The coming wireless spectrum apocalypse and how it hits you

October 12 [Fri], 2012, 17:13

The coming wireless spectrum apocalypse and how it hits you

by Marguerite Reardon

Small carriers are worried about getting snuffed by the deep pockets of AT&T and Verizon Wireless, and they want help. What judges and regulators decide to do could impact your wallet for years to come.

C Spire Wireless, a small, southern wireless provider formerly known as Cellular South, has an ambitious plan to build a fast, 4G LTE network to reach its 900,000 customers. To do it, C Spire bought $192 million worth of 700 MHz wireless spectrum, which is considered some of the most valuable wireless spectrum that's still available because it can travel long distances and penetrate obstacles.

But there's a problem. C Spire claims it hasn't been able to use this spectrum and hasn't been able to deploy its 4G network. It says the bigger carriers, especially AT&T, have used their market power to ensure chip designers and device makers make equipment compatible with their flavor of the technology, leaving smaller carriers in the cold. And without devices and network gear, C Spire says it's been sitting on a costly resource it can't use -- and thus can't deliver to you, the consumer.

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"We will deploy our 4G LTE network," said Eric Graham, C Spire Wireless' senior vice president for strategic relations. "But the fact that AT&T is using a different band plan [that is, a set of technical standards for equipment] in the 700 MHz spectrum has slowed things down. At least initially we'll be using other spectrum other than the 700 MHz spectrum we bought for 4G. But eventually, we are going to need that spectrum to add more capacity to our network."

In the wireless industry, it seems, you can never have too much spectrum. Even AT&T and Verizon Wireless, which together control about 70 percent of the wireless market, say they need more of it. But even if you have enough spectrum, as C Spire argues, the big guys can use their leverage with suppliers to make it darn difficult for you to use it.

"As we transition to 4G LTE, spectrum is a key part of the strategy and survival of every carrier. And it's the duty of the regulators to ensure that we don't end up with a market of spectrum haves and have-nots."

--Kathleen Ham, VP of federal regulatory affairs, T-Mobile

Can you imagine what would happen if the industry giants further solidified their hold on the market by hoarding even more spectrum? Bad things, those underdogs would assure you, starting with higher costs for consumers and fewer innovations. And that, they say, is why regulators and judges need to intercede.

"We are at a critical time in the evolution of the wireless industry," said Kathleen Ham, vice president of federal regulatory affairs for T-Mobile, in an interview with CNET. "And as we transition to 4G LTE, spectrum is a key part of the strategy and survival of every carrier. And it's the duty of the regulators to ensure that we don't end up with a market of spectrum haves and have-nots."

* See also: Wireless spectrum: What it is, and why you should care

But how many competitors are needed in a market? Are two enough, or perhaps three? It's this question that the Federal Communications Commission is trying to answer as it looks at some of the biggest in front of it today. T-Mobile, whose proposed $39 billion deal to merge with AT&T last year was rejected by the the Federal Communications Commission and the Department of Justice, says the FCC has already spoken to this point. And if it wants to preserve more competition, it had better establish policies that back that up.

"If the government turned down our deal [to merge with AT&T] because it wants us to continue to compete in the market," T-Mobile's Ham said, "then we need access to spectrum."

This fight over spectrum is the battle through which nearly every major move by the wireless carriers must be viewed. It's the reason that AT&T was willing to pay $39 billion to buy T-Mobile last year. It's also what's driving AT&T and Verizon Wireless to change their pricing models, eliminating unlimited data and creating share plans for data usage. It's why the failure of Philip Falcone's LightSquared is devastating not just to investors but to smaller wireless providers.

It's why the largest wireless operators are spending millions of dollars each year in lobbying to make sure rules for new spectrum auctions are written in a way that favors their interests, and it's why there has been so much wheeling and dealing around Verizon's move to buy wireless spectrum from a consortium of cable operators.

The companies that come out ahead with valuable spectrum today will be able to dictate what happens in the market as carriers move to 4G LTE services that will provide broadband-like data speeds to wireless consumers. And that scares the daylights out of smaller competitors.

Big carriers with muscle

Getting your hands on spectrum doesn't mean you're on easy street. Even carriers that have spectrum they want to use can still be muscled out of the market when AT&T and Verizon throw their weight around.

Because those two companies collectively control the majority of wireless subscribers in the country, smaller carriers say AT&T and Verizon are able to manipulate standards groups and control suppliers to the point where smaller providers are unable to get access to handsets and other network gear that's commercially available at high volumes to AT&T and Verizon.

C Spire says it's been a victim of these tactics. In April, it filed an antitrust lawsuit against AT&T and its suppliers for trying to run it out of business. In the lawsuit, C Spire alleges that AT&T collaborated with chip makers and standards bodies to create specifications for devices that run only on its sliver of 700 MHz spectrum.

This is a problem for smaller carriers like C Spire, because they need to use the same specifications for their handsets and networking equipment that a bigger player such as AT&T uses in order to get products to sell to their customers. Without the scale of a company like AT&T, these smaller players simply can't get manufacturers to build devices at a low enough cost and in a timely enough manner to compete against AT&T.

"AT&T has been abusing its position as a dominant buyer of the Lower 700 MHz wireless devices," C Spire's Graham said in a telephone interview.

For its part, AT&T says it created this "spectrum island" for technical reasons. AT&T argues that there are interference issues with the slice of 700 MHz spectrum that smaller carriers like C Spire own, and so to protect its wireless customers, AT&T developed its own "band class."

An AT&T representative declined to comment on the litigation. But the company has said publicly that C Spire couldn't prove that it didn't have legitimate technical reasons for developing its own standard for its wireless spectrum.

Consequences of a concentrated market

C Spire is only one of dozens of smaller providers throughout the U.S. trying to compete with the nation's two largest wireless providers. And the courts and the FCC are being asked to intervene and ensure competition where, not to put too fine a point on it, a relatively unfettered market has been unable to do so. And, as we said before, imagine the pickle C Spire would be in if the bigger companies were able to hoard even more spectrum?

It's a similar situation to when a large company or university, which already owns big chunks of real estate in prime neighborhoods decides to buy even more property. The fear is that the big owner will force out the mom-and-pop shoe store and replace it with a Foot Locker. The same fear exists with wireless spectrum. Smaller carriers will not only be prevented from buying spectrum, they may also be forced out of business by bigger players that control the standards used in handsets and network equipment. And they may refuse to strike roaming agreements that would allow smaller carriers to offer a wider footprint of access on their networks.

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This regulatory dilemma is coming to a head just as the FCC reviews the biggest transfer of wireless spectrum outside of a merger in the agency's history.

Last year, Verizon announced a $4 billion bid to buy 20 MHz of valuable Advanced Wireless Service (AWS) spectrum from a consortium of cable companies called SpectrumCo. Verizon, which already owns about 20 MHz of AWS spectrum, says it wants to use the additional cable spectrum as backup spectrum for its 4G LTE network.

