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Cheaper iPhone Will Cost More in China

September 11, 2013 by

But the cost of the phone — more than $700 in China — will still keep Apple’s phones beyond the reach of most Chinese consumers. And that predicament only underscores what has become increasingly clear in recent months: that Apple’s fortunes in China largely depend not on any phone, but on reaching a deal with China Mobile, the country’s largest cellphone carrier.

On Wednesday, Apple took another step in that partnership, when the Chinese government said that Apple’s phones could run on China Mobile’s new cell network, essentially paving the way for a deal between the companies.

An agreement would instantly give Apple access to China Mobile’s 700 million customers, and reaching it might require Apple to bend on price. China Mobile has been holding out on a deal for years, and it is now positioned to ask for better terms with Apple.

“The only way they’ll have a significantly better time in China over the next 12 months is if they can sign China Mobile,” said Jan Dawson, a telecom analyst for Ovum. “A small percentage would be a large number of new customers for Apple. So it’s even more crucial now that Apple gets that deal done.”

Apple has recently pursued an aggressive strategy for China. For the first time, Apple’s new phones will be released in China at the same time as they are in the United States. Analysts say the new gold color being offered for the higher-end iPhone 5S was probably designed for wealthy Chinese who enjoy flashing smartphones the same way they show off jewelry. And Apple has tailored some software features of its products for the Chinese, including easier setup for Chinese e-mail services.

China’s cellphone market is growing quickly, surpassing the American market last year. But so far, most Chinese consumers are gravitating toward cheap Android smartphones that can be bought for as little as $100 at full price from handset makers like Xiaomi, Huawei and ZTE.

Apple has been left as No. 6 in the Chinese market, and sales of its products in the country were down 4 percent in the second quarter compared with the same period last year. Though Apple is still enormously successful, its profit growth has slowed and its stock price has struggled. On Wednesday, the company’s shares fell more than 5 percent.

In exchange for adding Apple to its lineup, China Mobile may demand that Apple help subsidize the cost of the iPhones. It might ask for a better cut of each iPhone sale. Or it could just ask for a more lax contract, in which it can reduce the prices of the phones. In the United States and some European markets, Apple has forbidden carriers from discounting the price of the iPhone.

“With every passing month, China Mobile is getting stronger and Apple is getting weaker,” said Tero Kuittinen, a mobile analyst for Alekstra. “We have a moment where all of the cards are in China Mobile’s hands.”

When the new iPhones, the 5C and 5S, are released on Sept. 20, they will be available through two other Chinese mobile carriers, China Unicom and China Telecom, which together have more than 400 million subscribers.

Apple said on its Web site that the iPhone 5C, the cheaper model, would start at 4,488 renminbi, or $733, without subsidies from mobile operators. The new flagship iPhone 5S will start at 5,288 renminbi, or $864. That price is more than one-third higher in China than the $550 unsubsidized cost for the iPhone 5S in the United States.

Apple products have always been more expensive in China than in the United States — even though iPhones are actually assembled in China. That is because iPhones sold in China are subject to a 17 percent value-added tax, while those that are exported can be sent abroad tax-free.

The cost in mainland China is also higher than it is in Hong Kong, where there is no value-added tax or sales tax. There, Apple announced a price of 4,688 Hong Kong dollars, or $604, for the iPhone 5C.

Yet even with that 17 percent factored in, Apple appears to be marking up the iPhone 5C substantially in China, potentially giving the company room to maneuver later. Chinese carriers do not generally subsidize the handset price for consumers, but they often discount their monthly bills. So the eventual cost to consumers has plenty of room to come down.

Some analysts said Apple might have announced a high initial price in China to justify eventual price cuts. If an agreement with China Mobile were to come soon, Apple could then reap a marketing benefit by cutting prices just as it gained access to a vast new consumer base.

Ben Bajarin, a technology analyst for Creative Strategies, a consulting firm, said it was possible that China Mobile could trim the cost of the iPhone 5C and use the device to lure customers into paying for more expensive smartphone plans.

“That’s the one thing the iPhone’s been remarkably good at,” he said, “is driving value to the premium data service.”

Eric Pfanner reported from Tokyo.

Eric Pfanner reported from Tokyo.

Article source: http://www.nytimes.com/2013/09/12/technology/the-surprise-in-apples-cheaper-iphone-in-china-its-expensive.html?partner=rss&emc=rss

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Apple Tops Expectations on Strong iPhone Sales

July 23, 2013 by Leave a Comment

Investors did not seem to mind, at least in the short term, sending the company’s shares about 4 percent higher in after-hours trading. Strong iPhone sales helped beat the expectations of Wall Street.

But Apple’s earnings report on Tuesday highlighted some of the challenges the company faces as it continues to expand overseas. The company sells plenty of devices in the United States, but sales have lagged in some larger overseas markets, which are crucial for its future growth.

China has been especially problematic for the company. Overall sales of Apple devices in China fell 4 percent compared with the same quarter last year. And in Hong Kong, Apple’s sales were down about 20 percent — a trend that Timothy D. Cook, the company’s chief executive, found puzzling.

