Sprint CEO Talks About iPhone Decision, Other Challenges

Story first reported from USA Today

OVERLAND PARK, Kan. – By his own admission, Sprint CEO Dan Hesse isn't ready to hang out a "Mission Accomplished" sign yet. The No. 3 wireless company is in the midst of a turnaround. But, he says, "we're showing good success" in retaining customers, improvements in customer service and other metrics. Sprint last month reported a second-quarter loss of $1.37 billion on revenue of $8.84 billion. "It's blocking and tackling, quarter after quarter, year after year." Hesse hosted a group of journalists at Sprint headquarters this week. Here are highlights of the conversation, edited for space and clarity:

Q: What about the decision to sell the Apple iPhone even though Sprint had to spend billions to get that opportunity?

A: I've said everything has to make sense economically. But we knew our customers wanted the ability to choose the iPhone. We clearly looked at economics both short-term and long-term. Over time it starts to be cash-flow positive. We saw no reason to bet against Apple. You really don't want to be on the outside of that. From a brand perspective, you like having your brand associated with very strong great brands, and nobody can debate just what a great brand Apple has. We thought the benefits greatly outweighed the risks.

Q: You were a vocal opponent of the AT&T/T-Mobile merger. Are you satisfied you can compete now that the merger did not go through?

A: We're certainly working very hard. There's no question that the industry does have an issue with the size of the duopoly of AT&T and Verizon. I believe that over time we'll see more consolidation in the industry outside of the big two, because the gap in size between two and three is so enormous. Consolidation is healthy for the industry as long as it's not AT&T and Verizon getting larger.

Q: What are your thoughts on Google's acquisition of Motorola Mobility?

A: There'll be protections between the Android organization and Motorola. I can't say what will happen internally. But I honestly believe they will try very hard to keep Android's independence. We're actually looking forward to seeing what new devices the new Motorola will bring to the market.

Q: How are you positioning the Virgin and Boost brands, which offer prepaid wireless service?

A: Right now, generally the Boost brand is more kind of "talk and text." Virgin is focused a bit more on data and text. Boost tends to be a bit more urban; Virgin more suburban. Those are the basic differences.

Q: How does the growth of traditional wireless plans with contracts (postpaid) compare with the prepaid business?

A: We see increasingly that prepaid will be an opportunity for value and for customers who don't necessarily want to be tied into a contract for a couple of years. The iPhone on Virgin is an example of what we think is possible.

The (traditional wireless) business is the largest segment of the industry and, historically, it has been the most profitable. The Sprint brand is basically our (vehicle) to go after that industry. The prepaid business is growing more rapidly than the postpaid business. We doubled-down on the prepaid business a few years ago when we acquired Virgin. And we are expanding our offerings. As hockey great Wayne Gretzky reportedly once said, skate not to where the puck is but where it's going. The puck is going more to prepaid.

Q: Do you see a day when the typical household has multiple devices on the Sprint network?

A: As we look at growing overall revenue in the industry, what we're counting on is many more devices than one. We used to think five years ago that growth in the wireless industry is dead when you get to 100% penetration. Now we see numbers much north of that as customers have a variety of devices — wireless chips in your shirts, in your car, in many other areas. It's just another opportunity for us to increase revenues as an industry. We hope that over time there are a number of devices that are enabled by the Sprint platform.

Q: Will Sprint have an iPad, especially as you move to faster LTE networks?

A: I can't comment on that. But it's a very good question.

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AT&T, Sprint, Verizon Said to Plan Samsung Tablet to Rival IPad

Bloomberg

 

AT&T Inc., Sprint Nextel Corp. and Verizon Wireless plan to sell a tablet computer from Samsung Electronics Co. to rival the iPad, said three people familiar with the matter.

AT&T and Sprint plan to offer the device, called the Galaxy Tab, for less than Samsung’s wholesale price by bundling it with monthly wireless service contracts, two people said. Samsung, the world’s second-largest maker of mobile phones, is scheduled to announce the carriers’ support at a Sept. 16 event in New York, said the people said, who asked not to be named because the plans aren’t public.

Subsidies may help tablets such as the Galaxy stand out against Apple Inc.’s iPad, which starts at $499. Verizon Wireless hasn’t yet decided on such subsidies, said one person.

“The carrier-subsidized model would be very interesting,” said Ashok Kumar, an analyst at Rodman & Renshaw. “The market is going to be very crowded.”

Several companies including Hewlett-Packard Co. and LG Electronics Inc. are introducing tablet computers following the success of the iPad, a 9.7-inch touch-screen that acts as an e- reader, media player, word processor and calendar. The PCs access the Web through data plan contracts that represent the fastest-growing source of sales for the carriers.

Ashley Zandy, an AT&T spokeswoman; Cristi Allen, a Sprint spokeswoman; Jeffrey Nelson, a Verizon Wireless spokesman, and Ashley Lane, spokeswoman for Suwon, South Korea-based Samsung, declined to comment.

First in Europe

The Galaxy tablet goes on sale in Europe in October, before the U.S., and the company has plans for more of the devices next year, WP Hong, Samsung’s head of global planning, said at a electronics conference in Berlin this month.

