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[WEEKLY WIRELESS REPORT] Week ending May 11, 2012

This Week’s Stories experience, and uses the most advanced mobile internet technology on the market to make their lives easier and keep their families and property safer,” AT&T Announces IP-Based Petersen said. Remote Home Monitoring May 7, 2012 In February, AT&T announced plans to launch an SDK for international providers to equip global service providers with capabilities to offer customizable, web- AT&T has announced plans for a new consumer- based home automation, energy and security services based remote home monitoring system that includes to their subscribers. a portfolio of all-digital, IP-based home security monitoring and automation services. www.wirelessweek.com Called AT&T Digital Life, the carrier says the services will give users control over various aspects of their AOL to Give Shareholders All homes – security cameras, thermostat, water systems – using any web-enabled device, including PCs, Proceeds from Patent Bonanza tablets and , regardless of wireless May 9, 2012 carrier. AOL will give 100% of the proceeds from its $1 billion AT&T said it plans to begin trials in Atlanta and Dallas patent sale "directly back to shareholders," CEO Tim this summer. Armstrong said Wednesday, but the details are still being worked out. Specifically, AT&T says the new system will allow users to monitor devices such as cameras, AOL announced last month that it had agreed to sell window/door sensors, smoke, carbon monoxide, about 925 patents to (MSFT, Fortune 500) motion and glass break sensors, door locks, for $1.1 billion in cash. AOL also granted a non- thermostats, moisture detection and appliance power exclusive license to Microsoft for its remaining controls. patents. A few weeks later, announced plans to will buy 625 of those patents from Microsoft The devices will be wirelessly enabled to connect to for $550 million. the IP-based AT&T Digital Life platform inside the home. “We have not made the final decision," AOL CFO Artie Minson said about AOL's plans for distributing "AT&T Digital Life will change the way people live, the cash. AOL has already bought back 15 million work and play – and meets a clear need in the shares and has to be careful not to "trigger a change market,” said Kevin Petersen, senior vice president, in control at the company" by buying more, he said. Digital Life, AT&T Mobility, in a statement. “The service is smart, simple and customer centric– freeing Armstrong said he is generally happy with where homeowners to do the things they want to do without AOL's balance sheet and cash hoard stand. AOL had compromising on the things they need to do to care nearly $370 million in cash and liquid assets as of for family and home.” March 31.

AT&T promises professional installation of the "At this point, if we had a good reason to hang onto a platform, sensors and other devices, as well as 24/7 billion dollars in cash, we'd do it," Armstrong said. technical support and users will be able to add more services after the initial installation. Despite Armstrong's bullishness on the deal, he said the sale "isn't fully reflected in our valuation" in the New users will be able to check the system out in market right now. AOL shares are up almost 40% AT&T stores, and it will be made available for since it announced the patent deal. purchase on att.com when available commercially. He also talked up the 300 patents AOL is hanging The Digital Life platform includes built-in AT&T mobile onto, which relate to its core business, including Internet service and will also be capable of Wi-Fi, Z- technologies related to advertising, search, Wave and wired broadband connections. social networking, mapping, streaming and security. Microsoft and Facebook will each have a non- “Our focus is on providing our customers with a exclusive license to those remaining patents. comprehensive home security and automation solution that offers the best possible customer money.cnn.com [WEEKLY WIRELESS REPORT] Week ending May 11, 2012

Products & Services On Thursday, Microsoft also launched "Snapshot," which provides instant answers to queries about topics like restaurant reservations, hotel reviews, Bing Fires at with New maps and movie trailers. It also leverages Bing's Social Search social partnerships to help users search for people. May 10, 2012 Most of those features were available in Bing previously and can be accomplished in Google, but Microsoft is launching a major overhaul of its also-ran Snapshot relocates that data to a middle column, search engine Bing on Thursday, aiming at a keeping it out of the standard search results. weakness it sees in market leader Google.

