Who's next?

As a result, the big winner in AT&T’s merger with T-Mobile USA is likely to be AT&T’s largest competitor, Verizon Wireless.  Indeed, Verizon is starting to sound like a cheerleader for it to take place.  “We’ve been through a series of great acquisitions and great integration into our company,” said Dan Mead, the company’s CEO.  He added that he does not concur with those who say that the deal is bad for consumers.

Although AT&T is projecting that the deal will close within 12 months, given the likelihood of resistance from competitors, government regulators, and consumer groups, it could take far longer.  Once the deal closes, AT&T will have to integrate T-Mobile’s customers into the fold, which includes replacing incompatible 3G devices with ones that will work on the AT&T network.  Integration can take years.  Just ask Alcatel and Lucent, which lost billions in the years following their merger, or US Airways, whose integration took three years.

Verizon Wireless, however, will be content to sit on the sidelines.  Indeed, the longer it takes the better for Verizon.

Opposition didn’t take long to appear: competitor Sprint, which will be a distant third in the post-merger marketplace, was leading the charge against the deal within a day of the announcement.  Speaking at an industry event this past Tuesday, Dan Hesse, the company’s CEO, said to great applause that he has “concerns that it would stifle innovation and put too much power in the hands of two.”

Groups such as Consumers Union, Free Press, the Media Access Project, and Public Knowledge have come out against the deal on the grounds that it is anti-competitive and will most likely hurt consumers.  These groups wield some influence with Democratic members of the FCC and as well as on Capitol Hill.

The list of opponents seems to go on forever.  The Computer and Communications Industry Association (CCIA), an industry group that counts Google, Microsoft, and Yahoo as members, has already stated its opposition.  “A deal like this, if not blocked on antitrust grounds, is of deep concern to all the innovative businesses that build everything from apps to handsets.  It would be hypocritical for our nation to talk about unleashing innovation on one hand and then stand by as threats to innovation like this are proposed,” said Ed Black, the group’s president.

T-Mobile customers are also unlikely to be looking forward to the merger.  Basex has been a corporate customer of T-Mobile for 13 years, in part due to the excellent customer service that the company has always provided.  From personal experience, I can attest to the fact that every call I have ever had to make for technical support was handled as if I were the only customer the company had to deal with.  Service was personalized, the reps have always been friendly and knowledgeable, and they seemed genuinely concerned about whatever problem I was reporting.  They also had an excellent track record of resolving these problems.

The future of this deal is far from certain.  AT&T, by virtue of a $3 billion breakup fee due to T-Mobile USA parent Deutsche Telekom if the deal doesn’t close, is betting it can win approval.  This is one bet I wouldn’t necessarily make.

This Analyst Opinion is also available online at

Jonathan B. Spira is CEO and Chief Analyst at Basex.  H

So what did actually happen?  Well, for those hoping for a slew of new features, or an LTE-powered world phone, not much.  The iPhone 4 that Verizon Wireless will be offering is similar to the iPhone 4 that AT&T offers with a few exceptions.  The phone and its antenna have been redesigned to work with Verizon’s CDMA network, and there is hope that this will result in a solution to the “antenna-gate” problem, whereby users of the AT&T iPhone 4 lost calls when holding the phone in a certain way.  In addition, the Verizon version of the iPhone will be able to serve as a Wi-Fi hotspot for up to five Wi-Fi enabled devices.

So now that iPhone customers have a choice in terms of a mobile operator, which network should they choose?  While the accepted wisdom is that AT&T’s 3G network is actually faster than Verizon’s, its coverage is not nearly as broad.  If you spend most of your time in a major city and currently do not have many problems with your connection, then leaving AT&T for Verizon might be a bit hasty.  If you travel around the country, and find yourself on rural back roads, away from major metropolitan areas, Verizon will be the more attractive operator.

Verizon released the iPhone on its 3G CDMA network instead of on its new 4G LTE network.  According to Apple COO Tim Cook the official reason for this is that Verizon customers “wanted the iPhone now” and that the LTE technology would have forced design compromises that Apple was not willing to make.

