Inexpensive Wi-Fi That Travels With You

Image by Global X via Flickr

By THOMAS J. FITZGERALD

Wi-Fi is everywhere.

Or so it seems until you really need it and there is no coffee house with a free hot spot. Or when you don’t want to pay a fee to connect at the airport or a hotel for an hour.

Our pockets and bags are filling with Web-connected devices: laptops, smartphones, netbooks, tablets, e-readers and even cameras. But to connect one when Wi-Fi is not available means using a cellphone network, and that usually requires buying a new data plan for each device.

The cost-cutting solution might be to create your own personal Wi-Fi hot spot, a cloud of Internet connectivity to keep with you wherever you go. Not only can a personal hot spot provide a single point of access for all of your devices, it can be shared with friends.

The options are growing. You can buy a simple, slim unit that fits in a pocket or ones that can shift from 3G to speedier 4G networks. You can convert some cellphones into hot spots, while a few new phones now come with hot spots included. I tried several such options while traveling and in my daily routine to see what they offered.

The Novatel MiFi 2200, available from Verizon Wireless ($29.99 with a two-year contract) or Sprint (free after $50 rebate and with a two-year contract), is a Wi-Fi hot spot small enough to slip into a shirt pocket. It is a mysterious-looking object with no screen and a single button.

It wirelessly connects to a 3G cellular network just like a phone, but it also broadcasts a Wi-Fi signal to the surrounding area. Devices within a 30-foot range can connect. I used the MiFi while traveling by car from Boston to New York. Having the coverage brought peace of mind when using Google Maps on my iPod Touch and my laptop to guide me around Brooklyn.

Still, 3G speeds can be slower than what is available at land-based hot spots. Back at home, downloading my daughter’s favorite videos was faster on our home wireless network.

Verizon’s monthly data plans for the MiFi are $39.99 for 250 megabytes of data, or $59.99 for 5 gigabytes, with extra charges for exceeding those limits. Sprint charges $59.99 for 5 gigabytes and extra for exceeding limits. Another pocket-size option, the Overdrive 3G/4G Mobile Hotspot, from Sprint ($49.99 with a two-year contract), is slightly thicker than the MiFi but comes with more features. The first is speed. It can connect not only to Sprint’s 3G network, but also its new and speedier 4G network. The 4G network is not yet available nationally, but if you are in one of the 33 cities covered, including Seattle, Atlanta and Houston, speeds are fast. (Sorry, New York is not included.)

Another feature that was useful: a bright screen that displays information like remaining battery life, signal strength, the hot spot’s name and password and number of connected devices. The monthly data plan is $59.99, with unlimited 4G usage and a 5 gigabyte cap on 3G and extra charges for exceeding it.

The Clear Spot, from Clearwire, is another 4G option. In fact, it uses the same 4G network as Sprint (Sprint is the majority owner of Clearwire.) The Clear Spot is bigger than the Overdrive and probably not ideal to keep in your pocket during use; it requires a U.S.B. modem, with pricing from $69.99 to $224.99 depending on features. But if your goal is 4G speeds, the Clear Spot delivers.

Not all areas of each city are covered by the network so reviewing the company’s coverage map beforehand is helpful. The Clear Spot costs $49.99 and supports up to eight devices within a range up to 150 feet. Service plans with unlimited access start at $40 a month and a U.S.B. modem can also be leased for $3.99 a month. A plan offering 3G speeds in areas outside the 4G network is also available.

The CradlePoint PHS300 ($99.99 at Amazon), works with dozens of phones and also U.S.B. modems. Depending on your carrier, it may work with your phone’s existing data plan or require one that allows tethering. I used one with a BlackBerry Storm; after powering on the PHS300 and connecting it to the BlackBerry, I was viewing Web pages on my laptop in just under a minute and the battery lasted two hours and 20 minutes. The PHS300, from CradlePoint Technology, based in Boise, Idaho, is the same size as the Clear Spot.