The device, based on Google Inc.’s Android operating system, has a 7-inch screen and is able to play high-definition videos. The Galaxy has a global-positioning system, cameras on each side for video calling and acts as a mobile phone.

Research In Motion Ltd., the maker of BlackBerry smartphones, plans to introduce a tablet in November, people familiar with the plans have said. Motorola Inc., which makes Android-based smartphones, is also planning a tablet device for the holiday season, people familiar with the matter had said.

“I don’t think any of them are going to seriously challenge Apple for the lead over the holiday season at this point,” said Rhoda Alexander, an analyst at researcher iSuppli. “From a manufacturing standpoint, it would be a huge hurdle unless they’re going to start out of the gate at the volume that Apple is doing -- which would be risky at best.”

Apple, based in Cupertino, California, sold more than 3 million iPads in the first 80 days after it went on sale. To compete, tablet makers will have to offer something unique that the iPad doesn’t have, or cut their prices, Alexander said in an interview.

Consumers Sue Apple, AT&T over iPhone Antenna Problems

Reuters

"Avoid holding it in that way."

Apple Inc has been sued by iPhone customers in at least three complaints related to antenna problems on its newest model.

Apple launched the iPhone 4 last week to a huge groundswell of demand. But the launch was also plagued by complaints from some customers about poor call reception on the device when they held it in a certain way.

The problems have been a hot topic on the Internet, but it is unclear how many people have been affected. The issue does not seem to have hurt iPhone sales so far. Apple sold 1.7 million new iPhones in the first three days.

A putative class action filed Tuesday in the U.S. District court for the Northern District of California against Apple and AT&T Inc (T.N) -- the iPhone's exclusive wireless carrier in the United States -- includes allegations of fraud by concealment, negligence, intentional misrepresentation and defective design.

"The iPhone 4 manifests design and manufacturing defects that were known to defendants before it was released which were not disclosed to consumers, namely, a connection problem caused by the iPhone 4's antenna configuration that makes it difficult or impossible to maintain a connection to AT&T's network," the lawsuit said.

It said Apple and AT&T have failed to provide customer support and customers have been left with only thee remedies: "hold their phones in an awkward and unnatural manner," pay a 10 percent restocking fee and return their phones, or pay $29.95 to buy one of Apple's cases that are said to fix the reception problem.

The iPhone 4 represents a complete redesign over the previous model. A band around the rim of the smartphone acts as its antenna.

The company responded to user complaints last week by saying the antenna performance of every wireless phone is impacted in some way by the how it is held, depending on where the antenna is located.

Apple and AT&T both decline to comment on Thursday.

In another purported class action complaint filed on Wednesday against Apple and AT&T, in the U.S. District Court for the District of Maryland, Kevin McCaffrey and Linda Wrinn said they were sold "defective" iPhone 4 units, which drop calls and data service, "when held in a manner consistent with normal wireless phone use."

Both suits cite emails reportedly sent from Apple Chief executive Steve Jobs, responding to iPhone customers complaints' about reception. Those responses were widely circulated on the Internet.

In one response, Jobs said: "Just avoid holding it (the iPhone) in that way."

The cases are 10-02862 Goodglick v. Apple Inc, and 10-01776 McCaffrey et al v. Apple Inc. et al.

AT&T, Apple Struggle to Handle iPhone Orders

The Wall Street Journal

 

AT&T Inc.'s website, unable to handle the demand for Apple Inc.'s new iPhone on Tuesday, had difficulty processing orders and in certain instances appeared to reveal subscribers' personal information to strangers.

Although the scope of the problem and its underlying cause couldn't immediately be learned, some AT&T customers, who were logged into AT&T's website as themselves ended up in other users' accounts.

AT&T and Apple didn't immediately comment on the apparent glitch.

The security lapse was the second in a week for the No. 2 U.S. carrier, which acknowledged June 9 that a flaw in its website allowed a group of computer experts to uncover the email addresses of thousands of owners of Apple iPads, including prominent officials at companies, in the military and in the government.

The problems Tuesday with AT&T's site took shape as the company's chief executive, Randall Stephenson, was in New York talking to the media and investors.

Asked about last week's iPad incident, the CEO said privacy issues are important and that a failure to prevent more serious breaches of network security would stall the growth of the mobile data market.

"Customer privacy, data privacy is critical," Mr. Stephenson said in an interview before the latest problems became apparent.

Apple's iPhone 4 officially goes on sale June 24, but AT&T and Apple began accepting preorders Tuesday. Almost immediately, would-be buyers began complaining they were unable to complete order requests through AT&T's or Apple's websites.

AT&T said the day was the busiest for online sales in the company's history, but didn't say how many units were ordered. All iPhone 4s that could be preordered for delivery on June 24 sold out, the company said. Customers who order now will get devices on June 25 or later. There will also be iPhone 4s available in stores on June 24, AT&T said.

"I tried ordering in two states," said Chris Freeberg, who was trying to order the new iPhone from a computer in a downtown San Francisco Apple Store. The 27-year-old owner of an original iPhone woke up at 5 a.m. in his hometown of Chicago and tried to reserve the device before flying to the West Coast, but gave up after four tries.

