Dear Friends of Wireless Messaging,

Lots of Interesting News This Week

MARKETING FOCUS GROUPS
AND OTHER USELESS ACTIVITIES

Once in a while I find an article that I really like. This time it was in Linkedin, “Why Steve Jobs Didn't Listen to His Customers.” It expresses some intuitive beliefs that I have had for a long time.

I spent most of my career in sales, and one of the most frustrating things that I had to deal with was factory engineers telling me to go out and find what my customers wanted and bring them back the specifications. Then the marketing department would want me to forecast how many units would be sold — and bet my job on it.

Then maybe they would build it. If and when the new product came out, and the salesperson took it back to the customer, then the customer would put it into their next-year's budget so they could issue an RFQ or a bid. By the time that all happened, senior management — in all their wisdom — would have canceled the product due to lack of sales.

Does this sound like a made-up story? Well it isn't, because one just like it happened to my first mentor (the man who hired me at Motorola in 1964 — Al Konash).

THE 1958 FORD EDSEL

“Ford [...] claimed to have performed more than adequate, if not superior, product development and market research work in the planning and design of the new vehicle. Particularly Ford assured its investors, and the Detroit automotive press, that the Edsel was not only a superior product (as compared to its Oldsmobile/Buick competition), but the details of its styling and specifications were the result of a sophisticated market analysis and research and development effort that would essentially guarantee its broad acceptance by the buying public when the car was introduced.”

“Marketing experts hold the Edsel up as a supreme example of the corporate culture’s failure to understand American consumers.” [ source ]

“The Edsel fizzled. It flopped. It tanked. It became a national joke, the car that launched a million punch lines. By November 1959, when Ford finally mercy-killed the Edsel, it had lost an estimated $250 million — nearly $2 billion in today's dollars.” [ source ]

So much for “market-driven” products.

SMART WATCHES

(A little background.)

Back in the heyday of paging there was much discussion about the feasibility of wristwatch pagers. Dick Tracy style (the comic-strip-cop hero). Remember him?

This is the one Motorola made in 1990. In fact it was released on my first day on the job as international marketing manager in the Motorola paging product group.

It was a joint venture between Motorola and Timex. It didn't have very much market acceptance. There were problems:

• It used the GSC (Golay Sequential Code) protocol, which by that time was falling out of favor due to the mass acceptance of the POCSAG protocol, which was (and is) non-proprietary.
• It looks too “geeky” — like a watch designed by and for engineers.
• There were some initial quality problems. Mine failed early on. I still have it — it was repaired in the engineering lab.
• It had short battery life.

What they didn't know was that the Swiss watch industry had conducted a major market study, and had decided that there would be no mass acceptance of a wrist watch pager, simply because most people wanted their watch to be fashionable , and there are just too many different styles available.

Paging began its decline soon after as hand-held cell phones became widely available for “free.” It's hard to compete with free .

Never-the-less Motorola and Timex tried to make a go of it for some time. Other, more stylish models were released.

So with all this in mind, please see the following major report: “This is what luxury watch executives think of your 'cheap, plastic-designed' smartwatch.”

LBS (Location Based Services)

It was a sad day when Brooks Marsden died on July 11, 2007. He was a friend and colleague who was the Paging Industry's chief spokesman for LBS. After his untimely death at 59 years old, GTES got out of the location business.

Brooks taught me the basic concept of LBS using an analogy.

Imagine a little balloon filled with helium so that floats. Suspended below the balloon, on a string, is a sign with a message written on it. The helium pulls the sign upward but the weight of the sign has been adjusted so that the balloon and the sign remain perfectly stationary.

Please don't say this isn't possible—this is just a story to illustrate an important concept.

So anyone passing close enough to the sign to read it, can be informed about something that is related to that location. Got it?

Now let's relate this “Location Based Service” to Wireless Messaging.

Maybe someone is driving down a road and there is a problem ahead. Maybe a bridge out, a traffic accident, or a flood. There is no need to alert everyone in the whole state; just those close enough to receive the (weak) message signal on their smartphone. Just like reading the card hanging below the balloon, only via Wireless Messaging! Cool . . . right?

Or a store, restaurant, or other business wants to invite people who are passing by to come in and buy something, so an LBS beacon tells (wirelessly) all the enabled smartphone users passing by that they can get a discount if they stop in. Sort of like the modern version of employees of a store in a big city, standing on the sidewalk in front of the store, and trying to convince passersby to come in to the store.

So one real-world-equivalent of the balloon and sign is a small Bluetooth transmitter — a beacon. Apple calls theirs iBeacon™.

See some more possible applications in the following article, “What is Apple iBeacon? Here's what you need to know.”

Now on to more news and views.

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There is no charge for subscription and there are no membership restrictions. Readers are a very select group of wireless industry professionals, and include the senior managers of many of the world's major Paging and Wireless Messaging companies. There is an even mix of operations managers, marketing people, and engineers — so I try to include items of interest to all three groups. It's all about staying up-to-date with business trends and technology.

I regularly get readers' comments, so this newsletter has become a community forum for the Paging, and Wireless Messaging communities. You are welcome to contribute your ideas and opinions. Unless otherwise requested, all correspondence addressed to me is subject to publication in the newsletter and on my web site. I am very careful to protect the anonymity of those who request it.

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A NEW SUBSCRIBER

I am always happy when I get a new subscriber to the newsletter, but recently a really special person signed up — my grandson! It was a very pleasant surprise.

Corey Patrick Aloia is my second-oldest grandchild. He was born on December 5 ^th , 1988 in Iraklion, Crete, Greece while both of his parents were serving in the US Air Force. He graduated with a BS in Computer Science from The University of Alaska at Fairbanks in 2011 and is currently employed at Golden Valley Electrical Association in Fairbanks, Alaska as a computer software programmer.

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July 15, 2014

Mr. John Roth
Office of the Inspector General
Department of Homeland Security
245 Murray Lane SW
Washington, DC 20528-0305

Dear Mr. Roth:

The McClatchy newspapers recently published a series of articles that questioned Motorola's business tactics in the sale of telecommunications equipment to public safety officials. According to McClatchy, “government officials have handed [Motorola] noncompetitive contracts, used modifications of years-old contracts to acquire new systems, or crafted bid specifications to Motorola's advantage.” ¹ The McClatchy articles found that many of these practices involve public safety activities that are funded through the Department of Homeland Security (DHS). We are writing to ask that you investigate these allegations.

On March 30 and 31, 2014, the McClatchy newspapers published a series of seven articles raising serious allegations about Motorola's business practices in the public safety equipment market. One article focuses on the Kansas Department of Transportation's $50 million award to Motorola to build a new statewide emergency radio network that was crafted as an amendment to an existing contract. ² Despite state laws that require competitive bidding on all major projects, the article notes that Kansas officials have extended or modified a 1991 contract with Motorola at least a·dozen times without competitive bidding. Due in part to this noncompetitive contract, the state has spent over $4,000 apiece on many of its Motorola radios, despite radios with the same functionality reportedly being available for significantly less money. The article also reported that Kansas purchased proprietary encryption technology from Motorola that is unable to work with other manufacturers' equipment.

¹ McClatchy DC, How One Timely Purchase of Hardware Bent a Radio Contract Motorola 's Way (March 31, 2014).

² McClatchy DC, Kansas Gives Motorola $50 Million Contract, Based on Bids From 1991 (March 30, 2014).

 

Mr. John Roth July 15, 2014
Page 2

Similar allegations were raised in another McClatchy article, which found that Motorola received a noncompetitive, $23 million contract with Chicago by persuading the city to award the contract to Motorola to protect the city's previous $2 million investment in proprietary Motorola equipment. ³ The same article also describes Motorola winning a contract with Dallas to build a new digital network that has since been snarled in controversy “over the way [Motorola] has met city requirements for use of minority subcontractors, because most of the money flowed back to Motorola.” The article also notes that some jurisdictions have paid as much as $7,500 apiece for Motorola radios, while Motorola's competitors reportedly offer similar products for a fraction of that price.

An additional article focused on Motorola's contracts with Mississippi to build two communications networks for first responders. ⁴ According to the article, one of Motorola's bids was supposedly $90 million below that of a rival company. Motorola won the bid but then built a network that is incomplete or inoperable due to cost concerns. The article notes that Motorola also won a $148 million contract to build a new system in California's Riverside County, but that the project has been delayed for more than four years and the cost has risen to $172 million. The article suggests that Motorola may have a history of submitting a low bid to win a contract and then significantly raising its price by requesting contract modifications after the contract has been executed.