While the Verizon iPhone gains a feature (Wi-Fi hotspot capabilities) compared to AT&T’s it also loses some capabilities, namely support for GSM and the ability to work in most countries around the world.  While other Verizon smartphones including almost all those from Research in Motion support CDMA for Verizon Wireless’s network and GSM for roaming, the iPhone does not.  This may be a deal killer for users who travel frequently.

Because of limitations on CDMA networks the iPhone loses one additional feature, the ability of to be on a phone call and maintain a data connection at the same time.  Verizon may address this in the future, but for now, users will have to choose if they want to look up locations on Google maps or talk on the phone.

The new enhancements and limitations on the Verizon iPhone may make choosing a mobile operator for your iPhone easier than originally thought.  For current AT&T iPhone customers, moving to Verizon will require the purchase of a new iPhone (one that runs on Verizon’s CDMA network) and a possible cancellation fee (AT&T raised its cancellation fees in 2010 in anticipation of Verizon’s announcement).  But iPhone fans will have to choose between simultaneous voice and data and Wi-Fi hotspot capabilities not to mention the ability to roam internationally.

Cody Burke is a senior analyst at Basex.

Palm Foleo ca. 2007

Palm billed the Foleo as a “smartphone companion.”  Indeed, at its launch, Palm co-founder Jeff Hawkins explicitly acknowledged the shortcomings of the smartphone form factor for doing intensive e-mail.  With a 10.2″ color screen and full-sized keyboard, the Foleo would allow mobile knowledge workers to edit and view e-mail and Microsoft Office documents accessible on a smartphone (and eventually on non-Palm devices).  The Foleo would offer built-in Wi-Fi and Bluetooth wireless support, making it capable of accessing the Web (without a Palm) as well as browser-based e-mail.

A few months later, Palm announced it was pulling the plug on the project – at a point where the company was nearly ready to ship the product.

There were several reasons why this happened and hopefully the executives in Waterloo are reading this and paying attention.

First, the reaction to the Foleo’s launch in many quarters was a collective yawn.  There was much that was good about the machine (incredible industrial design according to Jonathan Spira, who had a brief opportunity to use one, plus a lightweight, perfect form factor for working on a plane in tight quarters).

There was also much that the Foleo was not.  It was not particularly fast and its functionality was limited due to Palm’s emphasis on making it a peripheral first and networked computer second.

Finally, Palm never anticipated the advent of netbooks, which were then making their first appearance.  Today’s netbooks, available (with mobile broadband contracts) for as little as $49, come without the limitations of the Foleo and were not designed as somewhat crippled peripheral devices.

Palm CEO Ed Colligan, in a message announcing the company’s decision, wrote: “Our own evaluation and early market feedback were telling us that we still have a number of improvements to make Foleo a world-class product, and we can not afford to make those improvements on a platform that is not central to our core focus.” Palm is “working hard” on its next generation software platform and the Foleo was based on a second platform and separate design environment.

Back in 2007 I wrote that the Foleo did indeed demonstrate the potential of the ultra lightweight diskless portable and I hoped that someone would take notice.  Perhaps RIM has.

David M. Goldes is the president of Basex.

On the road again.

Indeed, knowledge workers have become increasingly mobile and find themselves working from whatever location they happen to be in, be it a home office, the dentist’s waiting room, or an airport lounge.  The range of devices they employ has expanded to include not just desktop PCs and laptops, but netbooks and smartphones as well.

Therefore it is becoming increasingly important to enable access to documents, spreadsheet, and presentations without tying the user to one specific computer or location.

In most organizations, there has always been a kind of second class citizenship for the mobile worker when it comes to tools and support.  Among many managers, the prevailing thinking has always been that people will typically work at the office and, as a result, the best tools are to be found there.  Sometimes tools have been limited on the grounds of corporate network security (a home user could inadvertently put an enterprise network at risk).  But given that a clear plurality of workers work remotely today, this kind of segmentation makes little sense.

It is important to note that, even among mobile workers, there exist different groups, namely those who typically work from the same computer, be it a PC in a home office or a laptop that travels with the worker, and those who work from multiple devices such as public or shared PCs, netbooks, and smartphones.  To boot, one must then differentiate the power users from the occasional users.