“Hong Kong is an international shopping haven,” Mr. Cook said on the company’s earnings call in response to an analyst’s questions about Apple’s performance in China. “We saw some dramatic downturn there. It’s not totally clear exactly why that occurred.”

Gaining a foothold in foreign markets is becoming increasingly vital for Apple. Its growth has slowed in the most recent quarters, as its devices have largely saturated the United States and some top markets in Europe.

The tepid growth has led many investors to clamor for a new blockbuster product to restart growth and give Apple’s sagging stock a much-needed lift. But no such product has been announced. For several quarters now, Mr. Cook has suggested that the company has plenty of new products in the pipeline, and that some could reach the public this fall or next year.

The company could decide to introduce a cheaper iPhone to spur growth in China and other foreign markets, or even a so-called smartwatch that would compete in a brand-new market of wearable computers. Those ideas have long been discussed and considered at the company.

“Competition is heating up,” said Laurence Isaac Balter, chief market strategist at Oracle Investment Research, which has clients that own Apple shares. “They need to come up with some game-changers pretty soon.”

The third quarter is typically a slow time for Apple. That is because the company traditionally introduces a new iPhone model in the fall, so in the summer many consumers are waiting for the next model to be released.

But sales of iPhones were strong. The company sold 31.2 million iPhones, up from 26 million in the same period a year ago. It was the most Apple had ever sold in a third quarter.

Those sales helped generate a net income in the third quarter of $6.9 billion, or $7.47 a share. But that was down from $8.8 billion in the same quarter a year earlier. The company said revenue was roughly flat at $35.3 billion, from $35 billion a year ago.

The net income beat the expectations of Wall Street analysts. They had expected $7.32 a share and revenue of $35 billion, according to a survey by Thomson Reuters.

Analysts closely watch Apple’s gross profit margins. For the third quarter, Apple’s gross margin was 36.9 percent, down from 42.8 percent a year ago. In April, Apple warned that its gross margin would continue to fall in the fiscal third quarter to 36 to 37 percent.

Strong sales of Apple’s cheaper iPads and older iPhones are putting the squeeze on the margins. Apple did not disclose how many of each phone or tablet model it sold. But it said that while its iPhone 5 was the best seller, sales of the previous generations, the iPhone 4 and iPhone 4S, were also strong. Late last year, Apple added the cheaper iPad Mini to its lineup.

Even with the Mini, Apple’s iPad sales were a disappointment, coming in at 14.6 million for the quarter, missing analyst estimates for 16.7 million. Mac sales were also down slightly, at 3.8 million, from 4 million a year ago.

Investors concerned about Apple’s growth have punished the company’s stock. The stock price has fallen by roughly 40 percent from its peak of $705.07 in September. Shares closed at $418.99 on Tuesday, down 1.7 percent, before gaining ground in after-hours trading.

Apple may face a challenge in China, but the tech industry’s other two giants, Microsoft and Google, have their struggles, too. Microsoft posted a profit of almost $5 billion for the quarter, missing expectations of analysts, thanks in part to disappointing sales of its Surface tablet and an industrywide decline in sales of personal computers. Google also posted a profit, of $3.23 billion, but still missed analysts’ expectations as its desktop search business continued to slow and ad prices shrank.

Mr. Cook told investors to stay optimistic about Apple in China. About half a million people there are creating apps for iOS, Apple’s mobile software system for iPhones and iPads, he said. Sales of the iPad in greater China were up 8 percent and up 37 percent in mainland China, he said.

“Over the arc of time, China is a huge opportunity for Apple,” Mr. Cook said, “so I don’t get discouraged over a 90-day kind of cycle with economic factors.”

Article source: http://www.nytimes.com/2013/07/24/technology/apple-tops-expectations-on-strong-iphone-sales.html?partner=rss&emc=rss

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Lei Jun Builds His Xiaomi Empire by Aping Apple and Steve Jobs

June 4, 2013 by Leave a Comment

In a country where products like iPhones are made but rarely invented, Lei Jun — entrepreneur, billionaire and professed Jobs acolyte — is positioning himself and his company as figurative heirs of Mr. Jobs. The Chinese media have nicknamed his company, Xiaomi, the “Apple of the East.”

The title is a stretch, by almost any measure. But Mr. Lei nonetheless is carefully cultivating a Jobsian image here, right down to his jeans and dark shirts. He is also selling millions of mobile phones that look a lot like iPhones. Chinese consumers — and deep-pocketed investors overseas — seem to be believers.

And yet Mr. Lei’s biggest believer may be himself. He bounds onto podiums to introduce new cellphones. He proclaims things that may, to many, sound outlandish. For instance:

“We’re making the mobile phone like the PC, and this is a totally new idea,” Mr. Lei, Xiaomi’s chief executive, said during an interview at the company’s spacious, high-rise headquarters here. “We’re doing things other companies haven’t done before.”

That might come as a surprise to Apple and Samsung Electronics, the twin giants of smartphones. But Xiaomi (pronounced SHAO-mee) did sell $2 billion in handsets in China last year. It is emerging as a force in China, the world’s largest mobile phone market, and it expects its revenue to double this year.

