Apple Denies Tracking iPhone Location, Blames Software Bug
By Maisie Ramsay
Apple has denied that it tracks the location of its iPhone users in response to recent reports stating the company maintains detailed records of its devices' locations.
"Apple is not tracking the location of your iPhone. Apple has never done so and has no plans to ever do so," the company said in a statement on its website today.
However, Apple conceded that the device maintains a log of nearby Wi-Fi hotspots and cell towers to help determine its location.
Apple says that it collects information from nearby hotspots and towers to determine a user's location because using GPS can take several minutes to pinpoint a phone's location. Many of the iPhone's functions require fast, accurate location data, such as mapping apps and location-sensitive mobile advertising.
The company's explanation of the iPhone's collection of location data is in line with recent reports that the device records time-stamped GPS coordinates, stores them in a file and then transfers the location information to a user's computer when they sync their iPhone with iTunes.
The iPhone stores up to a year of information about its location and continues logging Wi-Fi and cell tower data from Apple's crowd-sourced database even after users turn off location service.
Apple said the lengthy storage of location information and the inability to stop the iPhone from logging the data was "a bug."
The company plans to issue an iOS software update sometime in the next few weeks that will reduce the amount of location information stored on the iPhone; stop sending the information to iTunes; encrypt the device's cache of location information; and stop adding data about hotspots and cell towers to its database when the iPhone is turned off.
According to Apple, the iPhone is not logging user's location but is "maintaining a database of Wi-Fi hotspots and cell towers around your current location, some of which may be located more than one hundred miles away from your iPhone, to help your iPhone rapidly and accurately calculate its location when requested."
The calculations are anonymously added to a crowd-sourced data base which is stored first on the iPhone and then backed up to iTunes when users sync their devices.
The tracking and storage of location data by the iPhone and other smartphones has come under scrutiny by lawmakers in both the House and Senate and Illinois State Attorney General Lisa Madigan.
On Monday, five Republicans from the House Energy and Commerce Committee penned a letter asking six tech companies, including Apple and Google, to answer questions about how their devices track and share users' location data. Senator Al Franken (D-Minn.) said Monday he plans to hold a hearing on May 10 about the issue, and Attorney General Madigan also called for a meeting with Apple and Google on the subject.
Nokia Axes 4,000 Jobs, Sends Symbian to Accenture
By Maisie Ramsay
Nokia said today it plans to lay off workers and transfer its Symbian business to a management consulting firm as part an effort to cut its operating expenses by $1.5 billion over the next two years.
About 4,000 of Nokia's employees, mainly in Denmark, Finland and the United Kingdom, will lose their jobs by the end of 2012.
The company's Symbian business and 3,000 associated employees in China, Finland, India, the United Kingdom and the United States will be transferred to Ireland-based Accenture, one of the largest consulting firms in the world.
Stephen Elop, Nokia president and CEO, said the company faced a "difficult reality" as it worked to reverse the company's downward slide in the global handset market.
"At Nokia, we have new clarity around our path forward, which is focused on our leadership across smart devices, mobile phones and future disruptions," Elop said in a statement. "However, with this new focus, we also will face reductions in our workforce."
Financial terms of Nokia's deal with Accenture were not announced. Under the agreement, which is expected to be finalized this summer, Accenture becomes a preferred partner for Nokia's smartphone development around Windows Phone 7. Accenture bought Nokia's Symbian support service business in 2009, creating the foundation of the company's mobility services portfolio. The companies' relationship dates back to 1994.
Elop said last week layoffs were in store as the company worked to cut expenses and bring its device portfolio up to speed with competing smartphones through a partnership with Microsoft on Windows Phone 7 devices.
As Elop stated last week, all employees affected by the layoffs will be able to stay on Nokia's payroll through the end of this year. The job cuts will occur in phases through the end of 2012 as Nokia ramps up the development of smartphones running Windows Phone 7.
Discussions with employee representatives began today, as required by law. Nokia is trying to mitigate the impact of the job cuts through a program that offers job training and other support to laid-off employees. At the end of last year, Nokia employed about 132,000 people around the world.
LG Narrows Losses, Mobile Shipments Fall
By Andrew Berg
LG Electronics, manufacturer of flat panel televisions and mobile phones, today reported losses of $14.6 million in the first quarter. That's compared to a $624.6 million net profit in the same quarter last year.
The company's reported loss narrowed from the previous quarter. LG Electronics posted $237.4 million in losses in the fourth quarter of 2010.
The company attributed most of the $58.1 million net loss to investments in affiliates, including flat panel maker LG Display and LG Innotek, which manufactures electronic components.
