Palm handset and OS is just part of the noise instead of a standout product like they had hoped.

In that world, Palm seems to have gotten lost.

This relatively small company did something important. It re-made itself. This is something that may have saved it 5 years ago. However the wireless marketplace changed during those past 5 years.

Suddenly there are many new competitors with high profiles, leaders in their spaces, with millions of existing customers, rolling into wireless and doing a great job of transforming the business. It is getting harder for Palm to be noticed in this noisy marketplace.

Lately the question being asked is about Palms future. The answer is clear and simple.

The marketplace changed dramatically during the last few years. Palm reinvented itself during the same period. However now there are many companies competing. Will Palm win competing with Apple and Google? Not a chance. Not in the marketplace and not in the media.

So what should they do? Simple.

Change the strategy. Rather than following the old plan and competing head to head with Apple and Google, change. Let them slug it out with each other. In fact let them compete with RIM and keep them all busy.

Palm can change strategy and compete for a smaller, but loyal customer group.

When I say smaller, I mean compared to Apple and Google. Remember the wireless marketplace continues to grow. There are more users than ever. The Palm segment will be bigger than it was. So even a smaller percentage of customerís can still mean quite a few. Enough to make Palm happy and healthy, but smaller compared to Apple and Google.

Palm no longer has what it takes to be a super charged brand. Not against Apple and Google. Perhaps they can turn into that over time, but for now they have to focus on getting close to their core group of customers again. Focus on re-creating the special relationship. Then to expanding the customer base as time goes by.

There are still plenty of loyal Palm customers still out there. There are also many powerful competitors, but there is room for everyone. This is not a stagnant industry. It is fast growing.

It is expected that over the next several years roughly 80% of the roughly 300 million-phone marketplace will be smart phones.

That is an incredibly large marketplace. There is no reason why Palm canít carve out a smaller, yet profitable nice among their loyal users.

Palm should not try and compete with Apple and Google. The wireless industry has many segments. Not everyone wants one of those devices. Palm should focus on the adult marketplace. Those who want some advanced features, but want it easy to learn and use. A device from Palm.

Palm can succeed if it gives its core users what they want.

If Palm can understand thatÖ if Palm can change their approach and not compete with Apple and GoogleÖ if Palm can focus on re-building their brand and relationship with their smaller but loyal customer base, they can create a strong growth company once again. Isnít that the goal after all?

 

 


 

New Microsoft MSN Home Page Breaks Marketing Rules

3-18-2010 

Microsoft just changed their MSN home page on the Internet for the first time in many years. I remember they gave everyone a sneak-peak a month or two ago. I spoke with many who took a look. Most liked parts of it, but preferred to keep the existing site. Microsoft however says people love it. Where is the disconnect?

Microsoft is breaking one of the key marketing rules. Donít tick off the customer. They are not the only ones who have done this, but they are the next in line.

Will this new home page be successful? I donít think so. Not the way it is being introduced. Let me explain. It has to do with the brand. Microsoft is breaking the brand and hoping the new look will be better. Hoping is the problem.

There are many customers and they have many different preferences. MSN has had the same home page for years and many consider it a home base. Do they love it? Most donít love it, but they are comfortable with it. They consider it home. Would they like to see it improved? Yes. Of course if you ask 50 people you will likely get 50 different suggestions. Do they want to be forced to deal with learning about an entirely new site? No. Thatís the rub. 

When we move our place of residence we try to reduce the stress of moving. Many donít like to move at all. Sure their house is not perfect, but it is home. Forcing these people to change will cause them discomfort and that is not how to treat valuable customers.

If all your customers love what is new you have no problem, but we all know that never happens. We have seen this mistake play out time after time with poor results.

Two examples.

Remember New Coke? This was when Coca Cola changed the recipe. They said it was better and what their customers wanted according to their research. Wrong. Some customers may have liked the new recipe, but most customers did not want to change. They wanted what they had become used to.

To Coca Colas credit they quickly understood this and gave in. They re-introduced the original recipe. They had both in the marketplace and the original recipe won. So much for thinking they needed a new recipe.

Another example is more recent. Comcast forced their basic cable television customers to change. This change requires them to pay more and rent converter boxes, every month. This also means that for some televisions in the house that are not watched enough to rent a converter box, they now only get around 25 channels. Surfing is gone since it takes a good second or two to change one channel.