At the moment, the former group will most likely have standard Windows productivity software such as Microsoft Office installed on the device.  However, the latter group, whose numbers are growing, will still need to be able to access tools that are more than sufficient to support their work, regardless of device or venue.

Such tools need to provide a variety of functionality, including the ability to create and edit documents (for the purposes of this discussion documents can include word processing documents, spreadsheets, and slide shows), and critically, provide links to corporate data stores to allow the knowledge worker to access files that do not reside on the device being used – and keep files behind the firewall.

Those who are working from home office PCs and laptops will almost certainly have a copy of Microsoft Word to use, but the ability to access files that are stored in a document repository is often limited.  The established strategy to deal with lack of access or poor controls on access has been to maintain local copies of documents.  This is for two reasons: ease of access and to preclude the possibility of someone else opening and/or editing the document at the same time.  Unfortunately, this strategy can lead to more problems than it resolves including a proliferation of document versions and the potential loss of critical work if a machine goes down and is not backed up.

One potential solution may be online desktop productivity tools, a market that has been largely dominated by Google and Zoho.  With the forthcoming release of Microsoft Office 2010, the company is also unveiling a line of online tools that are complementary to their desktop counterparts.  We’ll examine the new offerings next week.

Jonathan B. Spira is CEO and Chief Analyst at Basex.

Is it the year of the tablet yet, dear?

Similar devices have been around since the GRiDPad was introduced in 1989, although the GRiDPad tipped the scales at slightly over 2 kg.  Apple itself began selling the Newton as a PDA in 1996 but its handwriting recognition software and short battery life hampered its success. Microsoft’s Windows-based Tablet PC has enjoyed a modicum of success but it is mostly used by professionals such as nurses and insurance adjustors who are on the go for much of their day.

In addition, early tablets lacked today’s high-speed wireless networking capabilities as well as Internet content, which today are both more than plentiful.

With the iPad, Apple hopes to leverage the iPhone’s success and create a new category of gadgets.  The iPad supports Web browsing, e-mail, videos, music (it essentially has a built-in iPod), eBooks, as well as applications designed especially for the device.  It will also support almost all of the 140,000 applications in the Apple App Store.  The iPad uses a Multi-Touch interface and a large virtual keyboard (it can also be used with a traditional keyboard). It comes with a 9.7″ LED backlit display that provides a 178° viewing angle.  The machine will be supplied with either 16, 32, or 64 GB of flash storage, Wi-Fi and Bluetooth connectivity and, on higher priced models, the ability to connect to 3G networks.

Although there was much speculation about potential partners for the 3G connectivity, Apple will continue (for now at least) to rely on AT&T’s 3G network for the iPad in the United States, despite the many complaints iPhone users have had about their AT&T 3G service.

Apple’s iPad comes at a time where there are full-functioned netbooks on the market for under $300 – and these have a real keyboard.  Granted, they lack Apple’s vaunted UI but just how many portable devices do most people really need?  Apple is betting on customers going for a superior user experience and greater Net usage [the iPad uses flash memory and that gets expensive (the 64 GB model is $699].

Where the real impact may lie is in book, newspaper, and magazine publishing. Amazon offers the Kindle, a black-and-white eBook reader, that is the leader in what is essentially a small, niche market.  Amazon has been trying to branch out with an App Store-like offering but the superior (color) interface of Apple’s iPad could put it in the lead.

Publishers are looking to Apple to create a new model that will let them advertise and monetize their content.  Taking a different path from Amazon’s, Apple is allowing book publishers set their own prices (Amazon sets Kindle pricing).  Companies such as the New York Times and game-maker Gameloft are developing iPad-specific apps.

Still many questions remain.  Will the iPad reinvent traditional media?  Will consumers want to carry yet another device (the iPad is not a phone)?   Stock analysts are bullish on Apple and the iPad.  The company’s stock rose 1.5% yesterday to $208.99 and some analysts are predicting a high of as much as $285 over the coming 12 months.

What's new in Vegas for 2010?

Indeed, many companies schedule multiple pre-CES briefings to ensure that they reach their intended audience (including us).  To spare you from such overload, here are three notable new products that we think you should know about.