Verizon has already begun building its LTE network using a nationwide license of 700 MHz wireless spectrum. And it intends to use its AWS spectrum as well as the cable operators' AWS spectrum to add capacity to that network as it grows, especially in dense urban areas.

But competing carriers say that Verizon already has enough AWS spectrum in many markets. Competitors such as T-Mobile and MetroPCS initially accused Verizon of "warehousing" spectrum. They say other carriers could put that same spectrum to use much more quickly than Verizon intends to use it.

"Verizon's plan to acquire spectrum from the cable companies will allow Verizon to further dominate and control the nation's airwaves."

--U.S. Sen. Al Franken (D-Minn.)

In July, T-Mobile struck a spectrum-swapping deal with Verizon. If Verizon's deal with cable operators is approved by regulators, T-Mobile will buy some of Verizon's AWS spectrum holdings in certain markets. As a result, T-Mobile has now withdrawn its opposition to the cable deal.

Others who have been critical of this deal say the FCC and Justice Department, which is also reviewing the deal, still need to impose some conditions on the merger to protect consumers. In a letter to the DOJ and the FCC, U.S. Sen. Al Franken (D-Minn.) in late July pressed the government to adopt conditions that would ensure the partnership between Verizon and cable providers does not harm consumers .

"Verizon's plan to acquire spectrum from the cable companies will allow Verizon to further dominate and control the nation's airwaves," Franken wrote in a letter to FCC Chairman Julius Genachowski and U.S. Attorney General Eric Holder. "I am concerned that this transaction poses a serious threat to consumers and to competition that will ultimately result in higher prices and less choice for consumers. If your agencies do approve this deal, I urge you to only do so if you are able to adopt stringent conditions to protect competition and the public interest."

The FCC's big opportunity

Other stakeholders, such as the Rural Carrier Association, a Washington DC-based lobbying group, expect regulators to approve the deal. And like Franken, they are pushing for conditions. In fact, Steve Berry, the head of RCA, thinks that the FCC can use the Verizon-cable deal as a springboard to impose conditions that will prevent Verizon from gaining too much control over spectrum in any given market. And he thinks carefully crafted conditions could also prevent interoperability issues such as the one that C Spire faces with AT&T.

"The FCC has a unique opportunity with this deal to make a win-win-win for Verizon, the cable operators and the rest of the industry," Berry said. "This is the largest spectrum deal that the FCC has ever considered, and it makes sense for the FCC to set some competitive policy parameters."

Speaking at an industry event in June, AT&T CEO Randall Stephenson urged regulators to speed up spectrum license transfers. "By 2013 demand [for wireless data services in the U.S.] will outstrip supply. ... This isn't a problem that is six to eight years from now. It's happening now."

(Credit: CNET/Marguerite Reardon)

Verizon has already signaled it's willing to make concessions to get the deal completed. In April, the company said it would sell 700 MHz spectrum in the lower A and B blocks if the deal with the cable operators wins approval from regulators. And at the end of June, it said it had struck a deal with T-Mobile USA to sell big chunks of AWS spectrum it already owns to T-Mobile, if the deal with SpectrumCo is completed.

RCA's Berry said that this deal with T-Mobile must be examined more closely to make sure that Verizon is still not "warehousing" spectrum in markets where it could be used immediately by other carriers.

"It's not a cure-all," he said. "But clearly it gets some of the spectrum in the hands of competitive carriers. Even so, the FCC needs to look very closely at this."

Why this is important

There's no question competition keeps prices in check and spurs innovation. But how many competitors are needed in a market? Many believe that a scenario with two players in a market, a so-called duopoly, is just one competitor shy of a monopoly. And policy makers at the FCC have done what they can to avoid such a scenario.

Some consumer advocates say the concentrated power of AT&T and Verizon have in the market has already resulted in higher prices for data services. Two years ago, AT&T eliminated its $30 unlimited data plan, replacing it with a tiered offering. Verizon Wireless followed a year later with its own tiered offering. Now both AT&T and Verizon Wireless have introduced new "share plans," which allow people on the same family plan to share buckets of data or allows individuals to use their data across multiple devices.

The plans are meant to encourage users to bring additional devices, like tablets to the network, but they will also increase pricing on data services. As part of these new plans, Verizon has cut in half the amount of data it's offering to consumers at roughly the same price. Verizon now charges $50 for a 1GB data plan that also includes unlimited voice minutes and text messages. Its previous plan offered 2GB of data for $30 a month, and voice minutes and text messaging were sold separately. AT&T offers similarly priced plans

* See also: Help! These data share plans are too confusing (FAQ)

Even though AT&T and Verizon are bundling in unlimited voice and text messaging with the new share packages, consumers are still paying more and receiving less data than they were allotted under the previous plans.

"The cheapest option Verizon now offers smartphone customers is $90 for half as much data as $80 buys you today," Michael Weinberg, an analyst at Public Knowledge, wrote in a blog post last month. "And in less than 12 months, $30 has gone from buying you unlimited data to not even covering 1 GB...There does not appear to be very much competitive pressure keeping carriers from raising prices for customers -- which is part of the reason that we are against even more consolidation in the market."

Meanwhile, competitors such as Sprint and T-Mobile, along with regional carriers like Leap Wireless and MetroPCS, have not introduced share plans. And they are keeping unlimited data plans, although some like T-Mobile slow down service after a certain threshold is reached. Sprint is the only major carrier that offers unlimited data with no limitations for smartphone customers.

T-Mobile has publicly criticized Verizon's new pricing plan, stating that it doesn't offer consumer enough choice and penalizes customers who exceed their limits.

"What wireless customers really want is worry-free plans," said Harry Thomas, director of segment marketing for T-Mobile. "They don't want to have to do a lot of calculations to figure out if someone is going to go over their monthly data limit due to excessive usage."

But there's an increasingly contrarian viewpoint that says, wait a minute, the government should not be in the business of intervening for market laggards. Yes, we couldn't finish this piece without giving an enthusiastic proponent of free and unfettered markets his two cents.

Eli Dourado, a research fellow at the Mercatus Center at George Mason University, argues that "duopoly can be consistent with vigorous competition." He uses the digital camera market as an example. Nikon and Canon are the only two major players selling DSLRs on the market. And "despite the dominance of these two firms, the price of DSLRs falls every year, and quality continuously goes up."

Now a little background: The Mercatus Center is one of the most influential conservative think-tanks. It gets significant financial backing from the conservative libertarian-leaning Koch Family Foundations. And democratic strategist Rob Stein described the Mercatus Center as "ground zero for deregulation policy in Washington."

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He argues in a recent blog post that it may simply be unreasonable to expect several competitors to remain in the wireless market, because the fixed costs for operating these businesses is so high. It takes billions of dollars to buy wireless spectrum and build and maintain communications infrastructure. The same is true for other industries, such as commercial jet aircraft manufacturers. Today there are effectively only two competitors: Boeing and Airbus.

