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Facepalm moment
 California based Palm faces dire straits. Financial trouble looms as the company cut its forecast revenues and the share price slumped. Generally smartphone sales are riding a wave but demand for Palm’s new Pre, Pixie and their ‘Plus’ siblings has been low. It’s unfortunate as Palm’s webOS has some great features, including the best implementation of multitasking I’ve seen. So why the problems? Well, partly webOS is being squeezed out by established operating systems, the rise of Android and new entrants with more clout like Samsung’s Bada. Without the support structures and developer community, there can be no clamour generated for all important app consumption. Second, the advertising and branding has been dreadfully dull and even worse.
CEO Jon Rubinstein has sent a letter to all Palm employees, reassuring them that Palm has £500 million in the bank to carry it through the choppy waters, but that figure only just covers the amount that backer Elevation Partners has already stumped up to keep the firm running.
War chest is not for looting
 At Apple’s annual shareholder meeting, boss Steve Jobs defended the decision to sit on cash reserves of $40 billion. Roughly amounting to a fifth of Apple’s value and a strategically critical resource as the recession ends, Jobs alluded to the war chest being kept for something big. Investors would love to get their hands on the cash, but questions and suggestions were rebutted, with the explanation that buy backs and dividends would have no lasting impact on company’s share value.
Apple also announced it would place 25 new retail stores across Chine by 2012 and pursue other opportunities abroad. Currently around 60% of Apples revenue is reaped from international markets, according to the most recent quarter’s balance sheet.
Divide and conquer
Motorola has announced that it plans to split into two separate, publically-traded companies during the first quarter of 2011. One part covering Mobile Devices and Home (phones, set-top boxes and digital entertainment) and the other, Enterprise Mobility Solutions and Networks (Radio, computers and network infrastructure). Both new companies will use the Motorola brand.
Moto reorganised into three parts during 2008; handsets, infrastructure, and set top boxes. Various combinations of the three were touted as up for sale throughout 2009, with media speculation that phone manufacture would cease internally. Very little since the glorious Razr V3 has impressed, a trend interrupted by healthy Q4 sales of the Droid and Motorola’s seemingly wholehearted adoption of the Android operating system.
Is it crazy to just want to see a bunch of phones from the American giant that people actually want to use?
Like to know more? press release here
Provider says only short ‘organisational’ calls are made between 6pm and 7pm
 From 1st April, BT is pushing the beginning of its off-peak calling period, from 6pm to 7pm.
In a move sure to unsettle millions of customers who have calling packages including free evening calls, incumbent landline supplier British Telecom will move it’s off-peak period from 6pm to 6am, to 7pm to 7am.
The company acknowledges many calls are made in the early evening, and a spokesperson told the Guardian newspaper, “We’ve looked into it and 6pm to 7pm is a busy time for calling, but it’s the time when people make short, organisational calls,” he said. “It’s between 8pm and 9pm when they sit down to have a chat.”
In addition to moving the time slot, the standard cost of calls made during peak hours will increase from 5.4p a minute to 5.9p a minute. Customers with anytime plans also face an increase in the fixed charge to set up non-inclusive calls, from 9.3p to 9.9p a call.
Ofcom’s sixth annual Communications Market Report, published last August, detailed up to a quarter of UK households opting out of fixed line communications entirely, with Cardiff having as many as 27% mobile-only homes.
6pm off-peak calling is traditional and deeply ingrained in the UK national psyche. Telecoms is fiercely competitive market and I understand BT wanting to follow the mobile market in nudging customers towards taking anytime plans, though I think the company may have throw away one of its few remaining goodwill advantages.
Update! 12 Feb. Gavin Patterson, group managing director of BT Consumer and Ventures appeared on the BBC Breakfast news show this morning, giving a distinctly lacklustre performance. He was challenged by presenters, that the decision to move the time band was all about money. Mr Patterson defended the decision as simply ‘following the industry’, and talked about the value of anytime packages, costing around £5 extra a month for 24/7 land-line calling. He didn’t appear to like this being equated to customers paying £60 extra a year instead of having free calls between 6pm and 7pm.
