iPhone Inventories Are Rising

The iPhone may soon become a lost leader as inventories continue to rise at Apple, AT&T and Verizon.  On the earnings conference call today, Apple management stated the iPhone sales are expected to decline in the next quarter.  Is this because consumers are waiting for iPhone 5 LTE or for different reasons outlined below.

iPad sales are obviously making up the bulk of Apple's revenue going forward and will become the future of the company.  Carriers are becoming less important to Apple as most consumers are buying WiFi only iPads.  Are iPhone's priced correctly or are the data plans too expensive?   To me their pricing doesn't make sense to pay $600 for an iPhone and $399 to $499 for an iPad.  Most smart people realize the carrier subsidy is kind of a bogus pricing scam.

The market for connected devices is changing from smaller 4 inch screens to 10 inch screens on the iPad.  90% of Fortune 500 companies and 70% of Fortune 1000 companies are testing the iPad so this may be the only opportunity for carriers going forward.  Carriers need to enable their enterprises to sell iPad 3 LTE data plans.  

Apple Has Sold 67 Million iPads

iPad is the fastest selling product from Apple all time! 
35.1 million iPads sold during 1st quarter - March 2011
15.43 million iPads sold during 4th quarter - December 2011
11.12 million iPads during the 3rd quarter – September 2011
9.25 million iPads sold during the 2nd quarter 2011 – June 2011
4.69 million iPads during the 1st quarter 2011 – March 2011

iPad 2 is just now launching in China this quarter.

Apple Selling Lots iPads to Schools

Schools Using iPad as Teaching Tool

Apple is selling lots of iPads to school systems around the U.S.  School systems including San Diego and Redondo Beach have funding initiatives for this effort.  The iPad is a fabulous tool for teachers to use as a curriculum tool for their students.  

WiFi only iPad 2's are only $399 while the iPad 3 is priced at $499.  "The iPad price cut unlocked some education demand for customers who had a bit more price sensitivity," said Tim Cook on the earning conference call today.  At this price iPads could last for a long time in schools if properly cared for.  It makes sense for school systems to purchase these devices for all students in the classroom.  

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Verizon & AT&T Waiting For iPhone 5 LTE?

Are Verizon & AT&T Consumers Waiting for iPhone 5 LTE? 

Verizon & AT&T scared Apple investors over the few days reporting poor iPhone sales on their earnings calls.  At the same time Apple sold 35 million iPhones in the quarter largely supported by Japand and Asia.  It has been rumored that the iPhone 5 will be debuted around October of 2013 just in time for Holiday sales.  However, is the iPhone 5 LTE really that revolutionary?  Yes, speeds are faster but the content experience is still the same and the iPad experience is better.

I tend to think that the iPhone will become a lost leader and the iPad will take its place.  Why?  Content is consumed much easier on a larger screen.  4 inches on the iPhone vs 10 inches on the iPad is just a better experience.  If you are away from WiFi just tether your iPhone to your iPad and you don't need a separate iPad data plan.  

Apple Sold 12 Million iPad 3's in Just 2 Weeks

In the latest earnings release (Nasdaq: AAPL) sold 12 million iPad 3's in just two weeks in the first quarter.  Apple has sold 67M iPads overall since it launched and sold 30M iPads in the first quarter.  Apple is just now launching the iPad 2 in China and this is a huge opportunity.

Meanwhile, AT&T and Verizon both struggled to meet their iPhone sales targets in the quarter.   Apple is selling iPads just as fast as they can make them.  The can't seem to manufacture enough to meet the demand.  iPad sales estimates for the year are currently around 27 million and this number is undoubtedly too conservative.  I can see AT&T selling more than 50 million iPads this year.  Why, because 90% of the iPads being sold are WiFi only and it does not require an expensive carrier data plan.

Are consumers looking at the iPad screen of 10 inches vs 4 inches on iPhone as the new form factor for viewing content?  What does this say about the importance of carriers selling and subsidizing phones?    

