Mobile News: Security, Spectrum, and Mergers

Lately in the news, there’s been heavy talk about the mobile industry. News reports have generally been on these topics: hacks/security flaws, spectrum, and mergers. Tech blogs and websites have to been reporting different experiments and studies on the security flaws of either Android or iPhones. Technolog previously reported that paperclips could unlock iPhones and magnets could unlock iPads. While CNBC recently reported about an Android Bug that is released via a link opened from a spam text or email.

As far as spectrum, we are all being warned that, at some point in the not-too-distant future, data will slow tremendously from overuse of radio spectrum. While cell carriers may offer unlimited data, reaching a certain point will slow your data. For example, T-mobile slows data from 4G/3G to a G after 2gbs of data has been used within a billing cycle. This speed reduction or the use of limited data plans is to prevent congestion on wireless spectrum, which causes slow networks.

The other solution to congested spectrum is to acquire more of it. Some media entities have spectrum to sell.  Right now, Verizon Wireless is trying to buy spectrum from Comcast, Time Warner Cable, and Brighthouse Networks. If that deal is approved, Verizon Wireless would walk away with better and more spectrum placing them at a greater advantage then their competition. Another way to acquire spectrum is to merge. AT&T and T-mobile attempted to merge, but the government disapproved on the basis it could deplete competition.

Barnes & Noble to Lower Prices to Better Compete

To better compete with Amazon, Barnes & Noble is reducing the price of the Nook. “Barnes & Noble sales rise, launches cheaper Nook” by Phil Wahba of Reuters.com reports the company “lowered the price on its Nook Color e-reader to $169 from $199” and will introduce a Nook tablet that will cost $199. That new Nook will carry 8gb of memory, half of the current standard memory for their current tablet.

Along with the announced prices, the company reported increasing sales for the Nook business and printed business. The Nook business “rose 38% to $542 million during the holiday quarter… physical book sales at its 720 superstores rose 4.2% in the first holiday quarter since rival Borders Group shut down”. Barnes & Noble CEO William Lynch claimed yesterday that the company “now had 27 percent to 30 percent share of the U.S. digital books market”.

However, the company has previously admitted that the Nook business is costing too much.  Advertising and manufacturing is taking a toll on the company who recently (last month) stated they might spin off theNook into its own separate business or sell it. With a price cut, analyst Peter Wahlstrom is quoted stating “It’s hard to maintain the same profitability if you keep lowering prices”. 


It seems Barnes & Noble doesn't have the monetary ability to stay competitive in the tablet/e-reader market. Amazon is notorious for taking major price cuts to lure customers to their site for books and music, and it comes as no surprise that the company was able to sell the Kindle Fire at $199. On the contrary, Barnes & Noble doesn't have the financial capacity to keep their advertising at the level it is now and still manufacture tablets/e-readers. Reducing the Nook price might be great for customers but it won't help to increase profit.

Marketing Firm Wants Your Home for Advertisement

What happens with a mix of a marketing firm, homeowners looking for ways to pay mortgage and a house? According to Brainiacs From Mars, this is a formula for great marketing.  The marketing firm decided that homes could be marketing space and by offering to pay mortgages, homeowners would be willing to offer up theirs. “Exclusive: Mortgage problems? Turn your house into a billboard” by Tim Reid of Reuters.com reports the case of the Hostetlers of Buena Park, CA. They gave their home to Brainiacs From Mars in exchange for “getting their nearly $2,000 monthly mortgage paid.” The result was the company’s name plastered on the home against a green background and the 2^nd part of the home painted orange with a GR code and the Facebook and Twitter symbol.

According to the article, the mortgage payments go “up to a year” but doesn’t clarify the length of time homeowners must keep the advertising on their homes.  The Hostetler’s neighbors were told it would be one month; the couple might push for six months. Speaking of neighbors, some were not fond of the advertisement and color scheme. They complained and city council hasn’t been too agreeable.

The man behind the scheme is Romeo Mendoza, the founder and CEO.  The article reports “his ultimate goal is to turn 1,000 homes across the United States into giant advertisements for his marketing firm”.  Since advertising this format via the company’s website there has been “38,000 applications”.  Mendoza’s contribution to the article was pretty much stating that the scheme helps homeowners and that “he hopes the quirkiness… will convince companies to hire Brainiacs From Mars to run their advertising campaigns”. In the end, he believes the financial need of homeowners will give them the support they need to keep going. Although, Mendoza is aware of the challenge he faces with zoning laws and city council approvals.

Kodak is Officially Quitting Cameras

When Kodak filed for bankruptcy last month, the media exclaimed “the end of an era”. However, yesterday, Eastman Kodak co. announced plans to officially end its camera business.  The company will remain but “plans to get out of that business in the first half of the year as the bankrupt company looks to cut costs”. “Kodak to shutter camera business” by Sinead Carew of Reuters.com reports the company recognizes that the move will “result in ‘significant’ job losses.”

Previously, the company attempted to end their “20-year sponsorship of the Hollywood Theater that hosts the Academy Awards” before the Oscars to save money but they were advised they were too late to pull out.

The article reports two factors as contributing to the decision. 1. The company focused more on printers than cameras and 2. “the quality of digital cameras in cellphones improved, stand-alone cameras’ relevance became somewhat limited to the higher-end market, where Kodak did not compete in recent years”. Although, I would say the convenience of cell cameras contribute to their popularity rather than quality – digital cameras still tend to have better resolution than phones.

The future plans are to continue focusing on printers, “online and retail photo printing”, “[licensing] its brand to other camera makers”, and their commercial business.

Considering Kodak practically invented the digital camera market, now, we can declare the Kodak era to be done. Their role will now fall back into the background while their brand may or may not continue in the hands of other companies.

Sony Announces Next CEO

Yesterday, Sony announced a replacement for its current CEO. On April 1rst, current CEO Howard Stringer will be replaced by Kazuo Hirai. “Sony names Hirai to replace Stringer as CEO” by Yoko Kubota and Liana B. Baker of reuters.com reports “Hirai [is] a 28-year company veteran known for overseeing the phenomenal rise of the PlayStation gaming system in the United States”.

Hirai’s future seemed to be sealed when “he was promoted to head the company’s consumer products and service businesses, which produce the bulk of Sony’s $85 billion annual sales”.

The main goal for Hirai will to make the company better to compete with other competitors such as Apple and Samsung. Part 1 of the goal is to integrate all Sony entertainment entities to provide a fluid experience. Part 2 would be to reinvigorate the TV division.  The article reports, “Sony exited an LCD panel joint venture with Samsung” and also lost TV sales. Their losses are “expected to show a net loss for the fourth year in a row”

Reuters provided a small statement from Hirai:

“The path we must take is clear… To drive the growth of our core electronics businesses – primarily digital imaging, smart mobile and games; to turn around the television business; and to accelerate the innovation that enables us to create new business domains”

As CEO, Howard Stringer is known for "cost cutting" in the company. In 2011, he was criticized for his handling of the PlayStation security breach - it took him 6 days to announce the breach to customers and revealed that he wasn't aware of a previous breach. Hirai's 28-year experience within the company and technological knowledge of the products would make him a more knowledgeable and prepared CEO than Stringer.