Apple's Solution to iPhone Reception Problem

Apple employees are told to say: "The iPhone 4 is the best we have ever shipped!"

Law firm Kershaw, Cutter & Ratinoff LLP is apparently preparing for a class-action lawsuit against Apple and is soliciting iPhone 4 customers to contact them about its' reception issues. This is the same law firm that went after Facebook, Zynga, MySpace, RockYou and others for advertising scams.  The firm has asked: "If you recently purchased the new iPhone and have experienced poor reception quality, dropped calls and weak signals, we would like to hear from you," the Sacramento firm Kershaw, Cutter & Ratinoff LLP posted on its website. J.R. Parker, an attorney for the firm, told that the firm had received hundreds of responses to its investigation notices.

At the same time this is going on Steve Jobs is spinning his marketing and customer service teams into action to find the public perception war. Employees are told to say that the device's reception performance "is the best we have ever shipped" and that its critical antenna flaws are "a fact of life in the wireless world." Apples employees are told not to perform service on iPhones with these problems and instead to give customers a PR driven recitative instead. Also, while some folks have reported that using a bumper case prevents contact with the antenna band and preserves reception quality, AppleCare reps are being told to not give bumper cases to disgruntled users.

Here's the full text of the Apple employee document reported:

1. Keep all of the positioning statements in the BN handy -- your tone when delivering this information is important . . .
  • The iPhone 4's wireless performance is the best we have ever shipped. Our testing shows that iPhone 4's overall antenna performance is better than iPhone 3GS.
  • Gripping almost any mobile phone in certain places will reduce its reception. This is true of the iPhone 4, the iPhone 3GS, and many other phones we have tested. It is a fact of life in the wireless world.
  • If you are experiencing this on your iPhone 3GS, avoid covering the bottom-right side with your hand.
  • If you are experiencing this on your iPhone 4, avoid covering the black strip in the lower-left corner of the metal band.
  • The use of a case or Bumper that is made out of rubber or plastic may improve wireless performance by keeping your hand from directly covering these areas.
2. Do not perform warranty service. Use the positioning above for any customer questions or concerns.

3. Don't forget YOU STILL NEED to probe and troubleshoot. If a customer calls about their reception while the phone is sitting on a table (not being held) it is not the metal band.

4. ONLY escalate if the issue exists when the phone is not held AND you cannot resolve it.

5. We ARE NOT appeasing customers with free bumpers -- DON'T promise a free bumper to customers.

I like to buy products from companies that have integrity to admit problems when they exist and handle them appropriately.  Management teams are faced with difficult decisions everyday and this one is turning out to be a PR nightmare similar to BP (British Petroleum).

Related Articles:
iPhone Poor Reception A Black Swan Event?
How to Prevent iPhone 4 Reception Problems
iPhone 4 Experiencing AT&T Dead Zones Already

How to Tether an iPad to any 3G Phone

Since the iPad was first released, sophisticated users have been getting smart to avoid unnecessarily additional data costs by tethering 3G phones to the iPad when a Wi-Fi signal is NOT available.  Android smartphone users have it easiest tethering ipad to a 4G phone especially on T-Mobile. Not a surprise to see that AT&T has not been very consumer friendly to iPhone users and has made it very difficult for their data subscribers on the iPhone to tether any devices to their 3G service.  However, the Wi-Fi only iPad oan be used on the 3G network of any carrier to avoid purchasing another expensive data plan if they are already on Sprint, Verizon, T-Mobile or a smaller regional carrier. So here is a great option especially if your carrier never intends to cap your data plan.  Android users will likely be the heaviest adopters of this since most are already on other networks.

AT&T MicroCell Customers Complain Here

I have started receiving numerous emails from frustrated AT&T Wireless customers about their new MicroCell (aka Mini Cell Phone Tower or Femtocell for your home). Thousands of frustrated AT&T Wireless customers are starting to emerge who have been tricked into buying the MicroCell for $150 that does not work in some areas. We want to find out where?

As we have seen in the past the only way to get the attention of the telecom giant is to complain about service as a group.  Think of as the Groupon of complaints for cell phone coverage and poor service.  Here are some sample emails I have received from customers around the US.  Please send me your emails or post your experiences in the comments section below.