The latest way to create a mobile hot spot is with cellphones. This can eliminate the clutter of carrying and charging an extra device. Through Verizon, the Palm Pre Plus ($49.99 with two-year contract) and Pixi Plus (free with a two-year contract) include this option.

Using a Pre Plus with an iPad, I was online and viewing Web pages in about 15 to 30 seconds after waking the iPad from power-save mode. Also useful, the phone chimed when the iPad connected, letting me know I was ready to surf.

Using the phone as a hot spot quickly drained the phone’s battery, even with light surfing. Verizon is now waiving its $40 monthly fee for the hot spot feature. Monthly data plans for unlimited access start at $29.99, which could be an alternative for iPad owners. Starting Monday, Apple will no longer offer its unlimited data plan for the iPad 3G.

More phones with personal hot spots are on the way. Sprint’s HTC EVO 4G, which can run on Sprint’s 4G network, is expected Friday ($199.99 with a contract and rebate; plans for both calling and data begin at $69.99 plus a $10 premium data fee and $29.99 a month for the hot spot feature).

Google’s recently updated Android operating system, version 2.2, includes a hot spot feature and is expected to be made available soon. But not all Android phones will support that function.

Software can turn many new and older phones into hot spots, too. WMWifiRouter, from Morose Media, based in the Netherlands, works on a variety of phones. I used it on an HTC Touch Pro2, which runs the Windows Mobile operating system. The software ($19.99 at wmwifirouter.com) can be downloaded directly to the phone.

JoikuSpot (joikushop.com) supports the Symbian operating system, including many phones from Nokia and Samsung. Depending on your tolerance for risk, some phones like the iPhone and some Android phones, can be hacked to work as hot spots. Steps for hacking are posted across the Internet, but you risk voiding a phone’s warranty.

There was no one solution that was best for all users in all situations. It depends on the cellphone service you have, the devices you own and where you live or travel. With a laptop, an iPod Touch and maybe an iPad in the future, I like the idea of not carrying around yet another device.

After all, without having to depend on coffee shops for Internet access, I may also be carrying around my coffee.

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The Demise of Datebooks - NYTimes.com

Image by Yes, i'm guccio via Flickr

By VIRGINIA HEFFERNAN

I miss my Filofax datebook, with its six rings and dark red leather binder. I had a green one first, with a calendar that cast each week across two cream-colored pages. Back then, at age 30, I was not busy enough to need a whole page per day, which some Filofax calendars provide, but far too busy, or so I liked to imagine, to fit a week’s activities on a single page. I left that green one in a taxi and replaced it with a red one. Old reddie is still around, with my life during half of 2007 memorialized. Even when I started half-heartedly to use iCal, Apple’s personal-calendar program for the Mac, I lugged around the Filofax in case I needed — I don’t know — the address book? The dry-measure equivalent for “bushel”? The dialing code for Saudi Arabia? The size conversions for tailors (“Glove sizes are the same in every country”)? The centigrade temperature in Accra in May?

Image via Wikipedia

Something, surely. Carrying a Filofax, with all the inserts that came standard with it, made me feel substantial, cliquish and secretive. British. Like a person who keeps close at hand many bankers’ private lines and Mandarin phrases and measurements for handmade shoes. The apparatus of the Filofax circumscribed and elevated my identity. It also liberated my imagination by allowing for such elegant expression of it; various sketches and coded notes-to-self, in blue ink, pervade the pages of the 2007 book. When I had time on a train or at Starbucks, I used to make lists, often plans for self-improvement.

Image by Spinstah via Flickr

Google Calendar, the online scheduling tool that I turned to after iCal, does none of this for me. I share mine with my husband, whose calendar is now superimposed on mine, so that we can sync up our trips, meetings and doctors’ appointments. I find plenty of room for error and irritation in the entering of appointments and synching of devices. My appointments — or “events,” as Google Calendar calls them — are also freighted with reminders, so much so that the many e-mail prompts it sends me in the days before an event sometimes eclipse the event itself.