Mr. Lei, for his part, hardly discourages comparisons to Apple and Mr. Jobs. And why would he? Founded by a group of Chinese engineers three years ago, his company sold seven million mobile phones last year by using designs that mimic the look and feel of the iPhone and using marketing that seems right out of Apple’s playbook.

It’s no surprise that entrepreneurs aspire to create a Chinese Apple. Many talk about moving China beyond the dead end of assembling devices for other companies.

So far, however, true innovators have been scarce. At best, they have adapted others’ technology to the Chinese market.

Mr. Lei has attracted believers because no company’s annual revenue has reached the $1 billion mark in China faster than Xiaomi, not even Amazon, which took five years to get there. Xiaomi did it while earning a profit.

Its backers include Qiming Venture Partners, the venture capital arm of Qualcomm and Digital Sky Technologies, an investment firm run by Yuri Milner, an early backer of Facebook, Groupon and Zynga.

Xiaomi, which is privately held, says an initial public offering is years away. But the company is worth $4 billion, according to its latest round of financing last June.

If that valuation holds up, it would make Xiaomi one of China’s most valuable technology companies, behind Alibaba, Baidu, Tencent and Netease.

The company caters to young, college-educated people who want a smartphone but cannot quite afford one, people like Lu Da, a 26-year-old education consultant in Shanghai.

“I chose Xiaomi because it’s good value for the money,” he said.

Skeptics say the company produces low-price iPhone imitations with no significant software or hardware advantages. They also say the company faces stiff challenges from Apple and Samsung, which are in a position to offer low-price smartphones.

The marketing power of bigger local handset makers like Lenovo, Huawei and Taiwan’s HTC, which together recently sold about 25 percent of all smartphones in China, cannot be discounted either.

Whether the company succeeds, its rise has solidified Mr. Lei’s reputation as a start-up wizard. Part entrepreneur and part start-up investor, he spent more than a decade at the Chinese software company Kingsoft and took it public in 2007. (He remains chairman and holds a $300 million stake.)

He also invested in a string of successful software and Internet companies, including YY, an online social platform that went public on the Nasdaq stock exchange in the United States last year and is now worth about $1.5 billion. One of Mr. Lei’s earliest successes came in 2004, when Amazon paid $75 million to acquire his e-commerce company Joyo.com.

“Lei Jun is a phenomenal entrepreneur,” said Kai-Fu Lee, the former Google executive who now runs Innovation Works, a Beijing-based firm that invests in Chinese start-ups. “He’s insightful about user needs and markets, and now he has this incredible desire to create a household brand in technology.”

Mr. Lei has revealed little about his personal life, but he has nearly five million followers on Sina Weibo, a sort of Chinese Twitter, and is treated like a celebrity in technology circles.

He grew up near Wuhan, a gritty industrial city in central China, and studied computer science at Wuhan University. It was during college, in 1987, he says, that he read a book about Mr. Jobs, and decided to emulate him.

“I was greatly influenced by that book, and I wanted to establish a company that was first class,” Mr. Lei said. “So I made a plan to get through college fast.”

Xu Yan contributed research.

Article source: http://www.nytimes.com/2013/06/05/business/global/in-china-an-empire-built-by-aping-apple.html?partner=rss&emc=rss

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State of the Art: T-Mobile Breaks Free of Cellphone Contracts and Penalties

April 3, 2013 by Leave a Comment

Would you speak up if you were overbilled for a meal? Would you complain if you paid for a book from Amazon.com that never arrived?

Or what if you had to keep making monthly mortgage payments even after your loan was fully repaid?

Well, guess what? If you’re like most people, you’re participating in exactly that kind of ripoff right now. It’s the Great Cellphone Subsidy Con.

When you buy a cellphone — an iPhone or Android phone, let’s say — you pay $200. Now, the real price for that sophisticated piece of electronics is around $600. But Verizon, ATT and Sprint are very thoughtful. They subsidize the phone. Your $200 is a down payment. You pay off the remaining $400 over the course of your two-year contract.

It’s just like buying a house or a car: you put some cash down and pay the rest in installments. Right?

Wrong. Here’s the difference: Once you’ve finished paying off your handset, your monthly bill doesn’t go down. You keep reimbursing the cellphone company as though you still owed it. Forever.

And speaking of the two-year contract, why aren’t you outraged about that? What other service in modern life locks you in for two years? Home phone service? Cable TV service? Internet? Magazine subscriptions? Baby sitter? Lawn maintenance? In any other industry, you can switch to a rival if you ever become unhappy. Companies have to work for your loyalty.

But not in the cellphone industry. If you try to leave your cellphone carrier before two years are up, you’re slapped with a penalty of hundreds of dollars.

If you’re not outraged by those ripoffs, maybe it’s because you think you’re helpless. All of the Big Four carriers follow the same rules, so, you know — what are you gonna do?

Last week, the landscape changed. T-Mobile violated the unwritten conspiracy code of cellphone carriers. It admitted that the emperors have no clothes. John J. Legere, T-Mobile’s chief executive, took to the stage not only to expose the usurious schemes, but to announce that it wouldn’t be playing those games anymore.

It was a Steve Jobs moment: when somebody got so fed up with the shoddy way some business is being run (say, phone design or selling music) that he reinvented it, disruptively.