Finally, a McClatchy article highlights Alameda County's 2005 purchase of a Motorola master controller, or network switch, which contained proprietary features that prevented interoperability with non-Motorola equipment. ⁵ In 2007, the East Bay Regional Communications System Authority (EBRCSA) was formed to allow first responders in all jurisdictions in Alameda and Contra Costa counties to be able to communicate with one another when responding to major disasters or terrorist attacks. However, leadership at the EBRCSA insisted that all participating jurisdictions purchase expensive Motorola equipment to ensure that their equipment works with Alameda County's master controller. As a result, some jurisdictions, including Oakland, refused to join. McClatchy notes that Oakland “found itself squeezed out of millions of dollars in desperately needed federal grant money after it refused to join.” It appears that the EBRCSA has received a number of Urban Area Security Initiative (UASI) grants. ⁶

³ McClatchy DC, With Friends in Government, Motorola Beats a Path to Telecom Supremacy (March 30, 2014).
⁴ McClatchy DC, After Motorola Parlays Katrina 's Devastation into Telecom Riches, New Mississippi System Lies Fallow (March 30, 20 14).
⁵ McClatchy DC, How One Timely Purchase of Hardware Bent a Radio Contract Motorola 's Way (March 31, 2014).
⁶ East Bay Regional Communications System Authority, Funding/ Grants (online at www.ebrcsa.org/funding_and_grants.aspx ).

 

Mr. John Roth July 15, 2014
Page 3

We are concerned that the state and local jurisdictions discussed in the McClatchy articles, as well as many other jurisdictions, may have squandered federal grants, provided in part by DHS, as a result of questionable practices by Motorola. If the allegations in the McClatchy articles are true, millions of federal tax dollars may have been wasted, and millions more are at risk. We therefore ask that you initiate an investigation to determine whether the abuses described in the McClatchy articles occurred and if so, whether DHS grants were involved. If DHS grants were involved, we ask that you please propose changes to prevent a recurrence of these abuses. In particular, we ask that you please provide the following information :

• A list of all the DHS grants to state and local agencies that have selected Motorola as their vendor for public safety equipment and devices. Please also indicate whether these jurisdictions followed a competitive bidding process in their vendor selection.
• An assessment whether DHS has provided interoperability grants to jurisdictions that have then used those funds to pay for post-contract change orders from Motorola. Please also detail the scope and cost of any post-contract changes.
• An assessment whether DHS has issued grant guidance that prevents the use of proprietary features in public safety communications equipment, such as encryption standards.
• An assessment whether EBRCSA has been able to receive DHS interoperability grants while at the same time insisting that all of its participating agencies purchase Motorola equipment.

Thank you for considering our request.

Sincerely,

	Henry A. Waxman Ranking Member	Ana G. Eshoo Ranking Member subcommittee on Communications and Technology	Diana DeGette Ranking Member subcommittee on Oversight and Investigations

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GADGETS smartwatches

This is what luxury watch executives think of your 'cheap, plastic-designed' smartwatch

Jon Phillips @jonphillipssf Jul 7, 2014 3:15 AM

If Apple’s new watch guru feels the same way about smartwatches as his former TAG Heuer boss, then he knows he’ll face serious challenges in positioning the iWatch as a sophisticated wrist accessory with mainstream appeal.

On Friday the world learned that Patrick Pruniaux just left his position as TAG Heuer’s Vice President of Global Sales and Retail. He now works for Apple—presumably to help craft a marketing story around the presumptive iWatch. Pruniaux’s departure strikes me as particularly curious, because I’ve been asking executives at luxury watch brands to share their thoughts on the smartwatch market, and some of the most pointed criticism comes from Stephane Linder, TAG Heuer CEO.

Stephane Linder is TAG Heuer’s CEO

“None impress me in terms of design,” Linder told me, referring to smartwatches from Samsung, Sony, Qualcomm and Pebble. “They look like cheap, plastic-designed watches. In the luxury category, we work on every detail for crafted value. When I see the smartwatch, it’s interesting, but in terms of design, it looks like a cheap wrist computer. There’s not one that makes a great connection.”

Cheap. Down-market. Too geeky for fashion-conscious consumers. These are the criticisms lobbed at smartwatches by executives at traditional luxury wristwatch brands. It’s clear that even Apple, the epitome of tasteful gadget design, will need a talent like Pruniaux to resolve the intrinsic nerdiness of a watch manufactured in Taiwan and defined not by moving hands, but a 2.5-inch digital display.

Still, some watch company executives see glimmers of hope in today’s smartwatch offerings, and Linder himself doesn’t categorically rule out the possibility of a Swiss-made, TAG Heuer smartwatch some day.

There’s no mistaking the craftsmanship of a TAG Heuer Formula 1. As illustrated at the top of this article, even an old, relatively pedestrian baseline model looks precision-crafted compared to Android Wear watches.

Can you feel the hand of people in it?

If there’s a common complaint among wristwatch aficionados, it’s that today’s smartwatches lack the cues of fine craftsmanship, and borrow too much design DNA from pure consumer electronics. Linder, for one, says he’d like to see smartwatches with much more steel and a higher quality of finishing, “like you can feel the hand of people in it.”

Scott B. Wolfe, senior vice president for merchandising, design and product development at Citizen Watch , is another skeptic. Citizen has already dipped its toe in the smartwatch waters with its Proximity model, an extremely technical-looking analog chronograph that provides bare-bones phone notifications via a second hand that sweeps to either a “MAIL” or “CALL” label on its dial. But Wolfe says none of today’s smartwatches embrace “aspirational design”—a look that says something about one’s personal interests, whether that be sailing, car racing, or just a basic appreciation for precision micro-machinery or the finer things in life.

The Citizen Watch executive doesn’t like Samsung’s integrated strap and case with visible screws.

“From a design aesthetic, all these things look too much like gadgets, and not enough like timepieces,” Wolfe says. “The Galaxy Gear, personally, I don’t like the design. The case with the screws—been there, done that. They integrated the strap into the case, which looks a little cheap. This is almost what Dick Tracy’s watch looked like in the 40s and 50s, and that’s not ground-breaking.”

Thierry Casias, the creative director at Bulova , is a bit more kind to Samsung’s smartwatches than other watch industry VIPs are. He says the original Galaxy Gear did a good job in marrying a tech aesthetic to details that are already familiar to wristwatch customers—for example, a textured wristband. Still, Casias has doubts about the crossover appeal of most of the smartwatches he’s seen.

Scott Wolfe is senior vice president for merchandising, design and product development at Citizen Watch.

“Most favor the streamlined, clean aesthetic made popular by Apple, but this look will only appeal to gadget geeks,” Casias says. “The average person who already carries at least one device at all times—a smartphone, an MP3 player, et cetera—probably wants to downplay this piece of equipment. No one wants to wear a Star Trek prop.”

Linder was the harshest smartwatch critic I interviewed, but still concedes that the Samsungs, Motorolas and LGs of the world are at an immediate disadvantage because their operating systems don’t allow them to leverage analog dials, “the one component that says luxury” to prospective buyers. “If you go for purely digital, you don’t have the feeling of the mechanical instrument,” Linder says. “So maybe the question will be, Can you make a dial that looks like a dial, with hands like a real watch?”

Circling the path of least resistance

In fact, besides Citizen’s Proximity, we’ve already seen analog-dial wristwatches with rudimentary smart functions from Martian and Cogito . But these models definitely don’t bear dials, cases and straps that scream a luxury aesthetic. The next best option, it seems, is to go with a round LCD display, so at least your digital watch-face will resemble the majority of luxury watches sold today. That’s the Motorola approach, and it’s a design choice that works for Citizen’s Wolfe and Bulova’s Casias.

The Moto 360 almost looks like... a watch. And that’s good news to our watch industry VIPs.

“I think they’re going down the path of least resistance,” Wolfe says of the Moto 360’s circular display. “Ninety percent of the watches that we sell are round. So if you’re immediately starting off with a non -round shape, that’s not a winning strategy.” Wolfe praises the Moto 360’s “clean look” and chamfered bezel. He says, overall, Motorola has done the best job as far as pure design aesthetics, but wants to reserve final judgement until he can feel the Moto 360’s materials, and put the watch on his wrist.

Casias gives the Moto 360 his top smartwatch design honors as well. “It’s by far the best looking one of the bunch,” he says. “The aesthetic is minimal and modern, and really conveys the upscale feel of some popular brands on the pricier end of things.”

With a slight barrel shape, the Pebble Steel adds just a little bit of visual interest that other smartwatches lack.