From a San Diego AT&T Customer - "I found your website after fighting on the phone with AT&T about their coverage here at my house located at ______, San Diego Ca 92117. Started having problems with my iPhone for the past 3 months.  I called AT&T and they told me to go buy one of their cell phone reception boosters for $150.00! So now I paid them $160.00+ tax for service + a monthly fee that doesn't work.  Is there a problem with the AT&T network because my TV provide is AT&T U-Verse as well? Sorry for the rant but I am livid, anyways you can add that address to your map."

From a San Francisco Customer - "I love your web site because it gives me the ability to vent my frustration with AT&T's ineptitude and over hyped coverage.  I live in the city and would like to use my iPhone at home but AT&T's network is always congested near my apartment.  I went out and purchased the AT&T MicroCell and currently I am very disappointed with the amount of dropped calls.  It seems like the macro network is looking interfering with the microcell network and they are fighting for control.  What will fix the problem because I am thinking about going back to Wi-Fi and Skype for voice."

Related Stories:
Is Cell Reception Getting Worse?
Steve Jobs Cronies Hype: AT&T Getting Better
Why is AT&T's MicroCell Dropping Calls?
AT&T to Spend $1B on Free Femtocells
AT&T's Microcell U-Verse Set-Top Box
AT&T Home Cell Tower or MicroCell
AT&T Customers Will Soon Be Happy
AT&T Service Plans and Coverage Review

San Francisco Has the Worst AT&T Reception

San Francisco has been awarded with the worst AT&T reception in the US according to our users.  The map above shows where customers have complained about dropped calls, data congestion and poor voice quality consistently and its only getting worse.  Search the AT&T Consumer Generated Coverage Map by typing in your zip code or city name.  Ironically, one of the worst locations for reception is the AT&T building where Twitter's headquarters is. This building has very dense population of iPhones in the City and with 1.7 million iPhone 4 units sold in the first three days its not going to get any better.

AT&T Executives partly blame the San Francisco City Council and zoning laws, claiming that they are limited by 4 foot antennas.  I am not sure if I believe this excuse because back-haul, signaling and switching seem to be the carriers biggest challenge in other areas of the US.  Can AT&T make densely populated iPhone areas work properly with larger antennas and more fiber back-haul similar to SXSW in Austin?   AT&T executives claim that if they could put 6 foot antennas onto buildings that could would be better for all customers.  I would like to see a beta test in Downtown San Francisco of using larger antennas to test and see if it improved coverage. If successful, the San Francisco City County could use our database of complaints to measure the amount of complaints in an area as documented proof.

Also, we also think every AT&T iPhone purchaser (especially San Francisco) will eventually get a free 3G femtocell similar to Softbank in Japan when more competition starts to challenge their Apple monopoly.  AT&T's MicroCell may not be the complete solution to fix the problem but they certainly should not be charging for data or the device considering all of the complaints we are hearing about on their network.   Consumer reports across the country seem to be a very mixed bag about the AT&T MicroCell the tech capital of the World, San Francisco seems to be suffering the most. Some say the MicroCell works, some say it doesn’t (even when the network is up) and some say it drops calls all of the time.  The common issue seems to be interference with the Macro network and control for the signal is increasingly becoming a challenge for customers who are installing the mini cell phone tower.  Will AT&T stick with Cisco Systems as the MicroCell manufacturer or will they look for alternative femtocells?  

Apparently, AT&T looks like they are being selective about who they are selling their new MicroCell to as well.  Apparently, TechCrunch is trying to purchase a MicroCell one but has been denied.  AT&T managed to sucker in two of the biggest names in San Francisco to purchase their new Microcell,  Facebook's CEO Mark Zuckerberg and Salesforce's CEO Marc Benioff.  Both could be great advocates  had AT&T's network been prepared but apparently there were problems.  Benioff posted on his Facebook:  “Bought 2 AT&T MicroCells and apparaently installation won’t complete. Called AT&T. They said they are having a national MicroCell outage since Friday. It won’t work for 2 more days." Zuckerberg wrote on his Facebook: “I got one and it seems to work pretty well." “Pretty well” isn’t exactly a rave review.

