Monthly Archives: May 2010

Nokia Teams Up with Yahoo

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Nokia is not one of the major players in the US smartphone market, though they do tremendously well overseas.  Yahoo has been struggling in Google’s shadow for some time despite some recent positive strides (including a deal with Microsoft).  Yahoo currently gets about 8 times less unique page views than Google.  The two somewhat downtrodden companies have decided to team up, hoping that complimentary features will mesh to create a product that can compete with the big boys.

Depending on the expert, this is a smart move or a yawn-inducing one.  SeekingAlpha says, “the companies will leverage each others’ strengths in e-mail, instant messaging, digital maps and navigation services. We believe this partnership could help Nokia resurrect its declining mobile phone market share in developed markets like the US and Western Europe.”  PC World counters by saying, “…it’s understandable that the two yahoos — Yahoo and Nokia, that is — would want some help. But it’s hard to imagine that turning to each other is going to make much difference.”

Bernstein Research analyst Pierre Ferragu says, “One could always say the partnering of losers doesn’t make a winner.  It is often true, but for Nokia, the right future that could lead to an interesting investment case is more about stabilizing its existing position and being successful in the mobile platform game, riding on the back of Apple and Google coattails only.”  The companies are hoping to get in on the very competitive field of mobile media against such giants as Google and Apple, who do not appear to be very welcoming of any new competition. Or of each other for that matter.

Yahoo and Nokia will team up to offer enhanced mail, chat, and map features to users.

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Florida Governor in Trouble

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Any song that is used in an ad runs the risk of forever being associated with that particular product.  Many younger people, for instance, don’t realize that “Like a Rock” is not the Chevy song but a Billboard chart topper by Bob Seger.  For this reason, some artists choose not to allow their work to be used in advertising.  David Byrne of the Talking Heads is one such artist, so he was understandably irked to find that his voice and music was feature in a campaign ad for Florida governor Charlie Crist when proper permission had not been granted.

Byrne, who has a longstanding reputation for not allowing his work to be used in advertising, does allow use of his music in commercial films and television if the proper fees are paid. This is how he makes his living.  But Crist failed to ask permission – which he would have been denied anyway, according to Byrne’s blog post:

“Besides being theft, use of the song and my voice in a campaign ad implies that I, as writer and singer of the song, might have granted Crist permission to use it, and that I therefore endorse him and/or the Republican Party, of which he was a member until very, very recently.”

Byrne most assuredly does not support the Republican party, whom he says has stolen music before.  John McCain, for instance, used Jackson Browne’s classic “Running on Empty” during one of his campaigns even though he had failed to gain proper authorization.  Browne sued and eventually the McCain camp settled with him.  In the past, lawyers have tried to claim that their use of purloined songs should be protected by their First Amendment rights because it is integral in making a political point.  Byrne is hoping that a judge sees this as the ridiculous argument it is and awards him $1 million.

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More Rumored Apple Trouble

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If Apple isn’t suing someone, they’re being sued. It’s the nature of the beast, especially if you are the big Cupertino Beast.  This not-so-affectionate moniker was courtesy of Scott Reilly, formerly of Amazon’s digital music sector. Apple’s new legal woes are reportedly related to the bookselling giant’s foray into digital music.

According to the New York Times, Apple is facing an inquiry by the Department of Justice over possible antitrust issues, particularly related to Amazon’s music sector.  Because of the sensitive nature of the inquiry concrete details are few and far between, but according to “people briefed on the inquiries,” investigators are looking into whether Apple used its might to convince music labels not to allow Amazon exclusive rights to their material.  Amazon had a program called “MP3 Deal of the Day.”  On the day a single was released, Amazon would obtain exclusive rights to the song for that day only.  They offered it to customers at a discount.

Apple reportedly persuaded (or pressured) labels to refuse Amazon this exclusivity by saying that the singles featured by the bookseller would not be promoted on iTunes.  Since opening in 2003, Apple’s iTunes store has sold more than 10 billion songs, giving a much-needed infusion of revenue to the ailing music industry.  It is understandable that many of these labels bowed to Apple’s requests (or commands).

Antitrust attorney Daniel L. Brown of Sheppard Mullin Richter & Hampton says, “Certainly if the Justice Department is getting involved, it raises the possibility of potential serious problems down the road for Apple.  Without knowing what acts or practices they are targeting, it’s difficult to say exactly how big a problem this is.  But it’s probably something Apple is already concerned about.”  Thanks for clearing that up, Mr. Brown.