Even if Bing's changes give the service a boost, it has The most prominent new element in Bing's redesign is a long, long way to go to catch up to Google -- "Sidebar," a social search feature that scours users' something Microsoft hasn't been able to do since it social networks to surface information relevant to their launched Bing in June 2009. search queries.

Bing currently maintains a 15.3% share of the search Google unveiled a similar feature dubbed "Search market, up from 8.4% when Bing launched, according Plus Your World" in January to decidedly mixed to online data tracker comScore. Google commands reviews. Though some of the basic features are the 66.4% of the market, up four-tenths of a percentage same, Microsoft (MSFT, Fortune 500) thinks it has a point from the 65% it held when Bing debuted. better solution.

More than half the share that Bing has gained has Like Google, Bing's Sidebar will display posts from actually come from third-place Yahoo. The rest has people in your social networks who have recently come from search cellar-dwellers Ask.com and AOL. discussed a topic related to what you just searched for. A search for "San Francisco restaurants" will return posts from your friends talking about good eats There's usually no such thing as "bad" market share in the city. growth, but Yahoo's search is powered by Bing. That means more than half of Microsoft's share growth has come from cannibalizing its search partner. That's where the similarities end.

Meanwhile, Microsoft is losing upwards of $1 billion a Google's "social search" only displays Google+ posts quarter on its search business. -- something that Facebook and are cranky about. It's a walled garden that fences users inside Google's proprietary network. The search engine's sad state of affairs has even made it the butt of pop-culture jokes. On Sunday's episode of HBO show "Veep," the vice president's Bing's Sidebar works with multiple social networks, socially inept aide yelled out, "I'm Binging it!" to a including Facebook, Twitter and Google+. It stashes search request. its social search results off to the right side of the page, while Google plops them right into the middle of its main results. But if Bing does get social search right -- in stark contrast to Google's widely criticized approach -- it may be time to start taking it more seriously. Bing's strategy is pointedly different than that of Google, which is laser-focused on building its own . Though Google+ has grown to nearly money.cnn.com 100 million users, analysts are still trying to determine how active and engaged they actually are. Mozilla and Google Cry Foul

"We think this is a far better approach than building Over Browsers in Windows 8 our own social network," Stefan Weitz, Bing's senior May 10, 2012 director, said in an interview with CNNMoney. "We're not being restricting with anyone." If you thought you’d be happily browsing the web in either Google Chrome or Mozilla Firefox on that Sidebar isn't the only new feature in Bing's makeover. Windows 8 tablet you’re planning on buying, think Some of the more superficial elements of the redesign again. According to Mozilla, Microsoft is planning to began to show up on the website earlier this month, restrict the capabilities of third-party browsers on the including a cleaned-up look with significantly less tablet version of Windows 8, called Windows RT. clutter on the margins. [WEEKLY WIRELESS REPORT] Week ending May 11, 2012