Beyond the Moto 360, only the Pebble Steel was singled out among the wristwatch traditionalists for successful design. Wolfe says Pebble has “done a very nice job” by incorporating traditional leather and steel straps, and noted that the Pebble Steel’s barrel shape provides a small though notable point of interest in a field of smartwatches defined by rectangles. Casias, meanwhile, says the Pebble Steel “isn’t exactly attractive,” but is the second most wearable smartwatch of the ones he’s seen.

Cutting-edge features vs. timeless appeal

If there’s anything I learned from my interviews with the watch company executives, it’s that they’re operating in a completely different universe, with different rules of order, relative to the consumer electronics companies. Both camps produce things we put on our wrists, and these things display information a user might find relevant. But these are just trivial, incidental similarities.

Each industry must respect completely different pricing rules: A smartwatch can’t reasonably cost more than a $300 smartphone, while a luxury wristwatch can cost a year’s salary.

Believe it or not, the Citizen Proximity offers smart notifications. The second hand sweeps to labels on the 10 and 11 o’clock positions.

And each industry must respect completely different product cycles: The electronics industry embraces planned obsolescence, and that applies to everything from silicon chips to style trends. But a luxury watch must have timeless appeal.

And each industry must respect a completely different marketing narrative. For smartwatches, it’s all about functions, features, utility, productivity, and the next step in mobile computing. For luxury watches, the focus really isn’t even on telling the time. It’s about telling the world what kind of person you are via the loaded symbolism of a white-gold finish or a dial once preferred by Steve McQueen.

Yet smartwatches are here. They’re buzz-worthy. And the luxury timepiece market is taking notice, even if its manufacturers never intend to directly compete with the gadget companies for an ever-dwindling audience of people who will strap things to their wrists.

Wolfe says smartwatches should bring renewed interest to all types of watches, but Citizen remains fully committed to its Eco-Drive technology, a proprietary platform that uses ambient light to power its watches. This all but relegates Citizen to analog watchfaces for power-consumption reasons. And beyond that, Citizen would never align with, say, a Google because the company doesn’t “like to depend on third-party software people who may not be fully invested,” Wolfe says.

This TAG Heuer Aquaracer 72 model was created just for Oracle Digital Team USA. Only 50 were ever made.

Ironically, it’s Linder of TAG Heuer who’s more open to a world of smartwatch possibilities. His company has already dabbled in the smartwatch space with a limited run of Aquaracer AC72 models designed specifically for the World Cup sailing efforts of Oracle Team USA. These watches—just 50 were produced in total—eschewed moving hands entirely, and used a simple monochrome display to report sailing metrics like wind direction and intensity.

So it’s not like TAG Heuer has been completely antagonistic to the forward march of digital technology. Besides producing the limited-run Aquaracer, Linder says his team has studied smartwatches from Samsung and other manufacturers; this is certainly an exercise that should be helpful to the defector Pruniaux as he tries to elevate Apple’s iWatch above the smartwatch fray. It’s just that Linder and company aren’t going to sacrifice style and simplicity to reach what is essentially a different market of consumers.

“What could be a luxury smartwatch?” Linder asks. “What type of features? This is something we brainstorm. And if we find something, we could try it. But I don’t see us taking a big risk, unless we find a way to make luxury watches looking like real luxury watches that provide very easy-to-use, smart information that isn’t complicated—and don’t just replicate the mobile phone.”

Larry Busacca/Getty

TECH + HEALTH 07.17.14

Bill Gates’ Internet Doomsday Prophesy Comes True

In 1995, Bill Gates sent a (now infamous) memo warning of the Internet’s impact. Now, with the news of 18,000 layoffs at Microsoft, Gates’ words are truer than ever.

In a surprising letter to employees released today, Microsoft CEO Satya Nadella announced that the company would be firing 18,000 people over the next year. It’s the largest layoff sweep in the company’s 39-year history, amounting to 14 percent of its overall labor force. The company is slating at least $1 billion to pay for severance and other related costs alone. In the letter, Nadella, who was named CEO in February of this year, explains that the cuts are an attempt to “realign our workforce” and “simplify the way we work to drive greater accountability, become more agile and move faster.”

The logic of the cuts, which place Microsoft above Google, Intel, and HP in layoffs as a percentage of staff since 2011, according to The Verge , points toward a new direction for the technology giant with a renewed focus on providing business-to-business services like cloud infrastructure.

But the language of the CEO’s letter also suggests something deeper. In the age of the five-year-old WhatsApp, a messaging service bought by Facebook last February for $19 billion, the other major technology players of the past suddenly don’t seem so fresh anymore. Microsoft is the midst of a start-up identity crisis.

In today’s letter, Nadella repeatedly emphasizes words like “agile,” “efficient,” and “lean.” The latter in particular has become a buzzword for Silicon Valley start-ups. The “ Lean Start-up ” is a business philosophy created by entrepreneur Eric Ries that prizes “bootstrapping”—that is, taking as little venture-capital funding and operating with an eye toward as much profit as possible, as soon as possible. Bureaucratic overhead is bad, and that’s exactly what Microsoft has too much of.

Microsoft is looking to lean start-up adherents like Instagram, acquired by Facebook for $1 billion when it had just 13 employees, and Dropbox, now estimated at $10 billion, for inspiration in its own business. “We plan to have fewer layers of management, both top down and sideways, to accelerate the flow of information and decision making,” Nadella writes. “Our business processes and support models will be more lean and efficient with greater trust between teams.” In other words: cut out the fat, remove middle managers, focus on what makes the business run, and be more like a start-up.

That plan is pleasing investors: after the layoffs were announced, Microsoft stock jumped 3.8 percent to a 14-year high . Wall Street loves layoffs , after all. It also helps that around 12,500 of the employees to be let go are from Nokia, the Finnish phone maker that Microsoft acquired in what is now widely seen as a mistake .

In the past several months, talk of a technology bubble has become more commonplace even as Yo!, an app whose only purpose is sending the eponymous greeting to friends, immediately netted a $1 million investment after going viral. What Microsoft has become known for—producing effective consumer and professional technology—has become far less exciting than the smaller companies gathering audiences of young users who form the future of consumption. As the older company’s products and practices age, Facebook is becoming a kind of proto-Microsoft, nabbing companies like the virtual reality helmet Oculus in bets to land on the next big thing.

To maintain its relevance and grab investors’ attention, Microsoft needs to keep moving. In an infamous, prescient 1995 memo , founder Bill Gates wrote, “The Internet is a tidal wave. It changes the rules.” Previously, the company profited from that change. Now it’s finding itself on the wrong side of the wave.

To correct the course, they’re investing in the dynamic markets where younger competitors are already succeeding. “We live in a mobile-first and cloud-first world,” Nadella wrote in a memo on July 10. “We will create more natural human-computing interfaces that empower all individuals. We will develop and deploy secure platforms and infrastructure that enable all industries.” The CEO describes the company as a “productivity and platform company.” The plan is to build a holistic cloud operating system for businesses and individuals, enabling a new generation of work and play.

Yet Microsoft still faces the brand issue of being terrifically un-hip. Other big tech companies are meeting this start-up identity crisis by meeting the millennial market where the consumers already are.

Yahoo is pushing into the content business by turning itself into an advertising company. Its $1.1 billion deal for Tumblr, the youth-friendly blogging platform, gave it a badly needed image overhaul as well as access to an entirely different audience. The company is plowing money into Yahoo News content channels like Tech and Politics, snapping up brand-name journalists, and attempting to monetize their traffic with a new ad engine, Yahoo Ad Manager Plus. The volume of Yahoo’s display advertising is up by 24 percent, according to a recent report , but the price of the advertising has also fallen 24 percent.

Google, in contrast, seems to be moving toward hardware. The company has recently acquired Titan Aerospace, a drone manufacturer that Facebook was also vying for; Boston Dynamics, a military contractor responsible for developing battlefield robotics; and Nest, a designer of in-home products like smart thermostats and fire alarms. Together, these purchases suggest an investment in the “Internet of Things,” a growing body of products that bring Web connectivity into functional everyday devices.

While Google and Yahoo are developing their chosen niches with major acquisitions, Microsoft’s credo of staying lean could set them apart—at least for a while. But just like the rise of Apple, arguably one of the leanest, best positioned tech companies to weather the coming years, the winner will be whoever lands on the product that defines the next new market, as the iPhone changed the landscape of personal technology. What that will be is anyone’s bet, and it could be discovered by a team of 10 just as easily as 10,000.

Thursday, July 17, 2014, 07:33 pm PT (10:33 pm ET)

Rumor: Apple's 4.7-inch 'iPhone 6' to enter mass production next week, 5.5-inch model in August

By AppleInsider Staff

A report coming out of Asia on Friday claims Apple partner supplier Foxconn is prepping for mass production of a rumored 4.7-inch next-generation iPhone this month, while a larger 5.5-inch model is slated for manufacturing in mid-August.