There are tradeoffs that many customers did not want to make. Some like the new service. Some do not. However Comcast forced the issue on everyone and has not backed down. This is a mistake that will cost Comcast with the customers who do not like this change.

The problem with Coca Cola and Comcast is they made the decision for the customer. That is the mistake. They did not give the customer the choice. They forced the choice and called it better. They were both wrong. Coke gave in to the customer. Comcast did not.

Some customers like the new version. Fine. However others do not. That is the problem. People donít like to be forced. They like to be treated with respect.

Forcing the customer to change creates an adversarial relationship. Why any executive would want to do this is beyond me.

Consider Starbucks or Apple. These companies have a special relationship with their customers. Would these companies force their customer base to change so dramatically? Would these companies risk ticking off a large percentage of their customers? No. Companies who treat their customers with respect donít do that.

Companies can change the package design as long as they leave the product alone. This changes the product.

While this all-or-nothing approach always fails, a more moderate approach typically works. Introduce the new version along side the old version. Give customers a choice. Then try to win more customers to the new version, bit by bit over time. 

Itís all about showing respect for the customer. Maybe I am wrong, but I have not found enough customers who like the new MSN page to justify this dramatic change. Many like some new parts, but prefer the old version. Not surprisingly I have found many who are now looking to replace MSN. That is not what Microsoft wanted.

So what will happen next? Will MSN recognize customers are different? Will they recognize some customers like the change while others do not? Will they back off and have the respect for the customer and act like Coca Cola, or like Comcast? It will be interesting to see the next step. It will show how much respect Microsoft shows to the customer.

 


 

New Opportunities In The Changing Telecom Job Market

 

How secure is your job? We have seen millions of Americans lose their jobs over the last couple years. To make matters worse, replacing a lost job today is harder than ever thanks to the economy. Your best bet is to stay employed. So how can you improve your chances of keeping your job as others lose theirs? 

Every company in the telecom industry is both growing and shrinking. Whether you work in the local phone sector, the wireless and cellular sector, Internet, cable television or IPTV, these all have two sides, growing and shrinking.

The first thing you have to be concerned about is making sure you are familiar with the side of the business you are on. It is important to understand what is happening. The telecom industry is not the same place it was just a few short years ago.

As an example consider what happened to the long distance industry. Just one decade ago it was a massive, growing sector in the industry, lead by AT&T, MCI, Sprint and many smaller players. Not any longer. There is no separate long distance industry any longer.

Local phone company SBC acquired AT&T and took the name. Verizon acquired MCI. Sprint is still there, but is now a wireless carrier. As the long distance business faded, countless jobs have been lost.

Mergers have also played a role. Telecom used to be an industry with many smaller players competing with each other, like seven baby bells, three big long distance companies, and a couple dozen wireless carriers.

Today there is AT&T, Verizon, Sprint, Qwest and a few others. Wire line and wire less are consolidating.

The companies are larger, serve more customers, a bigger territory, and offer all the services from all the sectors. This transformation meant countless more jobs have been lost.

Now this economy is causing more job cuts. Workers are being cut, and this time there is no place for them to go.

However it is not all about job cuts. Parts of the industry are continuing to grow and add workers.

Choosing the right segment in an industry and even in a company is crucial as the industry continues to transform itself. Being on the right side makes all the difference in your employment.

Parts of the business are shrinking, while other parts are growing. However even in the parts that are growing, there are segments that are continuing to grow rapidly and other segments that are slowing.

Look at wireless as an example. The traditional wireless industry has been seeing remarkable growth over the last decade or two. However as nearly everyone who wants a cell phone now has one we are seeing that growth rates start to slow. What does that mean for wireless?

Plenty. Its not bad news, but it does mean changes. As long as you are working in the part of your business that is growing your opportunities will always be green.

Early on wireless carriers started focusing on selling devices to new customers. They never really tried to win business from each other. Then over the years that started to change. Suddenly they were competing with each other. Competition was focused on these two areas.

Now as new customers are getting fewer, the growth is focused on improving the networks and competing with each other for existing customers. Trying to win business from each other.

What about industry growth? It will not come from wireless voice. Instead look at other areas like wireless data. Smart phones are the new and fastest growing segment of the wireless industry.