Related Stories:
Is Cell Reception Getting Worse?
Steve Jobs Cronies Hype: AT&T Getting Better
Why is AT&T's MicroCell Dropping Calls?
AT&T to Spend $1B on Free Femtocells
AT&T's Microcell U-Verse Set-Top Box
AT&T Home Cell Tower or MicroCell
AT&T Customers Will Soon Be Happy
AT&T Service Plans and Coverage Review

iPhone Poor Reception A Black Swan Event?

There is a lot of Wall Street concern about AAPL's new Iphone reception problems customers are having. This time AT&T can point the finger back at Apple and say your faulty design is to blame and not our network. Could this become a major issue that will motivate buyers to hold off on making purchases until AAPL corrects the issue or will consumers learn how to hold the phone appropriately to fix the the problem? We will see as the early adopters begin to educate and influence the later purchasers. It may start out as a non-major news issue, but it could mushroom as Apple users expect perfection in the form factor of their devices. However, iPhone customers have lived with poor AT&T reception quality for quite some time and this is nothing new for them.

Watch this creative video portraying the consumer sentiment: 

If buyers delay purchases of new phones then this could affect expectations on earnings for the stock. Iphone 4 growth is already embedded into the stock price and any changes to these expectations could have implications for Apple's stock and the markets overall. AAPL represents approximately 20% of the QQQQ's ETF holdings. If you believe that if Apple encounters heavy volume selling you might see the rest of the NASDAQ collapse very quickly along with most other equities. The companies behind the QQQQ index like Google, Qualcomm, Microsoft, Cisco, Research in Motion are being sold off and the index is being supported by Apple's Strength.  See Displaced EMA.  What does this say if and when institution's decide to sell AAPL stock we might see a major down draft?

The Theory of Black Swan Events is the disproportionate role of high-impact, hard-to-predict, and rare events that are beyond the realm of normal expectations. The unexpected event usually has a large magnitude of consequences.

Related Articles:
How to Prevent iPhone 4 Reception Problems
iPhone 4 External Antenna Reception
iPhone 4 Is NOT 4G
What Does 1G 2G 2.5G 3G 3.5G 4G 5G Mean?

Verizon's Arrogance Now Rules the Air

According to Boy Genius - Verizon dropping “Can you hear me now” from marketing campaigns? This horrendous marketing campaign for a new even more egotistical slogan.  Can You Hear Me Now is now "Rule the Air - Verizon".  According to this USA today article the advertisement was a hit with potential consumers back in 2004.  Verizon might be the most arrogant company on the planet and it permeates throughout the management team.  These two comments below are very typical from all employees throughout the company . . .

VZW Rep Blog Comment:  Look we employees really don’t give a nuns c*nt about you customers a.k.a transmitters. In fact, when we finish up with you on the floor we go back to the inventory room and make fun of you and talk about how your wife was giving me the f*ck me eyes lol Then she took my business card when you weren’t looking. Anyway, we offer you premium services, you’re going to be paying premium prices. If you don’t like that, go to t-mobile you cheap f*cks. So tired of reading comments from our whiney customers on here. Stfu and pay up or leave, we don’t need you.  We are the best cell service available. You will do what we feel fit. Accept that or leave our service. Stop coming in to stores and b*tching about prices of phones. Stop asking for free sh*t, we are not a non profit organization. Buy some accessories, I don’t want to hear your cheap skate shpeil about how you can get a car charger online for five bucks. Meet me in the middle here and I will pull out of your wife after she texts me asking to meet up when your working. If you don’t, I’m going to leave you a slimy present, all though you’ll just think she’s all wet for you lol.

This time its going to come back in bite them in the ass and its going to be free Wi-Fi that is going to do it as they begin to role out expensive LTE.  Verizon won't rule the air very long when wireless technology researches perfect the much needed Wi-Fi "hand-off" capabilities.  There will soon millions of open Wi-Fi networks around the world and it will draft the cell phone towers.