"Would we really want there to be more commercial jet producers? There would be a whole lot of duplication of costs, and the price of jetliners and air travel would increase, not decrease. We're better off with a duopoly, and in fact we get duopoly precisely because vigorous competition between the jumbo jet giants keeps everyone else out."

It's a fair point. But there is no guarantee that companies that find big savings by consolidating will pass those savings onto consumers. In fact, when there are only one or two players in the market, there is little incentive to drop prices when the business gets more efficient.

"As a result, when thinking about carrier consolidation, you are essentially faced with two choices," said Public Knowledge's Weinberg. "One is to allow rapid consolidation in the hope of gaining efficiencies of scale, but at the same time recognize that the mo/duopoly you create will eventually have to be regulated as such or broken up. The other is to engage in a lighter level of regulation today that ensures that there is competition in the wireless market, and that said competitive market is capable of largely regulating itself."

"The option that does not exist is to allow the formation of a monopoly or a duopoly," he added, "and assume it will then act in the best interest of everyone else."

Samsung Galaxy Tab 2 7.0 (32GB)

June 19 [Tue], 2012, 16:29

Samsung Galaxy Tab 2 7.0 (32GB)

Reviewed by: Eric Franklin

The good: The Samsung Galaxy Tab 2 7.0 delivers a mostly pure Ice Cream Sandwich experience for only $250. The tablet also trumps the Kindle Fire in extras by including dual cameras, expandable memory, and TV remote control functionality.

The bad: The screen doesn't look as pretty as other PLS displays, and its camera performance is lacking compared to other tablets in the line.

The bottom line: The Samsung Galaxy Tab 2 7.0 offers an excellent value and a full Android experience that no other tablet can currently match for the price.


Photo gallery: Samsung Galaxy Tab 2 (7.0)

Photo gallery:

Samsung Galaxy Tab 2 (7.0)

I guess we have Amazon to thank for proving that you don't need a premium tablet to be successful. While Samsung tried competing on the premium tablet front for the last year and will continue to do so, it's finding this strategy to be more difficult than anticipated.

With the Galaxy Tab 2 7.0, the company is, thankfully, learning from its mistakes and taking a price cue from Amazon by offering a full-featured tablet for $250. The market isn't stagnant, though, so will Samsung actually have time to ... Expand full review

Photo gallery: Samsung Galaxy Tab 2 (7.0)

Photo gallery:

Samsung Galaxy Tab 2 (7.0)

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I guess we have Amazon to thank for proving that you don't need a premium tablet to be successful. While Samsung tried competing on the premium tablet front for the last year and will continue to do so, it's finding this strategy to be more difficult than anticipated.

With the Galaxy Tab 2 7.0, the company is, thankfully, learning from its mistakes and taking a price cue from Amazon by offering a full-featured tablet for $250. The market isn't stagnant, though, so will Samsung actually have time to capitalize before more powerful and still cheap alternatives enter the fray?


The Galaxy Tab 2 7.0 sports a slightly altered design from the 7.0 Plus, but you'd be hard-pressed to notice those differences at first glance, unless of course you were as intimately familiar with the Plus as I am.

The shape and weight are about the same with some slight dimensional differences. The new tablet's outer plastic shell spills a bit into the bezel at the right and left sides and the power/sleep button and volume rocker are more pronounced and feel slightly more responsive. Also, the IR blaster is a bit larger than the one on the Plus.

Aside from that, they're pretty much physically identical. The Tab 2 7.0 is fairly thin, although not Tab 7.7-thin. It's also comfortable to hold with smooth, rounded corners. Samsung identifies the color that covers the back of the tablet as "titanium silver," which seems fitting enough.

The Tab 2 7.0 retains the 7.0 Plus' thin design.

Samsung Galaxy Tab 2 7.0 Samsung Galaxy Tab 7.0 Plus Amazon Kindle Fire Samsung Galaxy Tab 7.7

Weight in pounds 0.74 0.76 0.9 0.74

Width in inches (landscape) 7.6 7.6 7.4 7.75

Height in inches 4.8 4.8 4.75 2.25

Depth in inches 0.3 0.3 0.4 0.37

Side bezel width in inches (landscape) 0.76 0.74 0.78 (Power button side), 0.6 opposite side 0.68

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The microSD card slot allows you to add an additional 32GB of storage on top of the built-in 8GB. Samsung provides 50GB of free Dropbox storage for a year on top of that. The door to the microSD slot is easier to open now and doesn't get stuck as often as the Plus' did.

Take that Kindle Fire! With expandable memory up 32GBs, you shouldn't have to worry constantly about running out of space.

The 2-megapixel front camera from the Plus has been replaced with a VGA one here, but the rear is still rated at 3-megapixel, albeit sans an LED. Thankfully each camera is located in the upper left corner when holding the tablet in landscape, thus allowing them to avoid unwanted fingers creeping into the camera frame when taking a picture.

The 3-megapixel back camera honestly takes pretty crappy pictures.

Equidistant from surrounding dual speakers on the right, sits a dock connector and the left edge houses a headphone jack and microphone pinhole. The ambient light sensor sits about an inch away from the front camera on the bezel. However, the ambient light sensor which automatically adjusts the tablet's brightness when auto brightness is turned on is calibrated too sensitively. When typing, my hand would occasionally cover the sensor making the screen darken. This was so consistent (and annoying) that I was forced to turn off auto brightness on the tablet while I used it.

Sadly, as with most Samsung tablets, there's no HDMI port, requiring you to purchase an adapter if you'd like to play video from your tablet on your TV.

Software features

Possibly the biggest selling point (other than its price) of the Tab 2 7.0 is that it ships with Ice Cream Sandwich (Android 4.0.3 to be precise) installed, making it the first Samsung tablet to do so.

Samsung's Touchwiz UI skin is of course included and comes with custom Samsung apps like Music Hub, Media Hub, and Game Hub, a built in screenshot app, and the Mini Apps tray located on the bottom of the screen. Tapping it brings up a tray of apps consisting of a calculator, notes, calendar, music player, and clock. However, the most useful of these is still the task manager, which allows you to quickly kill any app running in the background; this comes in handy when apps become otherwise unresponsive.

The basic look and design of ICS is retained, just with a Touchwiz skin and a few extra shortcuts for quickly turning off Wi-Fi, GPS, screen rotation, etc.

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Peel's Smart Remote app

The IR blaster found on the Tabs 7.7 and 7.0 Plus makes its way to the Tab 2 7.0 and in conjunction with Peel's included Smart Remote app, helps turn your tablet into a remote control for your TV. Peel can take the place of your cable or satellite channel guide and display a list of shows currently playing locally on your cable or satellite provider's channels. Go to the currently playing tab and click on a show, and your TV switches to the appropriate channel. Peel does a great job of holding your hand initially through a step-by-step setup wizard. The setup only requires that you know your TV's manufacturer's name, your cable/satellite provider, and your ZIP code. Thankfully, Peel spares us from having to know any more detailed information; however, be aware that Smart Remote does not work with regular monitors and only TVs or monitor/TV combos.