AT&T Reduces Dropped Call Rate in San Diego by 25%


AT&T Reduces Dropped Call Rate in San Diego by 25% and Launches Microsite to Show San Diego’s Local Network Upgrades

san diego, calif., April XX, 2012 AT&T* continues to drive investment and innovation to improve voice and data performance on its network. From 2009 through 2011, AT&T invested nearly $700 million in its wireless and wireline networks in the Greater San Diego area. Those investments are paying off in strong service performance, including a reduction in the dropped call rate in the San Diego area by 25 percent, keeping more wireless calls connected.

As part of the drive to deliver the nation’s best mobile internet experience, AT&T has made more than 1,075 wireless network upgrades in the San Diego area since the beginning of 2011. Enhancements through April 10, 2012 include:

·         Activating approximately 20 new cell sites or towers to help improve network coverage.
·         Enhancing nearly 20 cell sites to provide faster mobile Internet speeds.
·         Deploying faster fiber-optic connections to nearly 475 cell sites. Combined with HSPA+ technology, these deployments enable 4G speeds.**
·         Adding capacity or an extra layer of frequency to cell sites – like adding lanes to a highway – with the addition of nearly 575 of these layers, or “carriers.”
In addition, AT&T officially launched 4G LTE service in the San Diego area on January 8, 2012.***

And, AT&T has now launched the new “focus: San Diego” microsite, which is dedicated to providing San Diegans a birds eye view of these network enhancements. Updated weekly, the microsite provides an unparalleled view, unlike any other in the industry, of what AT&T is doing to enhance the customer experience.

CNN Money recently recognized AT&T for enhancing its wireless network, which is the nation’s largest 4G network and now covers nearly 250 million people. Last year, AT&T completed 150,000 network

400 Billion Skype Calls Per Year

Skype users made over 100 billion calls in the quarter according to Microsoft's earnings conference call.  Is it fair to say they will make over 400 billion calls per year.  How does this change International calling rates now that it makes 25% of all international calls (see chart below)?  Should your talk time rate plans be getting cheaper or will carriers continue to bundle talk time with data plans?  Carriers have seen their talk time minutes growth shrinking and this is likely due to alternatives like Skype (see chart below).  The billion dollar question is: What is Microsoft's average revenue per call for Skype users?  Assuming advertising is the method of payment.  

Skype will undoubtedly play a large role in the growth of Microsoft's mobile. cloud and gaming businesses.  Lets hope the keep the service free and continue to improve their monetization of the service through advertising.

Throttling vs Network Optimization of Traffic

Data Throttling vs Network Optimization of Traffic

The widespread use of smartphones, tablets and other sophisticated mobile devices – coupled with accelerating consumption of rich multimedia applications such as streaming video, live TV, social media, and instant video chat – is driving operators' evolution to LTE and other 4G network architectures for delivering mobile data services. Bytemobile's latest Mobile Analytics Report indicates that a tablet already generates three times the data volume generated by a comparable smartphone. With next-generation technology, including faster networks and larger devices supporting higher-resolution videos, the data generated from a single YouTube clip could increase by five times. Managing network capacity has become not only the single most important business challenge for operators and many are using different techniques.

Throttling mobile data is a method by reducing the speed of packets delivered to the user on the network.  Throttling is typically done when a user has exceeded the amount of data in a plan or is congesting the network by downloading too much video or content in an area.

Network optimization is a different technique used by the carriers.  It involves caching and compression to reduce the strain on the network.  The goal is to not reduced the user experience while preserving bandwidth on the network.

Bytemobile® Smart Capacity™ platforms enable mobile operators to deliver the best possible experience to their subscribers under all network conditions and to differentiate their services based on subscriber usage. The company's solutions have been deployed in the mobile networks of more than 130 operators worldwide to manage escalating demand for capacity due to video and other rich multimedia content and applications. With Smart Capacity, mobile operators can improve utilization of existing capacity and control operating expenses, while increasing revenue growth and profitability. Bytemobile is the industry leader in video optimization with 50 operators under contract.

Byte Mobile's US customers include: AT&T laptop division, Metro PCS, Alltel, Cricket and Sprint.  Verizon & T-Mobile are not currently customers and may be using a different method of detecting high data volume users and throttling them instead.  MetroPCS is the most widely deployed customer in the US to date.

ByteMobile competitors in include Flash Networks, Open Wave, Cisco, Ericsson, Allot, Sandvine.

