Palm Flounders

Smartphone and PDA maker Palm is not operating on all cylinders like its new CEO Jon Rubenstein was accustomed to when he was at Apple. This week the company said it was restructuring and cutting 10% of its workforce. Many of the terminations are expected to be executive types that will be replaced by engineers.

Among the company’s woes:

– Apple’s iPhone and a number of iPhone “wannabes” have gobbled up the PDA market.

– Palm says it will lose money in the current quarter.

– The Linux-based replacement for its five-year-old operating system – Palm OS 5 Garnet – probably won’t be finished until 2009.

– The company’s planned Foleo “smartphone companion” was canceled.

– Warranty costs on its new Centro and 500v smartphone for consumers has been higher than expected.

– Its share price is down some 70% over the last year.

Other than that, everything’s fine. Roger McNamee, who joined Palm’s board of directors with Rubenstein, sees clear skies ahead. “You won’t even see it in the numbers for awhile, but the company is off to a great start,” he said.

Apple Looks to Bring iPhone to Japan

DoCoMo and Softbank, two major wireless carriers in Japan, are candidates for exclusivity with the iPhone, reported Reuters. Japan is not a market for Apple to take lightly, however, as the iPhone will vie with some of the world’s most advanced phones.

This raises the question of whether the iPhone will even impact the mobile phone market in Japan. There are phones there that allow users to store credit card and banking information in their phones, which can then be used to make purchases by swiping the phone in front of sensors at cash registers.

DoCoMo is Japan’s top carrier, while Softbank sits at number three. Apple is in talks with both of them, but like the rest of the major carriers that have been candidates for the iPhone, both companies are reluctant to hand over such a large share of subscriber revenue that Apple is demanding.

And, of course, there comes the issue of Internet speed. It’s highly unlikely that Japan will accept the EDGE data network on the iPhone. In fact, DoCoMo only supports 3G, meaning it is almost certain the world will see a 3G iPhone in the coming months.

Steve Jobs met DoCoMo president Masao Nakamura in San Francisco earlier this month, and they discussed the terms of a deal should DoCoMo, which controls over half of Japan’s mobile market, become exclusive carrier partner for the iPhone.

“The negotiations are not going smoothly, as Apple’s conditions are extremely hard to meet,” a source told Reuters. “The ball is in Apple’s court right now.”

Apple’s talks with Softbank, which bought Vodafone’s local unit in 2006, could be a negotiating tool to win a favorable deal with DoCoMo, Reuters reported. Apparently, Softbank is not a true prospect for Apple, but rather a decoy to speed up negotiations with DoCoMo.

Thus far, Apple has chosen France Telecom’s Orange, Deutsche Telekom’s T-Mobile and Telefonica-owned O2 in Britain to bring the iPhone overseas.

Intel Launching Multi-Network Chips, Solid State Drives, Low-Power Chips for Mobile Devices

Intel is following hard on the heels of Qualcomm’s Gobi software defined radio (SDR) platform by unveiling a new test chip for mobile devices, according to a report in this week’s Wireless Watch. Intel is also promising an upgrade to its existing dual-core mobile chips plus other innovations, such as solid state drives (SSD), which will be geared to portable and mobile devices.

Intel’s test chip for SDR currently handles Wi-Fi, WiMAX and DVB-H mobile TV on one chip. Gobi, which Qualcomm previously launched, supports the mobile phone networks W-CDMA and EV-DO plus Wi-Fi, with the potential to add LTE, WiMAX and mobile TV in the future.

Intel’s solid state drive for handheld devices is the thumbnail-sized Z-P140, available in 2GB or 4GB models and weighing a mere 0.6 grams. Using an Intel controller, up to four of the devices can be linked for a maximum of 16GB. The drives can be used in any device that supports a PATA (parallel advanced technology attachment) interface.

Intel plans to release SSDs in mid-2008 that could be used as hard disk drive replacements in notebooks. The drives would be available in 1.8-inch or 2.5-inch models.

For the ultra mobile PC market, Intel said it is on track to deliver its first generation low power platform, codenamed Menlow, in the first half of next year. This will contain a microprocessor codenamed Silverthorne and a chipset called Poulsbo.

Intel still plans to ship next year an integrated Wi-Fi/WiMAX chipset that will be available as an option for its next-generation Centrino platform, codenamed Montevina.

