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  • Cellphone Sales Declining; Most Manufacturers Will Survive, But Not All

    Cellphone makers are heading straight into a cold, dry winter as sales are expected to drop to their lowest point since the beginning of the decade, WSJ reports . Nokia ( NYSE: NOK ), Qualcomm ( NSDQ: QCOM ) and Vodafone ( NYSE: VOD ) have all come clean and warned that the outlook looks grim for the remainder of the year and admit there's little reason to expect anything better in 2009. Manufacturers know all too well that consumers typically clamp down on phone upgrades during lean economic times, and that doesn't bode well since replacement sales comprise about 75 percent of all cellphone sales each year. Handset sales grew 15 percent in the first half of the year, but demand has quickly vanished, and analysts expect growth to drop to between 1 and 9 percent next year. The slowdown will likely lead to a wave of consolidation, including acquisitions, bankruptcies or business closures. "This slowdown presages a shakeout, especially among companies whose balance sheets were not in great shape to begin with… This exacerbates the pressure on the weaker players throughout the industry," Deutsche Bank telecom analyst Brian Modoff told the WSJ . Those with large smartphone portfolios pushing the latest and greatest technologies and features are expected to the weather the storm best. Meanwhile, the companies that mostly target mid-range phones like Motorola ( NYSE: MOT ) and Sony ( NYSE: SNE ) Ericsson ( NSDQ: ERIC ) will face a tough road. Sales are dropping off dramatically in India and China while BlackBerry-maker Research In Motion, Apple ( NSDQ: AAPL ) and HTC are outperforming on many fronts. The largest phone manufacturer, Nokia, could come out with an even larger global market share. While the company makes many low-end phone sales in India it also boasts operating margins of more than double its closest competitors in the market. "Nokia needs these forest fires to clear out the competitive threats," Tero Kuittinen, senior analyst at Global...
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  • Nokia 6650 Smartphone Hits AT&T; Lowers Outlook Growth

    AT&T ( NYSE: T ) Mobility starts selling Nokia's 6650 smartphone today, a small, but significant step for the Finnish handset maker. Though Nokia ( NYSE: NOK ) is the world's leading handset maker with a total market share of 39 percent, it has struggled to crack the US market, where it was once the leader. Research firm Strategy Analytics puts it Q2 market share at 8.4 percent, just ahead of Apple ( NSDQ: AAPL ), with a 5.7 percent of the market. The handset, a clamshell model that looks very similar to Motorola's RAZR, is priced at $70 on a two-year contract, after a $50 rebate. It includes one-click access to the operator's GPS Service, AT&T Navigator, as well as links to AT&T's video sharing and music services. Nokia has been trying hard to boost its market share in the US. After several years of ignoring carriers and seeing its market share high of 28 percent in 2002 dwindle away, the device maker has been wooing them by promising to tailor handsets specifically to their needs. Still, the company has a steep hill to climb. With Apple just behind it in market share on the back of a single phone model, Nokia needs to do a lot more wooing and tailoring at a time when the competition couldn't be fiercer ( release ). In another announcement today, Nokia lowered its market growth outlook in the face of "a sharp pull back in global consumer spending," brought on it said by the combination of "the global economic slowdown" and "unprecedented currency volatility." It expects industrywide shipments of around 330 million units in the fourth quarter, and 1.24 billion phones for the full year, down from a previous forecast of 1.26 billion phones. Nokia, however, says it expects to maintain its market share or for it to increase slightly in the fourth quarter form Q3, not great news considering phone sales typically get a boost in Q4 from the holidays ( release ). Mark Logic Digital Publishing Summit, Thursday...
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  • Three UK And INQ Mobile Launch Dirt Cheap "Facebook Phone"

