FCC Mandates Text-To-911

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.”

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Apple-IBM Alliance Downplayed

IBM Corp’s recent move to team up with Apple Inc to sell iPhones and iPads loaded with corporate applications has excited investors in both companies, but two rivals say they are unfazed for now.

Top executives at Dell and BlackBerry Ltd scoffed at the threat posed by the alliance, arguing the tie-up is unlikely to derail the efforts of their own companies to re-invent themselves.

“I do not think that we take the Apple-IBM tie-up terribly seriously. I think it just made a good press release,” John Swainson, who heads Dell’s global software business, said in an interview with Reuters in Toronto last week.

PC maker Dell and smartphone maker BlackBerry are in the midst of reshaping their companies around software and services, as the needs of their big corporate clients morph.

Swainson, who spent over two decades in senior roles at IBM, said, “I have some trouble understanding how IBM reps are going to really help Apple very much in terms of introducing devices into their accounts. I mean candidly, they weren’t very good at doing it when it was IBM-logoed products, so I do not get how introducing Apple-logoed stuff is going to be much better.”

While conceding that Apple products hold more allure, Swainson said they lack the depth of security features that many large business clients like banks covet.

IBM and Apple could not immediately be reached for comment.

BlackBerry Chief Executive John Chen similarly downplayed the threat of the alliance in an interview with the Financial Times, likening the tie-up to when “two elephants start dancing.”

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Samsung Makes Changes In Mobile

Samsung Electronics Co Ltd, the world’s biggest mobile phone manufacturer, has replaced the head of its mobile design team amid criticism of the latest Galaxy S smartphone.

Chang Dong-hoon offered to resign last week and will be replaced by Lee Min-hyouk, vice president for mobile design, a Samsung spokeswoman said on Thursday.

“The realignment will enable Chang to focus more on his role as head of the Design Strategy Team, the company’s corporate design center which is responsible for long-term design strategy across all of Samsung’s businesses, including Mobile Communications,” Samsung said in a statement.

Lee, 42, became Samsung’s youngest senior executive in 2010 for his role in designing the Galaxy series, a roaring success which unseated Apple Inc’s iPhone as king of the global smartphone market.

Samsung now sells two times more smartphones than Apple, largely thanks to the success of Galaxy range.

But the South Korean firm has also been battling patent litigation the world over, with Apple claiming Samsung copied the look and feel of the U.S. firm’s mobile products.

The Galaxy S5, which debuted globally last month, has received a lukewarm response from consumers due to its lack of eye-popping hardware innovations, while its plastic case design has been panned by some critics for looking cheap and made out of a conveyor belt. The Wall Street Journal said the gold-colored back cover on the S5 looked like a band-aid.

Chang, a former professor who studied at the School of the Art Institute of Chicago, will continue to lead Samsung’s design center which overseas its overall design strategy.

Lee, who acquired the moniker of “Midas” for his golden touch with the Galaxy series, started out designing cars for Samsung’s failed auto joint venture with Renault in the 1990s.

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Will Sprint Acquisition Efforts Succeed

Sprint Corp is meeting with banks to devise a funding plan for its bid for smaller rival T-Mobile US Inc, a source familiar with the situation said, as the mobile carrier works to ease regulatory concerns that the deal would hurt competition.

The source said that Sprint, which is owned by Japan’s SoftBank Corp, is looking to fund the bulk of T-Mobile’s estimated $50 billion price tag with corporate bonds and cover the rest with syndicated loans and convertible bonds.

Sprint is currently having discussions with at least five banks, the source told Reuters, including JP Morgan, Goldman Sachs and Deutsche Bank.

Bloomberg, which first reported that Sprint was in talks with banks on Thursday morning in Asia, said the carrier was also talking to Mizuho Financial Group Ltd and Citibank. Softbank is expected to make a formal offer in June or July, Bloomberg added.

Sprint spokeswoman Roni Singleton told Reuters the company does not comment on rumors and speculation. T-Mobile and SoftBank both declined to comment on the Bloomberg report.

Sprint is facing a battle ahead with U.S. regulators who oppose consolidation in the wireless market on the basis it would inhibit competition. The company is aware it may have to give up some of its spectrum holdings to win over critics, the source said.

Two of the most vocal opponents to the deal are Federal Communications Commission Chairman Tom Wheeler and U.S. antitrust chief William Baer, who have pointed to T-Mobile’s success since U.S. authorities rejected a 2011 merger between AT&T Inc and T-Mobile on the grounds the market needs at least four major players to be competitive.