Without citing sources, Taiwan's Economic Daily News reports production of Apple's anticipated 4.7-inch "iPhone 6" will begin in the third week of July, while a rumored 5.5-inch model is to hit the assembly line in the second week of August.

The publication noted a separate Chinese news service report that said the head of China's Henan Provincial Commerce Department made comments that Hon Hai, better known as Foxconn, is looking to hire some 100,000 workers to cope with expectedly high demand for the upcoming handsets. That figure echoes a previous rumor from June , but today's report adds partner supplier Pegatron is also preparing to hire some 10,000 employees for its part of Apple's order.

Along with the influx of new workers, Foxconn is expected to install automated robots called " Foxbots " on the iPhone 6 assembly line to perform non-critical tasks like locking screws and polishing parts.

Apple is expected to launch both handsets by the end of 2014, though release of the larger 5.5-inch "phablet" version may be delayed due to production difficulties. With Foxconn reportedly starting production nearly one month after the 4.7-inch iPhone, Apple is either looking at a staggered release, or does not expect equal demand the two variations.

Recent rumors have already guessed at a launch date on either Sept. 25 or Sept. 19 , though it is unclear if the larger model will be ready in time for simultaneous release.

In a note to investors on Sunday , KGI Securities analyst Ming-Chi Kuo said in-cell touch panel technology and color unevenness on the redesigned metal casings posed problems for both models, though issues are more pronounced with the 5.5-inch phablet. In his most conservative forecast, Kuo believes Apple could push back launch of the larger version until 2015.

Specialists in sales and service of equipment from these leading manufacturers, as well as other two-way radio and paging products:

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GoTenna lets users text off the grid

Kristen V. Brown
Published 3:29 pm, Thursday, July 17, 2014

The GoTenna, hardware that allows users to communicate via text message on smartphones without any cell service. Photo: GoTenna

For many, the cell phone is essential to modern life, but sometimes it can be pretty useless.

Say at a crowded concert, when a call won't go through despite having full service. Or the times you're somewhere with no service at all.

GoTenna, a portable device that enables smartphones to text over radio frequencies, seeks to make smartphones useful even when there's no service. Presales of the device launched Thursday.

"Whether you're just at Coachella and can't find your friends or camping and get separated from your group, we wanted to create a way to make your phone functional even when cell service isn't working," said Daniela Perdomo, co-founder of the Brooklyn company.

The GoTenna looks like a lightweight baby baton that essentially turns smartphones into walkie-talkies. Users type out text messages in the GoTenna's app, which are then transmitted via Bluetooth to the hardware itself, which then converts an analog signal into low-frequency radio waves readable on phones connected to other GoTenna devices.

Messages can travel up to 50 miles, though in an urban setting it's more likely that range is only a mile or two.

Texts can either be sent directly to a specific user or to any other user within range, potentially useful in emergencies. Users can also use the system to send out maps of their location.

While the GoTenna functions largely like a walkie-talkie, what makes the product novel is its degree of functionality. The GoTenna can transmit signals much farther than most walkie-talkies. Text communication shows users a message has been delivered, rather just shouting into the ether and hoping someone hears it in real time. And rather than requiring users to tune into the same radio frequency, messages can sent to individual users - a feat of complex network engineering.

Plus, it allows consumers to communicate using a method with which they are already familiar.

"The idea is that we're not trying to change consumer behavior," Perdomo said. "We're trying to adapt to it."

GoTenna is currently pre-selling pairs of the devices for $149, about half the planned retail price. Advances sales will help the company amass the capital for manufacturing. The devices are slated to hit shelves in the fall.

Kristen V. Brown is a San Francisco Chronicle staff writer. E-mail: kbrown@sfchronicle.com Twitter: @kristenvbrown

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Apple-IBM Deal: Trouble For Google, Microsoft

Apple's alliance with IBM will make it harder for Android and Windows Phone to carve a niche in the workplace.

7/17/2014 — 08:06 AM

Apple and IBM on Tuesday announced the formation of a partnership to sell iPhones and iPads to enterprise customers and to develop industry-specific apps backed by IBM cloud services.

It's a deal that will benefit Apple and might help IBM. But its real impact will be closing corporate doors to the competition.

With IBM's help, Apple will sell more iOS devices. That matters to Apple. IBM will profit, too, depending on how much IBM gets per device sold. But IBM will be looking for revenue from consulting, support, and cloud services. And it doesn't appear that Apple will be doing much to convince people to use those services or IBM's iOS apps. That's up to IBM's sales team, assisted perhaps by favorable App Store placement.

Given the low regard people have for the usability and design of enterprise applications — one enterprise software developer has made a habit of calling IBM Lotus Notes " a crime against humanity " -- the deal's major upside for IBM might be subjecting the company's apps to Apple's approval process.

Perhaps most intriguing is whether Apple wearable devices will be relevant to this deal. Apple is expected to introduce a new wearable product line this fall and its iOS 8 SDK suggests that health apps and data will play an important role. IBM, with its credibility in the healthcare industry, looks like an ideal partner to convince Apple customers to entrust health data to the cloud.

But the potential windfall from the partnership will be constrained by Apple's already considerable success. The company holds a commanding position in the enterprise mobile device market and might not be able to climb much higher. According to CEO Tim Cook, "over 98% of the Fortune 500 and over 92% of the Global 500 [are using] iOS devices in their business today."

Recent figures from mobile device management firm Good Technology suggest slightly more potential for growth. In May, the company reported that among its customers activating mobile devices on its mobile security platform during the first quarter of 2014, 72% ran iOS, 27% ran Android, and 1% ran Windows Phone.

Apple looks poised to keep Windows—and Google—mobile devices beaten down in the enterprise.

Compared to the previous quarter, Android activations increased one percentage point while iOS and Windows Phone activations remained flat. In other words, Apple's leadership position in the enterprise mobile market looks fairly secure; neither Google nor Microsoft appear to be gaining market share very rapidly.

Outside the enterprise mobile market, Android dominates and its smartphone market share continues to grow at the expense of its competition. According to IDC , Android had a global first-quarter 2014 market share of 81.1%, compared to 15.2% for iOS and 2.7% for Windows Phone.

An Apple-IBM alliance matters to Google and Microsoft because it is likely to reinforce the lead of iOS in the enterprise market, where Android and Windows Phone have yet to gain much traction.

"Android is struggling to get acceptance in the enterprise due to security concerns and the fact that Android is readily rooted," said Van Baker, VP and research director for Gartner's mobile and client computing services, in an email. "Samsung has addressed this with Knox but this is a recent platform for the enterprise so it is in the early stages of adoption. This partnership will make it more challenging for both Microsoft and Samsung to penetrate the enterprise."

At Google's developer conference in June, Sundar Pichai, SVP of Android, Chrome, and Apps, described API changes in the forthcoming Android "L" release that will provide a secure way to partition personal and corporate applications. He also noted that Samsung has contributed its enterprise security framework called Knox to the Android platform, thereby avoiding fragmented, vendor-specific enterprise security schemes for Android.

Google knows it has to push Android harder in the enterprise market, but Apple's alliance with IBM has made the mountain it must climb that much more steep. Microsoft, after years wandering in the wilderness, has just arrived at the base of the mountain, only to realize it's carrying too much baggage. And no one's quite sure what happened to BlackBerry.

Thomas Claburn has been writing about business and technology since 1996, for publications such as New Architect, PC Computing, InformationWeek, Salon, Wired, and Ziff Davis Smart Business. Before that, he worked in film and television, having earned a not particularly useful ... View Full Bio

Topic: Mobility

What is Apple iBeacon? Here's what you need to know

Summary: The Bluetooth-powered location system that could shake up shopping (and more) forever.

Steve Ranger By Steve Ranger | June 10, 2014 11:00 GMT (04:00 PDT)

Estimote's beacon technology is being used in a trial by Virgin Atlantic.

What is iBeacon?

iBeacon is Apple's implementation of Bluetooth low-energy (BLE) wireless technology to create a different way of providing location-based information and services to iPhones and other iOS devices. iBeacon arrived in iOS7, which means it works with iPhone 4s or later, iPad (third generation and onwards) iPad mini and iPod touch (fifth generation or later). It's worth noting the same BLE technology is also compatible with Android 4.3. and above.

How does it work?

The beacons themselves are small, cheap Bluetooth transmitters. Apps installed on your iPhone listen out for the signal transmitted by these beacons and respond accordingly when the phone comes into range.

For example, if you pass a beacon in a shop, the retailer's app (assuming you have it installed) could display a special offer alert for you. On a visit to a museum, the museum's app would provide information about the closest display, using your distance from beacons placed near exhibits to work out your position. As such iBeacon could be a much better option for in-door mapping — which GPS struggles with.