Firefly Mobile Plays Nice With Kidz Bop

Firefly Mobile, a US company that specializes in developing and manufacturing mobile products for children and teenagers, has signed an agreement with Kidz Bop LLC, producer of the “Kidz Bop” children’s audio series. The two are partnering to enable kids to download Kidz Bop content like videos, ringtones and wallpapers to Firefly Mobile’s newest phone, the flyPhone.

“The new flyPhone gives kids and tweens another way to enjoy mobile entertainment created especially for them…parents can be assured that their kids and tweens are finding age appropriate material at the flyStore,” said Patrick Marry, CEO of Firefly Mobile.

The flyPhone features a MP3 player, video player, camera, games, customizable ringtones and wallpaper that are age-appropriate for their target market. The Kidz Bop content for flyPhones will be made available through Firefly’s online store “flyStore.”

Kidz Bop has been the top children’s music series from 2002 to 2006, according to Billboard. Kidz Bop, which has sold 10 million CDs over the past six years, is a compilation of current popular songs sung by kids in order to create a child-friendly tone.

Bloove Brings Your Mobile to Your PC, a Phone Away from Phone

Bloove, which launched its public beta in October, has released the newest version of its self-titled software, a Web service that allows mobile phone users to access their phone’s services from a computer. This program can perform a variety of mobile functions including managing contacts and speed dials, SMS sending and placing phone calls.

The company looks to capitalize on a forgotten corner of mobile market, the corner that tends to forget its phone at home or the office. It works with a growing number of Nokia and Sony Ericsson mobiles, so all users need to do is sign up, download the application to their phones and then start dialing calls and sending text messages on their phone’s behalf. Text messages can be sent from a computer without the phone being present.

Currently, Bloove can only dial the phone for users, who then must then use their phones like normal. In the future, it plans to release an option for paid subscribers to place a VoIP call, which will not require the phone itself, but users will need headphones and a microphone for their PC.

Bloove connects to a phone wirelessly, so no cables or computer software are required, just the application on the phone. Users can even edit or create an address book if they currently don’t have one or their computer has a more complete one.

A nice feature of the newest version is that users are given access to their Inbox, Drafts, Sent and other folders on their mobile phone. They can browse these files normally and through a contact history. If a user has his phone with him, he can save messages to Bloove’s server and then remove them from his phone without losing them. All the information stored on a Bloove account can also be transferred to a new phone if the user’s is ever lost, stolen or the screen cracks and all he can see is black.

Service membership is free in the current version, and allows each user to attach one phone to the account and store 15 contacts and 100 messages. All other features available have no such limitations. Bloove currently has a little over 1,000 users and claims that these users have “saved their 100,000+ contacts.”

Sony Teams with European Music Services ‘Open’ Walkmans

As it promised to do back in August when it opened the Walkman platform, Sony has partnered with a bunch of European music download services to give users “an even greater choice than ever before for downloading and managing their music collections.”

At IFA in Germany this past summer, the Japanese giant unveiled a new line of Walkman digital media players that, in a first for the company, had open platform support, including Windows Media technology. The NWZ-A810, NWZ-S610 and NWZ-S510 series are the first from Sony since it promised to ditch the proprietary ATRAC format, which meant that consumers had to purchase their tunes from the now-defunct Sony Connect download store, in favor of openness and Microsoft PlaysForSure certification.

The five new strategic music service partnerships, one in each of five European countries, give consumers all sorts of benefits for signing up.

Sony’s new music download partners include HMV (UK), FNAC Music (France), Musicload (Germany), Terra Pixbox (Spain) and Planet Music (the Netherlands).

Walkman user benefits from the services range from a three-month free trial for “unlimited” music subscription and album downloads to free new tracks every week, depending on the country of residence and the purchase of a qualifying Walkman. Registered customers on partner Web sites will also be able to enter to win free Walkman products and exclusive limited-edition Walkman merchandise.

All of the partners are preparing “an exciting range of new customer-focused offers” for 2008, Sony said.

“These exclusive partnerships confirm Sony’s commitment to supporting an open standard with Windows Media Technology,” said Jeffry van Ede, VP of Sony audio marketing, Europe. “We are continuously striving to provide our customers with greater choice and flexibility for managing their digital music content. We are confident that these audio partnerships benefit our customers’ desire for an open standard and further enhance the versatility of our Walkman products.”