Apple is no stranger to the legal system and is currently in litigation with HTC, Nokia, and Kodak and is reportedly being investigated by both the Justice Department and the FTC.

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Netflix Thriving: Thank you iPad

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Netflix has been a phenomenal success, and the by mail/instant watch site continues go grow, enjoying the “sweet spot of its growth phase.”  A newly released app for the newly released iPad is helping push growth, and editions for the iPhone and iPod Touch are eagerly awaited.

Heath Terry, analyst with investment bank FBR Capital, reported that Netflix was outperforming expectations.  He says, “We continue to believe that Netflix is in the sweet spot of its growth phase: closing rental stores and expanding streaming options are driving significant subscriber growth, while the impact of rising content costs is more than offset by declining fulfillment costs.”  Further, the apps “should drive meaningful incremental subscriber growth, lower churn, and lower subscription acquisition costs.”

The app, which Dan Ackerman of CNET calls “one of the best reasons we can think of to sign on to Apple’s new device,”  allows you to stream television shows and movies directly from Netflix to your iPad. As part of your regular Netflix account, you can watch an unlimited amount of content on the Watch Instantly list and watch on your computer, television, or iPad and resume watching where you left off even if you switch devices.

You can browse through your options and update your Queue from your iPad, making it easy to get what you want, when you want.  The best part?  It’s free.  The second best part? It will soon be available for iPhone and Touch users.  One more last best part?  The new 1.02 version allows for video out so you can output videos with a Dock Connector, making it even more versatile and user-oriented.

A Netflix membership begins at $4.99 a month, and with that, you get unlimited streaming on Watch Instantly.  Add a few bucks and you get a few more videos.  No more late fees and an incredible selection of movies and TV shows.

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Do You Need to Go to Wal-Mart?

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Whether you love Wal-Mart or you view it as the worst of American capitalism, there is no denying that sometimes the deals are unbelievable.  The biggest of big box stores announced yesterday that they are cutting the price of the iPhone 3GS to $97.  That is 16 gigs of Apple ingenuity for under $100.  Wal-Mart says the $100 price reduction is part of an “aggressive” effort to discount prices for consumers, but many also see it as an inventory clearing before the 4G is launched.  Either way, is this a good time for Apple lovers to go to Wal-Mart?

You may want to hold off.  The 4G is expected to be released by June 7, and while it lost its air of mystery, many are still eagerly awaiting the new iteration.  For those Apple fans who want the newest and best, the 3GS won’t be it – or at least it won’t be the newest.  There are some who believe it will still be the best, but the 3GS will become the entry-level iPhone.  Another reason you may want to skip the trip to Wal-Mart – the phone costs just $97.  Plus tax in many states.  Plus a two-year AT&T contract.  Plus apps (they’re not mandatory, but hey, why not?).  According to Daily Tech:

“[T]he $100 price cut really means little in the grand scheme of things considering that the phone is going to cost you at least $1,680 over the course of a two-year contract in service fees alone.”

 

Who is this a good deal for?  If you’ve been eyeing an iPhone but haven’t wanted to pay $200+, it could be that you’re right for the “entry level” phone.  If you planned on buying a 4G, you may want to consider spending less and getting what many experts call the best smartphone ever.

Steve Jobs is set to give a speech at Apple’s annual world wide developers conference (WWDC), where it is widely believed he’ll finally announce the launch of the 4G.  It is also believed that Steve Jobs will tackle Google, Apple’s new arch enemy.  When asked if he would address “jabs taken by Google” at their own developer’s conference, Jobs said, “You won’t be disappointed.”  Hopefully consumers won’t be disappointed either.

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LimeWire Ruling

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LimeWire, one of the biggest file sharing sites in the world, is no stranger to controversy, but as the music industry tries to crack down on piracy, the Lime Wire LLC-owned company has been facing new scrutiny.  On May 12, a US District Court judge ruled against the popular file sharing site, saying it violated the copyrights of the 13 music companies that brought suit.