What real world iBeacon examples are there?

It's early days for iBeacon — Apple has only been testing it since December last year in its US retail stores. Virgin Atlantic is also conducting trial of iBeacon at Heathrow airport , so that passengers heading towards the security checkpoint will find their phone automatically pulling up their mobile boarding pass ready for inspection. In the London area retail giant Tesco has been testing it in a store, as is Waitrose, while Regents Street is working with retailers to test the technology too .

What actually is a beacon?

Any iOS device that supports sharing data using Bluetooth low energy can beam signals to an iBeacon app. For example, an iPad can both emit and receive an iBeacon signal. But other than this Apple doesn't make the beacons itself — these come from third-party manufacturers — for example the Virgin Atlantic trial is using hardware from Estimote.

Whether you'll pick up a signal from a beacon will also vary: walls, doors, and other physical objects will shorten signal range (as Apple notes the signals are also affected by water , which means the human body itself will affect the signals.)

Does iBeacon mean I'll be bombarded with ads wherever I go?

That rather depends on how many apps you have. The beacons themselves won't do much unless you have the corresponding app downloaded to your iOS device, so you should be able to browse in relative peace. Also, iOS doesn't deliver region notifications until certain threshold conditions are met — Apple's developer notes state the device has to cross an iBeacon boundary, move away from the boundary by a minimum distance, and remain at that minimum distance for at least 20 seconds before the notifications are reported.

That should reduce the pesting at least a bit. But there is certainly a risk of fatigue if you're being hassled all the way around the mall.

Can I make it stop?

Yes - as Adrian Kingsley-Hughes points out you can opt out by changing permissions under Location Services for the relevant app (accessed via Settings > Privacy > Location Services ), by switching off Bluetooth, or by uninstalling that particular app.

Why is iBeacon such a big deal?

The technology could be a big step towards mobile payments, something smartphone makers have been looking at for a long time without getting it right. Running the technology which breaks through and becomes the standard is going to be very lucrative. As such iBeacon is not the only game in town — PayPal is working on its own ' PayPal Beacon ' technology — expected next year — which will allow shoppers to 'check-in' and pay for goods from the PayPal account on their phone. Near Field Communications (NFC) is another technology trying to find an niche (right now with limited to success) in mobile payments, plus plenty of others.

Depending on how iBeacon evolves and is adopted it could form an important part of Apple's ecommerce and mobile payments effort. For example, the combination of iBeacon and Passbook could allow you to get sent a coupon while in a store and buy something without ever seeing a member of staff. Equally, shoppers may find the whole thing slightly unnerving and ignore it altogether.

Brad Dye, Ron Mercer, Allan Angus, Vic Jackson, and Ira Wiesenfeld are friends and colleagues who work both together and independently, on wireline and wireless communications projects.

Click here for a summary of their qualifications and experience. Each one has unique abilities. We would be happy to help you with a project, and maybe save you some time and money.

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rickm@preferredwireless.com

Selected portions of the BloostonLaw Telecom Update, and/or the BloostonLaw Private Users Update — newsletters from the Law Offices of Blooston, Mordkofsky, Dickens, Duffy & Prendergast, LLP are reproduced in this section with the firm's permission.

Open Internet Comment Period Extended until Friday, July 18, at Midnight

Due to an overwhelming response to the FCC’s Notice of Proposed Rulemaking on Open Internet rules, the deadline to file initial comments has been extended until Friday at Midnight. Originally due yesterday, the Public Notice announcing the extension indicated that the “overwhelming surge in traffic” was “making it difficult for many people to file comments through [the] Electronic Comment Filing System (ECFS).”

Clients interested in filing comments should contact the firm without delay. Reply comments are due September 10, 2014.

Headlines

FCC Releases Rural Broadband Experiment Order and Further Notice of Proposed Rulemaking

Yesterday, the FCC released a Report and Order and Further Notice of Proposed Rulemaking finalizing the decision to use Connect America funding for rural broadband experiments in price cap areas. The Report and Order establishes a budget for these experiments; establishes a methodology for selecting winning applications; describes the application process; and establishes a deadline for applications. Applications are due 90 days from the release of the Order, or Monday, October 13, 2104.

The FCC indicated that the Wireline Competition Bureau will implement a process for electronic submission of the formal applications similar to what was used for the Mobility Fund auctions. BloostonLaw is experienced in the Mobility Fund application process and is available to help clients apply for rural broadband experiment funding.

Budget. The FCC established a budget of $100 million for funding experiments, which will be drawn from the Connect America reserve account. The reserve account is projected to have approximately $220 million in funding as of the third quarter of 2014 that has not already been allocated to a specific program.

Support Term. The term of support will be a flat ten-year term, the same that will be available to bidders in CAF Phase II. The FCC specifically indicated it will focus the experiments on projects seeking 10 years of recurring support, rather than proposals for projects seeking one-time support or bidder-defined terms.

Area Eligibility. Proposals will be accepted at both the census tract level and the census block level. Eligible census blocks are those with a cost per location exceeding the Connect America Phase II funding threshold ($52.50), but below the extremely high-cost threshold ($207.81), and not served by an unsubsidized competitor offering voice service and Internet access providing 3 Mbps downstream/768 kbps upstream. Applicants are required to commit to serving the total number of locations in a given census block, even if that is less than the number of eligible locations.

Applicant Eligibility. All applicants must be designated Eligible Telecommunications Carriers (ETCs) within 90 days of being identified as a winning bidder.

Types of Experiments. The $100 million budget will be divided into three separate categories: $75 million for projects meeting “very high performance standards;” $15 million for projects meeting “specified minimum performance standards” which “exceed current standards;” and $10 million for projects “dedicated to serving extremely high-cost locations.”

Projects in the “very high performance standards” category must propose to deploy a network capable of delivering 100 Mbps downstream/25 Mbps upstream, while offering at least one service plan that provides 25 Mbps downstream/5 Mbps upstream to all locations within the selected census blocks. Projects in the “specified minimum performance standards” category must offer at least one service plan that provides 10 Mbps downstream/1 Mbps upstream to all locations within the selected census blocks. “extremely high-cost areas” projects must offer services delivering 10 Mbps downstream/1 Mbps upstream.

Selection Criteria. For those applications proposing to serve census blocks identified by the Connect America Cost Model as eligible for Phase II support, the FCC will compare requested amounts to model-based support amounts. For applications proposing to serve only census blocks the model identifies as “extremely high-cost,” (for which there is no model-determined level of support), the FCC will select applications based on the lowest-cost per location.

Project Limits. The FCC also established individual project limits for each experiment category: 20 million per project for “very high performance standards” projects; $7.5 million per project for “specified minimum performance standards” projects; and $5 million per project for “extremely high-cost areas” projects. Additionally, the FCC adopted an overall limit of $20 million per entity, including its affiliates, and a 25% bid credit for those seeking support for proposed experiments that serve only Tribal census blocks.

Financial Review. All winning bidders will be required to provide the most recent three consecutive years of audited financial statements, including balance sheets, net income, and cash flow, and to submit a description of the technology and system design used to deliver voice and broadband service, including a network diagram, which must be certified by a professional engineer. Winning bidders proposing to use wireless technologies also must provide a description of spectrum access in the areas for which the applicant seeks support. Winning bidders will also be required to submit a letter from an acceptable bank committing to issue an irrevocable stand-by original letter of credit (LOC) to that entity.
Funding Conditions. Funding recipients must offer service (meeting the appropriate service obligations outlined above) to at least 85 percent of the number of required locations by the end of the third year, and 100 percent of the number of required locations by the end of the fifth year.

Reporting Requirements. Recipients will be required to file an annual report pursuant to section 54.313 (also known as Form 481), though no service quality improvement plans will be required. Participants must also submit a certification with each annual report certifying that 95 percent or more of all peak period measurements (also referred to as observations) of network round trip latency are at or below 100 ms. Participants must also comply with the existing requirement for Phase II recipients of providing in their annual reports the number, names, and addresses of community anchor institutions to which the recipients newly began providing access to broadband service in the preceding year. Recipients will also be required to file build-out information with their reports, and must agree to cooperate with the Commission in any efforts to gather data that may help inform future decisions regarding the impact of technology transitions on achievement of our universal access objectives.

Clients who may be interested in applying for rural broadband experiment support should contact the firm without delay.