In a blog post, Mozilla expresses great concern over which says it has tracked 82.5 million phones the possibility that Microsoft might restrict browsers destroyed by water alone. other than Internet Explorer from working as a full- featured browser on a Windows tablet. While a third- The Hydro, which Chier calls a mid-tier Android phone, party browser such as Firefox would still run in the comes running Ice Cream Sandwich and features a touch-friendly Metro environment, it wouldn’t have 3.5-inch HVGA 480 x 320 display, 1GHz Snapdragon access to the Windows “classic” desktop. processor, 3.2-megapixel camera, Wi-Fi and Consequently, the browser would be cut off from the Bluetooth. “speed, stability and security” of a modern web browser, Mozilla says. isn't new to the business of keeping devices safe against water. "We began developing devices as Google echoed Mozilla’s worries in a statement. early as 2008, initially in Japan, with this water- resistance technology," Chier said, noting that to date “We share the concerns Mozilla has raised regarding the company has a total of 16 water-resistant phones the Windows 8 environment restricting user choice on the market. and innovation,” Google said. “We’ve always welcomed innovation in the browser space across all Chier explains that the Hydro is part of Kyocera's platforms and strongly believe that having great strategy to attract consumers looking for the competitors makes us all work harder.” ruggedized devices. The company already holds three of the four SKUs in Sprint's Direct Connect Answering a query from Mashable, a Microsoft portfolio. "This ruggedized area is really something spokesperson directed us to the company’s official we've been working hard on," Chier says. You’ll recall blog post about Windows on ARM (since renamed that Kyocera also partnered with Sprint on the quirky Windows RT), which has a lot of information about dual-screen Kyocera Echo. Internet Explorer but does not mention third-party browsers at all. The spokesperson wouldn’t say The Hydro is set to launch sometime in late summer. whether or not the final build of the software would Chier says there’s no carrier or pricing information restrict the capabilities of third-party browsers. available just yet. mashable.com In the interest of further addressing that mass-market audience, Kyocera recognizes that a lot of users Emerging Technology upgrading from a simple texting phone will still want a full qwerty keyboard on their new Android device. Enter the Kyocera Rise. Kyocera Introduces Hydro, Rise & New Audio Technology Cheir refers to a recent Yankee Group study that May 8, 2012 showed 69 percent of respondents said qwerty keyboards were a “nice to have” or a “must-have” feature on their phones. Kyocera is at it again, differentiating from the rest of the mid-range Android pack with subtle flares of technology that appeal to a broad customer base. The The Rise’s specs fall pretty much in line with the company announced two new Android phones, as Hydro, although it is not water resistant and features a well as demonstrating something called "Tissue- slide-out qwerty keyboard. Conduction Audio Technology," which the company says will improve the quality of voice calls by Last but not least, Kyocera is introducing a new eliminating ambient noise. technology that it hopes will help those who still make voice calls hear the person on the other end of the The Hydro, a water-resistant Android , is line a little better. Tissue-Conduction Audio perhaps the headliner for Kyocera at this year's show. Technology is designed to deliver sound vibrations John Chier, spokesman for Kyocera, explains that the directly to the eardrum. Chier says it’s a technology Hydro is certified protected against water damage for that was originally used in hearing aids but which up to 30 minutes in up to a meter of water. Chier says Kyocera hopes will translate well to mobile phones. a survey the company conducted showed that 70 percent of respondents said that waterproofing their The technology uses a specially designed Kyocera mobile was important to them. ceramic transducer to transmit sound through air as sound waves and tissue as vibrations. Chier says it "It's something that's really an adversary of mobile shouldn’t be too much of a mystery that Kyocera is phones," Chier said, citing research from TNS Global, well versed in this area. The company’s name, [WEEKLY WIRELESS REPORT] Week ending May 11, 2012