HP Notebook Projector Companion
Despite great advances in projector technology, many meetings are marred by an inability to get an important presentation on screen (or on wall, for that matter).  Most people don’t travel with their own projector; rather, many rent projectors at hotels or meeting facilities (typically at exorbitant rates).  HP has a tiny yet powerful solution that weighs only 260 g yet it can project a high-quality 60-inch-wide image up to 2.5 m away.  The image is more than good enough for most meetings and much sharper than a pico projector.

Iomega v.Clone
Iomega, now part of EMC, an information storage and management company, offers a hard drive management utility that allows you to take a snapshot of your computer’s operating system, applications, and data files with you on an Iomega drive.  This means that mobile knowledge workers can access their data from any computer (as long as they have the drive with them) and can also make setting up a new or replacement PC much less of a chore.

Lenovo Skylight
Does the world need another category of tablet or laptop?  Lenovo is betting that it does and introduced the Skylight, which might best be described as a laptop crossbred with a smartphone.

The Skylight is always on, just like a smartphone, runs a version of Linux, uses Qualcomm’s Snapdragon chip, but does not run conventional laptop software, instead relying on a unique user interface comprised of live Web gadgets (it comes preloaded with 18, including ones for Gmail, YouTube, and Facebook) as well as a traditional Web browser.  It connects to both Wi-Fi as well as mobile broadband (AT&T will sell the Skylight to run on its 3G network).

David M. Goldes is president and senior analyst at Basex.

Both the Loisium and Herrenhof are very modern, up-to-date hotels while the Hotel Sifkovits is older and more traditional. All three not only offered Internet access but it was free – and working.

The Loisium provided Wi-Fi access in common areas and wired access in guestrooms. The others were Wi-Fi throughout. I have only just arrived at the Sifkovits so I haven’t yet tested it fully but the connection at the Loisium was fast and simply requiring only a cable (available from the front desk if you don’t travel with one); the Herrenhof’s system required the entry of a user name and password every 24 hours (the front desk provides you with a card and you have to scratch off a strip to see the password).  My computer lost its connection several times and one card lasted only three hours but the front desk happily provided another card (reading me the login information over the phone to save time) and that did the trick.

The first part of the trip focused on Austrian Wine Country. You can read my journal and view photographs from the trip here. Then it was on to Vienna for my business meetings.

The slide show takes you through one day of the trip.

Jonathan B. Spira is CEO and Chief Analyst at Basex.

A report from our client RJ, a road warrior who flies to Europe several times per month, was typical.  After purchasing his new G1 and turning data roaming and data synchronization off, his bill for data roaming was $319.55.  T-Mobile customer service did agree to credit him for the charges without arguing the point – but the customer service representative also said that the G1 will turn data roaming back on regardless of what he does and that “you have to either keep the phone home or keep it off during your trip.”   “It’s sophisticated,” the representative added.  The rep suggested renting a phone from T-Mobile for future trips or unlocking the G1 so RJ could purchase and use a local SIM.

We spoke with T-Mobile to better understand the issue at hand.  A spokesman confirmed that data roaming can be turned off and supplied a written statement issued by the company in December 2008.

It reads:
If a T-Mobile customer would like to use their T-Mobile G1 while outside the country, they should contact Customer Care before they leave to ask that the WorldClass feature be added to their service at no additional charge.  If they choose, customers can also disable data roaming on the G1.  This can be done by going through the following steps: Home Screen > Menu > Settings > Wireless Controls > Mobile Networks > Data Roaming.

There is, however, a caveat:
Some third party applications available for download on Android Market require access to the Internet and have the ability to turn on data roaming when in use. Customers are informed whether an application will use this feature prior to downloading, but should also be aware when traveling outside the country.

As RJ’s customer service rep put it, “It wasn’t your fault.”

David M. Goldes is President and Senior Analyst at Basex.

Gogo became inaccessible 75 minutes prior to landing

For most of the flight, I was able to surf the Web, watch videos, read news, send and receive e-mail, and even check the flight’s exact position.  I was also able to use my BlackBerry Bold smartphone, including the BlackBerry Instant Messenger (BBM) feature.  Everything worked until 75 minutes prior to landing.  At that moment, the Internet became inaccessible.  The Gogo hotspots were replaced by locked access points labeled “Unknown.”  The purser on the flight said that the service goes down from time to time but it usually comes back on its own.  This time it didn’t.  Aircell, which runs the Gogo network, was unable as of the time of publication to advise what had gone wrong.

