February 2012

Apple Announces Independent Factory Inspections

Apple has asked the Fair Labor Association, an independent labor rights organization, to conduct special audits of working conditions inside Chinese factories where iPhones, iPads and other Apple products are manufactured. And, in a significant about-face for the company that has the potential to affect the electronics industry, Apple asked the organization to identify particular facilities where abuses are discovered.

Inspections started Feb 13 at a factory in Shenzhen, China, known as Foxconn City, which is one of the largest plants within China, with more than 230,000 workers. Human rights advocates have long said that Foxconn City’s employees are subjected to long hours, coerced overtime and harsh working conditions, all of which Foxconn disputes. Working conditions in Foxconn factories, including safety lapses that led to worker deaths. At Apple’s request, the labor group will also conduct audits of Apple’s other main assembly factories, including Foxconn’s plant in Chengdu and facilities run by Quanta and Pegatron, where the bulk of iPhones, iPads and other devices are made. Separate explosions last year at Foxconn’s iPad plant in Chengdu, and Pegatron’s iPad plant in Shanghai killed four people and injured 77. When completed, Apple said, the association’s inspections will cover factories where more than 90 percent of Apple’s products are assembled.

Get Ready for 1 Billion Smartphones by 2016, Forrester Says

In just four years, one billion people will own smartphones, many of whom will be professionals taking these devices to work, says Forrester, a research company. And because of that, businesses need to think big about how to use mobile products to engage with customers, the company says. Forrester estimated that by 2016, 350 million workers will use smartphones — 200 million of whom will take their own devices to the workplace. By that year, consumer spending in the mobile app market will amount to $56 billion, and business spending on mobile projects will have doubled, the study found.

When smartphones are in the hands of a billion customers, that’s not just a trend. That’s a moment that requires a huge rethink in how companies do business and build products. That’s the upshot of the study, which looks at the trends in mobile and their implications as CIOs and businesses adapt to this new form of personal engagement with users via mobile devices. Forrester forecast that one out of every three dollars spent in the tech economy will be mobile by 2016.

Here’s What Apple and Google Are Fighting Over: Search Goes Mobile by 2016

The tech press provides constant updates on the Apple versus Google mobile war, using statistics about unit sales, activation numbers, app downloads, etc. But it’s always good to remember what the war is about. Here’s a helpful reminder, via a Bernstein research note.

By 2016, analyst Carlos Kirjner predicts, the majority of Web search queries will come from mobile devices. But if you added tablet searches, you’d reach the tipping point that much earlier. And it will get there much sooner in the U.S., anyway, because smartphone penetration is much higher here than other parts of the world. At some point, Kirjner suggests, Apple may decide to jettison Google for a competitor like, say, Microsoft. And that could cause real problems for Larry Page and company. But those problems would be much, much worse if Google hadn’t created an iPhone competitor in the first place.

AT&T customers surprised by data speed limits

AT&T has some 17 million customers with "unlimited data" plans that can be subject to throttling, representing just under half of its smartphone users.

It stopped signing up new customers for those plans in 2010, and warned last year that it would start slowing speeds for people who consume the most data. What's surprising AT&T’s customers is how little data use it takes to reach that level — sometimes less than AT&T gives people on its "limited" plans. Users report that if they call the company to ask or complain about the throttling, AT&T customer support representatives suggest they switch to the limited plan.

AT&T spokesman Mark Siegel said that as of last summer, the top 5 percent of data users were using 2 gigabytes of data per month. But he also said the company doesn't actually throttle all of the top 5 percent "unlimited" data users. Last month, the figure was only 0.5 percent, or about 200,000 people, he said. That's because AT&T only throttles users in areas where the wireless network is congested that month, Siegel said. Siegel also pointed out that aside from moving to a tiered plan, "unlimited" plan users on the cusp of being throttled can use one of AT&T's 30,000 Wi-Fi hotspots, where usage is unmetered.

What to make of AT&T’s vanishing spectrum crisis

[Commentary] Is AT&T failing to keep its story straight about the need for more spectrum, or is it just that the popping of the spectrum bubble has taken them by surprise as well?