His effort to order from Apple's own store failed, too, so he decided to try again Wednesday. "I'm just ready," he said. "I just want it mailed to me so I can have it on the first day."

The computer outages appeared to be severe in some cases, forcing sales clerks to adopt manual work-arounds to get people signed up.

An Apple store employee in New York City said the preorder system had gone down. Apple stores in Manhattan and San Francisco were letting customers reserve the new phone at the store for pickup when the device goes on sale.

An AT&T sales representative at a New York City store said the preorder system had been down for much of the day. She was taking customers' credit card information and planned to enter it into the system once it came back up. She said similar issues were seen last year when the iPhone 3GS opened up for early orders.

The computer glitches are a black eye for AT&T and Apple, which have struggled to overcome complaints about dropped calls with the iPhone, but it wasn't clear whether they would have any lasting effect on demand for the smartphone.

Justin Berk, a meteorologist at the ABC affiliate in Baltimore, said he bounced around between the Towson, Md., Apple store and a neighboring AT&T store, enduring a 40-minute wait before an AT&T clerk manually took his credit card information. "Every iPhone launch has been a debacle," said Mr. Berk. "I'm so frustrated, but I still can't wait to get this phone."

Even as customers showed why the iPhone has been a key driver of AT&T's growth, Mr. Stephenson spent time talking about how new devices are making the smartphone market much more competitive, an indication the wireless carrier is already looking ahead to the day when its exclusive contract to carry the Apple device expires.

In an interview with The Wall Street Journal, Mr. Stephenson said 70% of his customers are tied up in family plans, which would make it harder for them to run to the doors in the event a competitor got hold of the iPhone.

He also said AT&T is broadening its slate of offerings, including to new phones powered by Google Inc.'s Android mobile operating system.

"We have a lineup that we haven't disclosed," he said. "There will be other devices that come along, and we'll do just fine."

On Monday, AT&T announced that it would sell its second Android phone, HTC Corp.'s Aria, starting June 20, and Mr. Stephenson said the top handset manufacturers are pouring money in Android in an effort to build the next flagship device.

"You're going to see Android become more and more prevalent in our device line-up," Mr. Stephenson said.

Apple, AT&T Hit with Glitches on new iPhone Orders

Associated Press

 

Apple and AT&T faced two major problems taking orders for the newest iPhone model just a week before it hits stores: Buyers reported problems registering their orders and an apparent glitch in AT&T's website was steering some customers into strangers' accounts.

Troubles in meeting demand for the iPhone aren't new.

But the latest apparent breach and other recent security foul-ups by AT&T could lead to identity theft - and have consequences for both companies. Customers have called for Apple to allow other carriers to serve the iPhone in the U.S., and the latest problems offer another argument.

The computer systems at Apple Inc., maker of the iPhone, or AT&T Inc., its exclusive U.S. carrier, have had various problems every year since the first iPhone launched in 2007.

Some customers who tried to buy an iPhone 4 on Tuesday said they were met with error messages on the company websites, and lines formed in stores as clerks tried to get orders into their systems.

Despite the problems, orders for launch-day shipments of the iPhone 4 sold out. On Wednesday morning, AT&T's site was no longer accepting orders. Apple's site was accepting orders only for black models, and would only guarantee shipment by July 2. That sets the scene for long lines at stores on June 24, when the phone is released.

The iPhone 4 costs $199 or $299, depending on the memory capacity. It will feature a higher-resolution screen, longer cell phone battery life and thinner design than last year's model.

Japanese phone company Softbank started taking orders earlier in the day, and was also flooded with requests. Softbank spokesman Furuya Katsuhide said that the better-than-expected demand had stressed the company's systems, which slowed both its website and the reservation process at stores.

On Gizmodo.com, a technology website, several readers posted stories of trying to log into their AT&T accounts to upgrade to the newest iPhone and being sent instead into strangers' accounts. That could set the stage for identity theft scams such as ordering other products under that person's name.

AT&T said it received reports of customers seeing the wrong account information but wasn't able to replicate the problem and was investigating. But the company said the personal information users were seeing in one another's accounts didn't include Social Security numbers, credit card information or detailed call logs.

Just last week, AT&T plugged an embarrassing security hole on its website that exposed the e-mail addresses of people who had bought another new Apple product, the iPad.

And in January, AT&T acknowledged to The Associated Press that a problem in its network was causing some wireless customers to land in strangers' Facebook accounts when they tried to check their own accounts using their smart phones. AT&T said it was fixing that glitch.

It doesn't happen often, but the Internet can forget who is who when multiple people log onto a site at the same time.

AT&T blamed a "misdirected cookie" for at least one of the problems in January. A cookie is a file websites place on users' computers to identify them. If the Internet provider fumbles a cookie and sends it to the wrong computer, the person using that computer will see a Web page he or she wasn't expecting.

Apple representatives didn't immediately respond to requests for comment late Tuesday.

New ATandT Zero Charger Is Smart, Efficient and Money Saving

eWeek

The AT&T Zero Charger knows when to say when: sensing if it’s not connected to a phone, it can cut off the power supply from an electrical outlet. It will also work with phones from different manufacturers, ideally including Apple, Nokia and Samsung, eliminating the need for each new phone to ship with a charger.