But I rely on the e-mail reminders because I dislike consulting the calendar itself. It shows, by default, a week per screen and requires, when I’m on my laptop, that I scroll down if I want to see the hours after noon. I find I’m not close to busy enough to pack those long hours with events. At a glance, then, my week looks like a wide gray sea with the odd piece of flotsam in it. It does not look — as did the Filofax week, which always had some things furiously circled or underscored like “deadline” or “birthday!!!!” — like a manuscript, a memoir, a diary.

As a committed user of the BlackBerry, Kindle, MacBook Pro and World Wide Web, I rarely get nostalgic for print — for broadsheets or magazines or even books. So I surprised myself by bridling at Steve Jobs’s boast, when introducing the Apple iPad in January, that the device has “a great calendar.” It never occurred to me that people liked digital calendars; these things lack personality, except as nags. As I discovered after trying the iPad, what Jobs must have meant was that you can get a horizontal view of the iPad calendar to see a whole week, no scrolling. You can also tap on an event to see it up close. As on the iPhone, you can also send information from an e-mail invitation straight to the calendar, and tap the name of a location noted on the calendar to bring up Google Maps, which promptly shows you where to go. I’m not sure all that “at your service” is personality, or maybe it’s the personality known as officious.

But what else can a calendar do? It’s hard to remember, surveying my dull Google version (“parents in town,” “book club”), that a Filofax was also a place for plot arcs, self-invention and self-regulation. It was, in every sense, a diary — a forward-running record, unlike backward-running blogs. The quality of the paper stock, the slot for the pen, the blank but substantial cover, the hints of grand possibilities that came with the inserts — all of these inspired not just introspection but also the joining of history: the mapping of an individual life onto the grand old Gregorian-calendar template.

In 1994, Nicholson Baker published an essay, “Discards,” lamenting the destruction of library card catalogs. “Nobody is grieving,” he wrote. I know I wasn’t. Even when he compared the card catalog to a literary agent’s Rolodex — bulging with cards that should be entries in literary history — I was unmoved. Catalogs and address books seem made to be digitized. But now that I’ve shelved my Filofax in favor of a calendar program that seems somehow to flatten existence, I realize that another year is passing without my building up the compact book of a year’s worth of Filofax pages that, every December, I used to wrap in a rubber band and put on a shelf, just as my new refills came in the mail. Nobody is grieving. Well, I’m grieving now, Baker. You never know what you’re going to miss.

Points of Entry: This Week's Recommendations

LEATHER-BOUND APP
Beautiful Filofaxes — alligator-bound for $2,300! — chronicle experiences, not events. Why not undigitize one part of your life? Filofax.com.

DAY JOB
An Aztec calendar, engraved in ceramic tile, by woodbyderaud. An abstract one, quilted, by Cactus Rose Quilts. A Mayan one, hand-tooled on a purse, by Izachel. Watch your life pass by the handmade way: find a calendar on Etsy.com.

GETTING THINGS DONE
Organization fanatics love SmartTime Pro, which, while arranging scheduled events to your liking, can also “find time for your tasks” — including minor errands like, as SmartTime proposes, “unjam paper in copy machine.” Demo at leftcoastlogic.com.

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Getting What You Pay for on the Mobile Internet - NYTimes.com

Image via Wikipedia

By KEVIN J. O'BRIEN

BERLIN — When TeliaSonera, the Nordic telecommunications operator, switched on the world’s fastest wireless network last December, customers quickly ratcheted up their consumption of mobile data tenfold.

Besides reaffirming the soundness of the operator’s investment in the new technology, called Long Term Evolution, or L.T.E., the data smorgasbord confirmed another truism: the days of flat-rate mobile data rates are probably drawing to a close.

All-you-can-eat plans — as they are known in the industry — were introduced when the mobile Web was in its infancy and demand was profitable and manageable. But with traffic booming, reflecting the growing popularity of smartphones, social networking and downloading music and video, network operators fear that flat-rate plans will eat into profits or even fail to cover costs.

