Sprint Corp unveiled a new pricing plan that gives customers 20 gigabytes of data and up to 10 lines for $100, doubling its data offerings, the latest in a series of cuts and promotions that is re-shaping the wireless industry.
Sprint’s chairman, business tycoon Masayoshi Son, is betting new prices will revive a carrier hampered by an expensive network overhaul and rising competition.
“The message is simple: We are back in the game. We are going to offer most competitive value for American consumers,” Marcelo Claure, Sprint’s newly appointed chief executive told Reuters in an interview.
The company will release new plans for individuals later this week.
The announcement marks the first move for the new CEO, who last week said cutting prices would be his top priority.
The move comes after Verizon slashed prices for its unlimited talk and text plan and T-Mobile expanded its family plan to 6 lines and could signal more price cuts ahead for the industry as a whole.
Sprint is going it alone after scuttling a months-long effort to pursue a merger with No. 4 U.S. cellular provider T-Mobile US Inc.
Last year, an aggressive campaign by T-Mobile to address subscriber frustrations and lower prices sparked a domino effect that caused the U.S. top four carriers to restructure pricing plans and cut rates to lure customers in a nearly saturated market.
But analysts worry the industry’s latest discount spree could increase pressure on already tight margins and rattle dividends.
While top carriers and Verizon have largely been able to mitigate the impact of T-Mobile’s discounts on their subscriber base, they would likely have to respond to price cuts at Sprint with steep discounts of their own to keep subscribers from migrating, analysts said.
“We will see a trickle down in pricing concessions across the industry. This is the start of a price war many anticipated would be coming,” said Angelo Zino, analyst at S&P Capital IQ.
New pricing plans that charge customers separately for the cost of their devices have somewhat offset price cuts this year, Zino said, but if the discounts continue, they could pose a long-term threat to the dividends.
ZDNet’s Mary Jo Foley, citing unnamed sources, said that Microsoft will deliver a “technical preview” of Threshold late in September or early in October. Previously, Foley had reported that Microsoft would offer a preview of some kind this fall.
Threshold may be officially named “Windows 9″ by Microsoft — the company has said nothing about either the code name or labeled the next iteration of its desktop and tablet OS — although there are arguments for dumping a numerical title because of the possible association with Windows 8, which has widely been pegged as a failure.
“Technical Preview” is a moniker that Microsoft has used in the past for its Office suite. For both Office 2013 and Office 2010, Microsoft used the term to describe an invitation-only sneak peek. Both application suites were later released as public betas prior to their official launch.
Windows, however, has used a different nomenclature. For 2012′s Windows 8, Microsoft called the early looks ”Developer Preview,”"Consumer Preview” and “Release Preview,” all open to everyone. The first was analogous to an alpha, the second to a beta, and the third to a done-but-not-approved release candidate.
Windows 7, however, had used the more traditional “Beta” to describe the first public preview in early 2009. The previous fall, when Microsoft unveiled Windows 7, the firm had seeded an invite-only “pre-alpha” version, also dubbed a Developer Preview, of the OS to programmers and some influential bloggers.
Within hours, the Windows 7 Developer Preview leaked to file-sharing websites. Microsoft may have changed its practices for Windows 8, letting anyone download the first preview, because of the inevitably of leaks.
In an update to her blog of earlier today, Foley added that the “Technical Preview” nameplate notwithstanding, Microsoft would allow anyone to download Threshold/Windows 9 when it becomes available in the next few weeks.
If Microsoft does ship a preview soon and sets its sights on a second-quarter 2015 final release, it will have significantly accelerated the tempo from past practice. With Windows 7 and Windows 8, Microsoft offered its first previews 12 and 13 months, respectively, and the public beta 8 or 9 months, before launching the operating system.
Eight or nine months from September would be May or June 2015; that, however, assumes that the Technical Preview is of beta quality. The name itself hints at something less.
Microsoft appears eager to put Windows 8 behind it. It has stopped beating the drum about the OS and recently announced that it would not issue any additional major updates. Instead, the firm said last week, it will include improvements or new features in small packets using the same Windows Update mechanism that regularly serves security patches.
The storage of user data in China represents a departure from the policies of some technology companies, notably Google Inc, which has long refused to build data centers in China due to censorship and privacy concerns.
