The Lonely Life of WebOS
HP has cut development of webOS hardware like the Pre and TouchPad, effectively taking away the only home the mobile operating system has. With nothing else to run on and no other companies using it, the OS will linger on ice unless and until a buyer or licensee comes along. Meanwhile, Google reaches out to Motorola, AT&T juggles SMS rates, and the Verizon strike takes some ugly turns.
08/20/11 5:00 AM PT
While the iPad remains king of the tablet market in terms of sales, it's getting stared down by a growing gang of competitors, most of which have taken sides with Google's Android operating system. Android tablets come in large and small, expensive and cheap, really nice and complete crap. There are a lot of them out there, but they all coalesce around that same Android platform.
Then there are the rebels who go it alone. The RIM PlayBook is keeping its head above water for the time being, bolstered by the fact that Research In Motion is a mobile stalwart that's still kicking, despite the fact that it's certainly seen better days. But it was HP's runner in the tablet race that seems to have become the market's latest casualty.
In reporting its quarterly earnings, HP dropped a bombshell: It's going to spin off its PC business and abandon its webOS hardware efforts. WebOS is the mobile operating system first developed by Palm and then gobbled up by HP when it swallowed Palm whole.
Killing each and every product that uses a particular OS isn't a literal death sentence -- webOS may well be scooped up by some company with a caring soul that can't stand to see it die. Or maybe HP wants to license it out. But unless that happens, webOS will effectively be lying dormant, and an operating system can start to decompose real fast when it's sitting still, especially in such a viciously competitive market. Developers stop building apps, consumers stop paying attention, and the ones who bought devices before they were de-shelved get bitter because firmware improvements, bug fixes and new software stop coming.
HP's decision to halt webOS device development could send a once-proud operating system into the first stages of zombification. It started out as an innovative and fascinating mobile OS forged by Palm as a sort of last-ditch effort to gain traction in a mobile market that had passed it by. Critics liked it, but it wasn't enough to keep Palm breathing on its own. So HP swooped in last year and bought Palm for US$1.2 billion with the intention of doing something amazing with the OS. But HP's taken away the only hardware webOS has, so now it appears webOS is a two-time loser.
The product that really drove home webOS devices' failure to gain traction was the TouchPad, the tablet that HP released just a few weeks ago. WebOS first debuted in Palm phones, and HP itself put out a few new webOS phones after the acquisition was finalized, but the TouchPad is perhaps the first webOS device that HP had a real hand in shaping from the ground up.
But less than two months after arriving on shelves, the TouchPad had already undergone a permanent price cut. Worse yet, retail chain Best Buy reportedly sold less than 10 percent of the 270,000 TouchPads it initially ordered. The rest of them sat there gathering guano in Best Buy's warehouses, and the retailer apparently wanted HP to swing by and take back some of the excess stock.
So what was a very crowded mobile OS space a year ago has become noticeably leaner. The less viable platforms are receding -- Symbian's being scaled back, Meego is on its last leg, and now webOS is out on its ear unless a buyer or licensee comes along. That leaves iOS and Android comfortably on top. RIM's working up a sweat trying to right its ship in phones while attempting to establish a tablet beachhead. And Microsoft is spinning up its Windows Phone efforts with that big Nokia partnership, as well as its tablet plans for when Windows 8 comes along.
Oh, and Bada. Can't forget Bada.
Listen to the podcast (14:46 minutes).
Google gave the smartphone world a good shake and slap this week with a surprise wedding announcement: It wants to run off and marry Motorola Mobility, the handset appendage that Motorola shook off earlier this year.
Pending regulatory approval, Google will pay $12.5 billion for Motorola Mobility, a figure that represented a 63 percent premium over the handset maker's share price on the day of the announcement.
The boards of both companies are unanimous in their approval of the buyout, and the deal's also getting enthusiastic encouragement from what might sound like an odd bunch of sources: Motorola's biggest competitors. As the deal was announced, companies like Samsung, HTC and LG were using phrases like "I welcome Google's commitment" and "we welcome today's news" and "we welcome Google's commitment." What a warm and friendly gang of cutthroat adversaries.