This May, “top green carrier” AT&T will begin selling the Zero Charger, an energy- and resource-saving charger for a variety of mobile phones.

The charger not only charges devices with better power efficiency, but it can sense when it’s plugged into a wall but not also a phone, and consequently cut the power supply from the socket, saving wasted electricity.

AT&T estimates—based on approximately 80 percent of users leave chargers in the wall, the average battery charger wasting 170mW when idle and that most users charge their devices three to four times a week for eight hours—that this electricity-cutting move could save enough to power 24,000 homes for a year.

“AT&T worked hand-in-hand with Superior Communications to create the first practical user-friendly, zero-draw charger for mobile phones,” said Carlton Hill, AT&T vice president of devices and product development, in a statement. “With the size of AT&T’s customer base, providing solutions like these helps our customers make a big difference.”

(Nokia has previously estimated that if the 1 billion people using its phones would just unplug the darn chargers from the wall, enough energy to power 100,000 homes could be saved.)

The Zero cell phone battery charger will come in smaller packaging than traditional chargers, as well as packaging that’s 100 percent recycled paper. It has a 5-star efficiency rating and, given its “block and cable” design, as AT&T describes it, the charger can adapt to a number of different handsets, eliminating the need for new phones to ship with chargers and enabling consumers to continue using a single charger over the years.

In June 2009, Apple, LG, Motorola, NEC, Nokia, Qualcomm, Research In Motion, Samsung, Sony Ericsson and Texas Instruments signed a Memorandum of Understanding (MoU), drafted by the European Commission, agreeing to standardize their devices’ chargers. Eliminating the need for each device to ship with a new charger not only saves resources, but keeps money in the pockets of consumers as well as device makers, which have smaller packages to pack and ship.

Gartner Analyst Carolina Milanesi called the MoU a “win-win for everyone.”

On March 5, AT&T additionally announced it would be requiring slimmer and more minimal packaging from its mobile handset partners. By reducing packing for device chargers, phone cases, batteries and data cables, AT&T hopes to keep 200 tons of plastic and paper waste out of landfills.

Solomon Chen, EO of Superior Communications said of the Zero Charger, in a statement, “Innovations like this help everyone take those small steps which will, in the end, lead to a better environment for all.”

Pricing for the Zero Charger will be approximately the same as current replacement chargers, which currently vary by model. 

New AT and T Pricing System To Target Heavy Data Usage

cNet

AT&T wants its iPhone users to use less wireless data, and it plans to introduce new pricing models to curb users' data usage as it tries to keep up with growing demand.

At an investor conference in New York on Wednesday, Ralph de la Vega, AT&T's head of wireless, announced that the wireless operator plans to introduce new pricing for heavy wireless-data users.

AT&T has been struggling to keep up with demand for wireless-data usage on its network. The iPhone, launched more than two years ago, has revolutionized mobile Web usage. The device, which was built more for accessing the Net than making calls, can access more than 100,000 applications, many of which use the mobile Internet.

iPhone users on average consume five to seven times more data per month than average wireless subscribers, according to analyst firm Sanford Bernstein. And all this usage is clogging the network, causing many iPhone users, especially in large cities such as New York and San Francisco, to experience dropped calls, slow 3G service, and issues connecting to the network at all.

AT&T has been reluctant to admit that there is a problem, but recently, the company has acknowledged that problems exist. According to The Wall Street Journal, de la Vega admitted that New York and San Francisco have been experiencing service issues. And the company recently launched an iPhone application that allows users to report service problems.

AT&T has been upgrading its network to the next generation of 3G wireless service to increase network capacity. But now the company is saying it needs to actually curb usage in order to get a handle on demand.

De la Vega said 3 percent of smartphone users are consuming 40 percent of the network capacity, with most of the high-bandwdith actvity coming from streaming-video and audio applications. Several applications on the iPhone provide nonstop Internet radio.

Unlike voice service, which is already tiered, wireless-data service is charged at an all-you-can-eat flat rate. iPhone users select a voice plan, then pay an extra $30 a month for unlimited data usage. By contrast, AT&T has limited the amount of data that its wireless-data card users can consume each month to 5GB. After that limit has been reached, customers who use the AT&T network to access the Net from their laptops get charged more based on their usage.

De la Vega didn't provide specifics of when or how a new pricing model would be instituted. But the hope is that it will help slow down the growth of data usage.

But asking iPhone users and other smartphone subscribers to cut back on their data usage may be somewhat unrealistic, and it could actually stifle innovation and development of the mobile Internet.

AT&T seems to realize that this is not a long-term solution. And not only is the carrier upgrading its network, but it's also asking the Federal Communications Commission to find more spectrum to auction off that can be used for wireless-data services. Jim Cicconi, senior executive vice president of external and legislative affairs for AT&T, said in a separate interview with CNET on Wednesday that something needs to be done to deal with the flood of wireless internet service data.

Cicconi and AT&T's CEO Randall Stephenson met with FCC staff members earlier this week to discuss the spectrum issue.