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How to Prevent iPhone 4 Reception Problems

iPhone 4 users are apparently experiencing decreased reception bars on the iPhone 4 when hands cover the external antennas.  Steve Jobs revealed that the iPhone 4’s slenderness (see pictures of old 3G and 4 on the right) was due to shifting the UMTS, GSM, Bluetooth, WiFi and GPS antennas to the outer stainless steel rim of the smartphone, but that decision may be coming back to haunt the Apple's customer service department for a short while.  Bars are lost when the phone is held by its bezel, because your hand is bridging the antennas located on both sides of the the bezel.  However, if you slip on a cover or case, therefore killing any connection between your conductive skin and the metal bezel, the issue goes away.  You can also learn how to hold the phone correctly (see in the picture above).

The video posted below isolates the problem to the lower left corner of the iPhone 4 and readers of Gizmodo were allgedly able to replicate the loss of reception on their iPhones. 

What Does 1G 2G 2.5G 3G 3.5G 4G 5G Mean?

With the announcement of the new iPhone 4 there is a lot of confusion about what is 3G and 4G.  Here is a great video which explains the evolution of the technology and what AT&T, Verizon, T-Mobile and Sprint use on their networks.  The first iPhone 3G used a technology called EGDE and the new iPhone 4 is using the the HSPA technology.  Here are the protocols explained so that when someone says they have a 4G iPhone you can correct them.

Generation - Definition - Technologies - Speeds
1G - Original analog cellular for voice (AMPS, NMT, TACS) 14.4 kbps
2G - Digital narrowband circuit data  (TDMA, CDMA) 9-14.4 kbps
2.5G - Packet data onto a 2G network (GPRS, EDGE) 20-40 kpbs
3G - Digital broadband packet data (CDMA, EV-DO, UMTS, EDGE) 500-700 kbps
3.5G - Replacement for EDGE is (HSPA) 1-3 mbps
4G - Digital broadband packet data all IP (Wi-Fi, WIMAX, LTE) 3-5 mbps
5G - Gigabit per second in a few years (?) 1+ gbps

Carrier IQ: Mobile Service Intelligence ?'s

Why are wireless carriers unwilling to look at open data source solutions (ie. to solve problems and would rather spend 1000X more on a solution that might not return any more value than free solutions. Is it a control issue?

When I speak with telecom industry insiders about the value that Carrier IQ providers to their customers (who?) it isn't clear.  The only things I have heard from people who know the company is that they have "issues" and their data is "too expensive".  I have tried to reach out to the company several times unsuccessfully to see about building a mutually beneficial relationship.  One of my biggest "pet peeves" being a telecom industry outsider is the incestuous nature of protected carrier business relationships.  As I see it the carriers are unwilling to look at open data source solutions to solving the problem and would rather spend 1000X more on a solution that might not return any more value than we do.  In my view, the RF engineers are trying to protect their jobs at all costs and continue to create complicated stories that the marketing / business people can't comprehend.

From what I hear about their fancy mobile handset intelligence solution is that it provides quantifiable data that their customers can act on but are they really solving the problem better than we are?  What is wrong with having actual customers log complaints where the network stinks for free.  Carrier IQ probably thousands of handsets on the market that are generating data on their behalf that the consumer doesn't even know about. Its impossible to fill in all of the billions of places that have coverage gaps so shouldn't a smart carrier purchase data where their customers WANT it most.  As you can see I am a reluctant supporter of applications that sit on the handset and eat up bandwidth, battery life and network bandwidth.

Bridgescale Partners recently led a a $12M series D round of financing for CarrierIQ a provider of mobile service intelligence solutions that use the mobile phone to give detailed metrics on service quality and usage. Mohr Davidow Ventures, Accel Partners, Charles River Ventures, Nauta Capital, and Intel Capital also participated in the round.  If anyone can share customers or revenue history please post on the comments section below.  However, here is a summary of their funding history which seems very elaborate considering the simple problem they are solving.

Total Funding - $42M

Series A, 8/06 $10M
Mohr Davidow Ventures
Accel Partners
Benchmark Capital

Series C, 1/09 $20M
Intel Capital
Presidio Ventures
Sumitomo Corporation

Series D, 6/10 $12M

3G & 4G Coverage Parity by 2013

According to industry experts 4G wireless network coverage will reach parity with its 3G networks in 2013.  Parity is referring to when the size of a wireless footprint to match 3Gs current footprint which is about 98% of the population. Some say that 4G could reach 100 million people this year but that seems optimistic.  This is expected to increase to 200 million by the end of 2012.