The result is likely to be higher prices for consumers.

“Finding a way to make mobile profitable in the medium and long term is one of the industry’s big priorities,” said Mike Roberts, an analyst at Informa Telecoms & Media in Chapel Hill, North Carolina. “We are now at the early stages of figuring out a way forward.”

Even before it spent 500 million Swedish kronor, or $70 million, to switch on its L.T.E. network last year, TeliaSonera began introducing pricing plans with download limits as advances in the third-generation technology that preceded L.T.E. led to an explosion in traffic.

“In 2009, the mobile data on our network in Sweden increased by 200 percent but the number of subscribers increased just 60 percent,” said Anna Augustson, vice president for communications mobility services at TeliaSonera in Stockholm. “Clearly, it was not a sustainable model from a business perspective to have a single, flat rate.”

Last year, TeliaSonera began selling a series of 3G mobile broadband data plans with monthly limits ranging from 2 gigabytes to 20 gigabytes a month, for 39 to 319 kronor.

TeliaSonera is selling an introductory L.T.E. network plan with unlimited downloads for 4 kronor a month. But by July, the operator plans to limit downloads to 30 gigabytes and charge 599 kronor for the service, almost twice the cost of its 20-gigabyte 3G plan.

In exchange, TeliaSonera’s L.T.E. users will get download speeds of 20 to 40 megabits a second, about 10 times those on its 3G network.

“We feel it is important for our customers to have a choice,” Ms. Augustson said. Instead of all you can eat, the new industry mantra, she said, is: “You get what you pay for.”

At least one major operator is doing likewise. In Spain last November, Vodafone, the largest European carrier, introduced Calidad Oro — Gold Quality — a premium plan for business users for €49, or $66, a month that guarantees fast service without monthly limits on downloads.

The advent of tiered pricing for mobile broadband is new, but, in a sense, it is also a throwback to the early days of the technology, when operators imposed often unrealistically high download fees that scared off consumers and delayed the development of the mobile Web.

Eventually, operators began selling all-you-can-eat plans, first in the United States and then in Europe, to ease consumer angst about running up big bills. The plans attracted users and helped speed the technology’s development. Now, some operators are moving toward sophisticated forms of metered pricing based on speed and consumption, striving to balance profitability and consumer satisfaction.

Soon, the biggest operators are likely to follow with plans that redefine how most consumers purchase wireless data. Top executives at AT&T, Verizon Wireless, Vodafone, Deutsche Telekom and Telefónica have all recently called on the industry to move away from flat-rate data plans, although only Vodafone so far has attempted a tiered pricing plan.

At AT&T, the No.2 wireless carrier in the United States, after Verizon Wireless, the use of mobile data surged 5,000 percent from 2007 through 2009 after the operator became the exclusive U.S. seller of Apple’s iPhone, which has helped popularize the mobile Web. But it has also strained AT&T’s wireless network at peak times in urban areas in New York and California.

“In light of the limited natural resource of spectrum, we have to look at the ways of conserving spectrum,” said Mark Siegel, an AT&T spokesman in Atlanta. “We have had to invest billions in our network to keep ahead of this demand. This may also require a different way of looking at pricing on the part of the industry.”

Operators do not disclose whether their mobile data services are profitable, although analysts say they are and point to the industrywide move to build L.T.E. networks, which are essentially mobile broadband networks, as the future for a business where revenue from voice services will play an ever-shrinking role.

Mobile data traffic levels are expected to continue climbing as the use of bandwidth-eating smartphones increases and operators around the world follow TeliaSonera’s example and install their own L.T.E. high-speed networks.

The number of mobile broadband users worldwide is forecast to increase 55 percent this year, to 437.8 million from 282.5 million in December 2009, according to Informa, the telecommunications research firm. By the end of 2014, the number of mobile broadband users is projected to reach 2.1 billion.

