AT&T Suing To Stop Prepaid Phone Unlocking, Resale

from the this-is-a-trademark-violation? dept

It's quite interesting to see the way companies misuse intellectual property law in order to try to prop up what is otherwise a weak business model. We've covered the case of Tracfone, a prepaid mobile phone company, who sells cheap phones hoping to make it up on the service fees. However, when an exception was added to the DMCA allowing phone unlocking, Tracfone flipped out. The company even went so far as to claim that unlocking mobile phones could represent a national security issue. Tracfone, though, is a rather small player in the space. It turns out that AT&T is joining in on the fun and suing to stop prepaid phone unlocking. The company is not going after individual unlockers, but the bulk unlockers. What's interesting, though, is that the lawsuit appears to be over the issue of trademark violation. Why this isn't just a contractual issue isn't clear -- but it seems strange to make it a trademark issue. However, again, all this really shows is that the business model around prepaid phones, relying on subsidized phones, isn't a particularly good one. That's no reason to sue or pass laws that protect it, though.

Filed Under: prepaid, trademark, unlocking
Companies: at&t, tracfone

Techdirt Announcements: Smart Dossiers And Thomson Financial Partnership

from the moving-forward dept

We're in New York City today making a couple of exciting announcements that I wanted to share with everyone. First up, we're launching a new offering as part of the Techdirt Insight Community called Smart Dossiers. As it stands today, it's quite difficult for companies to get good, knowledgeable analysis of companies, both private and public. In the financial sector, you get some coverage from "professional" analysts, but 65% of companies are considered "undercovered" with 35% having no coverage at all (according to a Reuters profile). And, all of those focus solely on the financial side, rather than understanding a company as a potential customer, partner or competitor.

With that in mind, we knew that the members of the Techdirt Insight Community were uniquely qualified to help solve that wide gap in the marketplace, and we've set up the Smart Dossiers offering in response. Companies can now get a SWOT (strengths-weaknesses-opportunities-threats) analysis on any company they'd like, with a minimum number of guaranteed perspectives from qualified, proven experts in the Techdirt Insight Community. Those experts are competing to provide the best possible analysis, continually ensuring quality analysis. Imagine being able to get a detailed, quick, analysis from multiple different people who have experience and knowledge about a specific sector. Actually, there's no need to imagine it, you can do it, right now. There are a variety of Smart Dossier packages available depending on what your company needs, starting as low as $995.

On top of this, we're also thrilled to be announcing a partnership with Thomson Financial, allowing Techdirt to distribute research from the Techdirt Insight Community (including Smart Dossiers) through Thomson's leading platform for providing research and analysis. Thomson offers deep real-time and after market research to thousands of institutional and business customers in 70 countries via professional subscription networks, including First Call and Investext, and we're thrilled to be a part of that system. As Keith Ackerman, Thomson Financial's Global Head of Next Generation Research, said:

"Thomson Financial views the addition of the Techdirt offering into its portfolio of research as significant. Our financial services and corporate clients have increasingly asked for and are spending more for insights, custom surveys and other kinds of research emanating from the use of expert networks and other types of social media. Accordingly, Techdirt and other high quality alternative research firms that feature these capabilities and research outputs are an important part of Thomson Financial's product strategy."

We're announcing both of these at O'Reilly's brand new Money:Tech event in New York, which looks like it will be very exciting. If you happen to be at the event, please make sure you say hello! Otherwise, if you happen to need a quick and useful detailed analysis of any company, check out Smart Dossiers today. Finally, if you think you have what it takes to provide this kind of analysis to companies around the world, please apply today!

Filed Under: research, smart dossier, techdirt, techdirt insight community
Companies: techdirt, thomson financial

The True Cost Of SMS Won't Matter Much As Mobile Devices Advance

from the it-will-work-itself-out dept

Last week, Slashdot linked to an entertaining analysis of the cost of SMS messages. Noting that many carriers are raising their SMS prices despite increasing demand for the service — demand which should be spurring competition — the author of the post figures out the number of bits in a text message and concludes that transmitting data by SMS is about 15 million times more expensive than doing so over a commodity internet connection.

But of course this isn't really a fair comparison. A commodity internet connection doesn't afford the ubiquity that a cellular network does. Comparing the data rate and price of voice traffic is probably more instructive (although the two types of messages are admittedly not transmitted in the same manner across the network). Taking AT&T's overage charge of $0.45 cents/minute and 13kbps as a plausible bitrate for a GSM call, my calculator says that SMS data is a mere 316% more expensive than voice traffic.

That's still not great, though. And there's no question that SMS prices are going up even farther — in the past year or so the Consumerist blog has been full of posts encouraging various carriers' users to escape their contracts thanks to those contracts' newly-increased SMS fees. It's an unfortunate situation: very few consumers select a carrier on the basis of its SMS offerings, and few will leave their carrier over them, either, blunting the consumer response to price increases. Plus, as the technology has gained popularity the mobile operators have lost the need to encourage its adoption through cheap rates. It's not very surprising to see them conclude that the most profitable price point for SMS is higher than the one they had been offering.

