Friday, November 6, 2009
Is Verizon’s New Early-Termination Fee Anti-Consumer?
Beginning Nov. 15, Verizon subscribers looking to get out of their smart-phone contracts early will pay $350 for the privilege. That early-termination fee is double the current one, but Verizon insists it’s justified because of the higher prices of today’s phones. An interesting move for a carrier that just last year agreed to pay $21 million to settle a class-action lawsuit filed by California consumers over the very early-termination fees it is now increasing.
Looks like tethering on Apple’s iPhone is still a matter of “when and not if,” as AT&T likes to say. Though the carrier’s decision to allow Internet telephony apps on its 3G network has lead some to speculate that the company will soon allow data tethering as well, that’s not the case. Evidently, there’s still a while to wait until AT&T supports that long-promised feature.
Discussing Palm’s first-quarter results earlier this month, the company’s leadership claimed that “the vast majority of new sales” for the quarter were generated by the Pre. Palm sold some 823,000 handsets during that period with sell-through of 810,000 units, so that’s an impressive feat. But only if the sales we’re talking about here were made to on-the-street consumers. And, according to Town Hall research analyst David Eller, it’s not entirely clear that they were.
Apple’s iPhone continues to be AT&T’s marquee handset, though the data-guzzling “Hummer of cellphones,” as the New York Times has dubbed it, has inspired widespread customer dissatisfaction with the carrier’s network. Indeed, according to Piper Jaffray, the iPhone 3G and 3GS are AT&T’s top-selling phones.
Can this really be true? Vonage posted another quarterly profit? Indeed it is. The Internet phone service provider reported a second-quarter profit of $2.3 million, or a penny a share. Wall Street had been expecting a loss of three cents a share. Great news. Sadly for Vonage, it was tainted by an increase in subscriber defections. 
Well, this is unexpected. Amazon has agreed to purchase online shoe retailer Zappos.com in a deal valued at about $850 million. Under its terms, the retailer will acquire all outstanding Zappos shares in exchange for roughly 10 million shares of Amazon common stock, valued at about $807 million, and some $40 million in cash and restricted stock. If the shoe fits, right?
The economy is in recession, consumer spending is down and the PC market is in the worst decline since the Great Dark Times of 2001. And Apple is doing just fine. After market close Tuesday, the company reported earnings that crushed the Street’s estimates into a fine iPod-white dust. Analysts surveyed by Thomson Reuters estimated that Apple would earn $1.16 per share on $8.16 billion in sales. Instead, it earned $1.35 on $8.34 billion for a profit of $1.23 billion.
You can’t overtake a market in a month, particularly one dominated by Google. But you can certainly chip away a small foothold. Which is what Microsoft managed to do with its new search engine, Bing, last month. According to StatCounter, Microsoft’s share of the market grew to 8.23 percent in June, up from the 7.8 percent share it held prior to Bing’s launch.
Palm shares are on a tear this morning, rallying on the company’s fourth-quarter financials and the promise of its new Pre handset. Palm is trading at $15.30 as I write this, up more than nine percent in reaction to the company’s claims that the Pre and Palm’s webOS are off to a strong start. 
What’s Sun going to do now? Shares in the company dropped more than 27 percent percent to $6.48 in premarket trading following reports that Sun’s board rejected a formal acquisition offer by IBM. After weeks of negotiations, the two companies were thought to be finalizing a deal for about $7 billion. But IBM lowered its offer over the weekend and then withdrew it after Sun balked at the price and terms of the sale.
Research in Motion’s effort to emulate Apple’s phenomenally successful App Store has a new name: BlackBerry App World. Not much of an improvement over “BlackBerry Application Center,” but an improvement nonetheless.
Perhaps Macworld Expo 2009 will have its “one more thing” after all. In a note to clients this morning, Ezra Gottheil of Technology Business Research speculates that Apple will indeed launch a new product category at Macworld in early January. A netbook.
If a global manufacturer of computer hardware like Belkin’s not exhibiting at CES, who is? I posed that question jokingly earlier this morning, but turns out there’s a very real and ugly answer to it: Not Seagate. Not Logitech. Not Cisco. Not Philips. Not Yahoo. And not Sanyo, either.