Kyocera, is derived from two words, Kyoto and developers have struggled to monetize their Android Ceramics. apps and games: A survey published earlier this week by research firm Funzoo reveals that mobile gamers “It’s a really great technology for helping overcome who play titles on iOS devices spend five times more ambient noise for people who have difficulty hearing than their counterparts on Android. their cell phones,” he says. www.fiercemobilecontent.com www.wirelessweek.com Mergers & Acquisitions Google Building Android Social Gaming Network Acquires mSpot to May 10, 2012 Expand Cloud Music Efforts May 10, 2012 Google is at work on a social gaming network optimized for its Android and has acquired cloud services firm designed to go head-to-head with archrival Apple's mSpot in a move to increase the breadth of music, Game Center multiplayer hub for iOS. video and radio content available across its devices. The companies did not disclose financial details of the Citing a source familiar with Google's plans, Business deal, although The New York Times estimates a price Insider reports the company is developing a native tag of $8.8 million. Android client supporting social gaming interactions across the Android platform, complete with an The mSpot platform includes branded streaming achievement system that awards virtual trophies for music and movie services optimized for a range of in-game accomplishments as well as leaderboard mobile devices and operating systems including ranking gamers against their friends. Apple's iOS and Google's Android. The free mSpot app for Android enables users to upload their digital While Android developers can presently leverage music library to a personal cloud locker to stream third-party social gaming tools to integrate multiplayer songs on the go or cache favorites for offline listening; features into their titles, Business Insider speculates the app also features lyrics, live album art wallpaper the native Android hub will incorporate features from and an equalizer. MSpot offers the first 5GB (about the Google+ social networking service, enabling 4000 songs) for free, with larger storage plans gamers to extend their existing digital identity and available for purchase. The company also generates contacts list into the mobile social gaming realm. revenues from premium rental fees tied to its mSpot Movies app. "[Google is] starting to really understand all of the needs and wants to make a game really successful," Samsung said it will integrate mSpot services directly an industry source said. "As recently as even a year into future smartphones and tablets. MSpot also ago, that really wasn't part of their institutional DNA. offers white-labeled cloud entertainment services But I think they're getting there." across operators including Verizon Wireless, AT&T and Sprint Nextel; The San Jose Mercury News A Google spokesperson declined to comment. reports mSpot will continue to operate as an independent subsidiary, with the white-label partnerships remaining intact. Apple introduced Game Center in the fall of 2010. Game Center-enabled titles allow players to compete against friends, send friend requests, vie for The mSpot acquisition follows a week after Samsung achievements and organize online multiplayer games. expanded its Music Hub streaming service to include In mid-February, Apple extended the multiplayer a scan-and-match feature enabling consumers to network to its forthcoming Mac OS X Mountain Lion access their digital music library across multiple operating system revamp, bringing iOS social gaming platforms and devices. to the desktop. At that time, Apple stated there are more than 20,000 iOS titles boasting Game Center Announced in conjunction with the new Galaxy S III support, with more than 100 million registered users smartphone, the revamped Music Hub scans the across the network. user's hard drive, matching their songs with the 17 million tracks available in Samsung's library and Android dominates U.S. smartphone sales with a making that content accessible via the cloud. Music market share of 51 percent, followed by iOS at 30.7 Hub closely resembles Apple's iTunes Match, which percent, according to the latest comScore data. But mirrors music library files with a 256 kbps AAC DRM- free version culled from the iTunes Store, offering [WEEKLY WIRELESS REPORT] Week ending May 11, 2012 consumers anytime/anywhere access to their don't want to hold them for too long but will see where collections via the iCloud digital media storage the shares go after the IPO." platform. Another takeover target poised to cash in big is Available for download from the Samsung Apps FriendFeed, a social news and link sharing service storefront, the subscription-based Music Hub app that Facebook acquired in August 2009. offers unlimited streaming access, allowing users to browse and search for content by applying filters like Facebook paid for the deal with $15 million cash and new releases, genres, artists and chart rankings. stock valued at around $35.5 million, according to the Music Hub streams tracks via Wi-Fi or 3G connection; Wall Street Journal. in addition to smartphones and tablets, the service is compatible with the manufacturer's Smart TVs and Home Theatre Facebook's IPO filings get into the specifics: It issued systems, as well as the desktop. 11,052,955 shares in August 2009 to "ten individuals and one entity" in connection with an acquisition. Facebook didn't identify the company, but several Music Hub costs $9.99 per month for streaming to sources close to the deal confirmed to CNNMoney one device or $12.99 per month to as many as four that it's FriendFeed. A Facebook representative devices. The scan-and-match tool is offered free with declined to comment. a paid subscription; by comparison, Apple offers iTunes Match at $24.99 per year. At $35 a share, FriendFeed's stake will be worth $387 million. Next to , it's the largest deal www.fiercemobilecontent.com Facebook has done.

Facebook's Early Acquisitions So what did Facebook get for its investment? Soar in Value May 11, 2012 An executive who helped shape Facebook's future.

Facebook shocked most of Silicon Valley by shelling FriendFeed had four co-founders, all former Google out a cool $1 billion to buy Instagram -- the priciest engineers. Co-founders Paul Buchheit and Jim Norris acquisition ever for a company that likes to grab moved on to other ventures, while Sanjeev Singh and startups when they're tiny and cheap. Bret Taylor stayed put.