BT, at one point you were the industry. Wouldn’t you rather lead than follow?
Sell, sell, sell
 The Wall Street Journal has reported that Deutsche Telekom may be under further investor pressure to shift, or reorganise part of its T-Mobile business. Citing mysterious ‘people familiar with the matter’, the Journal concluded that the most likely eventual outcome is the selling off of a 20% stake in T-Mobile USA as an initial public offering (IPO), meaning a flotation on the stock exchange.
Very similarly, a 4th place market position and grumbling noises about making more money from shareholders including the German government and US private equity group, Blackstone, eventually led to the current merger proposal of T-Mobile UK joining with France Telecom’s Orange UK holding. But not before a year of speculation that T-Mobile UK would buddy with Vodafone, O2, 3 or the Milk Marketing Board.
Now we can all contemplate similar US market consolidation, and a T-Mobile USA marriage of convenience to a competitor.
Will this affect competition? Of course it will
 The UK’s Office of Fair Trading (OFT) has asked the European Commission (EC) to bounce the UK aspects of the proposed joint venture between Orange and T-Mobile back to itself. Owners France Telecom and Deutsche Telekom announced the plan back in September 2009.
Following a programme of consultation, the OFT expressed it’s initial view, that the merger threatens significantly to affect competition in mobile telecommunications in the UK. Overall, the merger falls under European Union law and the OFT only has the power to request the case be further referred to the Competition Commission, but each referral adds months of time to the negotiations.
One of the biggest concerns is the T-Orange plan to combine and retain both company’s 1800MHz spectrum resources, thus controlling pretty much all of it as one company. This is causing cries of “Referee!” from the sidelines. It’s likely that the duo will be forced to hand some radio spectrum back to Ofcom control, who can then promptly sell it off again to raise revenue for the UK government.
Like to know more? press release here
Keep it simple, stupid
Monday 1 February was a pretty revolutionary day for T-Mobile UK. The date saw the network ditching all of its existing contract consumer plans. Gone in a flash are Flext, Combi and U-Fix, replaced with new Flexible Booster tariffs branded simply as low, medium and high user.
In a clear move to differentiate, monthly price points now range between £15 and £40 on 18-month packages, or between £10 and £35 for the same allowances on two-year deals. Previous high-end pricing points aimed at big-spenders (£50 to £100) have also been dropped.
The real kicker is the addition of a Flexible Booster, one free choice from exactly the same range is available with any of the plans. Customers pick from unlimited texts, 1GB of internet access, unlimited land lines, unlimited T-Mobile calls, or from a selection of international call boosters. The freebie can be toggled to any other choice once a month, and any extra boosters can be added for £5 each.
It’s not all wine and roses though and phone choice plays a part, it’s a rule of thumb that better handsets become available on more expensive plans. Some of these new plans ratchet up by £5 when a more expensive phone is selected, certain to cause grumbling as no increase is made to allowances.
 
<An example 24-month offer for 100 minutes and texts>
Taken at face value the plans certainly offer an excellent return to customer, and the choice of bolt-on with every option is a big attraction. However, out of bundle call charges to any UK phone are expensive at 30p a minute. This will severely penalise anyone that underestimates their use, buys a £10 package for an unruly teen, or spends a month with the wrong booster applied.
This whole move is part of Managing Director Richard Moat’s plan to stop T-Mobile haemorrhaging customers. He’s certainly been the broom that sweeps clean, with any project not delivering an immediate return being scrapped. Flext and U-Fix were seen as needlessly complicated, and Combi plans needed to be tweaked with extra minutes to remain competitive, confusing sales channels as much as customers.
