All Things Digital

Google’s (GOOG) Open Handset Alliance is going to have to do a lot better than a few early prototype demos if it truly hopes to unify mobile Linux around its Android specification. Because rival LiMo Foundation is stepping up its game. And fast.

Earlier this year, LiMo uncrated a first wave of handsets running on its Linux-based software platform for mobile devices–18 devices from seven vendors. And now the foundation is adding some big names to its roster of mobile-phone outfits. This morning, LiMo announced eight new members, among them: Mozilla, developer of the Firefox Web browser and Verizon Wireless (VZ).

The companies’ membership is an important endorsement for LiMo–Verizon’s in particular. The mobile-phone player seems quite invested in LiMo and its vision of mobile Linux, which is far more Democratic than the OHA, which is one of those wonderful we’re-Google-and-Google-always-knows-best democracies. So much so that Verizon has declared LiMo’s to be its preferred mobile OS.

“We are wholeheartedly endorsing LiMo’s approach, and we are investing company resources, but we see the opportunity to have both the OHA and LiMo succeed and/or work together,” Kyle Malady, vice president of networks at Verizon Wireless, said during a conference call with reporters this morning. “LiMo is our platform of choice, but if there comes a point where we see there is benefit for our customers we will use OHA as well.”

(Image Credit: ThinkGeek)

With its curvier edges, stylish silver trim, half-VGA 480-by-320 pixel screen and improved iTunes compatibility, Research in Motion’s (RIMM) new BlackBerry Bold should be a big hit with IT operations professionals convinced the iPhone isn’t an enterprise-class mobile device but driven to near-aneurysm by discontented employees demanding them.

The device is largely as expected–an iPhonish-looking thing with both GPS and Wi-Fi, 1GB of permanent flash memory, a 2-megapixel camera, full HTML browsing, 3G support on GSM networks with HSDPA access and, of course, the BlackBerry’s one-trick killer app: instant, secure email. That’s a compelling combination for business users and casual ones not easily swayed by the iPhone’s hype juggernaut as well. Indeed, Citigroup analyst Jim Suva says it could boost RIM’s quarterly shipments by 200,000 to 400,000.

But perhaps not without a bit of struggle. The BlackBerry Bold won’t ship until as late as August, which means Apple (AAPL) could beat it to market with the enterprise-friendly 3G iPhone it’s rumored to be uncrating at its Worldwide Developer’s Conference in June. Which has got to worry RIM. After all, the first-generation iPhone had claimed a 28% market share by the fourth quarter of 2007. That’s still less than the BlackBerry, which holds about a 41% market share, but the iPhone hasn’t even been on the market a year.

As the anniversary of the iPhone’s market debut approaches, the Mac faithful are quickly succumbing to Apple (AAPL) Rumor Seasonal Affective Disorder, an ailment most often associated with the lead-up to Macworld.

Fueling that trend today is a memo, purportedly leaked from inside AT&T (T), instructing employees not to schedule any vacation between June 15 and July 12 to ensure sufficient staffing for “an exciting Summer Promotional Launch.” This, of course, is being taken as proof positive that the 3G iPhone will arrive at market sometime during that timeframe. And for good reason, AT&T issued a similar mandate last year prior to the iPhone’s official debut.

Meanwhile, Vodafone (VOD) and Telecom Italia (TI-A) said today that they’d both won contracts to bring the iPhone to Italy this year, the first time Apple has allowed two mobile carriers to distribute the device in a single country.

An interesting bit of news and one that lends some validity to recent reports that Apple is stepping back from the exclusive iPhone distribution arrangements it’s been inking to spur iPhone growth abroad. “Apple’s either turned a corner that they’ve had to turn, or that they’ve chosen to,” Technology Business Research’s Ezra Gottheil said of the Vodafone and Telecom Italia deals. “I don’t know if they prefer the exclusivity, and the revenue sharing that goes along with it, or just prefer to sell iPhones and grow their share of the [handset] market.”

