Apple defies skeptics with huge iPhone sales | Sprint beats estimates on rising data revenue | AT&T will pare size of spectrum purchases
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April 25, 2012
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Apple defies skeptics with huge iPhone sales
Video: Gamco's Ward Says Apple at $700 `Highly Likely'
Apple soared past analysts' expectations, reporting on Tuesday a nearly 60% increase in sales and a 94% rise in profits in its fiscal second quarter compared with a year earlier. The company sold 35.1 million iPhones, many of them in China, where sales leaped by 400%. Analysts had feared lower-priced rivals would eat into iPhone sales, but the report "shows they are able to maintain their pricing without compromising on growth," said Michael Holt, a Morningstar analyst. Sales of iPads grew 151% to 11.8 million units. Verizon Wireless and AT&T together sold 7.5 million iPhones and are prospering from data services sold through the smartphone. ClipSyndicate/Bloomberg (4/25), Reuters (4/24), The Wall Street Journal (tiered subscription model) (4/24), CNET/Apple blog (4/24), ReadWrite (4/25)
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Company News
Sprint beats estimates on rising data revenue
Sprint Nextel cheered investors today as it reported a smaller loss than expected, thanks to higher bills from iPhone customers using data services. Average revenue per subscriber grew 6.6% as total sales rose 5.1% from a year ago. Sprint's losses doubled from a year ago, mainly because of the shutdown of the Nextel network. The loss of 192,000 contract subscribers was largely attributed to Nextel defections; the Sprint unit added 263,000 customers. Bloomberg (4/25), ABC News/The Associated Press (4/25)
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AT&T will pare size of spectrum purchases
AT&T will enter more modest agreements to ensure it has enough spectrum to meet demand, the carrier's head of wireless, Ralph de la Vega, said Tuesday after the telecom reported earnings. "We're looking for small acquisitions and will continue to look for more, since we don't see data growth slowing," he said. Also, AT&T retail outlets reported running out of the white and cyan models of the Nokia Lumia 900, leaving only the black versions in those stores. CNET (4/24), CNET/Internet & Media blog (4/24)
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Intel chief eyes carriers as possible partners
Intel CEO Paul Otellini says carriers have shown interest in partnering with the chipmaker, even to the extent of possibly selling white-label smartphones produced by Asian manufacturers rather than by the typical handset-makers. "The people who have the most interest in optimizing feature sets for the phones at the end of the day are the carriers who own the networks and want to get the maximum return from them," he said. Intel believes its new mobile chip, code-named "Medfield," has performance parity with those designed by rival ARM Holdings. The Wall Street Journal (tiered subscription model)/Dow Jones Newswires (4/24)
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Google tries again on smartphone sales with Galaxy Nexus
Google re-entered the smartphone direct sales channel on Tuesday, introducing on its website an unlocked version of Samsung Electronics' Galaxy Nexus phone. The move comes two years after it tried in vain to sell its own device online. Google is charging $399 for the phone; consumers can buy AT&T or T-Mobile SIM cards to use the Galaxy Nexus or pay $200 to purchase the handset from Verizon Wireless or Sprint Nextel under a two-year contract. Bloomberg (4/24), The Wall Street Journal (tiered subscription model) (4/24)
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Google Drive will sync mobile, other devices:
Google on Tuesday rolled out its cloud-based Drive storage service, which allows users to access and sync multimedia content from Web-connected devices, including smartphones and tablets. "Personal cloud is far more than just storage; it's synchronization, it's streaming, it's sharing files. Those ultimately become more important to the consumer than things like the personal computer," said Gartner analyst Michael Gartenberg. The Wall Street Journal (tiered subscription model) (4/24), Los Angeles Times (tiered subscription model) (4/25), Computerworld (4/24)
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Other News
New standard needed to achieve M2M's potential?
Since wireless technology has so far fallen short of fulfilling the ambitious goals set out for machine-to-machine communications, the creation of a new standard using so-called "white space" frequencies is needed, according to this commentary from a firm pushing the Weightless open standard as a solution to the problem. (4/24)
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Huawei hints it may enter merchant IC market for mobile chipsets
Huawei Technologies, which has developed its own ARM-based, quad-core processor for its smartphones, might sell chipsets for mobile electronics, an executive of the company hinted. "If we cannot make money from smartphones, we can still make money from the chipset offerings," said Executive Vice President Eric Xu. "If we can make money from every smartphone chip, then it will be substantial." Computerworld/IDG News Service (4/25)
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Earnings Roundup
Ericsson sees mixed results, signs China Mobile deal
Cautious attitudes by wireless carriers cut steeply into Ericsson's first-quarter profits, but its shares still rose after the company reported higher margins and income than analysts had expected. "Sales of high-performance mobile broadband developed well in North America, Japan and Korea, while other regions such as Europe including Russia, parts of Middle East and India were weaker," CEO Hans Vestberg said. Separately, Ericsson will sell equipment and services to China Mobile under a framework agreement based on the carrier's expansion of 2G and 3G services, the Swedish government said. The Wall Street Journal (tiered subscription model) (4/25), Reuters (4/25), Reuters (4/24)
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Public Policy
CTIA pushes for CISPA cybersecurity measure in House
CTIA-The Wireless Association® has joined two other groups in supporting a GOP-backed cybersecurity measure the House is expected to take up Friday. USTelecom and the National Cable & Telecommunications Association also signed off on the measure, which is opposed by President Barack Obama's administration. The legislation, known as the Cyber Intelligence Sharing and Protection Act, or CISPA, would protect industries that share information among themselves and with the government. Multichannel News (4/24), The Guardian (London) (4/24), PCWorld Business Center/IDG News Service (4/24)
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Other News
Senate is urged to end discriminatory taxation of wireless services
On average, consumers pay 7% in taxes across the country. When it's a wireless device and service plan, however, the average taxes and fees more than double to 16.3%. Last week, CTIA and six wireless providers that collectively represent 94% of America's 322 million wireless subscribers sent a letter to Senate Finance Committee Chairman Max Baucus, D-Mont., and ranking committee member Orrin Hatch, R-Utah, urging them to act quickly to pass the Wireless Tax Fairness Act (S. 543). Already passed by the U.S. House, S. 543 would place a five-year moratorium on any new wireless taxes and fees. The Wireless Tax Fairness Act received a zero by the Congressional Budget Office, which means that if this bill was passed, it would not cost the federal government anything. More than 300 million wireless subscribers would benefit from the passage of the Wireless Tax Fairness Act, so join us in getting the Senate to pass this legislation. Check out the CTIA Blog to see the letter and learn more about the discriminatory wireless taxes and fees.
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