Clean slate approach
 T-Mobile will be launching a new, simplified contract range on Monday, 1 February. It looks like its existing Flext, Combi and U-Fix ranges will all be ringfenced (unavailable to buy, but existing customers can continue on them), and that Solo ‘SIM only’ plans will be replaced with new rolling and 12-month offers from early March.
The unnamed new price plan range will be available as 18 or 24-month versions, and has been touted in the mobile press by T-Mobile sales bigwig John Fannon as “like a Chinese menu”.
Customers will get X and Y allowance minutes and texts for a set cost, then can choose a free booster that works for them. Booster choices include; unlimited texts, unlimited UK fixed-line calls, up to 1GB of internet access a month, and a variety of international call packages. I imagine some of these booster will only be available on higher priced plans, but I’m willing to be surprised and delighted. Other bolt-ons can then be added to a plan from £5 a month.
Does this sound familiar to you to? The plans are extremely similar to market-leader O2’s range, but T-Mobile can make a difference by offering a choice of booster at a lower price point. Currently O2 customers only get a choice at the £35+ point for 18-month deals, and at £30+ with 24-month contracts.
Because not everyone uses so many, it’s pleasing that unlimited texts will no longer be heaped on every plan, far better to have a choice you can swap out every month. I am a little sad that the era of 12-month deals with a phone has passed at T-Mobile, but at least this provides a market gap for someone else to plug.
92% fall in quarterly profits
 Swedish network infrastructure supplier Ericsson has said it will cut an extra 1,500 jobs on top of 2009 targets, as it reported another massive quarterly drop in profits. The company’s planned 5000 head-count reduction for 2009 was exceeded, and is now expected to top 6500.
Net profit for October to December was 314 million kronor (£27m), compared with 3.89 billion kronor (£333m) for the same period in 2008. Ouch.
Hans Vestberg, President and CEO allocates some of the blame to heavily reduced operator spending during the second half of the year. The press release also details restructuring costs, from voice telephony towards mobile broadband, as requiring significant spend by Ericsson.
These latest results were much worse than market forecasts, which expected to see a net profit of 3.23bn kronor.
"You know, the market is weak, but one might have hoped for some recovery in quarter four," said analyst Michael Andersson of Evli Bank. Cold comfort for the employees who probably think Evli Bank contains a transposition error on my part.
Like to know more? press release here
One week and 100,000 sales
It’s being reported that Vodafone has shifted 100,000 iPhone units in its first week of sales. Including pre-orders for both networks, Vodafone has topped Orange’s 30,000 launch day sales by an additional 20,000 and then gone on to sell the next 50,000 about twice as fast.
Although Vodafone does have a larger market share, the difference is only a couple of percentage points and doesn’t explain such rapid sales. Now that UK customers can get an iPhone with O2, Orange, Tesco or Vodafone, perhaps customers are more happy to purchase without the grief of feeling artificially forced to change their network. Vodafone have also been flexible in allowing early upgrades and incentivising existing customers repurchase. Also, it’s been my experience that Vodafone customers are extremely loyal to their brand, more so than any other UK customers.
There’s still no price war, with everyone charging virtually the same total cost on 18 or 24 month plans. Vodafone also followed the pack by setting a 1GB allowance on its iOfferings. iPhone popularity has been identified as causing major strain on 3G capacity, a trend that seems likely to continue to challenge all carriers.
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California based Palm faces dire straits. Financial trouble looms as the company cut its forecast revenues and the share price slumped. Generally smartphone sales are riding a wave but demand for Palm’s new Pre, Pixie and their ‘Plus’ siblings has been low. It’s unfortunate as Palm’s webOS has some great features, including the best implementation of multitasking I’ve seen. So why the problems? Well, partly webOS is being squeezed out by established operating systems, the rise of Android and new entrants with more clout like Samsung’s Bada. Without the support structures and developer community, there can be no clamour generated for all important app consumption. Second, the advertising and branding has been dreadfully dull and even worse.