Canada’s long national nightmare has ended. The iPhone’s coming to the Great White North. Apple (AAPL) and Canadian wireless provider Rogers Communications (RCI) have finalized a deal that will soon bring the iPhone to the RIM BlackBerry’s backyard.

“We’re thrilled to announce that we have a deal with Apple to bring the iPhone to Canada later this year,” Rogers chief executive Ted Rogers said in a statement just full of details. “We can’t tell you any more about it right now, but stay tuned.”

Good news for Rogers, which had suggested prior to the iPhone’s launch it would offer the phone in Canada, but was later forced to admit it hadn’t yet inked a deal with Apple.

Good news, too, for Canadian cellphone users. Particularly if Apple was able to wring a substantial reduction in wireless plan charges from Rogers–which, like all Canadian carriers, is notorious for its exorbitantly priced data rates. In the U.S., AT&T’s (T) combined iPhone service and data plans start at $59.99 for 450 anytime minutes, 5,000 additional night and weekend minutes, and unlimited data. A comparable plan from Rogers Wireless runs about $295 per month. And while the company recently began offering an “Unlimited On-Device Mobile Browsing Plan,” it doesn’t apply to BlackBerries, Windows Mobile devices or other smart-phones.

Motorola added another dancer to its conga line of disappointing quarters today, posting an ugly first-quarter loss. The ongoing collapse of its post-Razr phone business continued to weigh heavily on the company, which lost $194 million in the quarter ended March 31. That’s significantly worse than its year-ago loss of $181 million. Sales fell about 21% to $7.45 billion, from $9.43 billion a year ago. Mobile-devices losses were $418 million on sales of $3.3 billion, down 39% from the year-earlier quarter.

Suffice to say, the gruesome performance fell short of Wall Street expectations. Motorola (MOT) shares slipped into the mud following the news. They’re trading around $9 right now, down some 4%.

Not to worry, though, says CEO Greg Brown. Motorola, which plans to shed its money-losing handset division in 2009, is well positioned for recovery. “Motorola is still a huge business and an iconic company,” he told USA Today. “I see a vibrant, very successful mobile-device business with a fresh portfolio that is aggressive and competing effectively [in the global market]. These elements, I think, will allow it to compete ferociously in the future.”

Sony BMG (SNE) has signed on to Nokia’s (NOK) new “Comes With Music” program and really, who better than the pioneer of the rootkit digital-rights management scheme to endorse Nokia’s DRM-hobbled prebundled music initiative?

This morning, Sony BMG became the second record label to jump on board the Finnish phone giant’s Comes With Music offering, which–when it launches in the second half of 2008, will package mobile phones with a year of unlimited access to music. There are, however, certain caveats to that value proposition, as I pointed out last December:

Though Comes With Music does indeed permit owners of certain Nokia cellphones to download as many songs as humanly possible in one year (with no per-song data charges), transfer them to a PC and keep them at the end of that time, they must pay a per-song usage fee to burn them to CD. What’s more, the songs are wrapped in Microsoft’s (MSFT) ironically named ‘Plays for Sure’ digital-rights management scheme, which prevents them from being played on the iPod, Zune, etc. Finally, another 12 months access to the music catalog requires the purchase of a brand new phone.”

Clearly, Sony, like Universal (VIV.PA) before it, doesn’t see these issues as off-putting to consumers. “When you give consumers the key to the candy store without any limitations, there’s a lot more opportunity for discovering music that you might not have found before,” said Thomas Hesse, president of global digital business and U.S. sales for Sony BMG Music Entertainment. “We think this will energize the discovery of music.”

It might energize Sony BMG’s bottom line a bit as well. When Universal first signed up for Comes with Music, sources close to the company said that Nokia would pay the label up to $35 for every phone that offers access to its library. Nokia subsequently denied it was paying that amount, but it’s definitely paying something–to Universal, Sony and whatever other labels it manages to line up for the service.

Wow. Blockbuster is completely out of ideas, isn’t it? This morning the foundering movie rental chain went public with its bid to acquire ailing retail consumer-electronics chain Circuit City.