Apple said the move was part of an effort to improve the speed and reliability of its iCloud service, which lets users store pictures, e-mail and other data. Positioning data centers as close to customers as possible means faster service.
The data will be kept on servers provided by China Telecom Corp Ltd, the country’s third-largest wireless carrier, Apple said in a statement.
“Apple takes user security and privacy very seriously,” it said. “We have added China Telecom to our list of data center providers to increase bandwidth and improve performance for our customers in mainland china. All data stored with our providers is encrypted. China Telecom does not have access to the content.”
A source with knowledge of the situation said the encryption keys for Apple’s data on China Telecom servers would be stored offshore and not made available to China Telecom.
Apple has said it has devised encryption systems for services such as iMessage that even Apple itself cannot unlock. But some experts expressed scepticism that Apple would be able to withhold user data in the event of a government request.
“If they’re making out that the data is protected and secure that’s a little disingenuous because if they want to operate a business here, that’d have to comply with demands from the authorities,” said Jeremy Goldkorn, director of Danwei.com, a research firm focused on Chinese media, internet and consumers.
“On the other hand if they don’t store Chinese user data on a Chinese server they’re basically risking a crackdown from the authorities.”
Goldkorn added that data stored in the United States is subject to similar U.S. regulations where the government can use court orders to demand private data.
A spokesman for China Telecom declined to comment.
Chip-equipment maker Applied Materials has surprised most of the cocaine nose jobs of Wall Street with a better-than-expected third-quarter profit. It appears that contract manufacturers are spending more on technology used to make smartphone and memory chips.
The company also forecast current-quarter adjusted profit largely above analysts’ average estimate. Chief Executive Gary Dickerson said that demand for DRAM chips is expected to grow in the current quarter.
Applied Materials, which also provides equipment to make flat panel displays and solar cells, forecast an adjusted profit of 25-29 cents per share for the fourth quarter. Wall Street was expecting a profit of 26 cents per share.
Applied Materials expects revenue growth of about 10 to 17 percent, implying revenue of $2.19 billion to $2.33 billion for the quarter. Analysts on average were expecting $2.28 billion. Applied Materials’ net income rose to $301 millionin the third quarter ended July 27, from $168 milliona year earlier. Revenue rose 14.7 percent to $2.27 billion.
Revenue in the company’s silicon systems business, which brings in about two-thirds of total sales, rose 16 percent to $1.48 billion.
Sprint didn’t deny the report of Marcelo’s comments. A spokesman also confirmed Friday that Sprint is “focusing on providing the best value in the market.”
According to the account of Claure’s comments, he told workers, “We’re going to change our plans to make sure every customer in America thinks twice about signing up to a competitor.” The report, which first appeared in LightReading.com, also said that “very disruptive” rate plans are coming this week.
Sprint didn’t dispute Light Reading’s report, but a spokesman said Sprint is not commenting on “any potential pricing plans before they are announced.”
The spokesman, Doug Duvall, said Marcelo held his first all-employee town hall meeting before a standing-room-only crowd. He added: “He shared his passion for his family, work and soccer team and his commitment to leading Sprint. He discussed Sprint’s challenges and pledged to get Sprint ‘back in the game’ by focusing on providing the best value in the market, completing our network build and optimizing Sprint’s cost structure.”
By confirming Sprint wants to offer the “best value in the market,” it’s pretty clear that Sprint, the third-largest U.S. carrier, will soon wage a price war with the T-Mobile, the fourth-largest U.S. carrier that has quickly been gaining on Sprint.
Analysts recently said Sprint’s recent “Framily plan” isn’t competitive in the market, which former CEO Dan Hesse acknowledged in late July before his departure on Monday.
The Sprint Framily plans costs $160 a month for 4GB of data, but comes with overage charges and won’t allow tethering. Meanwhile, T-Mobile has a family plan offered through September that costs $100 a month for four lines and 10GB of data, although each line is limited to 2.5GB.
Hesse had earlier described subscriber plans Sprint was testing that have tiers of data and unlimited data.
According to Light Reading, Claure also told employees that price cuts are needed because Sprint’s network isn’t at the level of performance and reach that it should be. “When you have a great network, you don’t have to compete on price,” he reportedly said. “When your network is behind, unfortunately you have to compete on value and price.”
U.S. Federal Communications Commission has said it would accept public comments on its proposed new “net neutrality” rules through Sept. 15, giving the American public extra time to voice their opinions and concerns on how they think Internet traffic should be regulated.