Once it's set up, you can browse shows by category, mark shows as favorites, or prevent shows you'd rather not see on the list from showing up again. Thankfully, Smart Remote now syncs with over-the-air listings, but its accuracy as to which shows and channels were available to me left a bit to be desired.

Navigating the interface took some getting used to, but was easy enough to pick up; however, I took issue with the method by which cable TV screen menus are controlled by the interface. Peel went with a swipe interface that requires you to flick the screen in one of four directions to highlight different menus. While this method works and after some time could be gotten used to, I would have much preferred more-direct directional controls.

As I learned with the Tab 7.0 Plus and 7.7, Smart Remote's accuracy is very closely dictated by the information cable and satellite providers choose to release. So, while the Smart Remote guide may indicate that "Law and Order" is on right now on Channel 12, selecting it didn't always take me to the appropriate channel. In addition, sometimes the channel wasn't available to me or there was a different show on the channel at that time.

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Budget troubles force redrawing of plans to Mars

Written by Alicia Chang Associated Press

LOS ANGELES - Know how to go to Mars cheaply? NASA can use your help.

The space agency on Friday put out a call for ideas for the next Mars mission in 2018. The fine print: The cost can't be astronomical and the idea has to move the country closer to landing humans on the red planet in the 2030s.

The race to redraw a new, cheaper road map comes two months after NASA pulled out of a partnership with the European Space Agency on two missions targeted for 2016 and 2018, a move that angered scientists. The 2018 mission represented the first step toward hauling Martian soil and rocks back to Earth for detailed study - something many researchers say is essential in determining whether microbial life once existed there.

Financial reality

Agency officials said returning samples is still a priority, but a reboot was necessary given the financial reality.

In the past decade, NASA has spent $6.1 billion exploring Earth's closest planetary neighbor. President Barack Obama's latest proposed budget slashed spending for solar system exploration by 21 percent, making the collaboration with the Europeans unaffordable.

A team will cull through the ideas and come up with options by summer when NASA's latest mission, a $2.5 billion car-sized rover Curiosity, will land near the equator on Mars.

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Space Shuttle Discovery Mounted Atop Jumbo Jet for Ride to Smithsonian

by Robert Z. Pearlman

NASA mounted space shuttle Discovery on a jumbo jet Sunday (April 15), in preparation for the retired orbiter's delivery to the Smithsonian. The paired air- and spacecraft are expected to depart Florida for Washington, D.C., on Tuesday morning (April 17), weather permitting.

Discovery's mating to the Shuttle Carrier Aircraft (SCA), NASA's modified Boeing 747 jetliner, came a day later than the space agency had planned. On Saturday, wind gusts at the Kennedy Space Center's Shuttle Landing Facility set the 167,000 pound (75,300 kilogram) Discovery swaying under its lift sling, posing a risk that it could impact the Mate Demate Device (MDD), the gantry-like steel structure used to hoist the shuttle onto the jetliner.

Workers reconvened at 5 a.m. EDT (0900 GMT) on Sunday, to finish retracting the shuttle's landing gear. They then raised the orbiter 60 feet (18 meters) off the ground so that the carrier aircraft could be positioned underneath. Discovery was then lowered onto the jumbo jet's three protruding attach points to achieve a "soft" mating.

Work continued throughout the day Sunday to secure, or "hard" mate, Discovery to the 747, before removing the hoist sling and backing the paired vehicles out of the MDD on Monday morning.

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HP layoffs and Facebook IPO reflect Silicon Valley's highs and lows

May 19 [Sat], 2012, 13:32

HP layoffs and Facebook IPO reflect Silicon Valley's highs and lows

By Chris O'Brien

So rarely do two events occur in such close proximity that perfectly capture the agony and the ecstasy of Silicon Valley.

As the sun rose, hundreds of hoodie-wearing Facebook employees gathered on their new campus to celebrate the social network's first day as a public company. Meanwhile, employees of Palo Alto-based Hewlett-Packard were still digesting reports that their company is potentially planning to lay off between 25,000 and 30,000 people.

Facebook represents the promise of the future. HP, the onetime icon, seems destined to continue its slow, ignoble slide. And Silicon Valley shrugs and marches on.

"We once again see how 'creative destruction' continues to transform the Valley as Facebook goes IPO and Hewlett-Packard restructures," wrote Doug Henton, CEO of Collaborative Economics, in an email Friday. "This is historical but fits a longer-term pattern."

In a place like this, with its relentless fixation on the future, there is no time for sentimentality.

Today, who weeps for the passing of Netscape, SGI or Sun Microsystems? The valley just moves on, or, in the case of Facebook, moves into Sun's old headquarters.

Earlier this year, I was having coffee in Palo Alto with former Sun CEO Jonathan Schwartz to talk about a new health-related startup he had founded. I asked him how it felt to see Facebook occupying the place that had been home to Sun for so long before it was acquired and moved by Oracle.

Schwartz said, very matter-of-factly: "That's just how Silicon Valley works. Companies die and new ones are born."

Clearly, the verdict Friday is that Facebook is the future, while HP doesn't seem to have much of one. And that's why, even though the HP news is likely to affect far more people, a disproportionate share of the public and media's attention was focused on the Facebook news Friday.

The Facebook IPO represented the welcome end of several years of breathless speculation about when the company would go public. Yes, with the stock closing the day almost flat, it was easy to shrug it all off as anticlimactic.

But don't let the first-day performance fool you. Facebook is a juggernaut. Armed with billions of dollars, thanks to investors, it will hire thousands of new employees, acquire dozens of startups, and further extend its reach into every corner of the Web and our lives.

Yes, like any company, it faces challenges. Things could go sideways. Or a new competitor could come from nowhere and derail it. But I wouldn't count on any of those things happening anytime soon. I expect a year from now, Facebook's stock will be trading substantially higher, and many of us will be kicking ourselves for not buying it for that $38 when we had the chance.

Facebook, with its 3,500 employees and $3.7 billion in annual revenue, is now valued at $104.63 billion, more than double HP's anemic $42.43 billion valuation. That is shockingly low for a company with almost 350,000 employees and $127 billion in annual revenue.

And yet, it's hard to argue that it's wrong.

HP long ago turned away from its history of being a place that invented things and instead embraced the modern corporate mentality of trying to build itself up through a strategy of endless acquisitions and layoffs.

Starting with the Compaq merger in 2001, HP has spent more than $60 billion in cash and stock to acquire at least 59 companies. In the process of growing from 88,000 employees to nearly 350,000, the company has announced job cuts over the past decade that could top 120,000 come Wednesday.

This strategy was initiated by Carly Fiorina and embraced by Mark Hurd. For a brief moment his replacement, Leo Apotheker, seemed to promise a respite. He promised to invest! Give raises! Focus on innovation!