Mobile phone shipments declined 10 percent to 24.5 million units compared to the same quarter a year ago. The company reported strong sales of smartphones such as the LG Optimus One and Optimus 2X in North America. Profitability improved due to an increased portion of total mobile device sales being smartphones and efforts to cut overhead costs.
LG Electronics projects competition to continue to intensify into the next quarter. The company plans to meet that competition by diversifying its smartphone offerings. In the pipeline for the second quarter are the Optimus Black, Optimus Big, Optimus 3D and the LTE Revolution.
LG Electronics is the third largest producer of mobile phones globally, coming in behind Nokia and Samsung in the No. 1 and 2 spots, respectively.
Long-Awaited White iPhone 4 Finally Available
By Andrew Berg
No one would believe it if Apple hadn't confirmed it. According to a press release, the white iPhone 4 will be available beginning tomorrow. The pale version of Apple's iconic device will be available at Apple's retail stores and AT&T and Verizon Wireless stores.
"The white iPhone 4 has finally arrived and it's beautiful," said Phil Schiller, Apple's senior vice president of worldwide product marketing. "We appreciate everyone who has waited patiently while we've worked to get every detail right."
The white iPhone 4 was promised when AT&T and Apple launched the original version of the smartphone. However, the phone ended up being pulled after manufacturing challenges related to the white version were identified.
White models of iPhone 4 will be available in Austria, Australia, Belgium, Canada, China, Czech Republic, Denmark, Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, Luxembourg, Macau, Netherlands, New Zealand, Norway, Singapore, South Korea, Spain, Switzerland, Sweden, Taiwan, Thailand, UK and the United States beginning Thursday, April 28. The white iPhone 4 units will cost the same as their black counterparts.
Appia Launches Performance-Based Ad Network
By Monica Alleven
Appia, which bills itself as the "world's largest open app marketplace," is launching a new way for developers to make money. It's a performance-based advertising network that gives developers the chance to pursue a "pay per download" model – but only for downloads that an end user really wants to use. Appia made the announcement today from the 2011 AppNation conference in San Francisco.
It works similarly to how searches are done on the desktop through Google – type in your search term, and at the top, you'll usually see an ad that was paid for, above the other results. In Appia's model, developers bid and pay for their spot, which is clearly marked as paid.
It's important that it's evident that a spot is paid for, says Appia founder and CEO Jud Bowman. For one thing, it's genuine and clear, and for another, developers want to know they're getting a real user.
Last week, TapJoy made headlines after Apple clamped down on its developer guidelines. TapJoy created a successful network where developers embed "offer walls" that tell users they can get X number of points or incentives to keep playing a game, for example, if they download certain apps. After the end-user gets what they want, they usually delete the apps.
While it's unfortunate for TapJoy that it was forced to make some changes, its success is encouraging in that it's a clear indication that developers are willing to pay for downloads. Appia is not doing "offer walls," but provides a way for developers to pay for getting on a list where apps are downloaded not because it's a means to another end but because the end user wants the app.
Bowman says Appia is quite different from GetJar, which also bills itself as the world's largest open app store, in that Appia's apps are a combination of free and paid, and Appia isn't building a brand of its own; its partners are the carriers, handset makers and browser companies.
Appia powers more than 40 app stores around the world, for carriers, OEMs and browser companies, on a white-label basis. Bowman says carriers don't want to hand everything over to Google/Android or Apple/iOS, yet they need a way to attract developers, and Appia works with more than 30,000 of them. "We've tried to make it ridiculously easy," he says, in addition to providing another way to help carriers get in on the app action.
Appia's distribution network now reaches more than 200 million mobile subscribers in more than 200 countries. As part of the new ad system, developers who are trying to get the biggest bang for their buck can just target certain geographic areas where they think their app is going to be particularly appealing.
Appia didn't initially support iOS, but it does now, providing the chance to discover those apps, but downloading and billing is still done through iTunes. Besides iOS, Appia's new ad network supports Android, Java, Symbian, Windows Mobile, BlackBerry and Palm.
The performance-based advertising service has been in private beta since February with trial partners such as Flirtomatic and Blue Lion. More information can be found at www.appia.com/ppd.
Formerly named PocketGear, Appia, based in Durham, N.C., was founded with a lot of the same management team that was behind Motricity, which moved from North Carolina to Bellevue, Wash., a few years ago. Bowman is a co-founder of Motricity.
Appia now has 52 employees, and it's in active hiring mode. Last month, Appia announced a $10 million investment from Venrock. Previous investment rounds included Trident Capital, BlackBerry Partners Fund and Tomorrow Ventures, the investment arm of Google's Eric Schmidt.
Appia recently announced partnerships with Opera Software to power the Opera Mobile Store, as well as with Telcel in Mexico for its Ideas Appstore.
