WEEKLY RECAP

Can Verizon Take the iPhone’s Heat?

Perhaps you have an iPhone, and perhaps you were at CES last week. If so, you may have noticed that your phone’s data services just plain didn’t work most of the time. For some users, that’s an aberration that only happens when they go to very crowded events.

But for users who live in certain cities, that’s pretty much an everyday condition. In places like San Francisco and New York, AT&T’s cellular data network has been entangled in a years-long traffic jam, and it’s driven some users to solemnly swear that the day the iPhone comes to another network, that’s where they’re headed.

Now that day has arrived. Or at least, we now know when it’s coming. Feb. 10 will be the day the iPhone will arrive on the Verizon network, ending Apple’s exclusive agreement with AT&T in the U.S.

For the most part, the Verizon version of iPhone 4 will be just about the same as the AT&T version. It’s mostly the same design, though I’ve seen photos indicating the metal outer band is just little different — possibly a post-antennagate redesign. Same chip, same display. Same price, too: US$199 to $299 with a two-year contract.

To run on Verizon’s network, this new iPhone will use CDMA technology, not GSM. So it seems this is definitely not going to be a 4G phone — I guess that comes later. Also, the Verizon iPhone 4 can be used as a WiFi hotspot. Turn on that feature, and multiple devices in the room can wirelessly latch onto the phone’s data connection.

But the Verizon iPhone also shares a shortcoming with a lot of other Verizon smartphones — you can’t make calls and exchange cellular data at the same time. That might affect the use of certain applications, but for most users it’s probably not a make-or-breaker.

A much bigger issue for many will be how well Verizon’s network deals with a bump in traffic. Judging from how much energy Verizon iPhone rumors have had for so long, this thing is going to draw in a lot of customers. Some will be angry AT&T refugees; some will have been waiting for an iPhone for years but couldn’t bring themselves to sign on with AT&T; some will be loyal Verizonistas who just want to step up from their old dumbphones.

Verizon says it’s confident it can handle the load, but a study from the Yankee Group indicates the carrier’s network currently hosts the lowest percentage of smartphones among any U.S. nationwide carrier. A surge of new iPhone users will certainly drive that number up, and then we’ll start to see whether a Verizon iPhone restores balance to the universe or just tips the scale in the other direction.


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Privacy Settings: Off

Privacy is kind of a big issue for Facebook. On one side of that isuser privacy — what information friends, strangers and Facebook itselfcan see about you. Critics say the social network juggles its privacysettings too often and doesn’t tell the full story about who can learnwhat about you if they really, really cared to know. Suffice to saythat if you want perfect privacy, don’t join Facebook. If you wantso-so privacy, get into your profile settings and tighten them up –they are pretty loose by default.

But the desire for privacy is also felt by the company’s leadership.It’s the biggest social network in the world, it gets more trafficthan Google, it has over a half a billion members, yet it’s still nota publicly traded enterprise. That’s because so far, Mark Zuckerbergand company have decided they want to handle operations their own wayand not have to answer to stockholders or a board of directors.

It seems all that will change next year. Facebook plans to go public sometime in 2012, according to a document investment firm Goldman Sachs gave to several of its clients. Big IPO, big parties, big sloppy handshakes from Wall Street types, and at the end of the day, Facebook’s leadership will go home wearing diamond-studded collars. Handling the leashes will be many thousands of newly minted shareholders.

Another tidbit from the Goldman document: In the first nine months of2010, Facebook made $355 million. Make of that what you will.

Zuckerberg could have made a splash on Wall Street any given tradingday in the last two or three years had he decided to take Facebookpublic before. What’s so special about 2012? It seems that will be thepoint at which the Securities and Exchange Commission will possibly stepin and force Facebook’s hand.

At this time, not just anyone can invest in Facebook. You have to havethe right connections, and being a client of Goldman Sachs — a verybig client, specifically — is one way to get your foot in the door.The firm’s been asking its wealthiest clients if they want in onFacebook, and the kind of money it’s asking for values the socialnetwork at $50 billion. Apparently Goldman thinks it’ll get enoughtakers that by the end of this year, Facebook will have more than500 individual investors. Per SEC rules, when that happens, acompany has until the end of April of the following year to reveal the secrets of its financial sausage-making.

A Facebook IPO seems like it was almost bound to happen sooner orlater, given the company’s growth. Might as well do it when thecompany’s on a relative winning streak, right? Even so, going publicmight throw some cold water on the company’s culture, giving it awhole lot more busywork to take care of in order to fulfill theaccountability mandates public companies have. Lawyers, accountants,quarterly reports, shareholder meetings — sounds like someone there’sgonna have to buy a tie.

Selling Space

It’s been less than two months since MySpace basically conceded defeat in the general social networking space and decided it wasn’t going to try to compete head-on with Facebook anymore. Now it’s unclear who exactly will own MySpace a few months from now.

Just a few days after the company laid off half its staff — about 500 people — CEO Mike Jones has reportedly said that the social network’s current owner, News Corp., is exploring its options: maybe a spinout, maybe a selloff, maybe a merger.

The site used to be on top of the online social networking world. In fact, it still gets a significant amount of traffic, about 25 million hits a month. But it clearly blew what used to be a huge lead over its rivals.

MySpace has been kind of an odd fit for News Corp. ever since it joined the family in 2005. Stateside, the corporation’s most famous holdings are probably Fox News, Dow Jones, the Wall Street Journal and the New York Post — not exactly the kind of portfolio where you’d expect to see an online social network targeting teens and young adults.