At the new T-Mobile, the Great Cellphone Subsidy Con is over. You can buy your phone outright, if you like — an iPhone 5 is $580, a Samsung Galaxy S III is $550. Or you can treat it like a car or a house: pay $100 for the phone now, and pay off the rest over time, $20 a month.

That may sound like the existing phone subsidy con, but it’s different in a few big ways. You pay only what the phone really costs. You don’t pay interest, and you stop paying when you’ve paid for the phone; in other words, your monthly bill will drop by $20 a month, just as it should. (You can also pay it off sooner, if you like. If you have a good month and want to put, say, $70 toward your phone payoff, that’s fine.)

T-Mobile doesn’t care what phone you use, either; if it works on T-Mobile’s network, you can use it. And why not? Why shouldn’t you buy one phone you really love, and use it freely as you hop from carrier to carrier? Would you buy a car that uses only one brand of gas?

Yet another radical change: There are no more yearly contracts at T-Mobile. You can leave at any time. “If we suck this month, drop us,” said Mr. Legere. “Go somewhere else.”

In the new T-Mobile world, there are only three plans.

All come with unlimited phone calls, unlimited texts, free tethering (which allows your laptop to get online via your phone) and unlimited Internet. The only difference among the plans is how much high-speed wireless Internet you get each month: 500 megabytes ($50 a month), 2 gigabytes ($60) or unlimited ($70).

E-mail: pogue@nytimes.com

Article source: http://www.nytimes.com/2013/04/04/technology/personaltech/t-mobile-breaks-free-of-cellphone-contracts-and-penalties.html?partner=rss&emc=rss

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I.T. Managers Struggle to Contain Corporate Data in the Mobile Age

March 4, 2013 by Leave a Comment

“I’ve got Dropbox, Box, YouSendIt, Teambox, Google Drive,” says Ms. Simons, a 42-year-old executive, naming just five of the many services on her iPhone to store memos, spreadsheets, customer information and soccer schedules.

She and her colleagues at Mashery, a 170-employee company that helps other companies build even more apps, also share corporate data on GroupMe, Evernote, Skype and Google Hangouts. “From the standpoint of corporate I.T.,” she says, “my team is a problem.”

And how. “My peers are killing me,” says John Oberon, Mashery’s information technology chief, who is supposed to keep track of company data. While the company’s most confidential information is encrypted and available only to authorized executives, he said, “there’s only so much you can do to stop people from forwarding an e-mail or storing a document off a phone.”

Chinese hackers are one problem. But so are employees who put company information online with their smartphones and tablets.

Once the data leaves the corporate network, protecting it becomes much harder. Searching for the name of almost any large company, plus the word “confidential,” yields supposedly secret documents that someone has taken from the company network and published.

Netflix, the streaming video service, recently found employees using 496 smartphone apps, primarily for data storage, communications and collaboration. Cisco Systems, which powers much of the Internet with computer networking gear, found several hundred apps, as well as services for shopping and personal scheduling, touching its own network via employees.

“People are going to bring their own devices, their own data, their own software applications, even their own work groups,” drawing off friends and contractors at other companies, said Bill Burns, the director of information technology infrastructure at Netflix. “If you try and implant software that limits an employee’s capabilities, you’re adding a layer of complexity.”

Almost no service is invulnerable. In 2011, Chinese hackers obtained access to hundreds of United States government accounts on Google’s Gmail. Last July, Dropbox, one of the most widely used storage services, reported a loss of data from a large number of customers. Without special instructions, customer sales information in the online service of Salesforce.com can be moved to private accounts at Box. On Saturday, Evernote said user names, e-mail address and encrypted passwords had been stolen in an attack, requiring the passwords of more than 50 million accounts to be reset.

In 2011, Juniper Networks found more than 28,000 samples of mobile malware, mostly for capturing and transferring information like passwords. In January this year, Florida’s Juvenile Justice Department reported that 114,538 youth and employee records had disappeared when a mobile storage device with no password was stolen. The state will pay for a year of credit monitoring for everyone whose data was lost.

Last September, a customer notified Rite Aid that he could obtain other customers’ names, addresses and prescription records from the company’s mobile app. (Rite Aid says the problem has been fixed and that it is not aware of any data loss.)

Even without proof of compromised accounts, such losses can cost a company both money and reputation. According to the Securities and Exchange Commission, unauthorized disclosures of confidential information, whether from unsecured devices, leaky apps or poor cloud security, must be announced publicly if the information could affect a company’s stock price.

Some apps onto which employees may move company information, like Facebook and Amazon, are well known. Others, like Remember the Milk, used for completing tasks, or CloudElephant, a data backup service, are news even to some of the experts in I.T. Skyhigh Networks, which recently started monitoring personal use of apps, has counted more than 1,200 services used in corporate networks from personal devices.