The smart phone explosion was kicked into high gear a few years ago with the Apple iPhone. Now we see Google getting in with their Android phones, plus countless other wireless devices on that growing side of the business.

In addition, growth in wireless will come from transforming other industries. Like Ford giving wireless access to the Internet on the dashboard, or power companies having wireless meter readers. Industry after industry is looking to have wireless transform them.

Every industry continues to grow and change and transform itself. That means many new opportunities in wireless will come from other companies in other industries.

It is more important than ever to make sure your job is secure. That means know your industry, and study your company. Know the direction it has come from and where it is going. Look for the parts that are continuing to grow and the other parts that have seen the time and are starting to slow.

If you work in other industries, help them think about going wireless. You will either be a leader or a follower, but you wonít sit it out.

Industries, especially technology industries continue to transform themselves quickly. Every few years they are completely different places. Telecom in the 1980ís was about the telephone. In the 1990ís it was about the early stages of wireless and the Internet. The 2000ís were about the consolidation in the industry and competing with new sectors like television, as well as the loss of long distance.

Now we are in 2010 and the transformation continues. Traditional services like telephone and cable television have seen brighter days. New services from the same companies are starting to take over like wireless and Internet and all the new ways to delivering services.

Make sure you are in the growth curve, and make sure you continually keep up with where that growth curve is headed for you and your company so you can be there. That is the best way to keep your job.

 

 


 

Is rapid growth ending in the wireless industry?

3-4-2020 

We have watched the wireless industry continue its rapid growth over the last decade or two. It has changed rapidly, however the growth seems to be slowing. Is this a temporary slip, or is this a sign the industry is changing?

Weíve been watching the numbers of subscribers jump year after year. However the numbers have been getting pretty close to reaching everyone in the United States who wants a wireless phone. What happens when we reach the point of no more first time customers?

Until now there have been multiple targets for advertising and marketing messages. Two of them are new users, and also winning business from each other. As new users fade, the battle will be waged trying to win business from each other. We have seen Verizon trying to beat AT&T over the head in advertising in recent months, but it has not have that much affect. The market place is maturing and people know the carriers they like and why they like them.

Wireless has always been a growth business, but going forward it may not be anymore. Not the way we have traditionally thought of wireless and growth anyway.

Growth in the more traditional parts of the business is slowing. Thatís the bad news. However the good news is growth in other areas is increasing.

- We are seeing growth from traditional voice slowing, but growth from wireless data is continuing to explode.

- In addition there are many other new areas that will represent enormous growth opportunities going forward. Watch the wireless industry help other industries reduce their costs and improve their position in the customers mind using wireless technology.

It depends on how you look at the situation and which glasses you wear. If you are an employee or investor looking for the same traditional growth patterns we have seen over the last decade or two they unfortunately are slowing. That was inevitable. This could mean lots of change in coming years like potential job cuts in certain areas.

However if you are looking for the new growth patterns, they are many. Just look at the rapid growth of the smart phone segment. Since Apple introduced the first iPhone a few short years ago the wireless data and smart phone segment has exploded.

Other handset makers and many new apps are part of the mix. There are enormous growth opportunities in this area.

In addition every other industry is looking at wireless to transform parts of their business. Ford is putting Internet access on the dashboard of their cars. Power companies are putting wireless meter readers in the marketplace so they donít have to send people out in cars every day. The medical and health industry is embracing wireless to transform themselves.

Industry after industry is looking to let wireless bring them into the future. There are unlimited new opportunities, but they often come from the least likely areas. Many times wireless opportunities come from non-traditional places like other companies.

So yes traditional growth in wireless, the fast growing industry we have followed during the last decade or two is finally slowing. That is the bad news. At the same time, the good news is growth in wireless is still occurring in other areas.

You just have to make sure you look with the right set of glasses. There are separate parts of the business. Make sure you are focused on the changing opportunities going forward. Make sure you are where the growth is. During this weak economy it is important to keep your job going forward. So understand the changes that are occurring and stay ahead of the growth curve in your career and your investments.

 

 


 

Why Comcast Is Re-Branding With Xfinity?

2-19-2010 

In this analysis and opinion piece lets take a look at Comcast and their new brand, the reason it is needed, and whether it will succeed.

Suddenly new competition is changing the environment for Comcast. They are one of those companies who is working hard to re-invent their relationship with the customer. So far it has not worked, so as a next step they are re-branding the company.