Recently the nation’s second largest operator has seemed to back off from some of its more aggressive claims about how fast data traffic was growing. AT&T’s senior management told investors on two separate occasions last month that “The base increase of data consumption right now is growing 40 percent a year,” and “LTE does give us a 30 percent to 40 percent lift in network efficiency, but at current growth rates, that equates to only about a year’s increase in traffic”. Remarkably that 40 percent figure is not only far less than the growth rates projected by Cisco and assumed in the Federal Communications Commission’s October 2010 working paper, but it also contrasts dramatically with the figures AT&T itself presented when it announced the planned takeover of T-Mobile in March last year.

Why might AT&T’s data volumes have fallen so far short of the growth expected less than a year ago? Two obvious explanations stand out: it seems that offload to Wi-Fi is becoming far more successful than many expected, and AT&T is now cracking down on the top 5 percent of users of its unlimited iPhone data plans.

[Farrar is President of Telecom, Media and Finance Associates, a consulting and research firm]

Rep Conyers concerned about delays in LightSquared approval

Rep. John Conyers (D-MI) urged Federal Communications Commission (FCC) Chairman Julius Genachowski to move forward with his agency's review of controversial wireless start-up LightSquared.

"I write to express concern about delays in the approval process involving LightSquared's proposed 4G-LTE wireless broadband network," Rep Conyers wrote in a letter sent Feb 8. "I strongly urge the Commission to move with urgency to fully test potential solutions to the LightSquared-GPS interference issue employing transparent, fact-based methodologies, common-sense standards and independent testing facilities." Rep Conyers argued that LightSquared would expand wireless broadband access and increase competition in the wireless industry. "The U.S. wireless sector is in need of increased competition," Conyers wrote, noting that there are only four national carriers, with AT&T and Verizon controlling about 60 percent of the market. "Millions of Americans, especially in rural areas, lack even a single adequate wireless broadband option, with little hope on the horizon unless new providers enter the market," he wrote.

ACA Seeks Rejection Of Telco-Sought Modifications That Would Skew FCC’s Broadband Support Program

The American Cable Association called on the Federal Communications Commission to retain balance in the new Connect American Fund (CAF) regime and reject modifications that seek to turn back the clock and maintain the old pro-incumbent system. Instead, the FCC should continue to ensure that the CAF delivers affordable broadband service to consumers and businesses located in some of the most difficult communities to reach efficiently and in a competitively neutral manner. ACA raised objections to some of the proposed CAF modifications, including those proposed by the United States Telecom Association (USTA). In ACA's view, many of these changes would, if adopted, misallocate resources, distort competition, and delay broadband investment by the private sector.

Twitter and the incredible shrinking news cycle

[Commentary] In the not-so-distant past, news generally tended to travel in a few well-worn paths. Either it was reported by a newspaper, or it appeared on television at noon or 6 pm, or it was mentioned on a drive-time radio show — and those involved usually had plenty of time to report it and produce it. The arrival of CNN and 24-hour news changed all that, however, and Twitter and Facebook have changed it again: now, the news is just as likely to appear in a tweet, or to be posted as a status update by someone who is directly involved in the event. In a nutshell, this means that the value of a simple “scoop” or breaking news report is declining rapidly — and that might just be a good thing.

Facebook Wins Madison Ave.'s Hearts And Minds, Topples Google

Facebook has emerged as the “strongest” digital media brand among advertisers and agency executives, replacing stalwart Google, according to the 2012 edition of an annual survey of ad industry perceptions about the media brands they use to advertise with. The results, which are based on annual polls of thousands of advertisers and agency executives conducted by Advertiser Perceptions Inc., are to Madison Avenue what J.D. Power’s annual awards are to the automotive industry. The score goes beyond simple metrics like customer satisfaction to probe other key attributes that ad executives use to value media, including ad results, audience and the image of a media company's brand.

Chicago companies are creating apps to help users connect in the real world

A new crop of local startups is aiming to help people leverage technology and their online networks to derive real-world benefits. Buzzwords are being thrown around like Social Media 2.0 and social business, but now that these networks are maturing, people are looking to harness their power. Industry veterans say there is a growing desire for more than just “ambient intimacy,” the feeling of being close to someone via status updates, tweets or blog posts. Startups are creating tools not only to generate new introductions but also to help improve existing relationships, especially in the workplace.

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