Article source: http://www.nytimes.com/2013/03/04/technology/it-managers-struggle-to-contain-corporate-data-in-the-mobile-age.html?partner=rss&emc=rss

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Media Decoder Blog: The Breakfast Meeting: The Tech Industry Looks to Online Gambling and Business Insider Appoints an Executive Editor

February 18, 2013 by Leave a Comment

Developers across the technology industry are focusing on online gambling as their next billion-dollar business, David Streitfeld reports. Online poker and sports betting are certainly nothing new, but developers from giants like Zynga to specialists like Betable are creating more casual games on which users can bet, from casino staples like slots and roulette to considerably more creative diversions. Developers are currently aiming their products at foreign markets while trying to make inroads in the United States, where online gambling is still largely illegal. Legislation to legalize the practice is slow, facing headwinds from brick-and-mortar casinos and traditional antigambling factions.

Business Insider, the nearly six-year-old online news site, has named Joe Weisenthal, the site’s lead financial blogger, as its executive editor. Mr. Weisenthal, who begins his day at 4 a.m. and maintains a frenetic Twitter presence, was an obvious choice for the position because of his nervous energy and obvious love of his subject matter, Brian Stelter writes. Henry Blodget, who founded the site and remains its editor in chief, said the Business Insider will turn a meaningful profit during this quarter.

One reporter’s decision to authenticate an amateurish iPhone photo of an exploding manhole in Omaha involved shoe leather, not photo analytics or a careful examination of metadata, David Carr writes. Matthew Hansen, a columnist at the Omaha World-Herald, eventually traced the photo to Stephanie Sands, a graduate student the University of Nebraska at Omaha, and got a column out of it. The story may not be a scoop for the ages, but it does reinforce the point that local newspapers still play an interesting role even in the digital age and that reporters generally benefit from turning off their computers and physically exploring a story.

Winners of the 2012 George Polk Awards uncovered corruption at the highest levels of the Chinese government, exposed abuses at New Jersey’s halfway houses and delved deep into the Syrian civil war, Marc Santora reports. The New York Times won three awards and Bloomberg News won two, and other winners included California Watch, CBS News, Frontline, GlobalPost, The Maine Sunday Telegram, McClatchy Newspapers, The Milwaukee Journal Sentinel, The New Yorker and The Washington Post.

The death of a high-profile character on the season finale of “Downton Abbey” may have left fans of the show angry and mourning, but killing off characters generally fails to alienate audiences, Bill Carter writes. (Fans, have no fear of spoilers — specifics will appear in the interview description below.) Important deaths have played a part in shows from “M*A*S*H” to “Dallas,” but now audiences use social media to protest more vociferously than they could in the past, as the creators of shows like “Lost” and even “Boardwalk Empire” have found. Both shows remained popular despite an outpouring of outrage.

Julian Fellowes, the Academy Award-winning screenwriter and the creator and writer of PBS smash “Downton Abbey,” sat down for a spoiler-laden interview with Dave Itzkoff about the comings and goings on “Abbey” and his own possible departure from the show. (Read no further if you’re catching up.) The deaths of Sybil and Matthew, Mr. Fellowes revealed, were not necessarily his choice — the actors playing those characters decided to leave the show to pursue other opportunities. Mr. Fellowes would say little about the next season, except that one of the main themes will be the rebuilding of Mary. He is working on a possible period drama for NBC called “The Gilded Age” which, if it is picked up, would mean he would leave “Abbey.” As much as Mr. Fellowes would like to end the hit on his own terms, “the business of life is learning that you can’t lay down the terms,” he said.

Article source: http://mediadecoder.blogs.nytimes.com/2013/02/18/the-breakfast-meeting-the-tech-industry-looks-to-online-gambling-and-business-insider-appoints-an-executive-editor/?partner=rss&emc=rss

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BlackBerry Maker Unveils Its New Line, and a New Name

January 30, 2013 by Leave a Comment

In an event on Wednesday in New York to unveil a line of new smartphones and new software to operate them, Thorsten Heins, the company’s chief executive, synchronized the names as BlackBerry. But because the new name is now tied to the company’s hopes of restoring its main product’s status as a symbol of executive cool, the change carries some risk.

Frank Boulben, chief marketing officer of BlackBerry, said that Research in Motion had become more confusing than inspired. “We thought this was time to symbolize a real change with a name change,” Mr. Boulben said. “We wanted to have one brand, one premise, to focus all of our marketing efforts.”

Those efforts will reach new heights on Sunday, when BlackBerry will run an ad during the Super Bowl promoting the BlackBerry Z10, a touch-screen phone, and the BlackBerry Q10, a phone that combines a traditional BlackBerry physical keyboard with a smaller touch screen.

The new name was the biggest surprise in Mr. Heins’s presentation. The company began demonstrating the touch-screen phone and operating system in May and also made prototypes available to app developers at that time.

But Mr. Heins kept the focus on the phones. “Today represents a new day in the history of BlackBerry,” he said. “These BlackBerry 10 devices are absolutely the best typing experiences in the industry.”

Analysts, technology reviewers and app developers with advance access to the BlackBerry Z10 and the BlackBerry 10 operating system liked the phone, calling it the company’s first competitive touch-screen phone.

But the new products arrive long after Apple’s iPhone and phones using Google’s Android operating system have come to dominate the smartphone market, so their success is anything but assured. According to IDC, BlackBerry now holds just 4.6 percent of that market, about one-tenth of its peak market share.