All these guys grinning wide and offering their strangely same-sounding congrats may look a little weird, but it shouldn't be surprising. Google is the source from which all Android blessings flow, and it's probably unwise to whine about the acquisition strategy of the company giving you a free OS.
Besides, once Google owns Motorola Mobility, life may get a little easier for Android phone makers everywhere. In buying the company, Google will be taking control of tens of thousands of patents, any one of which could play a key role in blocking whatever claims rivals like Apple, Microsoft, Oracle or anyone else might make against Google or Android phone makers in the future. Google's already fighting a multiple-front patent war for the future of Android, and this purchase could go a long way toward helping it protect itself and its hardware partners.
But the deal may also give other handset makers cause for concern. It'd be nice for them to see some of the patent turmoil go away, but the fact will remain that once Motorola's under the Google umbrella, one Android handset maker will be Google's favorite. Right now anyone can make a Google phone, but after the deal's done, some phones will be Googlier than others.
Much depends on just how thoroughly Google integrates Motorola Mobility. Maybe this deal really is about the patents, and once those are in Google's pocket it'll just let Motorola run wild as a free-range subsidiary. Or maybe it'll even resell it somewhere down the road -- while retaining control of all those patents, of course.
On the other hand, it could opt to give Motorola Mobility some special Android privileges. Maybe Motorola gets new Android builds first, or maybe it becomes the exclusive maker of top-notch Android reference phones. That's sort of what Google's already done with the Nexus line of Android phones, though its given multiple manufacturers the chance to take a crack at Nexus.
Giving Motorola an extra-large seat at the Android table could motivate other manufacturers to start opening their minds to other OSes as well. Apple's iOS isn't going to happen, but Microsoft is no doubt very interested in getting Windows Phone into as many handsets as possible, even with Nokia already on its side. Some phone makers may even think about resurrecting webOS if Google begins favoring Motorola too much -- or even if Google's simply perceived as favoring Motorola too much.
No Bars Here, Move Along
Events over the last year or two in cities in the Middle East and Europe could be called "uprisings," "revolts" or just plain-old-dirty "riots," depending on your point of view. I'd call it "aggressive civic action" just to get an umbrella term going that could apply to all, but that's kind of clumsy.
Anyway, these events have shown that 21st-century protesters have a new tool to go along with the picket signs and ball-bearings and Molotov cocktails used by past generations. They use mobile phones to harness the power of mass communication and social networks, allowing them to manage and organize their activities on a minute-by-minute basis.
For those on the other side of the line, though, this makes it much harder to disperse and scatter a demonstration if they think it's getting out of control. Oppressive dictatorships have responded by trying to pull the plug on the entire country's Internet, which wasn't surprising. Then a couple of weeks ago UK officials started working with Research In Motion to control BlackBerry Messenger and try to tamp down some of the major disruptions going on in large English cities.
And lately a watered-down version of this informational blackout tactic has appeared in the U.S. too. It all started with the police shooting death of a homeless man named Charles Hill in a BART station in San Francisco. BART is short for the Bay Area Rapid Transit system. BART police officials say Hill was drunk and wielding two knives and broken bottle, so they insist that lethal force was appropriate, but witnesses say they didn't even try to use something less lethal, like a TASER.
The shooting led to various demonstrations in and around BART locations, and BART officials later acknowledged that at one point, they cut off cellphone service inside some of their stations for about three hours in order to disrupt the protesters. Naturally, doing so gave protesters yet another reason to be outraged, and that just motivated even more protests.
Those protests weren't limited to BART stations, though. The hacker collective Anonymous smelled fear in the air, so it jumped into the issue nose-first and broke into BART's computer systems. And then they dumped the personal information of about 2,000 BART customers into public view. If you were one of them, Anonymous would like you to know that your anger at them is misplaced and you should be getting mad at BART for not protecting your data well enough. It's not exactly standing in front of tanks or shoving daisies down rifle barrels, but I guess it works at getting peoples' attention. Later, hackers also broke into the BART Police systems, publishing personal information about cops.