Our speculation is that the industry will try and confuse the consumer as much as possible in order to try and differentiate their services.  Sprint uses the term WIMAX, Verizon is going with LTE and who knows what AT&T is going to market.  What all consumers need to know is that Wi-Fi is most definitely a competitor and its free.  Be a smart consumer and recognize that you may not need data access at high speeds on all parts of the globe so having a huge footprint is not that necessary.  3G was a big step-up from 2G and consumers really noticed the difference.  However, will they be able to differentiate 4G from Wifi?  I say No!

My speculation is that speed and coverage standards will need to be set in the next few years because the marketing coverage wars are only going to get more intense.  Clearwire is still a small company in terms of market share yet they already have a large Wimax (4G) footprint.  I am surprised that they haven't partnered with more carriers like T-Mobile, AT&T and Verizon who plan on building out their own networks or sticking with Wifi in certain areas.  Cable companies like Comcast and Sprint seem the most aggressive about leveraging the huge investment Clearwire has already made.

Related stories
Clearwire Adds "Honest" Coverage Maps
Rural Wireless Carriers Have Better Coverage
3G Coverage at Home
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Is Google Buying T-Mobile?

T-Mobile is giving away phones for free for Father’s Day weekend on June 19.  This first-of-its-kind promotion where every phone in every U.S. T-Mobile store will be free on Saturday, June 19. The promotion only lasts for one day but what is the catch? A family plan is required . . .  either sign up for a new one, or add another line to an existing plan. Individual plan subscribers are out of luck. T-Mobile will its retail stores at 8:30am on the 19th.

Rumors have abound for many years that the search engine giant and the 4th largest US carrier would get together.  T-Mobile has been experiencing some growth and management issues lately and the parent company Deutsche Telekom might be getting impatient and ready to make a big move. T-Mobile operates under the radar in the US and was the first carrier to offer Android handsets which helped it gain some market share.

Google also owns a large stake in femtocell company Ubiquisys which manufacturers femtocells (mini cell phone towers for your home). We think public femtocells through Wifi or 3G / 4G are a great location based advertising opportunity that the advertising giant could give a shot in the arm. See Femtocells + Google Location Based Advertising.  We also think as AT&T and Verizon begin to use data caps that Google must defend its mobile advertising position and one way to do this is just buy a carrier.  See Mobile Apps Fear Data Caps.

This advertising promotion seems to me like foreshadowing of what could dovetail into other free phone offers as Google gets better at monetizing data on the handset. Instead of thinking of handset comparisons, shouldn't we be thinking about mobile location-based services that are ad supported wherever we roam?  We think that phone service will eventually be free for limited use and all handsets will be smartphones. As soon as location based advertising and eCPMs for publishers are high enough I think this will happen. Dumb pipes will no longer be dumb. This could present and interested challenge for the larger carriers AT&T and Verizon who are not very resourceful about mobile advertising.

iPhone 4 Experiencing AT&T Dead Zones Already

How ironic that AT&T drops the ball once again for customers who want to pre-order the iPhone 4.  Yet the dogs keep coming back for the dog food that keeps making them sick.

The iPhone 4's first pre-ordering day has been a total disaster. AT&T's online system has collapsed, there are account security breaches, Apple's online upgrades are down, and AT&T stores are now using pen and paper to process sales. Apple's processing system seems to have collapsed. The reason: The iPhone upgrades depend on AT&T account server. Read more and follow the live coverage at Gizmodo.

I think this photo and video illustrate AT&T's poor planning and customer frustration for many years. 

WiFi vs 3G in NYC

How To Find A Cablevision / Optimum Wifi Hotspot in NYC?

NYC residents have been plagued with some of the worst cell phone coverage in the nation due to the density of the population.  AT&T Wireless has been bruised by the media and its customers for horrible 3G coverage in the city with customers experience many dropped calls and data congestion.  Well, now the cable companies are touting Wifi as a viable alternative to 3G but we have some questions:  How convenient is it connecting to Optimum's WiFi in shopping mall, on streets, train stations, parks, marinas, and sports complexes?  Is as ubiquitous as 3G in NYC?  What are the data speeds?  Can Optimum handle lots of simultaneous customers at a NY Nicks game inside Madison Square Garden or at a Yankees game?