"Clearly, there is a looming crisis that needs to be addressed when it comes to spectrum availability," Cicconi said in an interview at his office in Washington, D.C. "Wireless-data usage is growing far faster than anyone had expected. And if we don't do something soon, we will run out very fast. And then we will have to start telling wireless customers that they can't do all the things they want to do with their devices."

FCC Chairman Julius Genachowski has made freeing up more spectrum a top priority. And he has already proposed that the FCC look into taking some spectrum away from TV broadcasters to give to wireless operators to deliver more wireless-broadband services.

Naturally, the TV broadcasters oppose such a proposal.

For now, it looks as if AT&T will try to slow the growth with hefty prices. It will be interesting to see if its competitors follow suit. Verizon has already amended wireless-data pricing for its low-end phones in an effort to squeeze out more revenue from users. But drastic changes in data pricing could scare off some customers and curb smartphone adoption altogether.

AT and T Setting Sights On 'Telehealth' Industry

from NJ.com

The doctor will see you now. Or at least in the few seconds it takes AT&T to relay your vital signs over its broadband network.

The telecommunications giant has big plans to establish a foothold in the "telehealth" industry, an emerging field that links patients and physicians across the country via video and medical-information technology.

"These days, everybody is talking about medical care: Who gets it? Who pays for it? Who decides?" said Robert Miller, executive director of technical research at AT&T and a 40-year veteran at the company’s Florham Park research labs. "But few people are working on a technology solution that would lower costs and make medical care better at the same time."

AT&T scientists have spent the past year working on prototypes of products aimed at the home health care market. The idea is to make everyday household items "part of the network cloud," said Miller, holding up a pair of fuzzy bedroom slippers. They look perfectly ordinary, but they are actually one of many telehealth products in the pipeline at AT&T.

Called "smart slippers," they have pressure sensors embedded in their soles to transmit foot movement data over AT&T’s network. If something is amiss in an elderly patient’s gait, the device will alert a doctor via e-mail or text message, possibly preventing a fall and a costly trip to the emergency room, Miller said.

Such products would represent the next step in what is called "remote medical care." Sales in that sector and other telehealth services are expected to exceed $1.8 billion by 2013, up from just $77 million in 1995, according to a PricewaterhouseCoopers report.

With that much money at stake, AT&T, Verizon and medical device manufacturers such as Cisco are aggressively entering the rapidly developing market. But analysts say they must first convince all health care players — insurers, employers, doctors and patients — to get on board.

One the biggest roadblocks to growth could be limited reimbursement from Medicare and the general fee-for-service health care system, said Zachary Bujnoch, an analyst at the research firm Frost & Sullivan.

Representatives from AT&T’s business unit said it is too early to disclose the cost of upcoming telehealth products and services, but Bujnoch said costs can run up to $100 per month, per patient.

"This is virgin territory in the health care industry when you ask how we are going to pay for it," he said, adding that telehealth’s current market penetration is in the single digits. "Everyone is groping blindly in the dark to figure out what business models are going to work."

But telehealth’s potential is enormous, Bujnoch said, especially as large firms like AT&T invest heavily in research and development. Last spring, Intel and General Electric Healthcare announced they would jointly commit $250 million to develop wireless products to connect patients to physicians. And Verizon announced last month it has partnered with Cisco to deliver an audio and video consultation service that lets doctors interact with patients in real time.

Telehealth’s biggest advantage, proponents say, is its tremendous cost-saving potential. Remote patient monitoring alone can generate between 20 percent to 40 percent in savings, said Chris Wasden, managing director of health industry strategy and innovation at PricewaterhouseCoopers.

"Ironically, the United States is late to the party here," said Wasden, explaining that telehealth is much more common in developing countries such as India, where cell phones enable people to receive health care in remote areas that once lacked access to modern medicine. "They’ve already developed the ability to deliver mobile health care to their people, but we’re behind the times on that."

$6 BILLION INFUSION

AT&T’s push into the market comes as the Obama administration and Congress seek to overhaul the country’s health care system — partly by wiring hospitals, doctors and patients to reduce medical errors and duplication of services. As part of the effort, the federal government is putting at least $6 billion into various telehealth programs.

"The government is saying, ‘You have to go digital,'" said Tom Gregorio, chief information officer at Newark Beth Israel Medical Center, a 673-bed facility that also provides medical services to seven assisted-living centers in the Newark area.

A health care bill before the Senate would cut Medicare reimbursement for patients readmitted to hospitals up to 30 days after they were discharged. If the bill passes, Gregorio said he must find a way to curb the readmission rate at his hospital — or absorb the cost of those returning patients. Despite its uncertain cost structure, telehealth could be a solution, he said.

"Making sure that a patient isn’t readmitted — that alone is a positive return on investment," he said.

Despite telehealth’s potential, there are relatively few specific examples of how changes in the system might improve patient outcomes and reduce costs. At AT&T, Miller said the prototypes have not yet been thoroughly tested, though plans for a pilot program are under way.

A focus of those pilot programs should be to ensure that the technology is easy-to-use and reliable, Bujnoch said, since errors caused by remote medical monitoring devices could create unnecessary health care costs of their own.

"If it’s going to go off every three hours, who cares?" he said. "And that’s where they have to do the clinical studies and the research to prove that kind of stuff."