Analysts are concerned about how long it will take for the phones to go on sale in the United States. BlackBerry said the Z10 would be available in Canada on Feb. 5 and in the United States in March. Verizon Wireless announced that it would sell the Z10 for $200 with a two-year contract. BlackBerry 10 phones will also be carried by ATT, Sprint and T-Mobile, but those companies said they would announce prices later.

Mr. Heins, who took over as chief executive a year ago, said the company would release the second keyboard model, the Q10, in April. “I think the longer the time between announcement and availability these days, the worse it is,” said Jan Dawson, an analyst with Ovum. “It’s especially sad that it’ll likely be a month from that big Super Bowl spend to when it launches.”

Physically, the Z10 resembles an iPhone 5 with its corners snipped off. Unlike its competitors, the Z10 lacks a button to take users back to a home page and relies entirely on users swiping their fingers across the 4.2-inch screen from different directions to summon features or menus.

While the Z10 lacks a physical keyboard, the main attraction of BlackBerrys for many current users, the company said it had developed software that should alleviate some of the inadequacies of on-screen typing. For instance, it will offer word suggestions that can be selected with a flick of a finger.

BlackBerry said Wednesday that more than 70,000 BlackBerry 10 apps are now available.

BlackBerry 10 server software will allow corporate and government users to divide employees’ BlackBerry 10 phones into separate work and personal spheres and to give I.T. managers complete control over the former.

The company’s former name came to co-founder Mike Lazaridis in 1984 while he was watching a television program about football players using ballet lessons to improve their speed. He saw the words “poetry in motion” on the TV screen and, according to Rod McQueen, author of “BlackBerry: The Inside Story of Research in Motion,” Mr. Lazaridis said, “I knew what to do.”

BlackBerry joins a long list of companies that have changed their names to reflect a new beginning. Some of the changes, such as Apple’s decision to drop “Computer” from its name in 2007, have been subtle. Apple made that move to reflect its expansion into hand-held devices.

Other changes have been more dramatic. In 2003 Philip Morris, the cigarette and food giant, became the Altria Group to distance itself from the negative aura surrounding smoking. Interstate Bakeries adopted the name of its main cupcake product, Hostess Brands.

In 1998, Research in Motion sought professional advice and hired Lexicon Branding — which created Pentium for Intel and PowerBook for Apple — to create the BlackBerry name.

BlackBerry’s old name isn’t the only thing disappearing. Nick Manning, a spokesman for the company, said that BrickBreaker, a BlackBerry game with a cult following on Wall Street, would not be included on the new phones.

William Alden contributed reporting.

This article has been revised to reflect the following correction:

Correction: January 30, 2013

Because of an editing error, an earlier version of this article referred imprecisely to the plans of major American carriers to offer the two new BlackBerry models. While Verizon Wireless, ATT, Sprint and T-Mobile will all carry new BlackBerrys, not all will offer the Z10; Sprint has so far announced plans only to offer the other model, the Q10.

Article source: http://www.nytimes.com/2013/01/31/technology/blackberry-maker-unveils-its-new-line.html?partner=rss&emc=rss

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State of the Art: The BlackBerry, Rebuilt, Lives to Fight Another Day

January 30, 2013 by Leave a Comment

This apology is for the bespectacled student at my talk in Cleveland, and the lady in the red dress in Florida, and anyone else who’s recently asked me about the future of the BlackBerry. I told all of them the same thing: that it’s doomed.

That wasn’t an outrageous opinion. Once dominant, the BlackBerry has slipped to a single-digit percentage of the smartphone market. Its stock has crashed almost 90 percent from its 2008 peak. In the last two years, the BlackBerry’s maker, Research in Motion, released a disastrous tablet, laid off thousands of employees and fired its C.E.O.’s. The whole operation seemed to be one gnat-sneeze away from total collapse.

The company — which changed its name on Wednesday to simply BlackBerry — kept saying that it had a miraculous new BlackBerry in the wings with a new operating system called BlackBerry 10. But it was delayed and delayed and delayed. Nobody believed anything the company said anymore. Besides — even if there were some great phone, what prayer did BlackBerry have of catching up to the iPhone and Android phones now? Even Microsoft, with its slick, quick Windows Phone, hasn’t managed that trick.

Well, BlackBerry’s Hail Mary pass, its bet-the-farm phone, is finally here. It’s the BlackBerry Z10, and guess what? It’s lovely, fast and efficient, bristling with fresh, useful ideas.

And here’s the shocker — it’s complete. The iPhone, Android and Windows Phone all entered life missing important features. Not this one; BlackBerry couldn’t risk building a lifeboat with leaks. So it’s all here: a well-stocked app store, a music and movie store, Mac and Windows software for loading files, speech recognition, turn-by-turn navigation, parental controls, copy and paste, Find My Phone (with remote-control lock and erase) and on and on.

The hardware is all here, too. The BlackBerry’s 4.2-inch screen is even sharper than the iPhone’s vaunted Retina display (356 pixels per inch versus 326). Both front and back cameras can film in high definition (1080p back, 720p front).