FCC Dedicates An Additional $2 Billion In Schools And Libraries Support For Wi-Fi Networks

The FCC adopted an Order and Further Notice of Proposed Rulemaking to "modernize" universal service support for schools and libraries by, among other things, dedicating $2 billion over the next two years in support for Wi-Fi networks, in addition to the current annual E-rate budget of $2.4 billion. (Docket No. 13-184). According to the FCC, the Order will accomplish three major goals:

• Significantly expand funding for Wi-Fi networks and distribute it fairly to all schools and libraries while recognizing the needs of the nation’s rural and poorest school districts
• Maximize the cost-effectiveness of E-rate spending through greater pricing transparency, encouraging consortia and bulk purchasing, and better enforcement of existing rules
• Streamline and simplify the E-rate application process and overall program administration

The FCC also stated that it will phase out support for non-broadband services, such as pagers and phones.

In comments, NTCA had asked the FCC not to encourage consortia purchasing, pointing out that it is not always the most efficient means of providing service and also that some consortiums unfairly exclude the smaller ILEC. NTCA provided the example of a consortium that designed a Request for Quote ("RFQ”) for broadband service that effectively excluded the rural ILEC even though the local provider had the ability to provide the school district at issue with a less costly alternative. Although the FCC states that it will encourage consortia and bulk purchasing, because it has not released its Order it is not clear entirely clear at this time how the Order addresses this point.

FCC Extends Closed Captioning Requirements to Video Clips

In an Order released July 14, 2014, the FCC extended existing IP closed captioning requirements to IP-delivered video clips of all lengths, if the video programming distributor or provider posts on its website or application (“app”) a video clip of video programming that it published or exhibited on television in the United States with captions, regardless of the content or length of the video clip. Previously, the rules only applied to IP-delivered full-length video programming.

Under the rules, a video programming distributor or provider is defined as “[a]ny person or entity that makes available directly to the end user video programming through a distribution method that uses Internet protocol.” Such entities are required to comply with the IP CC rules for video content of any length, according to the following timetable:

• For “straight-lift” clips, which contain a single excerpt of a captioned television program with the same video and audio that was presented on television, the IP closed captioning requirements will apply beginning January 1, 2016.
• For “montage” clips, a single file containing multiple straight lift clips, the compliance deadline is January 1, 2017.
• For video clips of live and near-live programming, the compliance deadline is July 1, 2017. After the deadline, such clips may be posted online initially without captions as long as they are added within 12 hours (for clips of live programming) or within eight hours (for near-live programming) after the conclusion of the television display of the associated video programming that contained the clip.

Law & Regulation

FCC Issues Erratum to Omnibus USF/ICC Order

On July 11, the FCC’s Wireline Competition Bureau released an erratum to the Omnibus Report and Order, Declaratory Ruling, Order, Memorandum Opinion and Order, Seventh Order on Reconsideration, and Further Notice of Proposed Rulemaking. The Erratum corrects an error in the Omnibus Order pertaining to the implementation of the gradual phase-in to reductions under 54.318 (b) for rates above the rate floor new $20.46 rate floor.

Specifically:

Commencing January 2, 2015 (reflecting rates as of December 1, 2014), and thereafter, through June 30, 2016, we waive section 54.318(b) to the extent reported lines are less than greater than, or equal to $16. For the period between July 1, 2016, and June 30, 2017, we waive section 54.318(b) to the extent reported rates are less than greater than, or equal to $18, or the 2016 rate floor, whichever is lower. For the period between July 1, 2017, and June 30, 2018, we waive section 54.318(b) to the extent reported rates are less than greater than, or equal to$20, or the 2017 rate floor, whichever is lower.

Wheeler Announces Universal Service Fund Strike Force

Yesterday, FCC Chairman Tom Wheeler issued a press release announcing the creation of a Universal Service Fund “Strike Force,” housed within the FCC’s Enforcement Bureau and dedicated to combating waste, fraud, and abuse in the funding programs. The Strike Force will be led by Loyaan Egal, a former senior Assistant United States Attorney in the Fraud and Public Corruption Section of the U.S. Attorney’s Office for the District of Columbia.

According to the release, the USF Strike Force will focus on “safeguarding the Universal Service Fund and the other funding programs the FCC oversees.” It will investigate violations of the Communications Act, the Commission’s rules, and other laws bearing on USF programs and contributions, and coordinate with the FCC’s Office of Inspector General (OIG), the U.S. Department of Justice, and other law enforcement agencies to prosecute unlawful conduct. The Strike Force’s investigations and activities will “promote future compliance, protect those who depend on the funds for access, and safeguard contributors to the funds from the unlawful acts of others.”

Mr. Egal’s background includes nearly a decade as a federal prosecutor in the United States Attorney’s Offices for the Southern District of New York and District of Columbia, where he led complex investigations and successfully prosecuted cases involving international narcotics trafficking and money laundering, bribery and procurement fraud in connection with the U.S. military’s presence in Iraq, and campaign finance fraud concerning the City of New York’s public matching campaign funds program. While in the District of Columbia, Mr. Egal served as a lead prosecutor in an investigation that resulted in the successful prosecution of several individuals for campaign finance and tax fraud related to a scheme to influence federal, state, and local elections through illegal and unreported financial contributions.

FCC Announces Effective Date of IP CTS Rules

The FCC published a Notice in the Federal Register on July 11, 2014, announcing that the Office of Budget and Management has approved for three years the information collection requirements in the Commission’s Report and Order on Misuse of Internet Protocol Captioned Telephone Service (IP CTS). Sections 64.604(c)(10)(iv), (c)(11)(iii) and (iv), and 64.606(a)(2)(ii)(F), are effective July 11, 2014.

Sections 64.604(c)(10)(iv) provides for a hardship exception to the IP CTS default settings requirement. 64.604(c)(11)(iii) and (iv) provide specific language that must appear on any newly distributed IP CTS equipment in a conspicuous locations (or be distributed on labels to consumers who have already received IP CTS equipment that does not already bear the label), and requires IP CTS providers to maintain records of their compliance with this requirement. 64.606(a)(2)(ii)(F) requires applicants seeking certification as IP CTS providers to include with their application a description of measures taken by such applicants or providers to ensure that they do not and will not request or collect payment from the TRS Fund for service to consumers who do not satisfy the registration and certification requirements in §64.604(c)(9), and an explanation of how these measures provide such assurance.

Industry

FCC/NTIA Asks for Comment on Plan for a “Model City” for New Spectrum Sharing Technologies

In a Public Notice jointly issued on Friday (DA 14-981), the FCC and the National Telecommunications and Information Administration (NTIA) are seeking public comment on a July 2012 recommendation by the President’s Council of Advisors on Science and Technology (PCAST) that the Commerce Department establish a public-private partnership to facilitate the creation of an urban test city (called a “Model City”) for demonstrating and evaluating advanced, dynamic spectrum sharing. With PCAST having come to the conclusion that clearing and reallocation of government-held spectrum is no longer deemed to be a viable approach to spectrum policy due to the high cost, lengthy time to implement and disruption to the federal mission, the PCAST Report called for a new spectrum architecture based on spectrum sharing as an alternative to exclusive use. To bridge the gap from today’s spectrum use model to this new regime, the plan is to create an urban test facility in a major U.S. city to support rapid experimentation in spectrum management technology and practice.

The Public Notice states that the Model City program, if established could facilitate large-scale sustainable facilities for systems level testing in real-world environments across multiple frequency bands, including both federal and non-federal spectrum. The entire concept is still in its infancy; and the Public Notice asks for comments on a wide variety of topics, including basic structure, management, funding, collaboration among various stakeholders and other issues. The requested comments will help the FCC and NTIA determine whether additional actions and formal proceeding are necessary.
The Model City program potentially offers a tremendous opportunity for companies engaged in developing new spectrum sharing technologies to demonstrate the value of their products in shaping the federal government’s spectrum management policies for the immediate future.

Comments on the Model City plan are due to be filed 45 days after publication of the Public Notice in the Federal Register. We will be monitoring the Federal Register and will advise our clients of the filing due date.

Sprint, T-Mobile Reportedly Planning Joint Venture for 600 MHz Incentive Auction Bidding

According to a Bloomberg report, Sprint and T-Mobile US are planning to create a joint venture in order to bid for 600 MHz spectrum in next year’s planned broadcast incentive auction.

Further reports from the Wall Street Journal on Wednesday indicate that the companies are looking to raise a war chest of $10 billion to fund their bidding on the broadcast television spectrum. The $10 billion would be part of a larger $45 billion financing package being assembled by SoftBank to facilitate Sprint’s acquisition of T-Mobile.