But Facebook's now-staggering valuation, which Taylor, who now serves as Facebook's chief could top $75 billion when the company goes public, technology officer, is one of the company's leading means some of its earliest acquisitions are now worth engineers. Some Silicon Valley insiders say the deal eye-popping sums. was one of the smartest acquisitions Facebook has done. Here's an especially ironic one: . "It'll go down as one of the best, no-brainer decisions in the history of technology," says Color CEO Bill Facebook quietly purchased a patent bundle from Nguyen, who knows a thing or two about acquisitions. Friendster's current owner, Malaysian Internet His last startup, Lala, was bought by Apple in 2009. company MOL Global, in May 2010, and handed over 3.6 million shares as part of the price tag. The deal was valued around $40 million at the time, according "FriendFeed is one of the most transformative to GigaOm and other tech blogs. technologies we've ever seen," Nguyen says. "It changes how we consume our information. Before, it was search and browsing. No one was delving into If Facebook's shares price at $35, the high end of its the Web based on what friends were doing." proposed range, Friendster's stake will be worth $127 million. FriendFeed co-founder Buchheit, now a partner at tech incubator Y Combinator, said it wasn't an easy MOL has been sitting on its shares ever since, but it decision to sell -- even though in retrospect he sees it may unload them soon. as the clear right move.

"We will probably sell them for our business," MOL "I became convinced that they had a lot of upside," he Global principal owner Tan Sri Vincent Tan told says of the discussions with Facebook. "When you Malaysian newspaper The Star earlier this year. "We look at where we were as a product, the deal made a lot of sense." [WEEKLY WIRELESS REPORT] Week ending May 11, 2012

Facebook has done at least two dozen acquisitions “Sprint doesn’t just provide connectivity, but is an over the years, but it's been relatively stingy about enabler of the ecosystem,” he said. The carrier using its stock as currency. For all of the the opened its M2M Collaboration Center in Burlingame, acquisitions detailed in its IPO filing, Facebook issued Calif., two years ago as an interactive lab to help its a total of 21.8 million shares -- less than the 23 million customers develop and test solutions. Its year-old shares it is spending on Instagram alone. Sprint Command Center, a web-based portal, allows businesses to manage connected devices. Facebook CEO Mark Zuckerberg called that megadeal an aberration: "We don't plan on doing One area that is attracting M2M services is the utilities many more of these, if any at all," he said at the time. industry, Nelson said, because of the need to remotely monitor utility grids, including meters. True to form, Facebook's next acquisitions have been Telematics also is growing because only 4 percent of back in its comfort zone. Last month it issued 40,000 today’s vehicles are connected but the expectation is shares to pick up Tagtile, a small local marketing that vehicles will be connected for safety, diagnostics startup, and last week it nabbed Glancee, a social and even insurance purposes. discovery app, for a not-yet-disclosed purchase price. Sprint has partnered with Chrysler to provide wireless Even the newbies are poised for a nice payday. The communications for the auto manufacturers Uconnect value of Tagtile's stake will likely top $1.4 million when program. The carrier’s radios also a built into an Facebook goes public, making the year-old Audiovox aftermarket solution called OBD2 which company's two co-founders the newest members of provides wireless connectivity for vehicle diagnostics Facebook's million-dollar club. and performance information. That can be used for “user-based insurance” coverage that rates premiums based on driving performance. Also, the telematics money.cnn.com provider Aeris uses Sprint’s network for communications in Hyundai’s Blue Link system. Industry Reports M2M also is showing up more in such things as digital signage uses for information along highways or for Sprint Eyes M2M Growth advertising. It also is used for signs associated with May 9, 2012 point of sale terminals, including many Red Box video rental outlets. Sprint has been offering machine-to-machine communications more than a decade and is “Wireless is well-adapted to all these purposes,” continuing to see real growth in the service, according Nelson said. to Tom Nelson, whole marketing and emerging solutions director for the carrier. www.wirelessweek.com