They hope if they change the name and the brand that customers will forget the problems. The goal is right, however the plan is not.

The company will be called Xfinity. However they have not yet fixed the things that hurt the Comcast name. Therefore I think the new name will not work the way they want.

Comcast and their relationship with the customer have been hitting sour notes for many years. With competition building, they have been trying to repair their image.

As the company tries to reinvent itself with itís warm-hearted advertising, and improving their customer service by adding more operators, if you ask the customers, generally speaking the problem is not fixed yet.

Because there has been little focus on the customer over the years, even if the company reverses itself completely now, it will still be several years before the customers recognizes the change. This happened with Sprint in the 1990ís. Sprint fixed their customer care problems, but did not benefit for several years when the customer finally caught on.

The Comcast problem is they say one thing and do another with the customer.

An example is the recent shift to a digital network. Currently Comcast has two kinds of services. One is the digital network and has a converter box, and the other has a less expensive basic analog cable service.

Comcast has suddenly begun to force its customers of the basic analog service to switch to their basic digital service. That small change in the name does not give a good representation of the problems the customers being forced deal with.

Area by area, Comcast is transforming their network to digital. I hear from reporters all over the country looking for comments on this story as it rolls into their town.

The marketing rule Comcast is breaking is this. Otherwise happy customers who choose to do nothing will lose channels. Customers should be able to opt out of the changes and keep their existing service. At least for a transition period.

Instead these customers will drop from almost 100 channels to 20 something channels. If they wanted the channels they had before they have to spend more every month and rent a converter box for each television.

The problems with forcing the customers to make this change so quickly are many. This goes against the rules of building good relationships. One of the big problems for Comcast is the hit on their brand. Upset customers remember. 

First of all there is no quick channel surfing. Changing channels was instantaneous. Now it takes a second or so between channels. That spoils the fun for many. A hit on the brand.

Second it costs more. Customers have to acquire these converter boxes to make the additional channels work. Then they have to pay Comcast, per box, or per TV, on a monthly basis. Many chose not to have digital because they didnít have room for or didnít want the converter boxes. Thatís a problem customers now have to deal with. Another hit on the brand.

Third, since they have to pay for these boxes on a monthly basis, customers only get boxes for the televisions they watch often. They donít buy boxes for the less frequently used sets. On those customers can no longer watch all the channels. An example is in a guest room. Seldom used, but when someone is in there they can no longer watch television the same as before. Customers are now handicapped with only a few channels. Another hit on the brand.

Fourth are the long lines outside of Comcast stores with very upset customers waiting to rent converter boxes so they can get back to where they were. I stopped by several times to talk with customers. The lines were so long, and lasted a couple months and the customers were very upset. Another hit on the brand.

Fifth is the quality of the signal. Customers had quality problems now and then, but with this new digital network these problems seem to be much more numerous and longer lasting. Another hit on the brand.

The benefits of this digital system are a few extra channels and better quality picture, but to tell you the truth the picture was fine before also. Many customers think this change is not worth it, yet they are forced to make it and incur extra costs, and not have service on all their TVís.

To make matters worse this change was forced on customers, whether they want it or not. Comcast broke a key marketing rule. Donít force customers to change. Offer something new and let them choose. Let the customer stay in charge. If you have to make a change, introduce a transition period of a year or two in order for customers to get a better feel.

Comcast would have looked like the kind of company who cared about the customer by the process. Now they look like bullies in a childhood schoolyard.

Comcast shot themselves in the foot with this move. In the past it did not matter to them. They had no competition so they had nothing to risk. Now however there is growing competition.

First there is satellite television. Now there is a bigger threat. The local telephone company offering television. AT&T is offering Uverse and Verizon is offering FiOS in a growing number of places. According to various awards they have received it is very good quality.

The good news for the customer is the marketplace is changing to a customer-oriented place, instead of the company oriented place. That means the customer can vote with their feet.

A good customer reputation is key. That is built out of showing respect for the customer. Comcast instead gives with one hand and takes away with the other. They keep ripping open the customers wound and donít give it a chance to heal.

Thatís where this new brand comes into play. Comcast hopes Xfinity will breath new life into their market worn name. Expect to see them pouring lots of money into advertising the effort. However I donít think it will work, not yet.