Ericsson Profits Surge on Mobile Broadband Demand
By Malin Rising, Associated Press
STOCKHOLM (AP) —Ericsson says profits more than tripled in the first quarter, driven by continued strong demand for mobile broadband.
Net profit for the three-month period jumped to 4.1 billion kronor ($673 million), from 1.3 billion kronor a year earlier.
The company, based in Stockholm, said revenue for the period increased by 17 percent to 53 billion kronor from 45.1 billion with gross margin staying flat at 38.5 percent.
The result beat the expectations of 23 analysts polled by SIX Estimates, who had forecast sales of 48.5 billion kronor and a gross margin of 37.4 percent. Shares in Ericsson rose by 7 percent to 86.10 kronor ($14.13) in early Stockholm trading.
Ericsson, which builds wireless networks for mobile phone operators worldwide, said the strong demand for mobile broadband resulted in five out of 10 regions showing growth year-over-year. Countries with especially strong growth were the U.S., India, Japan, South Korea and Russia.
China had continued good momentum for second-generation networks, it added.
Greger Johansson, an analyst with research firm Redeye, said the results were "very strong," mainly because Ericsson's network business performed better than expected.
"This shows growth is taking off in the telecommunications sector and will probably continue for a while," he said.
The only cloud on the horizon for coming quarters is the potential supply chain effects of the earthquake and tsunami in Japan, he added.
With more than 90,000 employees worldwide, Ericsson is the industry leader but is facing competition from Nokia Siemens and China's Huawei in the networks industry.
Ericsson gets a smaller share of its income from its Sony Ericsson joint mobile phone venture — which last week reported a 48 percent drop in net profit to euro11 million ($15.8 million) for the first quarter, down from euro21 million a year ago.
Ericsson President and CEO Hans Vestberg said the company continued to gain market share in third-generation mobile equipment in 2010 and "at least maintained" its share of more than 50 percent in fourth-generation equipment.
"Group sales in the quarter increased by 17 percent year-over-year driven by continued strong demand for mobile broadband and especially for the multi-standard radio base station RBS 6000," Vestberg said.
The company said sales in the first quarter were not impacted by the devastating earthquake and tsunami in Japan, but said its supply chain of components is partly dependent on Japan which could result in delivery delays going forward.
"We have taken a number of actions to mitigate the effects to secure that we limit the impact on our customers," Vestberg said. "Our best estimate is that we will be able to deliver the majority of these volumes before end of third quarter 2011."
Amazon.com's Profit Tumbles More Than Expected
By Jordan Robertson, AP Technology Writer
SAN FRANCISCO (AP) — Amazon.com said Tuesday that its net income fell 33 percent in the latest quarter, a steeper drop than Wall Street expected as the online retailer poured more money into expanding its operations.
While Amazon's profit was a disappointment, its revenue topped expectations. The company's management says that the stronger sales mean Amazon needs more warehouses and upgraded technology, which require bigger investments that cut into earnings.
The world's biggest online retailer is also facing competitive challenges from Wal-Mart Stores Inc. and other rivals, and is spending to shore up its lead.
Amazon's expansion is also being complicated by ongoing battles with states over when Internet retailers should be forced to collect sales taxes from their customers.
And Amazon's Web hosting service, one of the Seattle-based company's biggest new initiatives, suffered an embarrassing setback last week. Major websites that use the service, including Foursquare and Reddit, crashed or suffered slowdowns, raising questions about the reliability of Amazon's "cloud computing" offerings.
Shares of the Seattle-based company dropped about 6 percent when the results were reported after the stock market's close Tuesday. They recovered some and down $3.05, or 1.7 percent, to $179.25.
The stock's recovery from its extended-trading lows appeared to reflect investors' belief that Amazon's expansion may be costly but will make the company more competitive.
Thomas Szkutak, Amazon's chief financial officer, said the higher expenses were directly related to higher demand for the goods sold on Amazon.
"We're just seeing tremendous growth, and because of that we're having to invest in a lot of capacity," he said on a conference call with reporters. He added that Amazon's international sales took a hit from the deadly earthquake and tsunami in Japan on March 11, which also cut into Amazon's profit.
The company said after the market closed that its net income was $201 million, or 44 cents per share, down from $299 million, or 66 cents per share, a year ago. The earnings were well short of the 61 cents per share that analysts polled by FactSet expected.
But revenue rose 38 percent to $9.86 billion, ahead of the $9.54 billion that analysts were forecasting, and up from $7.13 billion a year ago.
Amazon's second quarter revenue guidance also topped analysts' projections.
Amazon says it expects revenue of $8.85 billion to $9.65 billion. Analysts were expecting $8.75 billion.