The FCC has received more than 1 million comments already on new rules for how Internet services providers should be allowed to manage web traffic on their networks.
The FCC had set a deadline of July 15 for the initial comments and then September 10 for replies to those initial comments. However, the surge in submissions overwhelmed the FCC’s website and the agency had delayed the first deadline by three business days.
“To ensure that members of the public have as much time as was initially anticipated to reply to initial comments in these proceedings, the Bureau today is extending the reply comment deadline by three business days,” the FCC said on Friday, delaying the final deadline for comments to September 15.
The company reported Thursday that its net profit reached $214 million, while quarterly revenue increased 18 percent year-over-year to $10.4 billion.
Although better known as a PC maker, Lenovo has been making major gains selling mobile handsets in its home market of China. It is now the country’s largest smartphone vendor with a 12.5% share of the market, according to research firm IDC.
The second quarter was the first time Lenovo smartphones outsold its PCs, with 15.8 million units, the company reported on Thursday.
Lenovo’s handsets still aren’t making as much money as PCs. Almost half its revenue came from selling laptops, while its mobile devices division, which includes tablets, accounted for only 15% of its total revenue in the quarter.
The company’s PC business has in the past been helped by its huge presence in its home market of China. But in the second quarter, Lenovo reported that it was also making gains in PC sales to Europe, the Middle East, and Africa.
In those markets, the company’s revenue reached $2.8 billion, up from $1.9 billion a year ago.
Lenovo, which currently ranks as the number one PC vendor in the world, is trying to expand in servers and mobile devices. Earlier this year, the company announced it would acquire Google’s Motorola Mobility, and IBM’s x86 server business.
Lenovo is still working with regulators to get approval for those deals.
Social and mobile game company King Digital Entertainment Plc lowered its 2014 forecast after reporting lower-than-expected second-quarter revenue on Tuesday, as gamers continued to abandon its “Candy Crush Saga” game.
King also announced a $150 million special dividend, or 46.9 cents per share, payable to shareholders of record on Sept. 30. Its shares, however, slipped 22 percent in after-hours trading after closing at $18.20 on the New York Stock Exchange.
The company, which went public in March, said it has reduced its 2014 forecast and expects gross bookings in the range of $2.25 billion to $2.35 billion from its previous estimate of $2.55 billion to $2.65 billion.
“We have seen a step down in monetization in the latter part of Q2 and so we have adapted the view forward,” Chief Executive Officer Riccardo Zacconi said in an interview.
Investors have worried that unless King delivers a set of consistent and long-lasting hits, apart from “Candy Crush Saga,” it might suffer the same fate as “Farmville” maker Zynga Inc and “Angry Birds” developer Rovio Corp, which are struggling to retain players.
King’s second quarter gross bookings, an indicator of future revenue, was $611 million, up 27 percent from the year-ago period, but less than the last quarter when it reported gross bookings of $641.1 million.
King has yet to see its other titles such as “Farm Heroes Saga” and “Bubble Witch 2 Saga” fully offset user losses of its “Candy Crush Saga” puzzler game that accounted for about 60 percent of second-quarter gross bookings.
“We expect ‘Candy Crush’ will decline, but have a very strong tail and a long tail,” Chief Financial Officer Hope Cochran said in an interview. “We will be launching the ‘Candy Crush’ sister title in Q4, which will give more longevity to that title.”
What a difference a year makes. Motorola sold 8.6 million smartphones in the second quarter, up from 6.5 million in the first three months of the year, and more than double what it sold in the same quarter a year earlier, according to ABI Research.
The figures pale in comparison with those of Apple and Samsung, which sold 35.2 million and 75 million phones last quarter, respectively. But Motorola is in a position few thought it would reach just a year ago.
“The resurgence has slightly surprised me, to be honest. I didn’t expect to see Motorola come back in a meaningful way, but it actually has,” said Nick Spencer, senior practice director at ABI Research.
Ben Wood, director of research at CCS Insight, agreed.
“If you’d asked me about Motorola a year ago, I would have said it was on a distinct trajectory towards oblivion,” he said.
Motorola’s turnaround can be attributed only in part to Google, which announced it would buy the handset maker three years ago this week. The deal gave Motorola a new lease on life, but Google operated Motorola largely at arm’s length, and it now plans to sell the division to Lenovo.