In a Feb. 17 letter to Circuit City CEO Philip Schoonover, Blockbuster (BBI) offered to pay more than $1 billion for the chain. But, to date, Circuit City (CC) hasn’t fulfilled a request for due diligence necessary to make the bid definitive.

Why? In a conference call today, Blockbuster chief exec Jim Keyes described the offer as “simply too attractive to ignore.” But it seems Circuit City also thinks the offer might be too attractive for Blockbuster to finance. “… To date Blockbuster has been unable to satisfy Circuit City and its advisers that Blockbuster’s proposal could be financed,” the electronics retailer said in a statement. “In particular, Blockbuster’s proposal appears to contemplate a rights offering of unprecedented size relative to the issuing company’s market capitalization and at a price that is at a significant premium to Blockbuster’s current market price.”

Well, yes, there is that. And, of course, there are other issues as well. Like what, exactly, are the synergies between a foundering movie rental chain and a foundering electronics retailer–aside from the fact that they’re both, you know, foundering? If it’s Blockbuster rental kiosks in Circuit City stores, the alliance would seem doomed to failure. Wait. It is Blockbuster rental kiosks in Circuit City stores?

To be fair, Keyes says digital content is important too, and he seems convinced that Circuit City will provide Blockbuster with the infrastructure it needs to distribute video to TVs and mobile devices. “What this combination provides is the ultimate distribution channel for [digital] content,” he said this morning. “It’s not necessarily downloading content to the PC that will ultimately capture the consumer’s imagination. It’s the opportunity to get that content on your TV and your mobile device that is a game-changing opportunity.”

A game-changing opportunity for Apple (AAPL), maybe. But for a foundering, outdated video-rental outfit?

Well, it’s about time. With 48 billion text messages sent every month in the United States and one of every eight American households using only mobile phones for communications, it’s finally occurred to the federal government that a nationwide cellphone alert system might be a good idea.

And so yesterday the Federal Communications Commission announced plans to develop an emergency-alert system that would broadcast SMS messages to cellphones and other mobile devices wherever a crisis occurs. The Commercial Mobile Alert System, as it’s been dubbed, will deliver three different types of text alerts to mobile phone subscribers: presidential alerts concerning terrorist attacks and whatnot; imminent threat alerts warning of natural disasters; and Amber Alert child abduction warnings.

Sounds like a nice comprehensive program. Too bad you won’t see it for another two years, at least. Unless you happen to live in a region like Contra Costa County in Northern California, where a tech-savvy local government is already hard at work on its own geographically targeted emergency alert system.

Apple CEO Steve Jobs’s claim that Safari is responsible for 71% of mobile browser usage apparently echoed throughout Microsoft HQ like a hearty Nelson Mundt “Hah Hah!” since Microsoft (MSFT) has developed a more robust version of Internet Explorer Mobile with which to challenge it. At the CTIA conference in Las Vegas this morning, the company announced Windows Mobile 6.1 and along with it a new desktop-grade version of IE Mobile. With support for Adobe Flash and Silverlight, the browser should help Microsoft better compete with the full Web-browsing experience provided by Mobile Safari. Expect it at market in the third quarter of 2008.

Motorola has finally taken a RAZR to its handset business. In the face of growing pressure to bolster its ailing stock price, Motorola (MOT) yesterday announced plans to divide itself into two publicly listed companies–one focusing on mobile phones and the other on broadband and mobility services.

“Our decision to separate our Mobile Devices and Broadband & Mobility Solutions businesses follows a review process undertaken by our management team and Board of Directors, together with independent advisers,” CEO Greg Brown said in a release. “Creating two industry-leading companies will provide improved flexibility, more tailored capital structures and increased management focus–as well as more targeted investment opportunities for our shareholders.”

On a conference call with Wall Street analysts, Brown said the decision to carve out its handset business was the result of an evaluation process announced in late January, not a move engineered to appease billionaire investor-provocateur Carl Icahn who sued the company in a Delaware court Monday demanding access to minutes of board discussions about the division’s potential spin-off.