    In a bid to increase the amount of data its customers consume, Three UK launched its so-called "Facebook Phone" today--the INQ1--which Britain's smallest carrier and its handset partner INQ Mobile are calling the world's first social mobile phone. While the handset does indeed give consumers one-click access to Facbeook as well as live updates pushed direct to the front screen of the handset, the real story is the pricing of the phone: it is dirt cheap. The phone is free on an 18-month contract tariff of £15 a month ($22), which includes unlimited free Facebook, Skype, Windows Live Messenger and up to 1 GB of web access, unlimited emails, unlimited texting, and unlimited calls to other Three customers, plus 75 minutes of talk time to other networks. For an additional £5 ($7) more a month, talk time to other networks bumps up to 200 minutes. For pre-paid users the phone costs £79.99 ($119), plus they will need to pay at least £5 ($7) a month on internet access. Three UK CEO Kevin Russell said the rationale behind the phone and the pricing was to "open the market up," and to increase the amount of data customers used. The "explosion of the mobile internet" was "not going to happen," he noted at this morning's press conference, as long as data-oriented handsets such as the iPhone, Blackberry Bold, and the G1, were priced as high as they were. Of course, the INQ1 doesn't do as much as these other phones. The upstart handset maker's CEO Frank Meehan concedes there's no big app store for it, or endless applications available to consumers. Plus, should the phone prove popular, there's not much to stop other handset makers from offering their own versions. More to Come. Check out the best business jobs in digital media. Go here for paidContent.org Job Board.
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  • Apple's iPhone Stumbles In India

    The original iPhone generated a lot of interest in India, selling well on the grey market, so it went to reason that when the 3G version launched officially in the world's fastest growing wireless market, that it too would sell well. But apparently, that's not what happened, with sales of the iPhone 3G falling far short of Apple's own internal goals of moving 100,000 units by December 2009. Livemint.com reports that analysts tracking the Indian handset market estimate that half that number has been imported, with just a fraction—11,000 phones—sold so far. Given that every handset marker from the market leader Nokia ( NYSE: NOK ) to up and coming HTC have been anxious to capture the rapidly expanding Indian market, it seems odd that Apple ( NSDQ: AAPL ) hasn't taken sales in the country more seriously. So what hurt the iPhone 3G's uptake in India? For one, pricing was always going to be part of it. At $800, the gadget was without a doubt expensive, especially considering a typical IT worker's annual salary ranges from $12,000-$24,000. But cost isn't the entire reason. As Livemint points out, Nokia's N96, Samsung's Omnia and Blackberry Bold all cost even more than the iPhone. "Pricing communication," was a bigger reason. Indian consumers were well aware that the iPhone was selling in the US for $199, but Apple made no attempt to explain the sizable cost difference—that subsidzing handsets isn't common practice in the Indian market as it is in the US. Even worse, the phone was locked to the carrier, despite consumers being charged full price. Apple also left too much to its operator partners—Bharti Airtel and Vodafone—which didn't have the experience of aggressively selling handsets. They only sold the phones in their own stores, instead of branching out to the numerous retail phone outlets in India that sell 50 percent of all handsets. Marketing was another downfall. Again, it was left to Vodafone ( NYSE: VOD ) and...
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  • 3 UK, Australia To Launch Facebook Phone; INQ Mobile Focusing On Cheap Social Mobiles

    Hutchison Whampoa is rolling out a 3G Facebook phone in the UK and Australia next week, just in time for the holiday season. The handset, which will have the social net integrated into it as well as instant messaging, email, and Skype, is being built by Hutchison's new mobile device subsidiary INQ Mobile and is the first of what the fledgling handset maker calls "low cost social mobile" devices. The ultimate goal for these cheaper 3G smartphones is to drive more consumers to use mobile data, or a INQ Mobile CEO Frank Meehan told Unstrung , "You need to drive data usage higher right across all the handset segments. You want the majority of customers, not the top-end of the community that rules strategy at the moment." INQ's client-based Facebook app will always be on in the background, which means owners of the phone will get instant notice when friends update their profile, or as Meehan says, Facebook becomes like SMS. INQ will launch five more handsets next year, but will operators other than 3 pick up the phone? 3's Skypephone hasn't exactly been a runaway success. Only 3 sells the phone, and so far has only shifted 300,000 of them. But Meehan says that's because operators were "put off" by Skype, while Facebook, of course, is different. There's also the cost of the phone. The cost to operators who pick up the phone is $200, which Meehan claims is two to three times cheaper than the average smartphone. If an American carrier were to pick it up, he estimates the cost to the consumer would be $50 on a contract. Related Hutchison Launching Handset Subsidiary Focused On Social Networking Mark Logic Digital Publishing Summit, Thursday November 6, Westin Times Square. Insight and perspective from Outsell, Gilbane, Simon & Schuster, BusinessWeek.com, more. Evening cocktail reception. Cost is complimentary. Register now!
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  • iPhone Boosts Customer Growth At Swisscom; Hits Core Profit