Over the same period, the level of mobile data traffic on the networks of the world’s carriers is expected to rise 22 times, to 15.1 billion gigabytes from 674 million gigabytes. But without changes in pricing, operator revenue will rise 12 percent a year through 2014, according to Informa, just a fraction of the 49 percent projected annual increase in subscribers or the 86 percent annual increase in data traffic.

Operators are just beginning to link the price of a service — in this case mobile broadband — to the costs to a mobile network, said Kenneth Frank, the president of solutions and marketing for Alcatel-Lucent, a network equipment maker. “There is going to be so much creativity about pricing. We are only seeing the beginning,” Mr. Frank said.

Steve Smith, an analyst at Coda Research Consultancy in Guildford, England, said unlimited flat rates would not disappear but would become much more expensive. “Operators will have to work hard to get their tiers ‘right,”’ Mr. Smith said.

Over time, consumers will have many options for buying customized wireless broadband plans, said Pat McCarthy, a vice president for global marketing at Telcordia, a maker of bandwidth management software for operators based in Piscataway, New Jersey. Those may not mean higher costs for the average user, but heavy users may face higher bills.

“The problem with mobile broadband so far has been most of the revenue it has generated has gone to over-the-top Internet content services, not to the operators,” said Mr. McCarthy, who is based in Galway, Ireland. “That’s what they are trying to change.”

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Tensions Rise for Twitter and Outside App Developers - NYTimes.com

Image via CrunchBase

By CLAIRE CAIN MILLER

SAN FRANCISCO — It was the beginning of a beautiful relationship.

Twitter made it easy for programmers outside the company to build 70,000 applications that made the microblogging service more usable. Without them, people would not be able to post a photo, shorten a URL, monitor several Twitter accounts at once, easily use the service from a cellphone or search for people to follow.

Because of that, Twitter grew so fast that no me-too company could mount a serious challenge. People now write 50 million Twitter posts a day, up from just 2.5 million at the beginning of last year and 5,000 in 2007.

The outside developers did it all at no charge because Twitter allowed them to make money from advertisers or Twitter users willing to pay for apps. These programmers — who will gather this week in San Francisco at Chirp, Twitter’s inaugural developer conference — are starting to feel that life is getting a little more complicated.

Serious tension was starting to develop long before the conference, where Twitter is expected to announce ways it will make money, which could include advertising or paid accounts for businesses.

Developers fear that if Twitter’s engineers build the same features that they have, Twitter could transform overnight from generous benefactor to arch competitor to their start-ups.

The tension is becoming more acute as Twitter matures and develops the resources and desire to buy or build its own version of some of the outside apps. On Friday, Twitter announced that it had acquired Atebits, which makes Tweetie for the iPhone and Mac, and that it had worked with Research In Motion to build an official BlackBerry app. That has other start-ups that make mobile Twitter apps wondering if there is any room left for them.

“When we launched, Twitter was incomplete, so developers rushed to fill those holes, but eventually we’re going to have to build a lot of features in because they should be there,” Evan Williams, Twitter’s co-founder and chief executive, said in a recent interview. “We want to set those expectations.”

Fred Wilson, the Union Square Ventures partner who invested in Twitter and serves as a director, echoed that sentiment in a blog post last week that immediately put many developers on edge. “I think the time for filling the holes in the Twitter service has come and gone,” he wrote. “Twitter really should have had all of that when it launched or it should have built those services right into the Twitter experience.”

Pete Karl is an engineer who builds Twitter apps at the Digital Influence Group and his own start-up called Lion Burger. “I’m waiting for the other shoe to drop,” he said. “Before, I think developers had the upper hand. But now it’s time for Twitter to try and make some money, and I think they want to create a situation where the scales are tipped more in Twitter’s favor.”

For the technology industry, this is a familiar story. Giving away technical secrets to those who want to use your product to build their own might seem counterintuitive to most companies, but it is a common path to success in the tech world. Microsoft, Apple, Google and Facebook have all, to varying degrees, opened their platforms this way.