BART's cellphone shutdown maneuver has also caught the attention of the FCC. It's reportedly going to investigate whether doing that was a violation of the law. Intentionally blocking any kind of FCC-approved communication signal is serious business, and it could run afoul of the Communications Act of 1934. It might matter that what BART actually did was shut down power on a few cellular stations used to provide a signal to phones inside the platform areas, and FCC officials might consider that a different sort of action than jamming signals or actively interfering.
Moreover, BART said it was acting out of concern for passengers' safety in doing what it did. And BART spokesperson Linton Johnson went so far as to say in a KRON-TV interview that there is no right to free speech inside a station's fare gates. I'll just leave that one there.
Forty-five thousand workers at telecom giant Verizon continue to strike, and the situation could grow even darker soon. Within a couple of weeks, striking workers could lose their medical benefits, per a provision in their contracts. After that, if they want to keep some form of health insurance, they'll have to pay through the nose for something like COBRA.
Health benefits are actually one of the reasons the workers are striking in the first place. Due to shrinkage in Verizon's landline business, the company wants to tighten up certain benefits for workers in that division. That would mean bigger paycheck deductions for medical benefits, along with pension freezes, the elimination of a couple of paid holidays, and unfavorable changes to the pay-raise system. Union leaders said that would mean giving up decades of gains made through collective bargaining, and they pointed out that Verizon as a whole made $3 billion in profits this year.
But Verizon says almost all of that profit came from the wireless side of the business, and the wireline side -- the one on which the striking employees work -- has faced continual declines in revenue. The two sides have failed to come to an agreement; thus the strike began earlier this month.
Since then, things have sometimes taken an ugly turn. Striking workers say someone working for Verizon purposely drove a vehicle into a group of protesters. Meanwhile, Verizon officials have accused striking workers of sabotaging its network infrastructure, and they've obtained injunctions in multiple states barring strikers from blocking corporate buildings and harassing other Verizon workers.
Much hangs in the balance. If the strike fails, the unions involved lose lots of credibility, but if it succeeds, it could inspire workers at other telecoms that are facing very similar circumstances to be a little bolder with their own demands. Meanwhile, the deadline on which striking Verizon workers will lose their healthcare benefits if an agreement isn't reached comes on Aug. 31.
The SMS Squeeze
SMS text messages are to wireless carriers as popcorn is to movie theaters. They cost incredibly little to provide, yet consumers have become accustomed to paying prices that represent markups of 1,000 percent or more. Hey, whatever the market will bear, right?
Texting is a cash cow for carriers, but AT&T thinks it's found a way to squeeze the udder just a little more. It's reshuffling its pricing structure to go all or nothing on text messages. Customers who are new to AT&T will have two options: Buy the unlimited texting plan for $20 per month, or get charged on a per-text basis -- that's 20 cents per SMS message, 30 cents per photo message, or MMS.
AT&T used to have a much wider range of SMS plans, but this latest move has eliminated the last vestige of middle ground -- the $10, 1,000-messages-per-month plan.
If you're already an AT&T customer, you can keep the plan you have even when you swap out handsets; this limited set of options only applies to newcomers.
This move comes just as texting is beginning to level off. CTIA has estimated that literally 1 trillion text messages were sent in the second half of 2010, but that represented growth of just 8.7 percent over the previous six months.
Since then, growth may have slowed even further, because all the smartphones overtaking the market are capable of running apps that allow you to send short messages to other people without running up a huge SMS texting bill. Facebook put one out just a few weeks ago; there are lots of others for major mobile platforms. They mostly just use the phone's Internet connection to push through to the other person.
A few lines of text takes up an incredibly small amount of data. Certainly not 20 cents worth. Then again ... whatever the market will bear, right?