The failure of that deal cost AT&T a $6 billion break-up fee, a penalty Sprint feels confident it can avoid, the source said, adding that it is leaning towards having Deutsche Telekom, which currently owns 67 percent of T-Mobile, retain part of that stake.

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Juniper Boots Employees

Juniper Networks plans to reduce its global workforce by six percent and focus on its high-growth businesses. Juniper said most of the cuts would impact middle management positions and that it expected to incur cash charges of about $35 million in the first quarter, related to severance and other expenses. The company had 9,483 full-time employees as of December 31.

Juniper also said it would stop development of the application delivery controller technology, which helps remove excess load from servers, resulting in a non-cash intangible asset impairment charge of about $85 million. The company said it plans to consolidate its facilities, flog off of about 300,000 square feet of leased facilities.

Juniper added that it expected to record other non-cash asset write-downs of about $10 million in the first quarter and that it expects to carry out more restructuring in the second quarter.

Hedge fund Elliott recently claimed that Juniper shares were “undervalued” and could be worth $35-$40 if Juniper focused on revamping its core business of making routers and switches for mobile carriers such as Verizon and AT&T. Shares of Juniper are currently worth at $26.35.

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Intel Buys Into Altera

Technology gossip columns are full of news that Intel and Altera have expanded their relationship. Apparently, Altera has been Intel’s shoulder to cry on as the chip giant seeks to move beyond the declining PC market and the breakup of the Wintel alliance. Intel took the break up very hard and there was talk that Alteria might be just a rebound thing.

Last year Intel announced that it would manufacture Altera’s ARM-based quad-core Stratix 10 processors, as part of its efforts to grow its foundry business to make silicon products for third parties. Now the two vendors are expanding the relationship to include multi-die devices integrating Altera’s field-programmable gate arrays (FPGAs) and systems-on-a-chip (SoCs) with a range of other components, from memory to ASICs to processors.

Multi-die devices can drive down production costs and improve performance and energy efficiency of chips for everything from high-performance servers to communications systems. The multi-die devices will take advantage of the Stratix 10 programmable chips that Intel is manufacturing for Altera with its 14-nanometer Tri-Gate process. Intel’s three-dimensional transistor architecture combined with Altera’s FPGA redundancy technology leads to Altera being able to create a highly dense and energy efficient programmable chip die that can offer better integration of components.

At the same time, Intel officials are looking for ways to make more cash from its manufacturing capabilities, including growing its foundry business by making chips for other vendors. CEO Brian Krzanich and other Intel executives have said they will manufacture third-party chips even if they are based on competing infrastructure, which is the case with Altera and its ARM-based chips.

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AMD Buys Mobile Patents

China’s Lenovo is acquiring patents related to 3G and 4G technologies from U.S.-based Unwired Planet for $100 million, as the company sets about expanding with its proposed Motorola Mobility acquisition.

The 21 patent families that Lenovo is purchasing from Unwired Planet will help the Chinese company grow its smartphone and mobile business in new markets, it said Thursday.

In addition, Unwired Planet is licensing its patent portfolio to Lenovo for an unspecified number of years. The Nevada-based company develops mobile technologies in use by carriers including AT&T and Sprint. After its deal with Lenovo closes, Unwired Planet said it will have about 2,500 issued and pending international patents in its portfolio.

Although Lenovo is best known as a PC maker, the company is aiming to becoming a major vendor of mobile phones. Already, in its home market of China, Lenovo ranks as one of the biggest smartphone vendors, and has dozens of different models on the local market.

Lenovo’s mobile phone business is set to grow even larger. In January, the company announced it planned to buy Motorola Mobility from Google for $2.9 billion.

With the proposed acquisition, Lenovo’s handset business will get a foothold in the North American market. The company plans to keep the Motorola business intact, and even use the business to sell phones in its home market of China.

The Motorola deal will also help Lenovo shield itself from patent-related lawsuits that have been used to try to stymie the businesses of other handset makers. By buying Motorola, Lenovo will take ownership of more than 2,000 patent assets and also gain access to Google’s own patent portfolio.

Lenovo’s deal with Unwired Planet is expected to close in 30 days.

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Can MediaTek Challenge Qualcomm?

A top analyst has said that Qualcomm has nothing to fear from Media Tek’s announcement that it is gunning for the smartphone market.