It can be a stunning source of growth.

“Embracing the openness leads to ubiquity, and if you can embrace that ubiquity, you can make money,” said Mark C. Stevens, a lawyer for start-up companies at Fenwick & West in Silicon Valley.

But invariably, the provider and the developers bump against each other. “That’s how it always is when you develop for a corporate-owned platform,” Dave Winer, software developer, blogger and visiting scholar at New York University, wrote last week. “You have to make peace with that reality before you write your first line of code.”

Microsoft, for example, became ubiquitous in large part because of all the tools, like memory managers, that outside developers built. Once Microsoft built memory managers into Windows, those start-ups became irrelevant.

Twitter has been unusually free about letting developers tap into its data and technology, through what is known as an application programming interface. Sometimes it gives developers certain tools, like geolocation for Twitter posts, before it uses them on its own site, and developers can use the data and create a site or app without signing any contracts or even alerting Twitter.

“The problems we’re solving are so big that we need a lot of people working on them and we need to give them the same level of access,” said Ryan Sarver, the director of platform at Twitter.

If developers build something Twitter wants, the company has three options — let it exist separately, create its own version, or buy the start-up, as Twitter did in 2008 with Summize, which created a Twitter search engine, and last week with Atebits.

“For every platform ever, it’s a question of what should be left up to the ecosystem and what should be created on the platform,” Mr. Williams said.

Developers are rapidly learning that truth. Heypic.me is an iPhone app for posting photos to Twitter and to a Web site that shows Twitter photos on a map of the world.

Twitter has been extremely open with its data, said Heypic.me’s developers, Andrew Seigner and Robert Manson. When the developers asked for more geolocation data, Twitter promptly gave it to them. But they are aware of the risks. “When you go to write a Twitter application, you almost wonder, is Twitter going to come out with the same feature in a month and blow me away?” Mr. Seigner said.

Their fears were realized when Twitter built a similar site for the South by Southwest conference. They sent Mr. Williams a Twitter message asking if the site foreshadowed future Twitter sites. “If so, you have put us out of business,” they wrote. Mr. Williams responded that it was a one-off site.

As with all relationships, the tension could worsen once money is involved. That is a concern for companies like CoTweet, a San Francisco start-up that offers tools for businesses to manage their Twitter accounts by tracking conversations with customers and letting multiple employees respond.

Companies like Ford and Coca-Cola pay for the service. But Twitter has said it will introduce paid accounts for businesses, including a tool for multi-author accounts that was inspired by CoTweet’s. (CoTweet was acquired last month by the e-mail marketing firm ExactTarget.)

Both Mr. Williams and Aaron Gotwalt, co-founder of CoTweet, said they were confident that companies would pay for both services, because they would also offer different things.

Twitter has given some hints about where developers will have the most luck. Mr. Williams says Twitter has “a very complementary relationship” with start-ups like CoTweet that build apps for specific audiences. The need to discover people on Twitter and to search for the most relevant posts is so big that many people will be able to do it, Mr. Sarver said.

Mr. Wilson, who said he was not speaking on behalf of Twitter, said that big businesses would also grow from social games on Twitter and sites that group posts about a certain topic, like movies or job listings.

One of the goals of the Chirp conference is to shepherd developers in the direction that will be most useful to them — and to Twitter.

“There are things that are not good opportunities that people will probably be disappointed if they invest in,” Mr. Williams said. “But we also think there’s a whole bunch of other stuff that we’re not interested in doing or have no plans to do.”

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Apple vs. Google

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How the battle between Silicon Valley's superstars will shape the future of mobile computing

By Peter Burrows

On Jan. 5, Google (GOOG) did a very Apple-like thing. In a presentation at the Googleplex in Mountain View, Calif., the 11-year-old search behemoth unveiled Nexus One, a stylish touchscreen smartphone that runs on the company's Android operating system, is sold through a Google-operated retail Web site, and greets the market with an advertising tagline ("Web meets phone") as simple and optimistic as the one Apple used in 2007 to introduce its iPhone ("The Internet in your pocket").