To learn more, visit Bytemobile.com.

Which Carrier Has The Fastest 3G & 4G Network?

T-Mobile USA HSPA+ and the AT&T LTE networks are the nation's fastest "3G" and "4G" networks, respectively, among Tier 1 U.S. carriers, according to a new study from PCWorld.  AT&T, T-Mobile top network speed tests.

PC World conducted tests on the networks of the four Tier 1 carriers in 13 cities: Atlanta, Boston, Chicago, Dallas, Denver, Las Vegas, Los Angeles, New Orleans, New York, San Francisco, San Jose, Seattle and Washington, D.C. The tests were conducted by Novarum, a strategic wireless consulting firm, and used smartphones suggested by the carriers.

Among "3G" networks, T-Mobile's HSPA+ network performed the best, with average downlink speeds of 3.84 Mbps. AT&T's HSPA+21 network came in second, with average downlink speeds of 2.62 Mbps. Verizon came in third with average speeds of 1.05 Mbps and Sprint came in fourth, with average speeds of 0.59 Mbps.

AT&T's LTE network provided the best downlink speeds among 4G networks, topping out at an average of 9.56 Mbps. That bested Verizon Wireless' (NYSE:VZ) LTE network, which had average downlink speeds of 7.35 Mbps. However, Verizon's LTE network beat AT&T's in uplink speeds, with an average uplink speed of 5.85 Mbps compared with AT&T's 5.15 Mbps.

90% of iPads Sold Are WiFi Only

90% of tablets sold are WiFi Only

Are these articles why Apple's stock is starting to lose momentum?  Fear of Apple cannibalizing their high margin cozy carrier relationship business by selling WiFi only iPads?  Read these articles published by DeadZones.com predicting this in 2011 . . .

AT&T Spent $775M on Upgrades in Washington, DC Area in Last 2 Years

WASHINGTON, April 13, 2012 /PRNewswire/ -- To improve customers' experience, including meeting surging demand for mobile Internet, AT&T* invested nearly $775 million in its Washington, DC area wireless and wireline networks from 2009 through 2011, resulting in significant improvements to the speed and reliability of its service in the nation's capital. 

To further improve the customer experience, the company also announced that it is reallocating spectrum from the older, voice-centric 2G network to help add capacity to 3G mobile Internet cell sites. As part of that plan, AT&T is contacting select customers in the DC metro area who use 2G devices to provide them with more details, including options for upgrading their 2G handsets at no cost or low cost while keeping their mobile numbers.

This reallocation of spectrum is one way AT&T is helping address the looming spectrum crunch, an issue facing the entire wireless industry. AT&T's mobile Internet traffic doubled nationally from 2010 to 2011, and has increased 20,000 percent over the past five years.

During 2011, AT&T made nearly 1,400 wireless network upgrades in three key categories in the Washington, DC metro area. These enhancements include:
  • Deploying faster and more reliable fiber-optic connections to more than 725 cell sites.
  • Adding capacity – like adding lanes to a highway – with the addition of an extra layer of spectrum, or "carriers" to more than 625 cell sites.
  • Activating nearly 25 new cell sites or towers to improve network coverage.
"Investments in mobile Internet infrastructure will help drive economic growth and stimulate jobs," said J. Michael Schweder, president, AT&T Mid Atlantic. "Our ongoing investments in Washington, DC will give business, residents and visitors to the District and the region access to a more advanced mobile Internet experience."

In late 2011, AT&T also turned on 4G LTE in the greater Washington, DC area, which is capable of delivering mobile Internet speeds up to 10 times faster than 3G**. Even as 4G LTE expands, AT&T customers are able to enjoy widespread, ultra-fast and consistent 4G speeds on their compatible device as they move in and out of LTE areas. AT&T has two 4G networks that work together for customers, LTE and HSPA+ with enhanced backhaul. With other carriers, when you travel outside of their LTE coverage area, you're on a much slower 3G network.