Of course, Apotheker was gone in less than a year. Enter Meg Whitman. After growing rusty in the basement, it sounds like she's dragged out the HP layoff machine, gassed it up, and is apparently going to cut loose.

When a company's most successful product is the creation of former employees, it's hard to hold out much hope for its future. Sadly, binging on acquisitions and layoffs has gotten HP nowhere. The announcement expected Wednesday will be the surest sign that HP is lost with no chance of finding its way back.

But most likely, this news will be met with a shrug across the valley, where most people will be too busy figuring out how to start the next Facebook to fret much about a company like HP as it sinks into irrelevance.

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Sony Begins Entertainment Push After Ericsson Buyout

April 21 [Sat], 2012, 13:18

Sony Begins Entertainment Push After Ericsson Buyout


Sony revamped its mobile strategy to integrate gaming and entertainment features, in the wake of the completed Ericsson buyout of their joint venture.

The Japanese giant plans to merge its newly acquired mobile division into its electronics division, bolstering its product line-up and helping the company better compete in the smartphone market. The deal also fuels Sony's migration from low-end phones and puts a renewed emphasis on cutting-edge smartphones like its Xperia handsets.

The buyout figures into Sony CEO Kazuo Hirai's larger strategy to focus on producing high-end devices with unique capabilities that capitalize on Sony's strengths.

Hirai intends to "fully leverage Sony's diverse electronics product portfolio, in conjunction with our rich entertainment assets and growing array of networked services, to engage with our customers around the world in new and exciting ways," a goal the Ericsson deal will help reach by consolidating mobile operations and giving Sony full control over them.

The acquisition arrives at a critical time for Sony, as the company has weathered disappointing sales and a leadership overhaul. The Japanese company is struggling to stay afloat in a competitive market, and the deal confers vital advantages, like cross-licensing and integration opportunities.

Sony is already pursuing aspects of its strategy. This week, Sony granted PlayStation Certification to HTC, allowing the company's devices access to the cross-platform PlayStation Suite. Expanding this gaming suite, which was previously exclusive to Sony's smartphones, to some of the world's largest Android manufacturers is another way the company is getting its software into the hands of more customers and expanding its targeted gaming audience.

At the same time, Sony's decision to license its PlayStation Suite will likely bring the company revenue, which it can use to finance its higher-end smartphones. The company is fine-tuning these higher-end devices, and the licenses are expected to cultivate a market which Sony can capture with its own devices.

The Ericsson deal builds on this strategy since Sony can now employ its cloud technology and bring its gaming and entertainment holdings onto its handsets without working out deals with Ericsson.

Sony paid $1.29 billion for control of the company, which includes comprehensive cross-licensing agreements, and intends to rename the mobile company Sony Mobile Communications. The Ericsson deal was a necessary expense for Sony, as Hirai's plan hinges on substantial strategy shifts, and some of these changes may only be possible with the buyout.

Mobile Technology Enhances Sports Illustrated

By Shannon Willoby.

Sports Illustrated swimsuit viewerThe 2012 swimsuit issue of Sports Illustrated hits newsstands this week, but fans will be happy to know it's been given an upgrade thanks to mobile technology.

Readers can now point their smartphone's camera at one (or all 19) of the models featured in the swimsuit issue to view behind-the-scenes videos of the photo shoots. For it to work, readers must have an Apple or Android smartphone, download the Swimsuit Viewer mobile app, and point their camera at the models' photos.

How do they do it, you ask? Each model's photo has been embedded with invisible digital watermarks to ensure they do not detract from the photos.

Bryan Laurienti, leader of BBB Systems' graphic design team, said he thinks the digital watermarks are a great way to make the Sports Illustrated magazine an interactive experience. Plus, it gives the magazine a modern update that may draw in new readers thanks to the bonus videos.

Tell us your thoughts: Do you think mobile technology - like digital watermarks - will work well in a magazine like Sports Illustrated?

Android widens lead over Apple

By Chris Keall.

Mobile phones running Google Android software extended their market share lead over Apple's iPhone during the fourth quarter of 2011, market research outfit Gartner says.

Apple had a boom quarter on the back of the new iPhone 4S, selling more than 35 million handsets, double that of the year-ago quarter.

Yet Android-based smartphones (made by Samsung, Motorola, Sony, HTC, Huawei, LG and others) also more than doubled sales to maintain their collective majority market share.

The Android camp's fragmentation did mean that Apple registered the highest sales of any single smartphone maker.

And, like a recent IDC survey, Gartner found Apple is now number three in the cellphone market as a whole.

Apple and Android's success was at the expense of BlackBerry maker RIM and Nokia, whose smartphone share halved over the period (although it is in the process of mounting a fightback with its new Microsoft Windows-based handsets that will be released in New Zealand next month).

Microsoft New Zealand country manager Paul Muckleston told NBR that so far Windows Phone smartphones have been a hit with a niche audience. Nokia was still the largest mobile phone maker overall (see second table). The Nokia-Microsoft partnership would help Microsoft's mobile software pushing into the mainstream, and revive Nokia's smartphone fortunes.

With the three-way fight between Apple, Android and Nokia/Microsoft helping to grow the smartphone market overall, the phone companies win either way.

Global smartphone sales to end users reached 115 million units in the third quarter of 2011, up 42% from the third quarter of 2010, Gartner said.

Nokia's Windows Phone-based Lumia series has sold more than 1 million since its November launch in Europe, Nokia Australia-New Zealand MD Chris Carr told NBR - still modest compared to the numbers clocked by Apple and Android, but not bad from a cold start.

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Sony acquisition of Ericsson now complete - what we can expect

April 21 [Sat], 2012, 13:16

Sony acquisition of Ericsson now complete - what we can expect

By Edgar Cervantes.

This has been one of the smoothest acquisitions we have seen in the life of Android. In less than 4 months since its announcement, Sony has completed the full acquisition of the Ericsson mobile devision. This costed the Japanese manufacturer €1.05 billion, but good ol' Sony is now in full charge of its mobile division.

Even before this transaction was finalized, though, things had already started to change. We have seen the latest Xperia devices being unveiled without the Ericsson branding (like the Sony Xperia Ion and the Xperia S). But we feel like Sony's plans are not fully portrayed by these devices.

Sony can turn the tables around, and make things much better for its future. And we would assume that Sony has a plan - they did not spend €1.05 billion on a hunch. Sony Ericsson hasn't been making the best profits, but we should start seeing some strategy changes soon.

Seamless Connectivity with Sony Products

According to Sony, this is the main reason for said acquisition. The company wants smartphones to be part of the connected home that they have been creating for years. As of now, they have done a great job with their other products: computers, televisions, Blu-ray players, game consoles and other devices have the ability to communicate with one another, taking us closer to the "smart home."

This is something we can see the smartphone being integrated into - better communications with other Sony products and services. Many Sony TVs can now be turned on automatically when a Playstation 3 or Blu-ray player is in use, and the console can be controlled via a keyboard and mouse.