The thin, sleek, black BlackBerry has 16 gigabytes of storage, plus a memory card slot for expansion. Its textured back panel pops off easily so that you can swap batteries. It will be available from all four major carriers — Verizon, ATT, Sprint and T-Mobile — and Verizon said it would charge $200 with a two-year contract.

Some of BlackBerry 10’s ideas are truly ingenious. A subtle light blinks above the screen to indicate that something — a text, an e-mail message, voice mail, a Facebook post — is waiting for you. Without even pressing a physical button, you swipe up the screen; the Lock screen lifts like a drape as you slide your thumb, revealing what’s underneath. It’s fast and cool.

There are no individual app icons for Messages or Mail. Instead, all communication channels (including Facebook, Twitter and phone calls) are listed in the Hub — a master in-box list that appears at the left edge when you swipe inward. Each reveals how many new messages await and offers a one-tap jump into the corresponding app. It’s a one-stop command center that makes eminent sense.

The BlackBerry’s big selling point has always been its physical keyboard. The company says it will, in fact, sell a model with physical keys (and a smaller screen) called the Q10.

But you might not need it. On the all-touch-screen model, BlackBerry has come up with a mind-bogglingly clever typing system. Stay with me here:

As you type a word, tiny, complete words appear over certain on-screen keys — guesses as to the word you’re most likely to want. If you’ve typed “made of sil,” for example, the word “silicone” appears over the letter I key, “silver” over the V, and “silk” over the K. You can fling one of these words into your text by flicking upward from the key — or ignore it and keep typing.

How well does it work? In this passage, the only letters I actually had to type are shown in bold. The BlackBerry proposed the rest: “I’m going to have to cancel for tonight. There is a really good episode of Dancing With the Stars on.”

I type 20 characters; it typed 61 for me.

But wait, there’s more. The more you use the BlackBerry, the more it learns your way of writing. When I tried that same passage later, I typed only one letter: the I in “I’m.” Thereafter, the phone predicted each successive word in those sentences, requiring no letter-key presses at all. Freaky and brilliant and very, very fast.

There’s speech recognition, too. Hold in the Play/Pause key to get the Z10’s Siri-like assistant. Siri-like in concept, that is — you can say “send an e-mail to Harvey Smith,” “schedule an appointment” and a few other things — but it’s slower, less accurate and far narrower in scope. You can also speak to type, but the accuracy is so bad, you won’t use it.

This article has been revised to reflect the following correction:

Correction: January 30, 2013

An earlier version of this column reported incorrect information on the amount that cellphone carriers would charge for the new BlackBerry Z10. ATT, Sprint and T-Mobile said they would announce pricing information in the future; they have not announced they will charge $200 with a two-year contract (as Verizon has).    

Article source: http://www.nytimes.com/2013/01/31/technology/the-blackberry-refreshed-lives-to-fight-another-day.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Digital Domain: Republic Wireless’s Plan Melds Wi-Fi and Network Calling

January 26, 2013 by Leave a Comment

When I first saw this offer from Republic Wireless, I rubbed my eyes and looked for an asterisk leading to fine print that detailed a huge catch. But Republic, a division of a telecom company called Bandwidth.com, delivers exactly what it advertises. It can do so because the handset technology is a curious hybrid: it uses Wi-Fi when the customer is in a Wi-Fi area and Sprint Nextel’s 3G network when it is not.

The concept brings together the best of two worlds: the low cost of voice calls carried over the Internet and the convenience of making calls to any phone number using a major carrier’s cellular network when Wi-Fi isn’t available.

In my own case, on a typical day, I use my mobile phone mostly when I’m not actually mobile: I’m either at home or at work, perfectly positioned to use Wi-Fi at both locations. And I don’t even use the phone as a phone all that much. I use it mainly for e-mail and texts, neither of which requires enough bandwidth to benefit from the power of the fastest data networks.

If you walk into a Verizon Wireless store and buy an iPhone 5, you’ll pay $60 or more a month for an unlimited talk and texting plan, depending on the data allocation for Internet use that you select to go with it. Some of that monthly charge goes toward repaying the carrier for the discounted price that makes a $649 iPhone seem as if it costs only $200. But most of the charge is for gaining access to the carrier’s wireless network.

“We were looking at a mobile industry that had begun to charge extraordinary amounts of money, and we saw an industry opportunity that everybody else was missing: Wi-Fi is the new mobile,” says David Morken, co-founder and chief executive of Bandwidth, based in Raleigh, N.C.

Smartphone apps that offer voice calls using data plans, not minutes allocated for calls, are plentiful. Just last month, Facebook quietly added an option that lets users of the iPhone version of Facebook Messenger place free voice calls to other Messenger users. But using those apps to make a call means the recipient has to run the same app, an irksome requirement that never comes up when using phones alone.

Republic buys access to Sprint’s network on a wholesale basis for calls made outside of Wi-Fi areas. Its business model assumes, however, that Wi-Fi carries the load a majority of the time its phones are used. The company says that its service, even at $19 a month, is a profitable operation on a per-customer basis.

“We don’t have to force people, or even ask people, how to behave,” Mr. Morken says. “Over 60 percent of the time that the phone is being used, on average, our users are using Wi-Fi and that number is only going up.”