In 2005, a Supreme Court ruling made P2P sites like LimeWire a dying breed.  The Court found that Grokster, a similar file-sharing site, could be held liable for the illegal use of its software. It was estimated that about 90 percent of the files shared on Grokster were downloaded illegally.  The P2P site settled with record labels after the ruling, but it did shut down most of the sites that offered a similar product.  Or just made them, as in the case of LimeWire, issue carefully worded statements like the following:

The program distributed by Lime Wire, “LimeWire BASIC” and “LimeWire PRO”, is legal software, but like many legal things, it is possible to use it in illegal ways. Specifically, it is illegal for you to use LimeWire to share, distribute or download (all of which we call sharing) copyrighted files without permission, or to share unlawful pornographic materials. In addition, it may be unlawful to share certain other files that are protected, proprietary, personal or confidential or contain protected, proprietary, personal or confidential information. The LimeWire program is distributed and licensed for use only in an authorized and lawful manner and not to share files which the copyright owner has not permitted to be shared. Your use of LimeWire BASIC or purchase of LimeWire PRO does not constitute a license in or to share unauthorized or unlawful materials.

 

US District Court judge Kimba Wood, however, found that this disclaimer had very little value and did not reflect LimeWire’s attitude toward illegal file sharing, writing, “The evidence establishes that LimeWire users directly infringed plaintiffs’ copyrights, and that LimeWire engaged in purposeful conduct intended to foster that infringement.”

What does this mean for LimeWire?  They could close their virtual doors, just as Grokster and other file sharing and/or free streaming sites did years ago, or they could adapt to a more anti-piracy business model.  LimeWire Chairman Mark Groton wants to create a paid service that appeals to those who have always been able to download their music for free.  He says, “I don’t want to be on my deathbed thinking that I kept a bunch of musicians from making money.  I have a lot of work to do to get my karma scores up.”  And part of that work may be to bridge the gap between those that expect free music and the music companies that expect to be paid.

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Are E-Readers Doomed?

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E-reading has taken off in a big way, and Amazon’s Kindle has been a trailblazer.  The immensely popular electronic reading device has, according to some figures, sold more than 3 million units. It is available not only on Amazon’s larger dedicated reader, but also as apps for BlackBerry, iPhone, and Android.  Is this, as ZDNet says, another “nail in the coffin” for Kindle?

PC World echoes this prophecy, posing the question:  “If you could get digital books on the smartphone you already carry, would you still buy a dedicated e-reader?”  The answer for many would be no.  Why carry two devices, or more, when one will do? Amazon is hoping that the apps will be seen as an extension of their Kindle…that is, they’d like you to buy a Kindle, and then buy an app for more portability.

The upcoming Kindle app for Android has many wondering if its e-reader big brother will be rendered obsolete.  The Kindle offers a much better reading experience because of its large screen and E Ink display, which makes it easier to read text.  PC World’s JR Raphael writes that while the more “eye-friendly” interface is definitely nice, “is it worth enough to convince you to plunk down a few hundred bucks and then lug around an extra gadget everywhere you go?”

The Kindle app for Android will allow readers to do the following:

  • Purchase and read books from just one app.
  • Mark your last page read and any annotations and synchronize them with your other Kindle devices, whether on your computer, Touch, or on a regular Kindle.
  • Read in landscape or portrait mode.
  • Flip pages easily by tapping on screen or flicking your finger.
  • Create bookmarks.
  • Adjust the size of text.
  • Download for free.  The Android app is free – not the books, just the app!

While Kindle devotees are likely to love the convenience of smartphone apps, will new users opt to skip the e-reader and go right to the apps?

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Can’t Stop Piracy

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Music piracy is rampant all over the world; in some countries, over ninety-five percent of music downloaded is done so illegally.  A 2008 study found that the average teenager’s iPod had over 800 illegal tracks.  From the UK’s Digital Economy Bill to highly publicized court battles in the US, every corner of the world is dealing with this issue, and the music industry blames illegal downloading for a sharp drop in revenue.  How do you stop piracy?  You can’t, says Universal Music Group International vice president of digital music, Francis Keeling.

According to the BBC, Mr. Keeling made his remarks at the Great Escape music convention in Brighton, England.  “Are you going to stop piracy?  No you’re not.”  While this may seem self-evident to many of us, it generally runs counter to what most music execs will say.  His aim is not to stop piracy, an objective which he says “is just not going to succeed,” but to “make it socially unacceptable.”  Right now, piracy is one of the only crimes that law-abiding, straight-and-narrow people do not feel bad for engaging in.  Many people either don’t know what is illegal or what constitutes fair use, and many more do not care. Keeling says, “We’ve got markets like Spain and Italy, where [people say] ‘You buy music?  What are you doing buying music when you can get it for free?’”