It would be great if a portable device could be added into the equation. Imagine if there was an option that allowed you to do the same with your smartphone. Simply select the DLNA (or any form of wireless communication) option when walking into the living roon, and boom - the TV turns on and starts playing the movie.

Maybe being able to access your Playstation 3 while on the go will also be featured in the future, much like the PSP devices have been able to do for a long time. The possibilities are endless, but such features are what we should start seeing in Sony smartphones. The connected home is the future, after all.

Better Gaming

Sony is one of the most successful competitors in the video game industry. Its consoles have created a great consumer loyalty since the release of the Playstation 1. It continues to hang with the best of them with consoles like the Playstation 3 and the PS Vita.

There have been recent rumors of Sony moving to Vita OS in the future[1], but this is not expected to happen for a long time. And we hope it never happens, because it has great potential to be successful in the Android world.

Gaming is something very important in the mobile ecosystem, and Sony can apply some of its talent to coming smartphones. We have already seen a gaming device being released, the Sony Ericsson Xperia Play (image to the right). This phone is great, and the controller pad definitely makes for a better experience. The games and specs left much to be desired, though.

With Sony in charge, we should be seeing many improvements in the Xperia gaming strategy. Better gaming smartphones and tablets, an improved Playstation Certified experience and console quality games could really turn things around in the Android ecosystem.

Will we see super phones with access to games with PS Vita quality and resolution? We will have to wait and see. It is highly likely Sony will make some strong moves within mobile gaming, though.

Design and Performance

Sony Ericsson devices have not been the best, but they improved greatly last year. Sony Mobile Communications could take great advantage of the company's resources and talent. As already mentioned, Sony is no small kid on the playground. Many of its products are highly desired by the population, and their name has a great reputation for solid manufacturing.

Sony Ericsson's design already fits in with Sony's style, and we probably won't see that changing too much. We may see Xperia devices with much better specs, though. If the new smartphones are going to be powerful gaming devices, the specs will have to be much more impressive.

Quad-core processors and gadgets with 2 GB of RAM are just around the corner. We might, or might not be seeing Sony taking a leap in this movement. Sony might have some hiccups with the transition, but we could expect them to stay on top of the game from then on.


Sony has great potential and talent. We have seen it in their other products, and hope to see better smartphones being added to its line - but this is only the beginning. There is much more that could be done. The Japanese manufacturer could make use of its talent to add great cameras, better sound, better displays and all of the above mentioned improvements.

But Android enthusiasts care about even more - for some, a super phone is immediately discarded after learning that it has a locked bootloader (Sony Ericsson has been great about open bootloaders). It is also a big "no no" if a manufacturer is known for not keeping its devices updated in a timely fashion.

There are many things that Sony could do to make its customers very happy - some being relatively simple to accomplish. So let's see how Big Sony plays things out. We hope that it goes well. Competition is a great factor for the mobile evolution, and we hate to see manufacturers fail.

But let us know what you think. Do you think Sony will do well with the acquisition? If so, what do you see coming in the near future?

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Customers pre-ordering latest iPad will have to wait

March 13 [Tue], 2012, 13:09

Customers pre-ordering latest iPad will have to wait

By James B. Kelleher.

(Reuters) - People pre-ordering Apple Inc's new iPad to avoid the release-day crowds at the company's retail stores will have to wait longer to get their hands on the devices.

The latest version of the company's tablet, which was unveiled this week, is set to hit shelves next Friday.

But tablets pre-ordered online will not ship to buyers until the following Monday, March 19, according to the company's website.

Earlier in the week, Apple had promised the newest tablet would arrive at customers' homes on the launch date.

Trudy Miller, an Apple spokeswoman, said the change was made because customer response to the new iPad had been "off the charts," quickly exhausting the supply set aside for pre-order and delivery by March 16.

Apple's new product releases are some of the hottest events on the tech calendar, scrutinized by investors, the media and industry insiders alike.

To the company's devoted fans, who vie to be the first to own the latest device, a three-day delay would be an eternity and could add to the crowds at the company's retail stores.

In January, enraged Chinese shoppers pelted Apple's flagship Beijing store with eggs and shoving matches broke out with police after customers were told the store would not begin sales of the iPhone 4S as scheduled.

The new iPad sports a crisper display and an array of technology advances and tweaks.

Apple said it will continue to sell the iPad 2 but dropped its price by $100. The older tablet now starts at $399 while the new third-generation wi-fi only iPad starts at $499.

The high-end model of Apple's latest iPad starts at $629 and will be capable of operating on a high-speed 4G "LTE," or Long-Term Evolution, network. At speeds roughly 10 times faster than current 3G technology, that may help banish the sometimes shaky video quality of older devices.

New iPad 3 Is Incompatible With International 4G LTE Networks

Despite 4G technology being one of the most-touted features of the new iPad 3, SlashGear have noted that the iPad 3 will be incompatible with the LTE networks being rolled out in countries outside the United States.

While the iPad 3 supports data transfer rates of up to 73 Mbps on LTE, these speeds will only ever be seen by American and Canadian customers with international users to be relegated to 3G speeds.

The new iPad WiFi + 4G put up for pre-order in Europe yesterday supports the same 700MHz and 2100MHz LTE bands as the AT&T version in the US; however, actual LTE roll-out in Europe is expected to use the 800MHz, 1800MHz and 2600MHz bands.

That means, even if commercial LTE networks become more commonplace in Europe – which has for the most part remained using the faster variants of 3G technology, such as DC-HSDPA, which the new iPad also supports – the Apple tablet is unlikely to be compatible with them.

The Wi-Fi + 4G iPad 3 that is being released in the ten international launch countries is the same as that being sold in the U.S. on the AT&T network, despite international networks not running on the same frequency bands as AT&T.

Apple have admitted the issue and thus far only offered up the concession that if international users visit the U.S. they will be able to access the AT&T LTE network on their iPad.

iPads sold internationally will be able to connect to AT&Ts LTE network when in the US with the appropriate SIM and plan.

It is unclear at this stage whether Apple will release a different version of the iPad 3 in the future with LTE frequency bands optimized for local networks.

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Apple runs out of new iPads for Friday delivery

March 13 [Tue], 2012, 13:07

Apple runs out of new iPads for Friday delivery

By Gregg Keizer.

Computerworld - Apple has sold out of initial supplies of the new iPad in every country where it will launch the tablet on Friday, and is now telling buyers that orders will not ship for up to three weeks.

In the U.S. and Canada, all iPad pre-orders placed through Apple's online store will now ship on March 19, three days after the on-sale date. Customers who placed an order very early in the pre-sale process were told they will receive the tablet on Friday, March 16.

Some consumers, including Computerworld staffers who ordered the new iPad last Wednesday, have received emails confirming that their tablets have been shipped.

Australian orders will ship on March 22, while those ordered in other first-wave markets -- France, Japan, Germany, Switzerland and the U.K. -- currently show a shipping delay of two to three weeks.