On the same day, Apple did a very Google-like thing. Steve Jobs, the king of splashy product launches and in-house development, announced a strategic acquisition. For $275 million, Apple purchased Quattro Wireless, an upstart advertising company that excels at targeting ads to mobile-phone users based on their behavior.

When companies start to imitate one another, it's usually either an extreme case of flattery—or war. In the case of Google and Apple, it's both. Separated by a mere 10 miles in Silicon Valley, the two have been on famously good terms for almost a decade. Jobs and Google CEO Eric Schmidt, both 54, spent years in separate battles against Microsoft (MSFT) while Schmidt was at Sun Microsystems (JAVA) and Novell (NOVL). Over time, they went from spiritual allies to strategic ones. When Apple had an opening on its board in 2006, Jobs tapped Schmidt. "Eric is obviously doing a terrific job as CEO of Google," Jobs said at the time. Schmidt, meanwhile, called Apple "one of the companies in the world that I most admire."

Tensions in Silicon Valley's special relationship began to emerge in late 2007, when Google announced plans to develop Android for mobile phones. Apple had unveiled its iPhone in January of that year, and it was clear that the two companies would spar in the smartphone business. Still, both were niche players, with more formidable rivals in companies like Nokia (NOK), Samsung, and Research In Motion (RIMM). Only after software developers began creating thousands of mobile apps, and it became clear that phones would become the computers of the future, did the conflicts begin to grow serious. Last summer, Apple refused to approve two Google apps for sale to iPhone users, raising questions about how much of a Google presence Apple would allow on its devices. In August, Schmidt gave up his board seat. "Unfortunately, as Google enters more of Apple's core businesses," Jobs said at the time, "Eric's effectiveness as an Apple board member will be significantly diminished, since he will have to recuse himself from even larger portions of our meetings."

Now the companies have entered a new, more adversarial phase. With Nexus One, Google, which had been content to power multiple phonemakers' devices with Android, enters the hardware game, becoming a direct threat to the iPhone. With its Quattro purchase, Apple aims to create completely new kinds of mobile ads, say three sources familiar with Apple's thinking. The goal isn't so much to compete with Google in search as to make search on mobile phones obsolete. "Apple and Google both want more," says Chris Cunningham, founder of the New York mobile advertising firm Appssavvy. "They're gearing up for the ultimate fight."

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Apple spokeswoman Katie Cotton declined to comment on the company's advertising plans or its relationship with Google. Google spokeswoman Katie Watson said the company would not make executives available for this story. She did provide a statement, attributed to Vic Gundotra, Google's vice-president of engineering: "Apple is a valued partner of ours and we continue to work closely with them to help move the entire mobile ecosystem forward."

THE MOVE TO MOBILE

The tech industry has had its share of legendary rivalries: IBM (IBM) vs. Digital Equipment Corp., Microsoft vs. Netscape, America Online vs. Yahoo! (YHOO) Apple vs. Google could dwarf them all. Both companies are revered by consumers with a passion usually reserved for movie stars and pro athletes. They have multibillion-dollar war chests, visionary founders, and ambitions for smartphones, Web browsers, music, and tablet computers that set them on a collision course.

The key battleground in the near term is mobile computing. Analysts who once tingled when talking about the Internet are getting that same old feeling over mobile's potential. Morgan Stanley's (MS) Mary Meeker predicts that within five years more users will tap into the Internet via mobile devices than desktop PCs. Desktop Internet use led to the rise of Google, eBay (EBAY), and Yahoo, but the mobile winners are still emerging. "Now is the time to get going," says Doug Clinton, an analyst with Piper Jaffray (PJC). "It's about winning the battle today rather than getting into the fight tomorrow." Billions of dollars are up for grabs in selling phones, software, and services.