Creating a JV would be a way for the companies to participate in the broadcast incentive auction while at the same time pursuing their merger. The FCC's auction anti-collusion rules prohibit applicants that have qualified for bidding in the same geographic areas from having business discussions that might impact their bids or bid strategies unless the applicants are members of a bidding consortium or other joint bidding arrangement identified on the bidder’s short-form application. One could easily argue that few matters have more of a potential impact on an auction applicant’s bids or bid strategies than plans for a $22 billion mega-merger. (One could also argue that the pledge of $10b toward the incentive auction is a not-so-subtle way to build up pressure for the approval of the companies’ proposed merger.)

The Wall Street Journal further reports that T-Mobile will be the entity responsible for managing the JV, as a concession from Sprint Chairman Masayoshi Sun. Management of the JV would be independent of the merger transaction, and the JV structure would only be needed if the transaction is still pending before regulators when short-form applications for the incentive auction are due. A formal announcement of the Sprint – T-Mobile merger is expected this summer, and review of the deal by the FCC is expected to take at least a year.

Industry analysts have speculated that Sprint and T-Mobile would be big participants in the 600 MHz broadcast incentive auction due to their relative lack of so-called “low-band” ( i.e., sub 1 GHz) spectrum holdings. T-Mobile has focused much of its 4G LTE buildout on AWS-1 (1.7/2.1 GHz) spectrum. The company received a significant amount of AWS-1 spectrum nationwide as a breakup fee from AT&T when the proposed $32 billion merger of those companies failed to receive FCC approval in late 2011. Likewise, Sprint’s network buildout up to now has been focused on broadband PCS (1900 MHz) and BRS/EBS (2.5 GHz) spectrum. Low-band spectrum (such as cellular and 700 MHz band spectrum) is widely seen as being more valuable for the provision of mobile wireless services due to favorable signal propagation characteristics resulting in greater building penetration and fewer antenna towers needed to provide signal coverage to remote/rural areas.

The FCC’s recent Mobile Spectrum Holdings Report and Order ( FCC 14-50 ) cited to the Commission’s licensing records as evidence that AT&T and Verizon together currently own or control a vast majority of the low-band spectrum, and used this as the basis for adopting a “market-based” spectrum reserve. As currently constituted, this reserve would set-aside up to 30 megahertz of the recovered 600 MHz band spectrum for licensing to entities having less than 45 megahertz of suitable and available below-1-GHz spectrum in a geographic market. The reported $10 billion in auction financing would presumably allow the Sprint/T-Mobile JV to bid at least $10 billion for this “reserve” spectrum.

AT&T has previously announced it would commit up to $9 billion to the incentive auction. If Verizon were to commit a similar amount to the auction as the Sprint/T-Mobile JV and AT&T, then bidding in the forward auction of 600 MHz Partial Economic Area (PEA) licenses nationwide could reach $30 billion, far outstripping the Commission’s previous record $19 billion from the 700 MHz band auction (Auction No. 73) which concluded in March of 2008.

Of significance to our clients, the Sprint/T-Mobile commitment, when coupled with the AT&T $9b commitment, makes it much more likely that the FCC will achieve the minimum level of bidding necessary for the incentive auction to meet Congress’ requirements that the auction raise enough money to compensate broadcasters for the spectrum they contribute, cover the cost of the auction, and raise buildout funding for the nationwide public safety broadband network (FirstNet). Thus, it is more likely that if our clients are the high bidders on auction licenses, they will indeed get their licenses. The potential downside is that Sprint/T-Mobile venture has now positioned itself as a formidable bidder for the “reserve” spectrum blocks that AT&T and Verizon likely won’t be able to win due to their below 1 GHz spectrum holdings.

Deadlines

AUGUST 1: FCC FORM 502, NUMBER UTILIZATION AND FORECAST REPORT: Any wireless or wireline carrier (including paging companies ) that have received number blocks—including 100, 1,000, or 10,000 number blocks—from the North American Numbering Plan Administrator (NANPA), a Pooling Administrator, or from another carrier, must file Form 502 by August 1. Carriers porting numbers for the purpose of transferring an established customer’s service to another service provider must also report, but the carrier receiving numbers through porting does not. Resold services should also be treated like ported numbers, meaning the carrier transferring the resold service to another carrier is required to report those numbers but the carrier receiving such numbers should not report them. Reporting carriers file utilization and forecast reports semiannually on or before February 1 for the preceding six-month reporting period ending December 31, and on or before August 1 for the preceding six-month reporting period ending June 30.

Calendar At-A-Glance

July
Jul. 18 – Comments are due on the Open Internet NPRM (extended from July 15).
Jul. 23 – Comments are due on LMCC Petition to Expand Conditional Temporary Authorization
Jul. 31 – FCC Form 507 (Universal Service Quarterly Line Count Update) is due.
Jul. 31 – Carrier Identification Code (CIC) Report is due.
Jul. 31 – FCC Form 690 (Mobility Fund Phase I Auction Winner Annual Report) is due.

August
Aug. 1 – FCC Form 502 due (North American Numbering Plan Utilization and Forecast Report).
Aug. 1 – FCC Form 499-Q due (Telecommunications Reporting Worksheet.
Aug. 1 – Reply comments are due on Citizens Broadband Radio Service FNPRM.
Aug. 4 – Reply comments on LMCC Petition to Expand Conditional Temporary Authorization are due.
Aug. 8 – Comments are due on the FCC’s Omnibus USF/ICC Order.
Aug. 11 – Reply comments are due on T-Mobile Data Roaming Petition.
Aug. 14 – Deadline for CAF Phase II Challenges.
Aug. 29 – Copyright Statement of Accounts is due.

September
Sep. 1 – FCC Form 477 due (Local Competition and Broadband Reporting).
Sep. 10 – Reply comments are due on the Open Internet NPRM.
Sep. 10 – Reply comments are due refreshing the record on the 2010 Broadband NOI.

October
Oct. 13 – Deadline for applications for rural broadband experiments.

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What will the IBM-Apple partnership mean for healthcare?

By: Jonah Comstock
Jul 17, 2014
MobileHealthNews

When it comes to tech partnerships, it’s hard to imagine one more hard-hitting than Apple and IBM, two companies who announced this week that they would be collaborating on enterprise software for iPhones and iPads. Apple is also rolling out a new customer service and support offering specifically for enterprise customers.

“The landmark partnership aims to redefine the way work will get done, address key industry mobility challenges and spark true mobile-led business change—grounded in four core capabilities,” the joint release says. “A new class of more than 100 industry-specific enterprise solutions including native apps, developed exclusively from the ground up, for iPhone and iPad; unique IBM cloud services optimized for iOS, including device management, security, analytics and mobile integration; new AppleCare service and support offering tailored to the needs of the enterprise; and new packaged offerings from IBM for device activation, supply and management.”

It’s no secret that doctors love the iPad, and that one fact is what has allowed an unabashed consumer device to gain such a strong foothold in an enterprise like healthcare. Hospital CIOs, though, are often concerned about security, battery life, software compatibility, and a service plan for when things go wrong. They would sometimes rather their doctors use devices designed for enterprise use, a refrain we hear again and again from competing tablet vendors like Dell and Microsoft.

“Apple has made it very clear that they are not customizing their platform for business,” Dell’s Chief Medical Officer Dr. Andrew Litt told MobiHealthNews last year at HIMSS 2013. “If people want to use them in business environments that’s fine.”

With the IBM news, that’s no longer true. Apple is, at long last, tackling enterprise — and not just in healthcare, but in retail, finance, insurance, and many other industries. The biggest strike that other tablet makers — including dedicated medical tablet makers like Motion Computing — have had against Apple in healthcare may have just gone up in smoke.

It’s actually a little confusing why Apple would finally start taking enterprise seriously now — after it has all but proved it doesn’t need to. According to Manhattan Research’s James Avallone, Apple still holds a comfortable lead in hospital mobile device adoption.

“The iPhone is a top device, and it has been so since its inception,” he told MobiHealthNews in April . “During its first year being on the market, the iPhone and BlackBerry were neck-and-neck for physicians, and since then the iPhone has just really run away with it. Over the years Android devices have taken a strong second spot, but the iPhone has the majority of the market share and it continues to.”

The iPad holds a similar lead in tablets, despite high profile Microsoft Surface buys like last month’s 2,000-Surface deal with UPMC . But the Manhattan data also shows that in the last few years, mobile device adoption in hospitals in general has plateaued. When the market stops growing, there’s nothing for companies to do but to go after each other’s shares — so this might be perfect timing for an enterprise play from Apple to help it hold onto its lead.

The one thing this announcement doesn’t address is hardware criticisms of the iPad — that it lacks sufficient battery life for long hospital shifts, or it isn’t robust or easy enough to sterilize for the operating room. But those objections apply only to a subset of care providers, and have never been enough to offset the iPad’s aesthetic or ease of use.