Maintaining a patient’s privacy is also a big concern as more telehealth products and services emerge, said Tim Keough, president of the New Jersey Health Information Management Association. At the very least, data should be encrypted as it moves across a service provider’s network, he added.

Miller said AT&T is using guidelines established under the Health Insurance Portability and Accountability Act of 1996, or HIPAA, as its standard while developing its telehealth portfolio, though the rule doesn’t specifically address telehealth services.

Gregorio said some doctors are also leery of telehealth, due to lack of solid evidence of a return on investment. But if the federal government succeeds in its push for health care reform, Gregorio said it would "create a revolution associated with physicians having to adopt technology that they have been rejecting for a very long time."

The hardest party to convince will be private insurers, said Bujnoch, whose agenda isn’t always in sync with those of providers and patients.

For example, Horizon Blue Cross Blue Shield of New Jersey, the state’s largest insurer, does not cover telehealth services, but the company said it is receptive to emerging technologies.

"I like to think we are progressive on these things," said Stan Harris, a pediatrician and senior medical director at Horizon. "But AT&T needs to show us that patients wearing those slippers had fewer accidents. We need clinical trials and other research objectives to prove the technology."

Miller is hopeful that AT&T’s products will eventually be covered by Medicare. He said proliferation of telehealth is inevitable as populations live longer and the demand for cost-efficient home care rises.

"A lot of people, including myself, never feel that we’re going to get sick, get old or need health care monitoring," said Miller. "The statistics are inescapable and eventually we will."

1-GHz Projector Phones From LG, AT and T

PC Mag

Here's a whole bunch of firsts for the U.S.: LG today announced the Expo, a Windows Mobile 6.5-based smartphone with a built-in fingerprint sensor and optional pico-projector powered by a Qualcomm 1-GHz processor that I assume is their Snapdragon chipset, though LG doesn't say.

Without the projector, the Expo is a reasonably sized slider smartphone at 4.5 inches by 2.24 inches by 0.65 inches. It has a slide-out QWERTY keyboard, a 5-megapixel camera, a 3.2-inch, 800-by-480 screen, Wi-Fi, HSDPA 7.2, and a giant honking 1500 mAh battery.

According to LG's Web site, the projector is an optional, add-on accessory that will be sold separately. It weighs 1.8 ounces and projects an image eight feet, according to a statement from AT&T.

The phone will be available for $299.99 (minus a $100 mail-in rebate) with a new, two-year agreement. The projector attachment will be available "in the coming weeks" for $179.99, according to AT&T.

The phone also has GPS, Bluetooth, an accelerometer, a proximity sensor, and an FM radio on board.

The phone's manual explains that it runs LG's S-Class user interface, a creative hack of Windows Mobile 6.5 which heavily uses rotating wheels of icons. This will be the first LG S-Class phone in the US, along with the first Snapdragon phone sold be a US carrier and the first projector phone in the US.

According to an official AT&T/LG data sheet, the phone will go on sale first through business channels, not consumer sales. Phonescoop.com pegs the release date as Dec. 7.

We've seen all the elements of the Expo before, but never together in a phone for the U.S. market. LG announced its S-Class user interface last February and has released several phones in Europe with the new interface. Samsung has a projector phone on sale in Korea, which we spent some time with back in January. And the HTC HD2 Windows Mobile phone has a 1-GHz Qualcomm processor, but it hasn't been able to get any U.S. carrier support yet.

You can check out more of the Expo's features at LG's official Web site. AT&T's site for the phone doesn't appear to be live yet.

There's A Map For That

Judge rejects AT&T's effort to pull Verizon ads from the airwaves.

from Business Week

A federal judge on Wednesday denied a request by AT&T Inc. to force competitor Verizon Wireless to pull its "There's a Map for That" commercials.

But the judge scheduled a Dec. 16 hearing to give the AT&T attorneys another chance to make their case.

AT&T filed the lawsuit in federal court in Atlanta earlier this month and asked for a temporary restraining order and a permanent injunction to stop the ads. It contends they are misleading and amount to deceptive trade practices.

Verizon argues that the commercials are valid and truthful.

The ads show maps of the United States with areas highlighted to depict where third generation -- or "3G" -- network coverage is available. A map of the country nearly covered with red dots is shown to depict Verizon's coverage, while a map with some blue areas and a lot of blank space is shown to ostensibly display AT&T's 3G coverage.

AT&T says those maps are misleading because there is still regular coverage in areas where 3G service is not offered. The 3G networks allow users to access data faster.

The Verizon commercials mock Apple Inc.'s popular "There's an App for That" spots touting the thousands of applications that can be used on the iPhone. AT&T provides coverage for the iPhone.

AT&T Gets a Fuzzy Signal on Apple's iPhone

By The Wall Street Journal

Did AT&T get a sour apple when it snagged the iPhone?

Maybe. AT&T's exclusive right to offer Apple's smart phone over the past two years has attracted new customers, and at least initially enhanced the phone company's image. But it is difficult to know whether those benefits are worth what have been some considerable costs, both short and long term.