It took more than two years after the Google deal for Motorola to release a phone that resonated with consumers. Its first device was the high-end Moto X, but not using the latest components and relying on software features to attract buyers turned out to be a miscalculation.
But thanks to the Moto G, the LTE version of that phone and the Moto E, Motorola’s sales have turned a corner. The company apparently hit on a winning formula, offering phones at lower prices but with features good enough to please many consumers.
“As the market for flagship smartphones has softened and a lot of people are looking at buying devices without a contract, Motorola’s Moto E and G seem to have really captured the moment,” Wood said.
Firmware is a type of software that manages interactions between higher-level software and the underlying hardware, though it can sometimes be the only software on a device. It’s found on all kinds of computer hardware, though the study focused on embedded systems such as printers, routers and security cameras.
Researchers with Eurecom, a technology-focused graduate school in France, developed a web crawler that plucked more than 30,000 firmware images from the websites of manufacturers including Siemens, Xerox, Bosch, Philips, D-Link, Samsung, LG and Belkin.
They found a variety of security issues, including poorly-protected encryption mechanisms and backdoors that could allow access to devices. More than 123 products contained some of the 38 vulnerabilities they found, which they reported privately to vendors.
They’re due to present their research next week at the 23rd Usenix Security Symposium in San Diego.
Most of the firmware they analyzed is in consumer devices, a competitive arena where companies often release products quickly to stay ahead of rivals, said Aurelien Francillon, a coauthor of the study and an assistant professor in the networking and security department at Eurecom.
“You have to be first and cheap,” Francillon said in a phone interview. “All of those things are what you should not do if you want a secure device.”
Firmware security practices lag far behind those of the PC software market, where vendors like Microsoft learned the hard way that they need to patch software automatically on a regular, frequent schedule.
That’s often not the case with firmware, which may not be designed to patch itself periodically and also relies heavily on third-party software that may not be current. In one instance, the researchers found a Linux kernel that was 10 years out of date bundled in a recently released firmware image.
“On these devices, it’s a real nightmare,” Francillon said.
Apple, which was at the forefront of creating the tablet market in 2010 with its first iPad, has seen growth plummet from 2012, as larger phones became more popular and people delayed replacing their tablets.
Mass production of the iPad with a 9.7-inch (24.6-cm) screen has already started, and it is likely to be unveiled by the end of current quarter or early next quarter, Bloomberg said, citing two people familiar with the matter.
A new version of the 7.9-inch iPad mini is also entering production and is likely to be available by the end of the year, Bloomberg said.
Apple spokeswoman Trudy Muller declined to comment on the report.
International Business Machines Corp said in July it would partner exclusively with Apple to sell iPhones and iPads, which could rejuvenate the tablet’s sales by entering into a largely untapped corporate market.
Apple shipped 13.2 million iPads in the June quarter, 8 percent less than a year earlier. Sales of the devices, which accounted for 15 percent of revenue, fell short of Wall Street’s expectations for the second quarter in a row.
Dylan Larson, ?director for Intel’s Xeon product marketing, told a workshop in Intel’s Hillsboro campus in Oregon that Intel was keeping a close eye on Arm which it sees as its biggest rival. He said the chip maker needs to do more in the mobile devices segment to increase its foothold as Internet of Things gathers momentum.
Intel should not have bothered. The silly season story was sparked by a blog from former Apple executive Jean-Louis Gassee in which he said: “When Apple announced its 64-bit A7 processor, I dismissed the speculation that this could lead to a switch away from Intel chips for the Macintosh line for a homegrown ‘desktop-class’ chip. I might have been wrong.”
This was seized on by the tame Apple Press that Jobs’ Mob was going to drop Intel for its own homemade chips. This is based on the religious conviction that Arm designs and alongside Apple brilliance will come close to Intel any time soon. While this might be true in smartphones they not really comparing like with like.
Billy Cox, Intel’s general manager for the software development division told Computer Weekly that Arm has some bright people working for it and they are capable of innovating, but Intel has invested years in research and innovation.
AMD has said that, by the fourth quarter of 2014, ARM-powered servers will start shipping. Market analysts expect that ARM processors will account for 20 per cent of server units shipped by 2019. Larson said Intel was still at least two years ahead of ARM in the server market, and besides being server focused was so five years ago.