New York Cablevision customers can now get online at Optimum Wifi locations Search the Map  Cablevision is revamping its advertising attacks on Verizon and AT&T in the NY metro area. It wants to try and showcase how much better the Cablevision's WiFi network is against their 3G networks.  The large cable operator is running new ads that compare the sluggish 3G wireless networks with its own Wi-Fi networks that are free to its customers.  Cablevision touts Wi-Fi as being twice as fast as the 3G networks and 3 million Cablevision customers are accessing the Wi-Fi network per month at thousands of hotspots. Below are two of the TV advertisements.

Related Stories
Cable Operators Want to Own Local Wifi
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iPhone 4 Is NOT 4G

Apple's new handset is called the iPhone 4 and its not 4G as all the pre-announcement hype would have us believe. There are a lot of handset manufacturer marketing teams who are frustrated about the launch of latest iPhone 4 (NOT 4G).  They think Apple is confusing the marketplace branding a phone the 4th generation and it not being 4G.  There are lots of social media and blog sites asking the same question as one would assume that it should be 4G with all of the hype.  ITS NOT  I think it is also pretty "sleazy" of Apple to call it the iPhone 4 just as 4G and LTE is starting to get marketed heavily to consumers.  

Sprint, T-Mobile & Verizon Have 4G Networks . . .  So Why is AT&T Behind?

Currently, Sprint is the only carrier who has a 4G network while Apple and AT&T currently have an exclusive deal which is expected to last until 2012.  AT&T is far behind the other carriers Sprint and Verizon in deploying a 4G network on HSPDA. When the FCC auctioned off the analog TV spectrum in 2008, Verizon received a block of spectrum that enabled them to create a nationwide 4G network in a single frequency range, which is easier to implement. AT&T, however, finished second in the spectrum auction and ended up with a patchwork of disparate frequency ranges, which creates network and handset-design complications. As a result, Verizon's LTE network is due to launch first, sometime this year, and AT&T's not until sometime next year.

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Goldman Sachs Bullish on Telecom Stocks?

I have been hearing lots retail and institutional players scooping up AT&T & Verizon shares recently chasing nice 7%+ yields.  One way for people to do this is through the IYZ ETF which contains a basket of telecom stocks which include mostly: Sprint, Verizon & AT&T which make up 28% of the IYZ portfolio's holdings.  The IYZ ETF has a yield of 3.7% according to Google and Yahoo Finance based on the last dividend payout.

This video above was originally broadcast from the floor of the CBOE by the ETF Super Pit Hit on the OptionMonster YouTube channel on Wednesday, June 9, 2010. The video highlights potential bullishness or a possible hedge on the  trading desks of the largest bank Goldman Sachs.  Apparently a customer of Goldman was looking to buy the Telecom Exchange Traded Fund (ETF) IYZ iShares. Goldman Sachs wanted a July 30th (Exp) 20 call option (Bullish) which is not too far out of the money and relatively cheap considering all of the market volatility we have had as of late.  Some sophisticated investors might also argue this as a bearish indicator or a hedge against a short position in the ETF or long position in an individual stock.  However, strangely Goldman wanted a funky expiration date of July 30th and not the normal month-end expiration July 16 or August 20 (see options expiration calendar).  I am scratching my head as to why they would not take the middle of the month of July or August.  Is there some additional telecom news coming to market in the next 45 days?  Lets watch and see.  Maybe a potential merger or acquisition of T-Mobile or Sprint?

If ETF does make it above 20 it should have room to fly based on technical chargs but what could be the catalyst for this to happen?  Are they predicting that all of the 4G / LTE buzz and the iPhone 4 phone (Not 4G only 3G) will be the driver for this?  I happen to think telecom is going to face some fierce competition from FREE Wi-Fi as the primary competitor to LTE and 4G. I am not particularly bullish but I have owned the ETF for a few years.  The industry and the ETF have not performed particularly well over the last 10 years but I am hoping for the best.