    Sales of the iPhone helped generate 44 percent growth in new mobile subscribers in the third quarter, compared to the first two quarters, for Swiss telco Swisscom, but the boost came at a price. Core profit dropped 3.6 percent in the third quarter to 1.19 billion Swiss francs ($1.03 billion), when iPhone subsidies and dealer commissions shaved off 45 million Swiss francs ($38.5 million) in EBITDA. Swisscom, however, called the iPhone costs an "investment in the future," reporting that iPhone sales didn't just help drive "higher than average" customer growth in the third quarter, but revenue growth as well. Sales of the iPhone--which started in mid-July--"got off to an excellent start," selling 100,000 units in "the space of two and a half months". Swisscom said that it also expects the iPhone to drive up the average revenue per user, but did not specify what the gadget's impact was on ARPU in the third quarter. The Swiss telco has 5.3 million total customers, of which 3.2 million are postpaid subscribers. Release | Q3 Presentation Social Media Deals Report: This 199-page report, filled with charts and data, examines the categories, number and size of VC and M&A deal in social media from 2007 through 2008. Visit the ContentNext Reports page
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  • iPhone Subsidy Hits SingTel Earnings

    First, the good news: SingTel reported in a filing to the Singaporean exchange today that it had sold 170,000 iPhones since launching the handset in early July in Australia, and Singapore, the Philippines and India in late August. In Singapore, where SingTel is the iPhone's exclusive carrier, approximately 30 percent of the gadget's buyers were new customers. In Australia, where Optus competes with Telstra and Vodafone ( NYSE: VOD ) to offer the iPhone, 55 percent of the carrier's total activations were from new subscribers. SingTel estimates that Optus accounted for the majority share of iPhone 3G sales in Australia. Now the bad news, subsidizing the iPhone has come at a cos. In Singapore iPhone 3G activations reduced EBITDA by $27 million Singaporean dollars ($18 million) in Singapore, and $44 million Australian dollars ($30.8 million) in Australia. Still, SingTel said it was "confident" that its strategy of "expanding and acquiring high value data-centric 3G subscribers is value accretive". It reported that "early indications" show that ARPU rates for iPhone 3G users were 1.5 times as high as the overall postpaid subscriber base. No specifics on how SingTel and the iPhone are faring in the Indian market, where SingTel has a 30.4 percent stake in carrier Bharti ( Release ). Check out the best business jobs in digital media. Go here for paidContent.org Job Board.
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  • Wal-Mart To Sell G1 At Discount; Taking on Best Buy in Mobile?

    So much for being an early adopter. Just a week after the G1 phone went on sale for $179 at T-Mobile stores, Wal-Mart ( NYSE: WMT ) will begin selling them at a $30 discount at 550 of its locations--though no specifics on which ones. The price cut applies to new customers as well as existing customers eligible for an upgrade who sign up for a two-year contract, reports Dow Jones ( NYSE: NWS ). Selling the phones at Wal-Mart is one way to get the phones into the mass market, though Peter Chou, CEO of HTC, the maker of the G1, said sales were better than initial projections. He expects to sell 600,000 by year's end, which some believe is a deliberately low forecast. For T-Mobile, selling through Wal-Mart doesn't matter so much since they still get the contract. Wal-Mart, though, which has been selling phones for a while, gets a hot phone, one that can arguably draw customers to its stores. But the G1 also gives it a way to compete with Best Buy, the big box retailer which sees the wireless space as one its biggest and best future opportunities. Best Buy has been pushing hard in the wireless space. It has invested heavily to roll out the "Best Buy Mobile Experience" in all of its outlets as well as opening a number of standalone wireless outlets called Mobile Life stores. Currently, it is the only big box retailer to sell the iPhone (though there were rumors that Wal-Mart would too). Consider as well the news today that Wal-Mart is reducing the price of its music digital downloads with top hits going for $0.74, compared with $0.99 at iTunes, and starting at $0.89 at Amazon ( NSDQ: AMZN ). In the light of Best Buy's September acquisition of music download service Napster ( NSDQ: NAPS ) in which it said it was especially interested in its mobile capabilities, it wouldn't be too much of a stretch to see the G1, especially, somehow being bundled with music. The iPhone, of course, might be more difficult given iTunes, but still not unthinkable. A Complimentary...
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  • Earnings: SK Telecom Profit Plunges 57 Percent; Books Loss From Helio Sale