American was the first airline to install Aircell’s Gogo in-flight access on its aircraft and it reportedly costs $100,000 per plane to deploy the system.  The airlines clearly see this as an investment in both attracting and maintaining business customers and garnering incremental revenue.  Other airlines offering the service include Alaska Air, Delta, Southwest, and Virgin America. The rollout is in its early stages so, with the exception of cases such as American’s 767-200 fleet, where all of this type aircraft have the service installed and the routes (e.g. JFK-SFO and JFK-LAX) are predictable, it is difficult to predict on which flights the service will be available.

Despite the hiccup, in-flight Net access is useful to business and leisure traveler alike.  If only a tech support plane could have flown over to help us out….

Jonathan B. Spira is CEO and Chief Analyst at Basex.

American Airlines was the first U.S. airline to announce in-flight Internet service for domestic flights.  The first (test) phase of the American Airlines Gogo Internet service started in the middle of last year on the company’s fleet of 15 767-200 aircraft, which fly its transcontinental routes.

Recently, the company announced it will expand the service to over 300 domestic aircraft (the service doesn’t work over the Atlantic or Pacific oceans).

I am writing this from American Airlines Flight 15, New York (JFK) to San Francisco (SFO).  Until today, I hadn’t had to take a transcon flight since Gogo was launched so I was excited to try out the new service (most of my flying in the past nine months was transatlantic).

The last flight I took with Internet service was back in 2005, when Lufthansa and several other airlines still offered the Boeing Connexion service.

Once we hit 10,000 feet (we’re now at our cruising altitude of 32,000 feet), I turned on my trusty Lenovo ThinkPad X300 and it immediately found several Gogo hotspots.  It took just a few minutes to log in and and purchase service for today’s flight (a Gogo representative was handing out 25% discount coupons during boarding, I should mention) and I chatted with customer service about how to use my BlackBerry Bold smartphone on the same account (all I have to do is log off from the laptop and then log in from the Bold).

Gogo really goes

So far I’ve done a speedtest, which showed a download speed of 1.55 Mbps (double what the Boeing Connexion service was able to offer) and checked e-mail,  and read news from several Web sites including  the New York Times and Wall Street Journal.  The flight attendant has already served warm nuts and drinks so I’m going to relax and enjoy the flight for a little bit and then report again.

ON BOARD AMERICAN AIRLINES FLIGHT 15, 1:32 P.M. EDT

We’re still at 32,000 feet, just crossing over Minneapolis.

Purchasing Internet access for one’s laptop entitles you to log into the Gogo system from your smartphone at no additional charge.  Smartphone support was recently introduced by Aircell, the company that runs the Gogo network and it only took a few moments to point the BlackBerry Bold to the Gogo hotspot and log in.  I was surprised – but pleased – to find out that I was able to use BlackBerry Messenger from the Bold although I could not place or receive phone calls or send text messages.  BlackBerry mail worked as well as did multiple applications I use regularly on the device.

Current position at 13:32 EDT

By the time I had interupted multiple people via BlackBerry messenger, the flight attendants were handing out hot towels and tablecloths and starting to serve lunch (I had the herbed shrimp with couscous).   During lunch, I reconnected to the Net via the ThinkPad and, using Slingbox, watched CNN and channel surfed.  The picture quality was surprising good and audio quality was perfect.

After lunch, I checked in with a few colleagues via Lotus Sametime and read a few e-mail messages.

This is a working flight so I need to prepare a talk I’m giving tomorrow but I will continue this post later.

ON BOARD AMERICAN AIRLINES FLIGHT 15, 16:38 P.M. EDT/13:38 P.M. PDT

We just crossed the border from Nevada to California and I have been able to spend most of my time working, although connectivity was really only “required” sporadically.  I did get to finish an important document and e-mail it to where it was needed.  Absent Gogo, I could not have done that until we landed.  I know the recipient was waiting for it so having connectivity proved very beneficial.

In sum: is it an absolute requirement? Of course not, we’ve gotten along without in-flight Internet access since the Wright brothers. It was fun, however.