"We've made these investments because we're committed to improving service in the DC metro area," said Rob Forsyth, vice president and general manager for AT&T in greater Washington/Baltimore. "Today, AT&T customers in Washington, DC have access to the latest technology in our blazing-fast 4G LTE service. Our network allows customers to multi-task by simultaneously using voice and data, a huge advantage in a city where everyone is always on the go, doing several things at once." In the coming year, AT&T plans to continue to expand and improve their wireless network throughout the Washington metro area.

How Much is Verizon's Upgrade Fee?

Used Car Salesman at Verizon Wireless Stores

A $30 upgrade fee is ridiculous and out of principle you should leave the arrogant carrier.  A "used car salesman like experience" is what you will likely expect going into a Verizon Wireless store today.  Verizon is now charging existing customers a new $30 upgrade fee to any existing customers purchasing new mobile equipment at the discounted price with a two-year contract.  Verizon is letting some lucky customers trade in their phones to reduce the fee a bit, but how that helps will depend very heavily on what kind of user you are.   All negotiable.

Negotiation and hassle is basically what Verizon would like their customers to deal with.  Nothing is straightforward and it sounds like everything is negotiable.  Atleast that is why my wife said on her last trip to a Verizon Wireless store and that what it sounds like with the new $30 upgrade fee that is negotiable. Verizon bogus statement says:

"This fee will help us continue to provide customers with the level of service and support they have come to expect which includes Wireless Workshops, online educational tools, and consultations with experts who provide advice and guidance on devices that are more sophisticated than ever.While the upgrade fee is not unique to Verizon Wireless, most devices can be traded in with our green friendly trade-in program at verizonwireless.com/tradein as a way to save money or potentially offset the fee completely."

Why Is T-Mobile Charging $15 Per Month for Tethering?

Question: I am a T-Mobile customer with a Blackberry 9700 . I have used my phone as a modem for my laptop without charge since I bought my phone two years ago. This is, in fact, one of the main reasons I chose that phone. Recently, T-Mobile has prevented me from using my phone as a tether, and now is charging $15/mo to do so. I feel that this is a violation of my contact. (The best analogy I can think of is if they started charging a $1 per picture you took with your phone.) In looking around the web to see if others have complained about this, I came across your website. I am wondering whether you know of anyone who has complained about this change and what, if anything, they were were able to do.

Answer:  If you were grandfathered into the plan an old T-Mobile Blackberry plan paying $30 per month than you should be able to keep tethering for free.  However, all new Blackberry customers now must pay $30 per month plus the additional charge of $15 per month for tethering.

AT&T Shows Network Upgrades in New York

NEW YORK, MArch 30, 2012 In response to customer feedback, AT&T* is offering greater New York region wireless users a birds eye view of AT&T’s wireless network enhancements.

Beginning today, New Yorkers can see up-to-date network enhancements in the greater New York region by simply visiting the new “focus: New York” microsite. An industry first, the microsite provides an unparalleled view of what AT&T is doing to enhance the customer experience.

Visitors to the microsite will see a map of the greater New York region, and are prompted to select the city or borough they’re most interested in exploring.

The hyper-local map displays specific network enhancements that AT&T has made in the area since the beginning of 2011, and is updated weekly. Enhancements include new cell sites, broadband speed upgrades, capacity upgrades and network connection upgrades. The focus: New York microsite interactive map is also optimized for most mobile devices.

In the greater New York region**, from the beginning of 2011 through March 26, 2012, AT&T has:
-          Built more than 40 new cell sites, providing more bars in the area.
-          Upgraded more than 45 cell sites, providing faster mobile Internet speeds.
-          Added more than 3,000 carriers to increase spectrum on area cell sites, providing extra capacity to reduce dropped calls and improve service quality at busy times.
-          Expanded nearly 2,900 network connections with fiber lines at area cell sites, helping reduce dropped calls and enable 4G data speeds for compatible devices.

AT&T has also created a dedicated Twitter handle, @ATTNYC, that New Yorkers can follow for up-to-date information on what is going on in New York.

In addition to the greater New York region, AT&T has created microsites for: Atlanta, Dallas-Fort Worth, Detroit, Houston, Indianapolis, Kansas City, Philadelphia, Phoenix, South Florida, St. Louis and Tampa-St. Petersburg. More sites are planned and will be accessible at the “focus: AT&T” landing page.

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