For investors, and for federal regulators investigating such exclusivity deals, it is worth considering some factors. While AT&T has disclosed at least 10 million activations of iPhones since it became available in mid-2007, only about 40% of those were new customers. That number dropped to 35% in the most recent quarter when the 3GS phone became available.

That means only four million new customers signed up, about 5% of AT&T's total, or 6% of "postpaid" customers on costly monthly contracts. Complicating the math is that some activations represent upgrades from earlier iPhone versions. AT&T said last month that it had about nine million iPhone customers.

More important, perhaps, is that the iPhone likely has kept some AT&T customers from defecting. AT&T's churn, the percentage of customers who leave, has dropped to 1.49% from 1.7% since the third quarter of 2007. Over the same period, Verizon Wireless's churn has risen to 1.37% from 1.27%.

Then there is the extra revenue. AT&T has consistently said iPhone customers generate much higher revenue per user than the average, close to $100 a month. AT&T's "postpaid" average revenue per user has risen 4.7%, to $60.21, since the third quarter of 2007.

But partly offsetting that revenue is the reported $400-a-phone subsidy that AT&T has paid Apple since June of last year. That implies an iPhone customer brings in nearly $2,000 of revenue over the life of a two-year subscription, after recouping the subsidy cost.

Even so, J.P. Morgan Chase analyst Mike McCormack, who is skeptical of the return generated for AT&T from the iPhone, notes that AT&T has said other smart phones -- carrying a much lower subsidy -- tend to generate similar average-revenue-per-user levels as Apple's device. The iPhone subsidy has depressed AT&T profit margins. The metric AT&T emphasizes for its wireless division, operating income before depreciation and amortization, as a percentage of service revenue, has dropped from 41.2% in the second quarter of 2008, before the subsidy began, and has bounced in a range of 33.5% and 40.9% since. AT&T has said repeatedly it expects the margin to rise to the mid-40s long term.

And that margin doesn't reflect the impact of capital expenditures required to upgrade AT&T's network capacity so it can handle the average iPhone users' heavy Internet habits.

It is no secret that iPhone users download games, video and other Web data at two to four times the rate of other smart-phone users. Yet AT&T charges the same $30-a-month fee for unlimited data use it levies on its other smart-phone customers.

The heavy iPhone Web habits have strained AT&T's network, now the subject of numerous complaints. Sanford C. Bernstein analyst Craig Moffett noted AT&T's name was "jeered at every mention" by application developers at an Apple conference in June.

AT&T is taking steps to improve its 3G performance, but the damage to public perception of its network may be difficult to repair.

It is possible Verizon's network would have reacted similarly if that company had offered the iPhone. No matter: It seems likely that if Verizon eventually gets the right to offer the iPhone, some of those four million customers who signed up for AT&T may defect. Indeed, some of the older AT&T customers also may go. So whatever value AT&T got from the device, it seems clear that Apple was the real beneficiary.

As Cell Phone Market Reaches Saturation, AT&T And Verizon Look To Netbooks

Story from Business Week

For the country's two dominant wireless phone carriers, AT&T (T) and Verizon Wireless, the arithmetic is clear. Cell-phone penetration in the U.S. is approaching 90% of the population, and the recession is damping enthusiasm for pricey new phones and services. So to avoid a slowdown in sales growth, both cellular giants are getting into a new game: personal computers.

AT&T jumped in earlier this year selling the stripped-down laptops called netbooks at its stores in Philadelphia and Atlanta. These devices are already a big hit for computer makers, priced in the $300-$500 range at retail. Now the carriers want to sell them—much the way AT&T sells Apple's (AAPL) iPhone—by discounting the device but making up revenue with two-year contracts for expensive data plans. Long-term, the carriers aim to expand into a whole range of computers, Net-ready cameras, game consoles, and other such products. The goal: to find fresh revenue streams and stoke demand for their new, fourth-generation (4G) data networks, expected to start rolling out next year.

The netbook idea appears to have legs. On May 17, Verizon Wireless began selling Hewlett-Packard (HPQ) netbooks discounted to $199 with a two-year data contract starting at $40 a month. "We are ramping up very nicely," says Verizon Wireless CEO Lowell McAdam. Two days later, AT&T announced that by midsummer it would broaden its own netbook experiment to all its stores nationwide, offering Dell (DELL), Acer, or Lenovo (LNVGY) products. If Sprint (S) and T-Mobile USA (DT) follow suit, netbook sales could top 2.1 million units in the U.S. this year, with carriers accounting for 22.5%, market researcher IDC estimates. "We think we are really at the next big growth area of wireless," AT&T Mobility CEO Ralph de la Vega recently told BusinessWeek.

Pricing is still a work in progress. In Atlanta, AT&T subscribers who sign up for a two-year service contract can snag an Acer netbook for as little as $50, but they must shell out $40 or $60 a month for either 200 megabytes or 5 gigabytes of wireless capacity, used for everything from messaging friends to posting photos on Facebook.

Similarly, Verizon customers who pay $60 a month for a data plan can get an HP netbook for $199. "You are not going to find too many laptops at that price point," says Verizon Wireless director of marketing Michael Willsey.