Rhythm Releases Q1 Mobile Video Ad Data
By Monica Alleven
Rhythm NewMedia saw huge growth in mobile video advertising in the first quarter: 36 percent more than the fourth quarter of last year.
Part of that growth may have been driven by the addition of more publishers and advertisers using its network, but Director of Marketing Lisa Abramson says the whole addressable mobile video market has grown.
The first-quarter data includes ad campaigns from more than 70 Fortune 500 brands; Rhythm served more than 728 million average monthly content views in the quarter in the United States. Its brands include P&G, GM, HBO, Kraft and Disney, and publishers include CBS, ABC, NBC Universal, Fox, Warner Bros. and more.
Rhythm finds that in-stream video ads, which automatically play as a commercial break during full episodes or in-stream before video clips, outperform all other video units, with a high average completion rate of 87 percent. Interactive pre-roll ads, which are seen before an app launches or between a screen change, averaged 27 percent completion rate, and tap to interactive video (which involves taps from a display ad) had a completion rate of 21 percent.
As for who's viewing mobile video advertising, Rhythm says 40 percent are watching videos, 50 percent are playing games and 80 percent are viewing articles or photos.
Rhythm recommends combining ad units for maximum effectiveness and says it's the only mobile advertising solution to provide all three types of video experiences: in-stream video, interactive pre-roll and tap to interactive video.
Data points in Rhythm's quarterly report are based on ads served across iPhone, iPod Touch, iPad, Android and other devices in the U.S. market, including tablets. Brands in the categories of entertainment, telecom and consumer packaged goods ran the most campaigns during the quarter.
So, will traffic spike later this week when the big event takes place in London? Abramson says she's not aware of any Rhythm advertisers planning a specific mobile campaign around the royal wedding, but Rhythm works with plenty of entertainment news sites, so it's likely there will be more traffic as people tune in for video highlights.
FirstNews Briefs for April 27, 2011
Companies in today's briefs include: Sprint, Leap Wireless International, RadioShack, T-Mobile, National Association of Broadcasters, CTIA, Verizon Wireless, Casio, Cox Communications, BodyMedia, Sprint, Qik, Skype.
• Sprint wants the FCC to provide it with confidential information AT&T redacted from its application to acquire T-Mobile USA. If the FCC grants Sprint's request, the information will be released to the company's lawyers, who must keep the information confidential.
• Leap Wireless International CEO Doug Hutcheson has waived his annual bonus due to the company's financial performance in 2010, according to documents filed with the SEC yesterday. The company's losses more than doubled last year to $785 million despite an 8 percent increase in sales, which reached nearly $2.7 billion for the full year 2010.
• RadioShack said the "underperformance" of T-Mobile USA's postpaid service and devices resold through its stores and kiosks caused same store sales to slump in the first quarter. In February 2011, RadioShack informed T-Mobile that it had "materially breached" its contract with the company. RadioShack said it continues to work closely with T-Mobile to resolve the breaches and described their discussions as "constructive." The company expects the matter to be resolved, but did not say when they expected to reach a deal with T-Mobile. Overall, RadioShack made $35.1 million on net sales of $1.06 billion.
• The National Association of Broadcasters (NAB) has filed a study with the FCC questioning the existence of a spectrum crisis. The paper suggests alternative solutions to auctioning broadcasting spectrum to help alleviate mobile broadband congestion. The NAB has been opposed to selling off additional broadcast spectrum. CTIA, which wants Congress to allow the FCC to conduct more auctions of broadcast spectrum for mobile broadband, says the NAB's study is flawed and inaccurate.
• Verizon Wireless plans to launch the Casio G'zOne Commando on Thursday, April 28. The Commando is a ruggedized Android-based smartphone designed for use in environments like construction sites, warehouses and factory floors. The device comes pre-loaded with eight apps allowing the handset to function as a compass; walking counter; personal trainer; thermometer and more. The device will cost about $200 with a two-year contract and a data plan.
• Cox Communications has promoted former AT&T executive Kelly Williams as vice president of wireless product and operations. Williams helped plan the deployment of Cox' wireless service and ran the company's wireless network operations team. In his new role, Williams will be responsible for the development, management and support of the company's wireless products and services.
• BodyMedia has launched an app bundle with Sprint. The Sprint BodyMedia ID pack combines the company's fitness apps with other third-party apps, including Facebook. Earlier this year, BodyMedia said Sprint would begin carrying its wearable body monitors starting in 2012.
• Qik has launched a new version of its Android app that allows users to conduct mobile video chats between contacts on both Android smartphones and iPhones. The company also updated its iPhone app. Qik specializes in mobile video chat and was recently acquired by Skype, which uses the company's technology in its own video chat offerings.