Hong Kong's online store simply says that the new iPad is currently unavailable.

U.S. carriers AT&T and Verizon, both which will also sell the iPad, are only taking customers' email addresses for later notification when the tablet is available.

The tight supplies and resulting delays were not surprising.

Last year, the Apple iPad 2 sold out on its first day of availability in the U.S., where shipping delays changed several times on opening day, first from two to three business days, then five to seven days, and finally settled on two to three weeks.

Four days later those delays had grown to four to five weeks, a timespan that one analyst called "intense."

Apple acknowledged it could not keep up with demand for the iPad 2.

In an April 2011 conference call with Wall Street analysts, Tim Cook, at the time its chief operations officer, called demand "staggering" and admitted orders were bogged down in the "mother of all backlogs."

Not until the mid-point of 2011's third quarter did Apple claim iPad 2 supplies had matched demand.

More recently, analysts predicted that Apple would face a repeat of the problem, in large part because suppliers of the new model's higher-resolution screen have had difficulty getting high yields from their lines.

Last week, Richard Shim, a senior analyst with DisplaySearch, said manufacturing the iPad's 2,048-by-1,536 pixel screen was a "challenge" for Sharp, Samsung and LG Display.

The shortages have again created opportunities for resellers who claim they will have the tablet next week.

On eBay, for example, prices for a 16GB Wi-Fi third-generation iPad run as high as $1,200, a 140% markup over that model's list price of $499, while 64GB 4G tablets are priced as high as $2,799, or 238% above the $829 list price.

Apple will begin selling the new iPad in its retail stores, as well as other outlets such as Best Buy and Radio Shack, on Friday, March 16.

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Instagram's Highly Anticipated Android App Is Coming Soon

March 13 [Tue], 2012, 13:04

Instagram's Highly Anticipated Android App Is Coming Soon

By Christina Bonnington.

AUSTIN, Texas - The Instagram party is about to go from a few cocktails with friends into a raging kegger. An Android version of the super-popular photo-sharing app will be released "very soon," according to the company's founder.

In a fireside chat Sunday at South by Southwest Interactive, Kevin Systrom showed a glimpse of the upcoming version of the app, which is currently being tested in a private beta. Smartphone photogs who use Google's mobile platform rejoiced.

"I'm glad to see Instagram coming to Android," said SXSW attendee Patrick Asher, who recently picked up a new Samsung Galaxy Note smartphone. "I'm going to download it. I'm looking forward to taking more photos on this than my old iPhone."

The arrival of the new app will end months of frustration for photographers who carry Android devices and can't participate in Instagram's white-hot world of social photography. Instagram earned the honor of being Apple's iPhone app of the year for 2011 and has quickly amassed a tight-knit community of smartphone photographers who enhance their square-shaped images with an array of retro-style filters.

"It'll be really cool to try out the filters with my photographs," said J.J. Martinez, an organizer of SXSW Interactive. "I take photographs with my smartphone a lot, at least every day, but I think I would take more pictures with Instagram."

Others are also eager to check out the photo-sharing app on Google's increasingly prevalent mobile platform.

"It'll be interesting to see how they bring it to the Android platform so the experience is intuitive and natural," said Darren Himebrook, a producer at a Miami-based advertising agency. When asked if he felt left out that Instagram has been iOS-only, Himebrook said, "Oh totally!" a sentiment echoed by several other Android users we spoke with after the announcement.

Android phones provide a fundamentally different user experience than iPhones. For example, Android smartphones have either three or four permanent navigation buttons at the bottom of the screen, whereas the iPhone has a single home button, with all other navigation performed within various apps.

In his talk, Systrom said the Instagram team has been "working hard on making this one of the best Android apps you'll ever see." He also said the iOS version has been downloaded more than 27 million times so far.

Rumors that Instagram for Android existed in some form and would be landing soon have persisted for months. Instagram's founder played pretty coy about the subject until now.

"In some ways, it's better than our iOS app. It's crazy," said Systrom.

Luckily, Android users like Himebrook, Martinez and Asher won't have much longer to wait before sussing this out for themselves. Until then, check the gallery above for a selection of the many Instagram photos Wired staffers have taken in Austin during SXSW 2012.

Instagram Coming Soon To Android, Co-Founder Shows It Off Briefly

By Ray Willington.

Instagram. Just the mention of the world brings up vivid images of slightly tweaked photographs, uploaded via iOS devices to all corners of the web. But there's a problem: it's only on iOS. Android, BlackBerry, Windows Phone, etc. -- none of those platforms have Instagram. Why? Hard to say why the company hasn't branched out yet, but they know that Android is growing too large as a platform to ignore. At the annual South by Southwest conference in Austin, Texas, the company announced that they had reached 27 million registered users. And of those, a ton of people are actively using it. Co-founder Kevin Systrom was quoted as saying that they're seeing "Facebook-level" engagement.

But more importantly, that the Android app is coming. He even showed it off. There was no full demo, but he had it on a prototype, and he said that in some ways, it's even better than the iOS app. There's no definite date, but it's coming soon -- soon enough for the co-founder to tease it at SXSW.

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Instagram Reaches 27 Million Registered Users

March 13 [Tue], 2012, 13:02

Instagram Reaches 27 Million Registered Users

By Kim-Mai Cutler.

Instagram, the photo-sharing app that has taken a definitive lead on iOS, said it has surpassed 27 million registered users today at the SXSW Interactive conference in Austin, Texas.

Co-founder Kevin Systrom didn't disclose daily active users during his fireside chat with TechCrunch editor Alexia Tsotsis. But he did say of all the users who have been active in the last week, 67 percent of them used the app yesterday.

"It's Facebook-level engagement that we're seeing," Systrom said.

He didn't really offer any clarity on rumors that the company is raising $40 million at a $500 million valuation.

"Good companies are always fundraising," he said. "Whether you're meeting people or considering firms, you're always fundraising. But it doesn't mean we're active. We're trying to create a long-term, viable company that doesn't come and go with fads. It should be something that lasts and creates meaningful value."

Systrom also had one more thing up his sleeve - he showed off the company's upcoming Android app. He waved it around very briefly on-stage, but he didn't give a full demo. (That's for later, and the company tells us they aren't totally ready for a walkthrough yet.)

"In some ways, it's better than our iOS app. It's crazy," he said.

Co-founder Mike Krieger added that folks over at Android have been pretty impressed with the way the app leverages the platform. It's taken awhile to come to Android simply because the company was focused on scaling on iOS, Systrom said.

"I don't think it took us so long. We just had priorities. Had we tried to be both on Android and iPhone at the same time, it would've been tough to innovate in the way that we have," he said.

He was also coy about what Instagram's business model will ultimately end up being. The app currently doesn't have any advertising and it doesn't have any in-app purchases. Path, in contrast, sells some filters. (But it also has far fewer users with the latest publicly shared figure being 2 million registered users.)