Probably not, but buyers may notice that when the service fees are tallied up, the cost could be as much as $1,440 over two years, plus the price of the netbook. And that may be on top of $30 a month or more the customer is already paying for another data plan linked to his cell phone. Tech-savvy shoppers may balk at this, given a logical alternative—on some service plans they can "tether" the computer to their smartphone with a cord and use the high-speed cellular connection. AT&T charges $15 a month for this on top of a subscriber's data plan.
"Limited Viability"

Some analysts say the chances of driving iPhone-like revenues are slim unless the carriers pull in millions of new users with cheaper data plans. That's what's happening in Europe, where service plans cost less and come in a variety of forms, including prepaid monthly and daily plans. As is, the U.S. approach—counting on well-heeled customers with little sensitivity to price—has "limited viability," says CCS Insight analyst John Jackson.

Technical glitches could also spoil the fun, but carriers say they're ready. PC makers will field hardware problems for customers while the service providers handle diagnostics and network issues. "We're very much in coordination with their customer care people," says Glenn Lurie, AT&T Mobility's president of emerging devices, who managed the Apple relationship. "This is nothing new for us."

AT&T And Apple Handcuffing Skype Users

Story from PC World

If you've been an InfoWorld reader for more than two years or so, you no doubt remember that we used to be a magazine. Now we're online-only and doing rather well, thank you. But it's been a wrenching change, and many other publications, particularly newspapers, have not done nearly as well.

The Internet is a source of what historian Joseph Schumpeter called creative destruction, bringing with it enormous benefits along with the collapse of old business models. And now that wireless technology is well on the road to convergence with the Internet, even more business models are being challenged. Indeed, the technology itself is being pushed as consumers and businesses demand ever more complex services.

Which brings us to the latest episode of this story: Skype versus AT&T and Apple, a duopoly I like to call Ma iPhone. Since Skype put its app on the App Store, more than 2 million downloads have been recorded because people want to make cheap Skype calls with their iPhones. Go right ahead, says Ma iPhone, but you can only make those calls via Wi-Fi, not 3G.

Apple implemented the policy at AT&T's behest.

The high-speed Skype internet phone ban has touched off a wave of protests, including calls for Congress and the FCC to get involved, if not directly, via regulation that would clarify the issue of Net neutrality and wireless services once and for all. It's an important debate that speaks to issues that we in the IT community should be thinking about.

As you may have guessed, I'm on the side of the consumer. I don't buy Ma iPhone's arguments that it can't afford to give Skype, which it considers a competitor, a leg up. And I don't believe the claim made by pro-corporate bloggers that the iSkype would be a bandwidth-hogging problem child.

Just whose network is it?

Ma iPhone's argument was well summed up during an interview with USA Today. Jim Cicconi, AT&T's top public policy executive, says AT&T has "every right" not to promote the services of a wireless rival. "We absolutely expect our vendors" -- Apple, in this case -- "not to facilitate the services of our competitors," he says. "Skype is a competitor, just like Verizon or Sprint or T-Mobile," he says, adding, Skype "has no obligation to market AT&T services. Why should the reverse be true?"

On the surface, the argument has some appeal. Why help a competitor? But we're not talking about a widget maker. There is a well-established set of legal and regulatory principles regulating telecommunications networks. They must be open. AT&T can't pick and choose what services customers can use on their landlines. And it appears that the law also leans in the direction of opening the less-regulated wireless networks. "Telecommunications networks are there to provide access for everybody. If not, they [the carriers] are breaking the bargain inherent to communications," says Chris Riley, policy counsel of Free Press, a nonpartisian advocacy group that is pushing the FCC to act.

"Wireless broadband networks cannot become a safe haven for discrimination," he says. "The Internet in your pocket should be just as free and open as the Internet in your home. The FCC must make it crystal clear that a closed Internet will not be tolerated on any platform."

AT&T argues that it can't afford to deliver services to a competitor. I don't believe it. There's a lot more money to be made selling wireless services than there is in the moribund landline business. Just as InfoWorld had to change its model to live in the age of digital publishing, AT&T has to accept that its business model has to change. Like it or not, the old ways of doing business no longer work.

There's plenty of bandwidth

Riley, who sports a doctorate in computer science as well as a law degree, makes short work of the argument that Skype calls will slow down the network. "VoIP calls are low-latency, but also relatively low in bandwidth usage," he says. Indeed, AT&T, unlike some in the blogosphere, doesn't even make that bandwidth argument about Skype. But it has made the bandwidth argument about streaming video services. Several weeks ago, AT&T briefly changed its terms of service to ban certain third-party streaming video from the iPhone. It quickly backed off that position, but it's worth noting that -- while claiming streaming movies, television programs, and so on would clog the network -- the company continued to offer similar services over the same network. It even has a YouTube button on the iPhone, notes Riley. "AT&T wants to have its cake and eat it, too," he says.

I don't mean to argue that the bandwidth is unlimited. There are real issues here, and I'd encourage you to read a special report InfoWorld published on the subject late last year. Still, I think Ma iPhone is way off base in its treatment of Skype, and I urge you to defend the principle of Net neutrality, whether it be wired or wireless. But don't do so in a knee-jerk way: The destruction of business models by new technology is of great importance to those of us who make our living in media and information technology, and I'd urge you to give it real thought.