Last month, I tested a Republic handset, a Motorola Defy XT. It’s a light smartphone with a small screen, acceptable sound quality and great battery life.

Republic’s Web site gently warns against acting like a “data hog” and encourages its customers to “play nice and try to use Wi-Fi as much as you can.” But scolding isn’t needed: Wi-Fi is faster than 3G, so users have an incentive to opt for Wi-Fi wherever it is available.

The Motorola handset is the only one now offered by Republic, and it costs $259. The phone runs an older version of Android, and it has some first-generation glitches, like losing a connection when a caller starts out on a Wi-Fi network and then leaves the coverage area. (With a click, the call is resumed using Sprint’s cellular network.)

Today most Wi-Fi access requires a logon. But that shouldn’t prove a great inconvenience: you can simply set up the phone once with Wi-Fi at home, then once more at the office. At other locations, users can ignore Wi-Fi availability and use 3G instead.

Mr. Morken says a solution to the Wi-Fi-to-cellular handoff problem has been worked out in the company’s lab, and should be available midyear. Later this year, he also expects to offer more handset models, including one at the high end; he says they will run the latest version of Android.

Matt Carter, president of the Global Wholesale and Emerging Solutions division at Sprint, asserted that the company was happy to serve as Republic’s supplier. When I asked whether Republic’s Wi-Fi-centric model, with its drastically lower price to the consumer, would pose a serious threat to the incumbent carriers, including Sprint, he said, “If the world operated based on just economic decisions, people wouldn’t go buy the most expensive cars on the planet, right?”

Mr. Carter listed reasons that most consumers would prefer the wireless service obtained directly from a major carrier: a wider range of devices and the convenience of placing a call without having to tinker with Wi-Fi setup.

Republic “will resonate with a sliver of the marketplace,” Mr. Carter said. He compared wireless carriers to the major airline carriers, which still control a majority of the market despite low-priced upstarts like JetBlue or Southwest, which he described as appealing only to “a certain segment of the population.”

Philip Cusick, a J.P. Morgan analyst who covers telecommunications, says he doesn’t expect a major shift of customers to Republic Wireless. The price difference isn’t as great as it first appears, he says, when one considers that 80 percent of customers of ATT and Verizon are on family or employer-related discount plans.

MR. MORKEN of Bandwidth.com says he knows that his company must lower the price of its handset — the industry rule-of-thumb for no-contract wireless services is that a simple handset cannot cost more than $99 and a smartphone, $149. But if Republic can offer me an Android phone with a generously sized screen for a reasonable price, I don’t see why, with Wi-Fi available at work and home, I should continue to pay an expensive-sports-car price for my wireless service.

“There’s a reason why the carriers around the world don’t want you using Wi-Fi for voice and text,” Mr. Morken says. “You will soon realize you shouldn’t have to pay what you’re paying today.”

Randall Stross is an author based in Silicon Valley and a professor of business at San Jose State University. E-mail: stross@nytimes.com.

Article source: http://www.nytimes.com/2013/01/27/business/republic-wirelesss-plan-melds-wi-fi-and-network-calling.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Trade Gap Grew in November

January 11, 2013 by Leave a Comment

WASHINGTON — The trade deficit in the United States expanded in November to its widest point in seven months, the Commerce Department said Friday, driven by a surge in imports that outpaced only modest growth in exports.

The trade gap widened 15.8 percent to $48.7 billion in November from October, the report said.

Imports grew 3.8 percent, to $231.3 billion, led by gains in shipments of cellphones, including Apple’s new iPhone.

Exports increased only 1 percent, to $182.6 billion. And exports to Europe fell 1.3 percent, further evidence of the prolonged debt crisis that has gripped the region.

A wider trade deficit acts as a drag on American growth. It typically means the United States is earning less on overseas sales while spending more on foreign products.

Faster growth in exports helped the economy grow from July through September at an annual rate of 3.1 percent. Most economists estimate growth has slowed in the October-December quarter to an annual rate of less than 2 percent, in part because of weaker exports.

Through the first 11 months of 2012, the trade deficit ran at an annual rate of $546.6 billion, roughly 2.4 percent lower than the 2011 deficit.

Imports of consumer goods grew to $45.3 billion in November, a monthly record. Much of the growth was from cellphones and other household electronics products. Oil imports dropped 2.5 percent, reflecting a fall in prices and lower volume.

Imports of foreign-made autos and auto parts rose a sizable $1.5 billion, to $25.6 billion November, probably reflecting catch-up shipments following port disruptions in October caused by Hurricane Sandy.

The American trade deficit with China, the largest with any country, totaled $29 billion in November. That was down slightly from the monthly record of $29.5 billion in October. But the trade gap with China was still on track to set a new annual record in 2012.

In its latest outlook, a forecasting panel for the National Association for Business Economics predicted that the trade deficit for 2013 will total $533 billion, a slight improvement from the $540 billion deficit they expect when the trade numbers are totaled up for all of 2012.

Article source: http://www.nytimes.com/2013/01/12/business/economy/trade-gap-grew-in-november.html?partner=rss&emc=rss

Filed Under: Economy News Tagged With: , ,
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