"We have a visual platform and advertisers like visual mediums. They like TV and magazines, but attention is moving online and they want to switch," he said. "I do believe that Instagram has put a stake in the ground and we're growing more quickly than anyone. Is there something in there we could do to make it a multi-billion dollar business? I think we can figure out something along the way."

Launched in the fall of 2010, Instagram grew out of some unsuccessful experiments in location sharing. While the company would have been too late to a crowded space that included Foursquare and ultimately Facebook Places, Systrom and Krieger saw that their beta users were sharing tons of photos.

"I was not super pumped up about location-based services. But I saw that what Kevin was doing was more about sharing the story of a place," Krieger said.

Systrom added, "Burbn never really failed. We just never really let it fly."

They quickly turned around a native iOS app that seemed to marry elements of paid camera app Hipstamatic with social features. It was perfect timing since the iPhone 4 was just arriving on the market and the device finally had a camera that produced photos of comparable quality to what point-and-shoot cameras could do. Apple also had an installed base of iOS devices that was finally large enough to produce the network effects that Instagram needed to take off.

"Mobile has created a totally different dynamic for discovering apps," Systrom said. "You're sitting in a bar and your friend is taking some pictures and then you ask what app they're using."

The app was soon a home run that quickly secured a top ranking among photography apps and then a consistently high ranking on the free app charts. On the first day, 25,000 registered users showed up. The challenge soon became about scaling the back-end and infrastructure.

"From then until now, it's been a hockey stick," Systrom said. "We've been very lucky with scaling. The difference is that we're served out of the cloud and we can call up instances with the demand. We also have a fantastic team that focuses on scale."

Just months after that, the company picked up a $7 million Series A round led by Benchmark Capital, with participation from Baseline Ventures, Square CEO Jack Dorsey, Chris Sacca and Quora co-founder Adam D'Angelo. Benchmark partner and Facebook alum Matt Cohler joined the board.

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5 Most Telling Takeaways From Tim Cook's Goldman Sachs Keynote

February 20 [Mon], 2012, 12:31

5 Most Telling Takeaways From Tim Cook's Goldman Sachs Keynote

By Christina Bonnington,

Tuesday afternoon, Apple CEO Tim Cook presented the keynote speech at the Goldman Sachs Technology and Internet Conference. Cook's presentation ranged from discussion of Apple's supply chain strategy in China to how the iPad is cannibalizing computer sales.

We listened in on the nearly hour-long keynote livestreaming from Apple's website, and rounded up the five juiciest, most interesting reveals of Apple's roadmap and culture.

Here's what we found - with insight on why it matters.

On Factory Working Conditions

"Apple takes working conditions very, very seriously, and we have for a very long time… Our commitment is simple: Every worker has the right to a fair and safe work environment, free of discrimination, where they can earn competitive wages and they can voice their concerns freely. Apple suppliers must live up to this to do business with Apple. If we find a supplier that intentionally hires underage labor, it's a firing offense."

Cook also detailed how Apple is constantly monitoring its factories. He said Apple has eliminated child labor in the final assembly portion of its supply chain.

It's important to note that Cook opened his keynote with a discussion of working conditions at the manufacturing plants of overseas suppliers. Sure, accusations of inhumane conditions in Foxconn factories are currently making news, and Cook certainly had to respond to the bad press. But the content and tenor of Cook's comments suggest a new humility on Apple's part - that the company knows it needs to do the right thing. We can call this a third gesture of "corporate kindness" in the new Tim Cook Era.

On Quality

"Price is rarely the most important thing. A cheap product might sell some units. Somebody gets it home and they feel great when they pay the money, but then they get it home and use it, and the joy is gone. The joy is gone every day that they use it until they aren't using it anymore. You don't keep remembering ‘I got a good deal!' because you hate it!"

Let's read between the lines: Cook was responding to a question about tablets, and the above response is obviously a dig at the Amazon Kindle Fire. Clearly, Cook doesn't think the Fire, or any other budget tablet - or any other tablet, for that matter - is a threat to the iPad.

His response doesn't simply suggest he's a man with a competitive streak. It suggests he doesn't have any respect for the Fire and its Android brethren. It's a position that recalls the bluster of Steve Jobs, and proves Cook is just as much the fighter.

On Competition

"The real catalyst to the tablet market will be innovation and pushing the next frontier. Honestly, we'll compete with everybody. I love competition. As long as people invent their own stuff, I love competition."

The unspoken message: If you don't invent your own stuff, Apple's legal team will make sure to set things right. But this statement also makes us wonder which companies, if any, Apple considers to be competition. Google perhaps? In today's keynote, Cook could only muster calling Android "that other OS."

On Mac Cannibalization

"iPad has cannibalized some Mac sales. The way that we view cannibalization is that we prefer to do it to ourselves than let someone else do it. We don't want to hold back one of our teams from doing the greatest thing, even if it takes some sales from another product area. Our high-order bid is, ‘We want to please customers and we want them buying Apple stuff.'"

While this was just a basic reiteration of Apple's position since the advent of iOS, it's also telling for what it reminds us about Microsoft - namely, that in the ongoing synergistic fusion of Windows 8, Windows on Arm and Windows Phone, Microsoft will be attempting to prop up the Windows legacy by any means necessary.

Indeed, when you think of Apple as a dynamic, forward-thinking company, when do you ever think of Mac OS? It's just not part of the daily conversation or news cycle. But Microsoft has a deeply entrenched, vested interest in making sure Windows never goes away, even if it means, well, window-dressing the Windows desktop with a mobile U.I. We don't blame Microsoft for trying, and it certainly doesn't have Apple's "luxury" of owning such a small part of the desktop and enterprise market share.

On Steve's Legacy

"Steve grilled in all of us over many years that the company should revolve around great product, and that we should stay extremely focused on just a few things rather than try to do so many that we do nothing well. We should only go into markets where we can make a significant contribution to society, not just sell a lot of products. And so, these things, along with keeping excellence as an expectation of everything at Apple, these are the things that I focus on because I think those are the things that make Apple this magical place. We're always focused on the future. We don't sit and think about how great things were yesterday. I love that trait. I think it's the thing that drive us all forward."

This is Tim Cook's assurance to the investment community that a little Steve Jobs avatar is perched upon his shoulder. The avatar isn't issuing orders, mind you. It's just rubbing Cook's delts, and reminding him about core company values.

And this is a helpful avatar to have. We've seen all too many tech companies lose their mojo following the departure of founding fathers. Just look at the mess that's become of Hewlett-Packard. Tim Cook emphasized that he's striving to maintain the same culture and vision that Steve Jobs fostered while he was in charge. And because Apple does have a clearly defined focus, it should be able to continue to deliver solid, inventive products in the years to come.

And, of course, having another iPad waiting on deck - a product launch that wasn't acknowledged in even the most tangential, knowingly cheeky way - doesn't hurt Mr. Cook's chances for success either.

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