Apple didn’t choose just any partner for its enterprise bid. IBM itself is no stranger to healthcare, after all, it made healthcare the flagship use case for Watson, the data intelligence processor that mimics human thinking and learning well enough that it managed to beat the best Jeopardy champions back in 2011. It’s been providing backup support for oncologists ever since. IBM knows how to manage data in a healthcare setting.

Will Watson itself show up in the fruits of this partnership? It’s certainly possible. The release talks about IBM MobileFirst for iOS Solutions: “a new class of ‘made-for-business apps’ targeting specific industry issues or opportunities in retail, healthcare, banking, travel and transportation, telecommunications and insurance, among others, that will become available starting this fall and into 2015.”

When it comes to targeting specific issues in healthcare, with apps that will be powerful enough to persuade hospitals to go with Apple, IBM is ahead of the game with Watson and with software like the Careflow clinical decision support application IBM Research demoed at Health 2.0 last year .

The IBM-Apple partnership is sure to make waves in many of the industries it’s impacting. But in healthcare specifically, it could be the reinforcement that Apple needs to hold its dominant position in the medical tablet war that’s been raging since the iPad’s inception .

Why Steve Jobs Didn't Listen to His Customers

June 19, 2014

Gregory Ciotti Marketing at Help Scout

 It's really hard to design products by focus groups. A lot of times, people don't know what they want until you show it to them.

—Steve Jobs

One of the most famous opinions from a highly opinionated man. Regardless of your personal view on this statement, it is remembered because of the implications that Jobs makes about customer feedback.

Forbes called the quote “ a dangerous lesson .” Even as someone who has presented ample research that customers can and do inspire innovation across multiple industries, I’m here to tell you that you should mostly agree with Steve Jobs’ sentiments, at least in terms of developing innovative solutions for customers.

Let's look at a few split opinions on the quote, and compare the merits of focusing on internal innovation versus the insights to be gained from customer feedback.

The Benefits of Sheltered Innovation

Can the focus on the internal creativity of product teams really have a place in the business world? Should customers be ignored?

According to Mario D’Amico, senior VP of marketing at Cirque du Soleil, the answer is, well, kind of, but not entirely.

In a 2012 theoretical case study published in the Harvard Business Review, D’Amico was asked what he would do about implementing customer surveys and feedback if he were in charge of a world-class dance troupe.

The scenario posed to D’Amico was this: a new marketing executive for the dance troupe wants to implement surveys in order to find out what customers want to see in upcoming shows. She rationalizes that knowing this will help the company grow.

The theoretical company founder instead argues:

 Why do we want to ask what our audience thinks?
We don’t care what they think.

How can people tell you what they want if they haven’t seen it before? If we ask them what they want, we’ll end up doing Swan Lake every year!

D’Amico is then asked: does customer feedback take a backseat when innovation is the primary objective?

Working for a company that thrives on creativity (read more about Cirque du Soleil), he offers a surprisingly balanced take on the issue.

First, he empathizes with the creatives as well as the founder of the company, who claim that the company’s core mission (and the reason for their success) is founded on doing what no customer expects them to do:

 Any innovative company struggles with how much to listen to customers. Most realize that you cannot trust them to tell you what your next new product will be.

D’Amico argues in industries where companies thrive on innovation, asking customers what they “want” does not improve a company's competitive positioning .

Apple’s competitive edge is perhaps that they have been able to avoid the sameness trap. When relying on consumer input, is it not inevitable that they will tell you to do what other popular companies are doing?

How can you get ahead of the curve if your customer feedback only consists of today’s ideas?

A tough question to fully answer. Let's first look at whether customer feedback is a valuable resource at all.

Do Customers Know What They Want?

 If I had asked people what they wanted, they would have said faster horses.

—Henry Ford

(Note: readers have mentioned that we've yet to find a reliable source for this quote. It is therefore very possible that Ford never said this. I'll keep it here only because it argues this point: that while customers can pinpoint problems, they don't usually envision the best solutions)

With the problems in predicting future customer intentions, and the potential lack of clarity in feedback, one has to wonder if there is any point to listening to customers.

D’Amico would argue yes, and I would absolutely agree:

 If the directors are smart, they’ll approve the idea of surveying customers. We use data to brief the members of our creative team, to help them understand who’s applauding when the curtain goes down.

We don’t tell them to use a red dress or a blue dress or [what to do] in a certain scene, but we do educate them. Then we get out of their way so that they can create.

His statements are right on the money and, in my opinion, can be applied to multiple industries in regards to approaching feedback.

The takeaway: Customer feedback can often guide entrepreneurs, product developers, designers and marketers towards problems, but feedback should not be used to dictate the solution.

 Customer feedback is great for telling you what you did wrong. It's terrible at telling you what you should do next.

—Phil Libin, CEO of Evernote

The Real Utility of Feedback

When Ron Johnson, former VP of retail operations at Apple, became the CEO at J.C. Penny, a lot of controversy ensued with, arguably, much of it relating to knowing one's customer base.

After Johnson came on board and reformed operations at J.C. Penny, company sales dropped by double-digit percentages and stock plummeted by over 40 percent.

One of the most ambitious parts of Johnson’s overhaul, the elimination of discounts, was questioned by colleagues who wanted to consult with customers (and gather feedback) about the new changes before implementing them.

Supposedly, when asked why he bristled at this suggestion, Johnson responded :

 We didn't test at Apple.

Did Johnson ignore conventional industry wisdom and move too abruptly to impose practices inspired by his time at Apple? One lesson certainly learned is that J.C. Penny is a different beast when compared to Apple's innovation.

However, this situation doesn't have to be an either/or. Why not find a happy middle ground in regards to using feedback; one that promotes using customer's behavior to simply pinpoint problems.

We’ve seen how D’Amico at Cirque du Soleil, another highly creative company, has stated that understanding your customers’ wants and pains is a pivotal part of building a better product — and that it doesn’t have to restrict your innovation.

If Jobs’ situation at Apple was supposedly unique, how can other highly innovative companies implement smarter ways to find out what their customers want without sacrificing their ability to innovate? How can they fight the “sameness trap” while getting a better handle on what customers really need?

Some would argue that the answer is quite simple: Find out what customers want without directly asking them. Well, simple to say, but much harder to do.

With the dance troupe example, it is obvious that asking customers exactly what they want to see in a show will result in generic answers, and end up stifling creativity.

So, don’t ask that! Far more important avenues of questioning to create an innovative dance performance might be:

• What sort of things move customers emotionally?
• Which shows did they have trouble understanding?
• What visual elements left a lasting impact?

Add in demographic information, and you’re well on your way to understanding customer expectations and insights — all without resorting to telling your team of creatives to “go with the red dress instead of the blue one,” just because customers said so.

I would argue that all businesses should view feedback in this way. Feedback doesn't have to control your product's road map, and you can incorporate feedback into your creative process without doing “Swan Lake every year.”

Observe, don't just listen and blindly follow feedback.

Perhaps this is the truth behind Apple's innovation — Steve Jobs did actually listen to customers, but only to find out which problems they faced, and to identify the biggest points of friction they had. He did not listen to customers' proposed solutions because his belief was that the best, most innovative solution had to come from the company.

Customers might help identify the destination, but you can't listen to them on how to get there.

Put another way, it isn't the customer's job to tell you how to solve their problem; feedback is most useful in identifying which problems actually exist.

With these types of goals in mind, companies can gather valuable feedback from their customers that need not interfere with their creative process, or dictate how they should approach developing the best solution.

But that's just my opinion... what do you think?

About the Author: Gregory Ciotti is a marketing strategist at Help Scout , the invisible email support software for small businesses. He authors the data-driven essays on customer loyalty found on the Help Scout blog .

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Google confirms Android Wear will support custom watch faces

BY EDGAR ALVAREZ
July 17, 2014

Since its beginnings, the Android platform has been known for being heavily customizable . As such, it's not exactly a surprise to hear Google say its new smartwatch ecosystem , Android Wear , is due to support watch faces from third-party developers. However, having actual confirmation makes for perfect peace of mind. In a Google+ post , Android's VP of Design Matias Duarte affirmed this would be the case, stating that the Wear team is already working on a custom watch face API. “Customization has helped Android thrive, and the same will be true for Android Wear,” he wrote. The incoming API will make it “as simple as possible” for devs to make all-around great watch faces, ones which can look good, not drain a battery and blend well with the watches card-based UI . Duarte said “some” of these things won't be available until later this year, but that they are, without a doubt, on their way. So, don't worry, soon enough you'll have better choices to deck out that fancy, smart tick-tock wearable of yours.

The “Trickle Down Theory” isn't working!