Fortunately for the rest of us, this state of affairs doesn't seem likely to last much longer. Although there's little reason to have faith in the mobile market's ability to bend the carriers to consumers' will, new technologies are going to inevitably dry up the SMS bonanza. We're on the verge of the iPhone SDK's release, and Google's Android seems likely to find its way into many cheaper handsets. These and other technologies mean that the average customer will have access to bulk data services on their handset soon if they don't already. And once bulk data can be consumed, so many options for short message communication become available that SMS's specialized role will disappear almost immediately. Between web interfaces, widgets, IM clients and email apps, there are a vast number of ways to send short strings of text. Services like Twitter that offer a variety of input modalities will no doubt help to stitch together this looming surplus of communication options.

Given how few bits are required to transmit those messages (and the generic nature of those bits), there'll be no way for the carriers to keep short message transmission as expensive as it currently is — not without without pricing web browsing, email and other mobile data services into oblivion. I wouldn't expect SMS to disappear, but it seems safe to assume it'll start getting cheaper soon.

Filed Under: cost, data, messaging, mobile phones, sms

Telcos Realizing Markets Don't Just Grow Forever

from the maturing-markets dept

It's always interesting to see stories worrying about high growth markets maturing. When a market is growing rapidly, there are always those who believe they'll grow forever. But markets mature and run out of growth potential. The telco industry is now coming to terms with that, as 80% of Americans have mobile phones, and 79% of homes with computers have broadband access. At that point, it's no surprise that telcos might not have the same growth opportunities as before, and might start scrambling to try to find new avenues for growth. That's why you see both Verizon and AT&T pushing into the television market, while poking around in some other areas as well. It's also why Sprint needs to kiss and make up with Clearwire, and get a nationwide WiMax system up and running. Also, start expecting to see attempts to create more innovative uses of the telecom systems already in place, such as non-phone equipment making use of mobile networks (the Kindle was just the beginning). Either way, the scramble is now on for telcos who are used to growing at a certain pace to start aggressively seeking new avenues for growth. While that's happening, don't be surprised to see more aggressive attempts to poach customers from each other as well. That's going to be good for customers, as it's likely to force the various telcos to become more open as a way of attracting more customers by doing more than just dropping prices. No matter what happens, the telco industry recognizes that it needs to change and change quickly if it wants to keep up some form of growth.

Filed Under: competition, growth, mature markets, telcos
Companies: at&t, sprint, verizon

T-Mobile Sued For Forcing People To Accept (And Pay For) Text Messages

from the pls-dnt-mk-me-gt-txt-msgs dept

It's not too hard to remember the day when a lot of people couldn't receive text messages on their mobile phones. I still sometimes ask people to see if they use text messages. Apparently, if they're on T-Mobile, I shouldn't even bother. Even if you don't want to use text messaging, T-Mobile requires users to accept messages... and to pay for them. That's resulted in a class action lawsuit against the company for unfairly forcing people to pay for text messages they don't want. While it may not be a huge issue right now, if SMS spam picks up, it could become a very important issue.

Filed Under: class action, text messages
Companies: t-mobile

What's Wrong With A Little Exaggerating The Size Of The Mobile Porn Market?

from the size-does-matter dept

For years and years, we've been hearing analysts talk up the prospects of the mobile porn market with little to no evidence that it's more than a niche market. Almost all of the analyst estimates are based on assumptions concerning how VCR technology and the internet were both driven by huge demand for pornographic content. It's natural to then assume that the mobile industry will go down the same path. However, that ignores why VCRs and the internet worked well for adult entertainment. Both allowed a better quality offering to be viewed in the privacy of your own home. Mobile porn is the opposite. It's a lower quality product that you can now view out in public. That seems a lot less appealing. So, take it with a pretty large grain of salt when analyst firms insist that mobile porn is about to be a big thing. These are the same firms that have been predicting huge growth for mobile porn for a while, with little to back it up. Yes, there is some market for mobile porn, but it's hard to see it being as big as some of these predictions make it out to be.