“We are already doing that – five years ago we were more server-focused. Today we take a holistic approach,” Larson said.
He said that the Internet of things might mean mobile chips but it also leads to big data, and enterprises need sophisticated datacentre infrastructure to analyse that data, said Larson.
“Our datacentre strategy, which encompasses compute, storage and networking, is aimed at providing enterprises with a software-defined architecture.”
Security researcher Dan Rosenberg has told a Black Hat conference how it is possible to permanently unlock the bootloader on Android phones – provided they use a Qualcomm Snapdragon chip.
Rosenberg said that the flaw is in ARM’s TrustZone technology, which runs a trusted operating system and another for normal apps. This is supposed to improve device security, but in Qualcomm’s implementation, they cocked it up. It means that if a hacker gets access to the trusted operation part of the chip, it can run whatever application he or she likes.
This affects all known Android devices with a Qualcomm Snapdragon SoC, including the Nexus 5, the HTC One, and Samsung’s Galaxy Note 3, as well as the Moto X. The Samsung Galaxy S5 and the HTC One M8 have already been patched.
The U.S. Federal Communications Commission voted last week to require U.S. mobile carriers and many text-messaging apps to support functionality that allows texting emergency dispatch centers, even after questions about whether the centers will be ready by the deadline.
The commission’s vote requires U.S. mobile carriers and some texting apps to put emergency text-to-911 functionality in place by the end of the year.
Even though the nation’s four largest mobile carriers have all added text-to-911 functionality this year, less than 2 percent of the nation’s 6,800 emergency dispatch centers are ready to receive texts, said Commissioner Ajit Pai. The commission’s action will give smartphone users the impression they can send text to emergency responders, when many will not be able to, he said.
The FCC’s action “encourages the public to dive into text-to-911 functionality, when in reality, there’s hardly any water in the pool,” Pai said. “The order is sure to result in massive consumer confusion, and therefore will endanger, rather than advance, public safety.”
FCC Chairman Tom Wheeler applauded the largest mobile carriers — Verizon Wireless, AT&T, Sprint and T-Mobile USA — for adding text-to-911 functionality. The agency needs to push other carriers and emergency dispatch centers, called public-safety answering points or PSAPs, to do the same, he added.
“A lot of time of has passed since [the four largest] carriers stepped up and did something voluntarily, and the other carriers serving the consumers of America did not,” he said. “If you don’t step up to your responsibility, we will.”
Smartphone users should still call 911 if possible, but text-to-911 services need to be more widely available, Wheeler said.
The adoption of text-to-911 will let smartphone users contact police and other emergency responders when it’s not safe to talk on the phone, Wheeler said. It will also aid people with hearing or speech disabilities, he noted.
“Texting is now as important a function on a mobile device as talking,” Wheeler said. “Some of those text messages are cries for help.”
Last week Zynga reported results for the quarter that ended June 30, revealing declining revenues and deepening losses. In the process, the company also lowered its outlook for the full year.
For the second quarter, Zynga posted revenues of $153.2 million, down 34 percent year-over-year. The company also saw a net loss of $62.5 million, compared to the previous second quarter’s loss of $15.8 million. On a non-GAAP basis, Zynga reported bookings down almost 7 percent to $175.1 million, with a non-GAAP net income of $2.8 million, as opposed to the $6.1 million non-GAAP net loss it reported for last year’s second quarter.
“While our quarterly financial results were in line with our guidance range, we aspire to do better and improve execution across our business,” Zynga CEO Don Mattrick said. “Inside Zynga, we recognize that our products have the potential to live for multiple years and with nurturing, refinement and investment, they can grow and scale. We are purposefully competing, and while we would like to be further along, we believe we are making the right decisions to grow our business and unlock long term shareholder value.”
The results convinced Zynga to downgrade its outlook for the full year, as it now projects bookings of $695-$725 million, down from $770-$810 million. Meanwhile, Zynga expects its full-year non-GAAP earnings per share to be flat to down a penny, compared to the previous guidance of up one to three cents.
On the plus side, Zynga’s daily active users, monthly active users, monthly unique payers, and monthly unique users were all up quarter-over-quarter. However, all of those metrics were down significantly year-over-year.
Zynga shares were down nearly 8 percent as of this writing to $2.69 in after-hours trading.