The “open” Walkmans support non-secure Windows Media Audio (WMA), AAC and MP3 as well as the secure WMA Digital Rights Management 10. The NWZ-A810 and NWZ-S610 Series also support the AVC (H.264/AVC) Baseline and MPEG-4 video codecs.

Connectivity Will Drive CE Sales

Sales of networked consumer electronics devices will grow from 9.8 million units this year to an impressive 71 million in 2011, according to Parks Associates. The market researcher’s new white paper, “Consumer Technology: Key Trends and Outlook for 2008” also reports that the way in which consumers create and share content, enjoy entertainment applications, communicate and enhance their productivity both at home and on-the-go is evolving as digital technologies become more mainstream.

“As 2008 kicks off, multiple players in service delivery, software development and platform design are poised to address the growing consumer appetite for lifestyle enhancement solutions and productivity applications – from broadband to portable music and emerging television services,” said Parks Associates VP and principal analyst Kurt Scherf.

Home networking will become more commonplace in the CE space in 2008, Parks forecasts. Additionally, it expects connectivity to be the most sought-after feature in new products and services-driven applications. According to the report, nearly 92 million households will subscribe to a digital video service in 2011, up from 70 million in 2007. It also predicts that revenues for online video will hit $9.7 million in 2011, up from $1.4 billion this year.

“Home networking media and connectivity software have matured, so device connectivity has become a true differentiator and value-added feature,” Scherf said. “Distributed media and communications features will entice new market entrants, including the consumer electronics industry and bundled services providers.”

The white paper is available as a free download at http://www.parksassociates.com.

New Captain on Deck at Sony Ericsson

In a Wireless Watch report on a new CEO taking over Sony Ericsson, Caroline Gabriel says: Sony Ericsson’s new man, 64-year-old Hideki Komiyama, has a hard act to follow, taking the reins from Miles Flint last month.

Like Nokia, Flint focused on branding, and made Sony Ericsson the most successful handset maker on this front by leveraging the Sony Walkman and Cybershot tags. His successor aims to make even greater capital out of those brands, and possibly also Sony’s PlayStation Portable (PSP) gaming device, while also copying Nokia’s shift into multimedia Web services.

Komiyama, a Sony veteran, faces “a daunting challenge,” as consultancy CCS Insight puts it. The area of the market where the company has thrived – multimedia smartphones – is now one of the most competitive, and the move to low-end models remains high risk for a company that, despite its 35% increase in earnings in the first three quarters of this year, cannot leverage the economies of scale or the efficiencies of Nokia.

Komiyama’s initial decisions will focus around software and services, as he bids for an influential position in the evolution of mobile Internet platforms. The Web services strategy has been launched around the PlayNow music system, and will make strong use of the Sony brands, but needs further refining in functionality if it is to compete with Nokia Ovi. The new CEO will also need to streamline the operating system policy – it uses Symbian OS in only 18% of phones, in contrast with Nokia’s 53%, which gives the latter an advantage in efficiency, developer support and time to market. However, Sony Ericsson also needs to make decisions about what to do about Linux and other emerging factors like Google Android, while also chasing a more prominent position for its UIQ user interface, which it shares in a joint venture with Motorola, and which needs to be more aggressively enhanced and marketed to operators and licensees, if it is to make an impact on the ambitions of Nokia Series 60 to be a de facto standard.

The New York Times weighs in on open networks

Interesting article online in the New York Times today about Verizon’s announcement concerning the opening of their network to 3rd party devices and development.

See the full article here.

Nokia Accelerates Change of Pace in Mobile Industry

-Bridges the Divide between Mobility and Internet
-New Music Service to Make Applesauce of iTunes

After the unfolding of Nokia World 2007, held this week in Amsterdam, it’s apparent that the Finnish handset maker is prepping to become a key player in the overall mobile market. “Consider all the new words that became part of the industry lexicon in the past 12 months: N95, iPhone, Android, Ovi. They are words that represent new directions and new competition in our industry, which is ultimately great for the consumer,” said Nokia president and CEO Olli-Pekka Kallasvuo in his keynote to a crowd of approximately 2,700. “We are at the dawn of a new era in mobile communications driven by the rapid convergence of the Internet and mobility, and Nokia is setting the pace of change.”