Filed Under: market projections, mobile porn

Idle Musings: Chances Of Motorola Ditching The Handset Business Seem Slim

from the go-back-to-selling-startacs dept

There's some buzz today about a research note from an analyst firm suggesting that Motorola might ditch its struggling handset business. However, as Eric Savitz at Barron's points out, even the analyst who brought up this possibility doesn't seem to think it's likely. Motorola has really had quite a roller coaster ride in the handset business over the years. Every so often it seems to hit on a specific handset design that catches on... but then forgets that it needs to keep innovating. Remember the Motorola Startac of the mid- to late-90s? Everyone had one of those. And then, everyone else innovated past Motorola while it kept releasing the same phone over and over again with minor improvements. The same sort of thing happened in the mid-2000s, as Motorola had a hit with its RAZR phone. Again, however, all the other handset makers eventually leapfrogged (or should that be LPFRG'd) Motorola, leaving Motorola in trouble once again. The research note points out that the business is so far behind that the company might even have trouble selling off the division to a Chinese manufacturer -- the strategy Siemens used to dump its struggling handset division to Benq a few years back. At this point, it still seems unlikely that Motorola will exit the business, but it seems pretty clear that the company needs a strategy a little more long term then "let's come up with an iconic phone every 10 years and then sit back."

Filed Under: handset business, razr, startac
Companies: motorola

JetBlue Providing WiFi/TV For Other Airlines?

from the helping-the-industry-out dept

Prior to 9/11, there was a lot of effort being put into plans for internet access from airplanes. However, the resulting turmoil in the airline industry put all of those plans on hold. In the end, that may have been a good thing, as the early technology was both expensive and clunky, and only a few generations later are we starting to see technology that is both affordable to install and use showing up. In the last few months, we've seen more and more stories about WiFi in the sky, with the latest one being that Continental is about to start offering live TV and WiFi, similar to a few other airlines. Having just flown on Continental on an excruciatingly long trip to Europe and back, I'd say that having internet access and live TV would have made the flights much more enjoyable.

What's really interesting here, though, is that Continental is turning to competitor JetBlue to provide the service. We were among those surprised when JetBlue bought some available spectrum for air-to-ground internet access. Like many, we had suspected that it would go to a service provider that would provide a generic service to any airline that wanted it. But, with JetBlue winning the bid, it opened up questions about whether the company would hoard the opportunity as a differentiator for its own flights. Apparently not. If JetBlue can succeed in outfitting other airlines, it could represent a useful side-business for the company -- even if it diminishes some of JetBlue's own competitive advantage. Of course, given that a new study has suggested that WiFi-in-the-sky really isn't a huge selling point, perhaps this makes sense. Basically, people are saying that it's a nice-to-have rather than a need-to-have. In other words, it's unlikely to bring that much new business directly to JetBlue, but if JetBlue can make it available on lots of other airlines, people would be happy using it.

Filed Under: airplanes, internet access, wifi
Companies: continental, jetblue

China Can Access Mobile Phone Data To Spy On People

from the but,-you-know,-only-for-good-reasons dept

Given China's mentality towards its citizens, it probably won't surprise many people to find out that the head of the country's biggest mobile phone operator gleefully acknowledges that it can spy on anyone's location and has no qualms about handing that info over to authorities. He also talks about how the company is considering using this data to better target advertisements. While the article paints this as somehow shocking, it's been widely assumed that this was true already. And, the idea, as expressed in the article, that it wouldn't or couldn't happen in the United States seems a bit naive as well. Given how telcos helped the US government spy on phone calls without warrants, it seems like it may already be happening here as well.

Filed Under: china, civil rights, mobile phones, privacy, surveillance, us

Smartphones Patented... Just About Everyone Sued 1 Minute After Patent Issued

from the wasting-no-time dept

This past Tuesday, the US Patent and Trademark Office issued a patent on "a mobile entertainment and communication device." Reading the patent, you realize it describes the quite common smartphone. It's a patent for a mobile phone with removable storage, an internet connection, a camera and the ability to download audio or video files. The patent holding firm who has the rights to this patent wasted no time at all. At 12:01am Tuesday morning, it filed three separate lawsuits against just about everyone you can think of, including Apple, Nokia, RIM, Sprint, AT&T, HP, Motorola, Helio, HTC, Sony Ericsson, UTStarcomm, Samsung and a bunch of others. Amusingly, the company actually first filed the lawsuits on Monday, but realized it was jumping the gun and pulled them, only to refile just past the stroke of midnight.

As the link above explains, the patent itself is based on a bunch of continuation filings, which are commonly used by patent holders who want broad patents to cover the latest technologies well after they've already come about in the market. It would seem like the concept itself, merely combining a bunch of things that people were already talking about, should never have been granted based on the Supreme Court's recent KSR ruling that merely combining existing concepts doesn't deserve a patent. Also, as noted in the comments to the link above, it would appear that there's a fair amount of prior art. In fact, Apple even sent over some prior art concerning the patent just before it was originally supposed to be issued last summer -- but somehow patent holder's lawyers talked their way around it. In the meantime, it looks like we've got yet another case of an overly broad and obvious patent being used against a huge number of firms. I'm sure that's exactly what Thomas Jefferson expected when he created our patent system.

Filed Under: patents, smartphones
Companies: apple, at&t, helio, hp, htc, motorola, nokia, rim, samsung, sony ericsson, sprint, utstarcomm