Until they realize they have to fix the problems first, then re-brand, I donít think this new name will work. Customers will realize quickly that the name is different, but the problems are the same. The value of the new brand will be lost.

I have met with Comcast executives and like them. They seem like nice people. The problem is they donít connect the dots and realize that what they do with their company in order to grow, also impacts millions of other people, their customers.

They have not explained why they are forcing the customer to deal with these problems. Why they need to upgrade the network. They do not give the customer the respect they demand.

Comcast should understand they need to involve the customer, not dictate to them. Especially when competition is building and their risk is greater than ever.

Advice; fix the problems, then change the brand. Explain why this is necessary. And show respect for the customer base. Youíll have much more success with the effort!

 

 


 

Will Windows Mobile 7 resuscitate Microsoft?

2-16-2010 

When Microsoft entered the mobile phone arena hopes were high. We thought they were going to power their way up the ladder and lead in the space. After all they are the primary computer operating software Ė have a very strong brand Ė so why wouldnít that translate to the mobile world? However so far they have been a disappointment. 

The current Windows Mobile operating system has been too complicated and Microsoft doesnít seem to know it. Worse Apple and Google have stolen the headlines. Could that be getting ready to change with Mobile 7?

Listening to Microsoft it sounds like they are wildly successful with Microsoft Windows Mobile operating system. However I have tried several versions of the OS and even though it looked like and tried to act like Windows, it did not cut it. This was just too confusing for a wireless phone. Even a smart phone.

Itís an inverse relationship. The more powerful a smart phone, the easier the operating system needs to be. If the operating system is complicated or has too many steps, it will not be popular, period. Mobile phone operating system needs to be simpler and operate with fewer clicks.

-         The Microsoft OS is on roughly 10% of the phones sent out last year in 2009. Thatís only about 1% better than their market share in 2006. That means Microsoft has stalled.  

-         Apple started with no market share in 2006. They launched the iPhone in 2007 and market share is already up to around 13%. Apple struck gold and keeps growing rapidly. How long will that continue?  

-         Google is next. We donít yet know the numbers, but I expect the market share to grow as quickly as Apple.  

-         As we watch Google we should also be asking who will be next?

A few years ago Microsoft entering the wireless space was big news, but in the few yeas since Apple and now Google have changed the language and nobody is even talking about Microsoft anymore.

So what will Microsoft do to reverse their fortunes?

There is plenty of competition in recent years. Since Apple jumped in to the smart phone space a few years ago the bar is raised even higher. The simplicity and beauty of the Apple design is awesome. Even though it does not do some of the easy basics that are important for many users it is still popular. When they fix these issues it will be even more popular.

Google has jumped in with their Android system and that is a getting even more media attention than Apple this year. Google even unveiled their own device. This is the next big adventure to follow.

These two companies have transformed the wireless space during the last few years. Look what happened to Palm. They started the smart phone revolution and were successful a decade ago. Now they are a small player.

What will be the next big revolution in the wireless operating system battle? Will it be from Apple or Google or someone else?

These companies are changing the language. Speaking a language that Microsoft just doesnít. Who would have thought it possible, but suddenly Microsoft looks like a big old industry giant. Just like AT&T did in the 1990ís. Still commanding large market share, but struggling on the creative side. 

AT&T reinvented itself in the last 6 years and is doing well again. Can Microsoft?

Many handset makers have explored several different options. Palm for instance started out with their famous Palm OS. Then started using the Microsoft Windows Mobile OS. Then rolled out their Palm webOS. Today they have all three on the market as they continue to listen to customers and compare.

RIM Blackberry has its own operating system. Nokia, Samsung, Ericsson, LG, HTC and others are all dealing with the same questions. Which operating system to use in their devices? Which do customers really love?

The wireless customer base has hundreds of millions of different users in the United States alone. It is massive. In that group expecting one OS to win with everyone is unreasonable. But different people like different operating systems for different reasons.

An objective look at todayís market sees winners and losers. Microsoft was considered a winner several years ago. However today both Apple and Google have taken that away and Microsoft is just blowing in the wind. 

The first thing they have to do it re-think everything. They still have a very strong, but tired brand. First thing they have to do is update the brand.

They recently released the new Windows 7 and it has been successful so far. That is good. The problem is they released it under their tired old brand. So to my way of thinking, it could have been much more successful.