One thing that surprises me is that only 25% of the fund is invested in Mobile Telecom companies and the other 75% is in Fixed Line Telecommunications companies.  Yes . . .  fixed line telecom is a bit more stable but that is not where the growth is.  I am also surprised not to see a small portion of the fund invested in Clearwire as well (CLWR) even though it has its' share of financial issues.  The last thing that surprises me is that cable companies Comcast, Cablevision and Time Warner absent from the index. (CMCSA, CVC, TWC).  Cable Companies are making a huge push into telecom right now and will be direct competitors with AT&T and Verizon Wireless soon.

Ticker Name % of Assets
T AT&T INC 18.31

Mobile Apps Fear Data Caps

For many years, unlimited data plans have given mobile app users an all-you-can-eat buffet. But how will customers react AT&T’s new, limited menu by simply eating less?  Many software developers fear consumers will download and use less mobile bandwidth intensive apps. AT&T says that just 2 percent of its customers use more than two gigabytes a month so based on current usage patterns it shouldn't affect the majority.  The ripple affect could be large across many sectors of tech including: VoIP, Games, GPS Navigation & Internet Radio.  AT&T might not yet understand the negative implication of their potentially short-sited move.

Wall Street thinks the cap is about higher prices and price discrimination and it is going to be flowing in extra money and quickly. Customers inevitably will use more mobile bandwidth and consumers will ultimately pay as much as 50% more because of the change. The low cap also protects the wireless telcos lousy and over-priced video packages. With the low cap rates almost everyone will need to maintain their landline broadband for free wifi. There's nothing wrong with a cap at a reasonable level at least as high as today's 5-10 gigabytes. A 2 gigabyte cap will be destroyed by the market as Verizon + AT&T will soon marginalize wireless competition.

One of the biggest problems, developers and consumers say, is that users are not sure how much bandwidth they are consuming with an app. AT&T customers should be able to track data use via the company’s Web site portal and receive alerts when they near their quotas but is their an API available to provide more transparency?  I doubt it.  All mobile apps need WiFi only options and must show usage patterns and make it transparent about what the typical data usage is for various applications.

Wi-Fi vs 4G
Experts project that improved technology will drive down the cost to the carrier of delivering more data by as much as 50 percent as they move to fourth generation 4G speeds.  It is assume that carriers could afford to charge less as customers consume more but again Wi-Fi is free and it remains to be seen if mobile users will want to pay for heavy data consumption outside of Wi-Fi.  Our view is that once location based mobile advertising rates are understood that data subscription usage will be a thing of the past.  However, we are at the mercy of short-sighted profit oriented moron carrier executives who are profit and not product motivated.  

Applications that stream high-bandwidth video and route phone calls and face-to-face video chats like the iPhone 4G over the Internet could be seriously affected. Location based applications that constantly send a phone location and continuously download data from the network could face usage challenges. Internet calling services like Skype, which route voice and video calls over the cellular data network, could also be affected. However, Skype experts say users should be able to make plenty of voice calls on the service each day without having to worry about extra fees or data overages.  

Mobile content companies like Hulu, Netflix & Youtube will get hurt the most as soon as mobile customers begin to look at their monthly bills and get shocked.  It wouldn't surprise me to see some of these mobile subscription based video sites quickly establish relationships with the carriers to exempt their customers who are paying monthly fees. In theory AT&T could segment content distribution from their "partners".  Its not fair to the little guy but in all likelihood will happen.

GPS Navigation
Mobile apps for GPS Navigation are one of the applications that uses the most bandwidth and clogs carrier networks the most.  The continuous signaling issues experienced between cell phones and towers in densely populated or traveled areas have required carriers to beef up their back-haul in many locations where they have under forecast.  Google Maps, Bing Maps, AOL Mapquest and Navteq will need to provide some high level leadership for the industry if they truly want to inspire innovation for the up-and-coming apps. 

Mobile Games
Game developers have been trying to add more robust features to games to take full advantage of the iPhone, but they might scale back features like adverting, location based multi-player.  Games will have to be considerate of bandwidth usage or they may soon find themselves without any players if parents start to look at data monthly data bills.

Internet Radio
Rapidly growing Pandora now has 54 million users who listen an average 13 hours a month over the internet, but only a fraction of its customers currently use the app over 3G.  Pandora has been striking deals with auto OEM's to embed the service in radios.  It remains to be seen if 4G will be the answer to the bandwidth issue and if cellular (LTE) will take over satellite as the preferred distribution means.

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