Nelson, speaking on the sidelines at the CTIA U.S. Wireless Subscribers Hang Wireless 2012 show, said analysts who had predicted last year that M2M would be one of the industry’s Up on Contracts biggest growth generators are now saying that growth May 11, 2012 is taking place. Sprint, eyeing that expansion, created its emerging solutions group nearly three years ago to U.S. consumers have had their fill of expensive, bring together the expertise it had been developing. contract-based phone plans. Figures from T-Mobile USA on Thursday, added to earlier reports from other Potential enterprise customers are interested in the companies, indicate that the U.S. wireless industry return on investment from M2M, which Nelson said lost subscribers from contract-based plans for the first can be driven by gaining new business revenue or by time in the first quarter. Contract-based plans are the cutting costs. ROI can usually been found in one of most lucrative ones for phone companies. The those two areas, he said. industry default over the past several decades, they account for the vast majority of revenue at the big phone companies. The biggest hurdle for an enterprise to use M2M solutions has been the task of stitching together its own solutions, Nelson said, which is where Sprint The seven largest U.S. phone companies, comes in. The carrier can offer end-to-end M2M representing more than 95 percent of the market, lost solutions either from its internal expertise or through a combined 52,000 subscribers from contract-based its partners, he said. plans in the January to March period, according to a tally by the Associated Press. The companies have a combined 220 million devices on such plans, [WEEKLY WIRELESS REPORT] Week ending May 11, 2012 accounting for about two-thirds of the total number of manage, since the companies have incompatible devices. networks. Branding could pose a challenge too: T- Mobile wants to appeal to business customers, while Since nearly every adult, and many children and MetroPCS sells almost exclusively to low-income, teenagers, already have phones, there's little room for urban households. Acquisition talk surrounding growth anymore. But subscribers are also flowing to MetroPCS surfaces from time to time, but no deals cheaper, no-contract plans, which showed an have resulted. increase of at least 2 million. That figure, however, is down from more than 5 million in the same quarter a The AP's tally of subscribers excludes some contract- year ago. based machine-to-machine connections reported by T-Mobile. The company also added 435,000 The industry is also adding millions of non-phone prepaying subscribers of all kinds in the quarter, devices, like smart energy meters. These so-called which was the best result in more than two years for "machine-to-machine" connections usually carry very that category. T-Mobile credits its new prepaid low monthly fees, on the order of a few dollars per monthly plans with fast "4G” data service for the month. increase.

For example, AT&T subscribers on contract-based www.mobile-tech-today.com plans pay an average of $64.46 per month, while other AT&T customers pay an average of $11.52 per month.

T-Mobile's report comes on the last day of the U.S. cellphone industry's annual trade show in New Orleans. At the show, companies talked about various ways of boosting their business outside phones. For instance, AT&T launched a home security and automation business, and the head of its wireless business, Ralph de la Vega, said the company is getting closer to launching family data plans, which would allow the sharing of one "bucket" of data among various devices and family members. That could encourage people who already have a smartphone to get a tablet with data service as well. Verizon Wireless has already announced that it is introducing such plans this summer.

The first quarter is a seasonally weak one for contract-based plans, and the industry is likely to show some subscriber additions for the whole of the year. But the gains will be spread unevenly over the phone companies. For the last year and half, the four nationwide phone companies have added or lost subscribers in order of size: Verizon Wireless, the largest, has gained the most, followed by AT&T Inc. Sprint Nextel Corp., No. 3 in size, has mostly lost subscribers, while No. 4 T-Mobile has done so consistently. That poses a conundrum for regulators who want to preserve vibrant competition in the industry.

AT&T launched a major bid to consolidate the industry last year by striking a deal to buy T-Mobile for

$39 billion, but the project was scuttled by regulators th who said it would reduce competition and raise prices 120 Madison St. 15 Floor for consumers. On Wednesday, Bloomberg News, Syracuse, New York 13202 citing anonymous sources, reported that T-Mobile (315) 470-1350 was in talks to buy MetroPCS Communications Inc., 1-888-8KSRINC the fifth-largest cellphone company in the U.S. However, the combination would be difficult to