The conference featured a host of announcements that included the introduction of its new Comes with Music service, the expansion of additional services for its Ovi portal, the launching of the eco-friendly Evolve handset and a partnership with Telecom Italia. Overall, the event served as a means for Nokia to announce its vision for the mobile industry – and to warn those companies who stand in its peripheral vision.

Comes with Music Hopes to Make Applesauce of iTunes
At the event, Nokia launched Comes with Music, an app that offers a selection of unlimited music for a year from a variety of current and past artists. Comes with Music is pre-loaded onto newly purchased devices and is a result of a partnership with Universal Music Group International, Nokia is currently in talks with the remaining major labels about getting them to participate. After the 12-month period expires, users can opt to purchase a subscription to the service. Interestingly, and unlike any other subscription service, listeners can still keep the tracks that they’ve downloaded regardless of whether or not they pay for the service.

“We set out to create the music experience that people are telling us they are looking for – all the music they want in the form of unlimited downloads to their mobile device and PC. Even if you listened to music 24 hours a day, seven days a week, you would still only scratch the surface of the music that we’re making available,” said Anssi Vanjoki, executive VP and general manager of multimedia for Nokia. “Comes with Music fulfils our dream to give consumers all the music they want, wherever they want it, while rewarding the artists who create it.”

Additionally, Nokia will expand its Ovi portal to PCs and the Internet. Previously, Ovi’s features, which include music access, games, social networking, content sharing and mapping, were only accessible through an on-device WAP portal. Now, users will be able to access Ovi through personalized mobile and PC Web-based portals, or “dashboards,” which will offer integrated access features like contact list synchronization.

Mike Grant, head of broadband and media at telecommunications research company Analysis Mason Group and a conference attendee, said the implications of Nokia’s launchings are extremely important to operators. “Should Nokia successfully execute these developments and attract even a small proportion of their current one billion customers to this service, both operators and other OEMs will have a mountain to climb to offer the same compelling proposition. Nokia is laying down the gauntlet, saying effectively that Apple have got it right, and they intend to compete for consumer loyalty across mobile, PC and the Internet. Moreover, while Apple have a strong presence in the US, Nokia’s global market reach and scale make it a powerful competitor to all in this space,” said Grant.

Partnering with Carriers
Nokia also announced that it will be partnering with Telecom Italia to provide mobile services to customers by enabling Ovi and additional Telecom Italia services on select Nokia handsets. Nokia’s N95 8GB and N81 will be the first models whose menus will be customized to provide access to both services. “Ease of use has always been at heart of Nokia devices and this collaboration is an important step in creating the same for Internet services,” said Jyrki Salminen, senior VP of Nokia multimedia. “Nokia devices and services are based on open standards making it easy for us to work with forward thinking operators such as Telecom Italia to provide consumers with a choice about which internet services they want to access from their mobile device.”

Last month, Nokia and Vodafone collaborated to integrate a number of Vodafone’s Internet and software services with Nokia’s Ovi portal. According to Faultline, the Telecom Italia deal and a previous partnership with Vodafone Italy enable Nokia to access more than 80% of the Italian market as well as significant sections of Western Europe.

Bridging the Mobility-Internet Divide
The event also announced the acquisition of Avvenu, a US-based start-up whose services let consumers access and share files stored on their PC on their handset over the Internet.

Finally, Nokia addressed its commitment to environmental issues by launching the Evolve 3110, a candybar-style handset composed of bio-covers made from approximately 50% renewable materials. The device’s energy-efficient charger uses 94% less energy than the Energy Star requirements and comes in a small, 60% recycled content package.

Overall, companies like Apple need to heed Nokia’s battle cry to the mobile industry. Even though Apple has seen success with its products like iTunes and the iPhone, customers still aren’t completely satisfied with their overall mobile experience, one which Nokia hopes to rectify – and take some additional mindshare away from Apple while it’s at it. “Nokia has stepped out ahead of the rest of the industry in bridging the divide between mobility and the Internet. Successful execution appears to be their one remaining challenge,” said Analysis Mason’s Grant. “We shall watch the company’s progress in 2008 with interest.”