A Foolish Week of Telecom
If you've been yearning for an iPhone but didn't want to sign a multiyear contract with a major carrier, you will have to wait only a few more weeks for your dream to come true. Leap Wireless International's (NAS: LEAP) Cricket brand will become the first U.S. carrier to offer the iPhone on a prepaid -- that is, month-to-month -- basis.
An iPhone 4S with 16 gigabytes will cost $499.99. That's $300 more than what AT&T, Verizon, or Sprint (NYS: S) charge, but $150 less than what it would cost for an unlocked iPhone from Apple (NAS: AAPL) . That cost will be on top of the monthly $55 fee for so-called "unlimited use" (data throttling will happen after 2.3 gigabytes of usage).
The jury is still out on whether this is a positive move for Leap. JPMorgan analyst Philip Cusick told Dow Jones Newswires that pricey smartphones are "nearly irrelevant" to those typically using a prepaid plan, that those folks aren't in a hurry to pay the price of an iPhone.
But Leap's CEO, Doug Hutcheson, said that its $900 million three-year contract with Apple will pay off in helping the carrier retain its customers. "Loyalty is higher, and churn is lower with iPhone," Hutcheson said on a conference call.
Will RIM go the way of the dodo?
There seems to be a perpetual storm cloud hovering over Research In Motion (NAS: RIMM) . This week the gloom came down in buckets as RIM CEO Thorsten Heins warned in a statement that the first-quarter numbers will be even worse than expected, and that the company had retained a couple of investment banks to figure out what to do next.
RIM market cap has dropped from $40 billion to $5 billion since the beginning of 2011.
Speculation abounds that selling off the BlackBerry brand is the most likely option.
Buffy, the iPhone Killer
Last November, All Things Digital reported that Facebook was working with smartphone maker HTC to bring out a customized version of an Android phone. That phone was codenamed "Buffy." Now, according to The New York Times, Facebook has lured half a dozen engineers away from Apple to (it is rumored) bring out its own smartphone.
An unnamed Facebook employee quoted by NYT said, "Mark is worried that if he doesn't create a mobile phone in the near future that Facebook will simply become an app on other mobile platforms."
Maybe Mark should talk with Stephen (Elop) of Nokia (NYS: NOK) and Steve (Balmer) of Microsoft before jumping headfirst into those iOS- and Android-infested waters.
An LTE iPhone omen?
Whether this is to replace those engineers that jumped ship for Facebook or not, it is of note that Apple has posted job openings for 24 positions. Even more notable is that those positions are for quality assurance engineers and call for experience or knowledge of LTE.
Does this mean an LTE iPhone is coming in the near future, or is it only to meet the overseas needs of the 4G LTE iPad? Remember the brouhaha in Australia and the U.K. over "4G" iPads that could only run on U.S. or Canadian LTE networks?
Will Apple become a wireless carrier?
Apple CEO Tim Cook said during his keynote appearance at the AllThiingsD conference that becoming a wireless carrier, or even purchasing such a carrier, would not be to Apple's advantage. Because of Apple's global footprint -- with most of its money made outside the U.S. -- "owning something just in the U.S. would not have great value in our total worldwide footprint," Cook said.
R.I.P. for iDEN
In one year and one month, Sprint will pull the plug on its push-to-talk iDEN network. Customers will then be given the chance to switch to a push-to-talk plan on Sprint's CDMA network. This week the carrier stopped all sales of iDEN devices.
Shutting down the iDEN network has not come cheaply, so far costing well over $500 million. But that price may be worth it as the carrier can use that freed-up spectrum in its upcoming 4G LTE network.
He said, they said
It's Google vs. Nokia and Microsoft in yet another chapter of finger pointing in our litigious new world of mobile technology. Google accused Nokia and Microsoft of antitrust actions by together transferring a large number of patents to a so-called "patent troll," Mosaid Technologies, in order to enforce their collective patent rights.
Nokia and Microsoft did enter a patent cross-licensing agreement last year, but Nokia took exception to Google's accusation. "Google's suggestion that Nokia and Microsoft are colluding on intellectual property rights is wrong," said a Nokia legal spokesperson in a statement.
Who can blame Nokia for trying to make some money off of its patents? With its recent woes, the company can use every dollar it can get hold of. It now earns $618 million a year from patent licensing, and has the potential to earn hundreds of millions more from royalties.
If you want to stay primed on the trends in telecom, check out The Motley Fool's report on "the next trillion-dollar revolution." It details a "hidden" component play inside mobile phones that is also a leader in the exploding Chinese market. Hundreds of thousands have requested access to previous reports. You can access this one now -- it's free. Or if you'd like something more company-specific, our senior technology analyst details exactly why Apple still looks like a buy in our new premium research report.
At the time this
article was published Fool contributor Dan Radovsky owns shares of AT&T. The Motley Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of Apple. Motley Fool newsletter services have also recommended creating a bull call spread position in Apple. The Motley Fool has a disclosure policy.
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