But MySpace didn’t lose its lead just because it was a corporate misfit. It also lost it because of its extended awkward adolescence.

MySpace managed to draw a lot of people into social networking for the first time. But what it showed them when they got there was a site full of gawdy user-designed profiles, message boxes full of spam, ugly and intrusive ads, and an overall cumbersome user interface. The site’s cleaned itself up a lot since then, and now it’s actually looking OK, but at that crucial phase in the growth of online social networking, MySpace was this crowded, festering swamp from a GeoCities nightmare.

And Facebook happened to come in at just the right time with just the right alternative. It had been limited to college kids at first, so it avoided the “teenybopper club” associations that MySpace is still stuck with. It also offered a clean interface. Ads were there, but they weren’t as awkward. And since relatively few users had been into online social networking long enough to establish anything like brand loyalty, Facebook sucked them in by the millions. And now we are all slaves to Zuckerberg.

Even though half the desks at MySpace are empty, there’s still some hope. Though it’s way behind Facebook, it’s still the second-largest social network out there, and it has a lot of cache among musicians and music fans. Maybe Viacom could buy it and hook it up with MTV. Maybe CBS could buy it and sit it next to all the other sites it’s been buying. Maybe AOL could be buy it and do … whatever it is that AOL does with the stuff it picks up. Point is, this site may have a lot of rust and a stinky interior, but it still runs, and it might be a great buy for a company looking for a particular kind of fixer-upper.

Whack-a-Hacker

Despite the name, Sony’s PlayStation 3 is actually capable of a wholelot more than playing video games. It has a very muscular processorinside, and in the past, some people have figured out ways to use thePS3 for much more productive tasks than laying waste to alienarmies.

You could install software to turn it into more or less a fullyfunctional Linux PC, and it’s even compatible with the Folding@Homeproject, which lets participants volunteer their computer’s processingpower to help out research in protein folding. So when they’re notbeing used to blow up imaginary enemies real good, some PlayStationsare unlocking the secrets of molecular dynamics.

But Sony isn’t 100 percent supportive of efforts to use PS3s morelike PCs and less like gaming consoles. For example, in a firmwareupdate last year, Sony nixed a PS3 feature called “OtherOS,” — thefeature that enabled the console to run Linux. Those who updated tothat new firmware version borked their machine’s Linux capabilities,and anyone who bought a new PlayStation from that point on never sawOtherOS at all.

For some users, barring Linux seriously lowers their PS3’s value, sosome hackers decided to do something about it. GeorgeHotz, the original iPhone hacker himself, cracked the console’s rootkey, and a hacking group with which he’s associated, Fail0verflow,cracked the PS3’s security codes. This information would give ownersof newer PS3 machines the ability restore OtherOS, if they thinkthey’re up for it.

Sony has filed a temporary restraining order in an attempt toprevent this information from ever being published. According to thecompany, the motivation for its action isn’t some deep-seated hatredfor Linux. It’s all about security. That was the reason it gave fordumping OtherOS in the first place. Sony says that dissemination of theconsole’s security codes lets users play pirated games.

This action likely won’t sit well with Sony customers on the geekierside of the spectrum, who were already pretty miffed that Sony cut offthe PS3’s Linux legs. And even to owners who’d never think of messingaround under the hood of a PlayStation or any other gadget, the ideathat a company is trying to tell people what they can and cannot dowith their own personal property long after it’s been bought and paidfor sounds ridiculous, especially since the mere act of installingthese keys doesn’t directly result in a bunch of free games fallinginto your lap. Someone might choose to pirate games after hacking thesystem, but why stand in the way of people with legitimate intentionslike turning the thing into a Linux box?

For Sony, it’s also a move in the opposite direction of competitorMicrosoft. Currently, the Xbox Kinect is one of the hottest items inthe video-game world, and Microsoft has scored big points in thehacker community by openly tolerating — you might even say encouraging– hacking the product to do stuff it wasn’t originally intended for.And the hacker community has responded with all sorts of applications,practical and impractical alike.

The Vision Thing

AMD’s public statement regarding CEO Dirk Meyer’s abrupt departurethis week called it a “resignation.” But consideralso that the company said that the departure was “effectiveimmediately” and that its board of directors didn’t think Meyer was theright person to take the company to the next level. So in other words,he was axed.

It’s left a lot of people wondering why. Meyer guided AMD through somepretty rough patches, and things were finally beginning to turn aroundfor the company. He managed to more than quadruple AMD’s stock valuefrom the time he stepped on board to about 9 bucks a share. And AMD’sannouncement last week of a new line of Fusion chips was pretty well-received.

Perhaps the board feels that even though Meyer kept thecompany breathing during some dark times, it’s sick of being regardedas second banana to Intel, and it’s time to do something crazy toshake up the desktop/laptop status quo. Maybe it wants to jump intothe tablet market, or maybe it has smartphone processors in mind.

Still, even if cutting Meyer loose was the right thing to do for AMD’s future,it’s strange that the board tapped CFO Thomas Seifert as temporary boss instead of having a permanent replacement all warmed up on the sideline. Meyer’s vision may not have lined up with the board’s, but the title “interim CEO” is about as vision-free as it gets.

2 Comments

  • The real story about who’s going to lose out with this whole verizon iPhone story is tracfone. For years, thanks to AT&T’s sad network woes, tracofne has sold iPhone owners back up CDMA phones. If the new iPhone is any better, or the CDMA network for that matter, then tracfone will lose out on the ‘back up’ revenue.

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