Qualcomm rules North America and Europe while right now MediaTek is best known for being the leading player in the Chinese market. Now there are signs that MediaTek seems to have reached the maximum market share that they can achieve in China and will be looking to go after Qualcomm in other markets.

But Jefferies analyst Peter Misek views MediaTek’s cunning plan as more of a medium to long-term threat to Qualcomm versus a near-term threat.

He commented, “The high-end smartphone market is saturated and while we believe that pricing and subsidy pressure will become more severe globally, Qualcomm has significant opportunities through integration, iPhone 6, and royalty collections in China.”

Of course it is optimistic to think that the iPhone 6 will do well in China. Many analysts have lost their lunch money betting on Jobs’ Mob doing anything in China.

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Qualcomm Acquires Patents From HP

Chip making giant Qualcomm Inc has purchased a patent portfolio from Hewlett-Packard Co, including those of Palm Inc and its iPaq smartphone, in a move that will bulk up HP’s offerings to handset makers and other licensees.

The portfolio comprises about 1,400 granted patents and pending patent applications from the United States and about 1,000 granted patents and pending patent applications from other countries, including China, England, Germany, Japan and South Korea.

The San Diego-based chipmaker did not say how much it paid for the patents.

The majority of Qualcomm’s profits come from licensing patents for its ubiquitous CDMA cellphone technology and other technology related to mobile devices. Instead of licensing patents individually, handset vendors, carriers and other licensees pay royalties to Qualcomm in return for access to a broad portfolio of intellectual property.

The patents bought from HP, announced in a release on Thursday, cover technologies that include fundamental mobile operating system techniques.

They include those that HP acquired when it bought Palm Inc, an early player in mobile devices, in 2010 and Bitfone in 2006. HP tablets made using Palm’s webOS operating system failed to catch on.

“There’s nothing left at Palm that HP could get any use out of so it’s better to sell the patents, which are always valuable to Qualcomm,” said Ed Snyder, an analyst with Charter Equity Research. “They have to keep that bucket full.”

The new patents will not lead to increased royalty rates for existing Qualcomm licensees, a Qualcomm spokeswoman said.

Last year, HP sold webOS, which it received as part of the $1.2 billion Palm acquisition, to South Korea’s LG Electronics Inc.

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ZTE Attempts To Double Marketshare

China’s ZTE Corp, the world’s seventh-largest smartphone maker, wants to nearly double its U.S. market share in the next three years by increasing spending on marketing.

ZTE, which trails nearby rival Huawei Technologies Co Ltd in selling both smartphones and telecoms equipment, wants more share of the fat profit margins promised by sales of high-end phones in the United States.

But the company needs to first work on its image. Its mainstay telecom equipment business was essentially shut out of the U.S. and other markets after government officials flagged security concerns about Chinese-made equipment.

ZTE targets a U.S. market share of 10 percent by 2017 from 6 percent in 2013, Lv Qianhao, global marketing director of mobile devices, told Reuters at a company event on Thursday.

That would place it a distant third behind Apple Inc with 41 percent and Samsung Electronics Co Ltd with 26 percent, according to September-November data from researcher comScore.

To that end, ZTE will increase its U.S. marketing budget by at least 120 percent this year from last, Lv said without elaborating. Like other Chinese handset makers, ZTE is grappling with low brand awareness in the world’s second-largest smartphone market and perceptions of inferior quality.

Samsung Electronics, which earns around two-thirds of its operating profit from its mobile division, spent $597 million on marketing in the United States in 2012, according to researcher AdAge.

Last year, ZTE signed a deal with the Houston Rockets basketball team and released a Rockets-branded phone.

“We want young U.S. consumers to participate in our marketing activities, so we will have more NBA (National Basketball Association) stores and channels that sell our products,” Lv said.

Globally, ZTE aims to ship around 60 million smartphones this year compared with about 40 million smartphones last year, said Senior Vice President Zhang Renjun.

The company sees much of that growth in developed markets – including Russia and China- which accounted for 68 percent of mobile device revenue last year compared with 35 percent in 2007, said Lv.

ZTE’s mobile device business sells feature phones as well as smartphones. It was the fifth-biggest mobile phone vendor in July-September, according to researcher Gartner, though it fell out of the top five smartphone sellers list in the same period.

ZTE expects to have swung to a profit for last year having booked its first-ever loss as a public company in 2012.

It based its turnaround on cutting costs, signing fewer low-margin contracts, and winning contracts to build fourth generation telecommunication networks.

The company expects global investment in 4G to reach $100 billion this year, Zhang said.

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