    Korean operator SK Telecom ( NYSE: SKM ) reported third quarter net income plunged 57 percent to 333.6 billion won ($225 million), on sales of 2.9 trillion won, the company said today. Profit missed analyst expectations, which had been forecasted to reach 353.7 billion won, based on a Bloomberg poll. South Korea's dominant carrier, which has a 50.5 percent share of the market, said sales--up 3 percent year on year, and down 1.1 percent sequentially, had been hurt by an increase in subscribers taking on more aggressively priced tariffs and on an overall decline in subscribers. It was also hit by the cost of foreign debt and reported a loss from the sale of its stake in Helio, its JV with Earthlink ( NSDQ: ELNK ), to rival MVNO Virgin Mobile USA ( NYSE: VM ). Operating profit was also down, dropping 6.1 percent to 504.1 billion won compared to a year ago, when the company posted a 373.1 billion won gain. It, too, fell short of analyst expectations, estimated at 584.9 billion won. Other Earnings Highlights: -- Wireless internet revenue down: Wireless internet revenue declined by 11.6 percent year on year to 619 billion won, hit by its 33 percent cut in mobile internet tariffs. On a quarter-on-quarter basis, wireless internet revenue grew 3.1 percent from growth in flat-rate data plan subscribers. -- SK Telecom now has a total of 22.87 million subscribers. The average revenue per user (ARPU) came in at 42,393 won, down by 3 percent year on year and 2 percent quarter on quarter. Release A Complimentary Webinar from Innodata Isogen-- Beyond Cost Arbitrage: Best Practices for Delivering Large-Scale Editorial Outsourcing Services . Register now .
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  • Illegal G1's "Pouring" Into China

    US-ordered G1's have been "pouring into China" illegally since it was released in the US on October 26 through T-Mobile, reports Pacific Epoch , citing the Chinese IT site DoNews. The handsets are going for a lofty 3,999 remminbi ($584) in Bejing's Zhongguancun, or consumer electronics shopping area, plus another 500 remminbi ($73) to unlock the phone. Will the G1 go the way of the iPhones in China? Apple ( NSDQ: AAPL ) has openly admitted it struggled with the gray market for the handsets. In February, there were some 1.4 million iPhones that hadn't been activated on their respective networks--with China and India's gray markets supposedly sucking them all up. Related The Case Of Missing iPhones Apple Sells One Million iPhones In 3 Days; Gray Market Still Thriving In Asia iPhone Shortage: Runaway Gray Market In Emerging Markets To Blame? EconWomen, Oct. 29, 2008 | Edison Ballroom | New York City Our panels are jam-packed with top women’s media executives. Register: http://econwomen.eventbrite.com
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  • China Mobile To Release Android-based Phone From Lenovo Mobile: Report

    China Mobile plans to release an Android handset built by Chinese handset maker Lenovo Mobile between February and March 2009, writes Pacific Epoch , citing a ChinaByte story that quotes Lenovo Mobile brand commuication department GM Wang Yan. Recent stories have surfaced that China Mobile would release an Android handset at the end of the year with Taiwanese handset maker HTC, builders of T-Mobile's G1, but that the efforts have been delayed. A Complimentary Webinar from Innodata Isogen-- Beyond Cost Arbitrage: Best Practices for Delivering Large-Scale Editorial Outsourcing Services . Register now .
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  • DeviceAnywhere Launching Virtual Developer Labs For RIM, UK Operators O2, 3 UK

    A slew of deals for internet-based software testing service DeviceAnywhere, benefiting from the booming interest in mobile applications from operators and device makers as they try to lure consumers. The WSJ.com reports on DeviceAnywhere's partnership with RIM ( NSDQ: RIMM ) to let third party developers test their applications on a single system that represents 100 Blackberry models running on 16 networks. The company also announced it had launched virtual developer labs for British operators O2 and 3UK. Developers will be able to test their applications to ensure they work on any handset in the carrier's portfolio, which in Three's case means some 50 handsets, while O2 has over 40. ( O2 Release , 3UK Release ). On October 29 at the Edison Ballroom in New York City, EconSports will delve into everything: the complicated economics of league rights, data business, syndication, exclusivity, premium and more. Register for Econsports: http://econsports.eventbrite.com
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