Microsoft needs to reinvent the brand. Give it a young, new, aggressive, energetic feel. Thatís who they are competing against. Microsoft needs to break the rules. They may have created the old rules, but that was yesterday.

Look at the success of Google. It broke the rules. Now it is moving into business after business and changing the rules of each. Google doesnít enter and try to compete. Google redefines the rules of the game and can win right out of the box. It is not magic. Itís just that they set the new rules of the game. Smart thinking.

This was the same as what Apple did. Apple has a unique relationship with their customers who stand outside of stores all night to be the first to buy the new version of the iPhone. Thatís also magic. A special relationship with the customer.

Now think of Microsoft. A very successful, but very large, and now very old company, compared with the newcomers.

If you want to be number one in the marketplace, you have to reinvent it with you on top.

Realize that Google and Apple are very successful today. Will they be 10 years from now or will we be standing at someone elseís alter?

Could Microsoft reinvent them selves and succeed again? Yes of course they can. Theya are still a large and strong company. The question is will they. Do they have the right thinking? Will they do what they need to do? Will they reinvent the company, or just release another new product?

They want to be young and vital and important once again. They want to be a leader once again. They are trying, but only using one arm to lift the weight. Will they reinvent their brand and their image in the marketplace? That is the big question.

 

 


 

Wireless carriers black-eye; early termination fees

2-16-2010 

There is always quite a bit of talk around about how unfair it is that wireless networks charge early termination fees or ETF. People ask, what gives the networks the right to charge these fees. Are they trying to get the customer upset? Donít they realize that upset customers wonít do business with them again?

All the arguments sound good, but are wrong, mostly. The point behind these fees is being missed. They were not originally set up as a profit center. This was simply set up to make sure the company didnít lose money, then it changed over time.

In the US phones are sold on a different basis than other countries. Elsewhere customers pay full price per phone. That means they pay hundreds of dollars more per phone. In the US these phones are discounted by hundreds of dollars. Customers like this lower initial price.

The network discounts the price and pays the additional amount themselves. As long as the customer stays for the length of the contract Ė typically two years Ė then the network recovers this large discount and makes a profit.

Thatís the key part that the customer forgets. If the customer cancels in less than the length of the contract the carrier loses money.

There are only two prices carriers can charge; the non-discounted price, and the discounted price. People think the price they pay, the discounted price, is the only price. They think it is a marketing gimmick to have a non-discounted price. Customers think this is supposed to let them think they got a better deal and that no one actually pays the full amount.

This is where the cell phone industry is missing the boat. They should explain that in many countries customers do pay the full price. They should also give the customer the choice up front. Let the customer choose the basis to do business. That will clear up the problem.

Tell the customer they have a choice. They can either pay the full price and have no early termination fees, or take the discounted price, but have to abide by the two-year contract with the carrier.

That means wireless networks should not charge early termination fees to customers if they are not giving customers a discount in return.

Additionally, flat-rate early termination fees that companies charged in the past are not right. They should decrease the further we go into the contract. If the customer leaves near the end the carrier loses much less than if they left early on. So the customer ETF should be much less.

Generally speaking early termination fees are fair. However companies began to wield them like a sword and abuse the customer. That is when the customer started to turn on the whole idea.

Generally speaking most wireless carriers have Ė or are Ė reworking this charge and moving from a flat rate to a pro-rated amount. This is fair. However this is for new contracts. Existing contracts are still on the old basis.

So this is a problem that will take care of itself over the next year or two as older contracts expire.

The FCC has also asked all four of the major wireless providers Ė Verizon Wireless, AT&T Mobility, Sprint Nextel and T-Mobile USA and even Google for that matter, to explain their early termination fee policies. They also want to know how these carriers disclose this information to their customers. Perhaps some tweaking will be helpful.

There are many other wireless carriers, like Apple and Dell and all the smaller players as well. Perhaps they will be asked the same questions at some point.

In the beginning this fee was not a profit center. However over time this may have changed and become one. If the carriers focus on protecting themselves from loss and not on profit, I think customers would understand and both sides could live in peace.

The pendulum swung one way in the beginning, then it swung to the unfair side, now it is time for the pendulum to swing back to the middle where it is fair for both the customer and the cellular networks, and it looks like that is what is happening now.