It is this attitude that the music industry has to combat, and they can’t do that until they provide an easy and inexpensive option for consumers who no longer what CDs.  Keeling foresees a subscription-based model.  “Spotifiy,” he says, “has been a big success.  It works off this freemium model, which was always a big jump for us – to let consumers access music for free, and get them off pirate services, with the aim of getting them up the ladder…”  The paying, legal ladder.

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iPhone Cool as Ever Even as Other Smartphones Gain Ground

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The iPhone is undoubtedly the smartphone against which all others are measured.  Despite the aura of mystery around the new 4G iPhone (which is what caused such a debacle last month), the new edition is making the news again.  Digi Times is reporting that Apple has ordered 24 million 4G iPhones from its Chinese manufacturer for market this year alone.  These numbers have been called “aggressive, but not unreasonable.” How is the iPhone doing against the new crop of exciting – and feature-packed – smartphones?

According to the LA Times, the iPhone’s “cool factor proves stronger than the lure of rival phones’ features.”  In short, the iPhone is not the best, but it’s the best.  People are enamored of the iPhone’s allure, its looks, its prestige.  Despite the fact that the iPhone lacks coverage in major cities like San Francisco and New York and its camera could be sharper, devotees prefer their Apples.  The company enjoys enormous customer loyalty, and it is this that is driving terrific sales even as phones like the Incredible are coming out with, in many cases, superior features.

That being said, Android is also gaining ground, despite having a fraction of the apps (38,000 compared to 200,000).  The platform is becoming more popular with developers and with consumers.  Chris Moore, partner with venture capital firm Redpoint Ventures, says, “I am quite impressed by the traction the Android ecosystem is getting…I want to say that on the current trajectory, they (Android) will pass the iPhone platform, or at least reach parity by the end of this year or middle of next year.”

While Apple’s iPhone sales are stronger worldwide by some 3 million units, Android phones have surpassed iPhone sales in the US.  Sales of smartphones overall have increased by almost fifty percent since 2006, and hordes of companies are scrambling to be the top choice.

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HTC Bringing the Goods

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Last week, it was announced that HTC was filing a complaint against Apple for patent violations. This comes months after Apple started proceedings against HTC for the same charges.  HTC is not limiting itself to fighting in the courtroom: they’re bringing it to the stores as well.  Their new Incredible gives the iPhone a “run for its money,” according to the Wall Street Journal.

While you will find fanatic iPhone fans from coast to coast, you will also find a great many frustrated Apple users in large cities like New York and San Francisco.  Here, iPhone users are  in the land of no signal and dropped calls, which has given Verizon lots of ammunition for ad campaigns (like the one where the iPhone finds itself on the Island of Misfit Toys).  HTC is hoping to hone in on this dissatisfaction by offering loads of signal and great apps.  While there are a few downsides to the Incredible, there are also a lot of very big upsides.

On the positive side, as noted by the WSJ:

 

  • Great signal.  The lucky WSJ reporter who got to try out the Incredible noted that he could make a phone call – which would likely be dropped within five minutes – from one small spot in his Manhattan bedroom.  With the Incredible, he could branch out and sit on the couch.  Though this is just speculation, he probably could have paced without losing the call.
  • Fun apps.  The iPhone’s claim to fame, or one of them, is that it has an amazing array of apps from which to choose.  The Incredible doesn’t yet have the same range, but it does offer several solid favorites.
  • Speed and efficiency.  Browsing is lightening fast – and you don’t have to stand in one spot to get signal.
  • Other features: camera, FriendStream (merges data from Facebook, Twitter, and Gmail into a single list)

On the not-so-good side:

  • Music is limited.  This is a Google Droid phone, and it is not compatible with Mac.  You can’t import your tunes from iTunes.  But you can import them from Amazon, which allows you to use the music on more than one device.  If you already have an iPod stocked with songs, you’ll want to keep it.
  • Battery life.  If you use your phone sparingly, a single charge should last you all day.  If you browse, make calls, and run apps, you’re looking at four hours.  To be fair, the iPhone offers similar juice.
  • Busy interface.  This might well not be a downside for some, but for others, there might be too much going on.  It is not as intuitive as iPhone’s legendary iPhone.

So should you rush out and get an HTC Incredible?  If you need Verizon-quality coverage in areas where AT&T fades out, the Incredible could well be the smartphone for you.

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