The money in mobile advertising is small—about $2 billion last year, according to researcher Gartner, compared with $60 billion for the overall Web. But figuring out how to make mobile advertising more profitable is a lot more important than merely getting in as the hockey-stick curve begins to move upward. A company that can nail mobile ads and share the wealth with the growing legion of app developers—freelance software writers who create all those sometimes-useful (Business Card Reader), sometimes time-killing (Flick Fishing) mobile programs—could pull in the best of the lot. Create the strongest ecosystem of apps and devices, and, the thinking goes, you leave rivals gasping to keep up. "The mobile platform that creates the most ways to make money wins," says David Hyman, chief executive of MOG, an Internet music service that's developing mobile apps.

Apple has a substantial lead in establishing this ecosystem. Developers have created more than 125,000 mobile applications for Apple devices—seven times as many as exist on Android—and the endless diversity of apps has helped the iPhone quickly pick up 14% of smartphone share, compared with 3.5% for all the Android-powered devices put together, according to estimates by the market research firm IDC. But in the past few months, an increasing number of app developers have complained that they couldn't make money on their work. Free apps have become the norm, and very few sell for more than 99 cents. Some developers have profited by embedding ads in their apps, but the payments tend to be insignificant since the ads are usually smaller, less effective versions of their Web banner forms. According to a source familiar with his thinking, Jobs has recognized that "mobile ads suck" and that improving that situation will make Apple even harder to beat.

Not one to shy away from a challenge, particularly when it offends his aesthetic sensibilities, Jobs and his lieutenants have discussed ways to overhaul mobile advertising in the same way they had revolutionized music players and phones, say two sources close to the company. The sources did not reveal specific plans at Apple but say there are several possible ad approaches. Apple could employ its user data and geo-location technology to make ads more relevant, so that a user cruising the mobile Web at lunchtime could receive an ad for specials at a nearby restaurant. It could also use the iPhone's capabilities in creative ways—say, having someone shake the device to win a rebate the same way they do to roll dice in games.

To pull any of this off, Apple realized that it needed a network of advertisers and the technology to target ads to customer behavior. In fall 2009, Apple entered the bidding for AdMob, the leader in the nascent mobile advertising industry. It was a target that made perfect sense; more than half of the AdMob ads served up on smartphones ended up on the iPhone or iPod Touch (which also run Apple's apps). But before Apple could close the deal, Google intervened, announcing on Nov. 8 that it would pay a staggering $750 million for the company.

Outbid on its first choice, Apple quickly turned to Waltham (Mass.)-based Quattro Wireless, AdMob's closest rival. Tellingly, when Apple announced the deal, Jobs gave Quattro CEO Andrew Miller the title of vice-president of mobile advertising. Vice-president is a rare title at Apple, and Miller is the first one ever assigned to online advertising. Apple has also hired an M&A specialist to better compete for deals (box).

For almost any company, taking on Google in search advertising would be folly. Google dominates traditional search with more than 65% of the market, and its share of search on mobile phones is even more imposing. More than a million businesses bid on keywords to show up alongside search results, and most experts have assumed a migration to mobile devices as more people use them for computing tasks.

Yet mobile search hasn't taken off. Gartner estimates that $924 million was spent on mobile search ads worldwide last year, less than 2% of overall Internet advertising. The problem is that user behavior isn't consistent between desktops and mobile devices. Many people shy away from calling up minuscule search bars on their phones and pecking out queries using cramped keyboards. Search ads tend to be less effective, too, since people are reluctant to give over the one browser screen they have on a phone to an ad. In many cases, apps are far more effective; it takes fewer steps to find the best local sushi joint using apps from Urbanspoon or Yelp than to type out "best local sushi" into a search bar and navigate the results. "Eric Schmidt has said that the search problem is 99% solved, but, boy, is that self-serving," says Jonathan Yarmis, research fellow with the consulting firm Ovum. "The fact that I have to go to a search bar at all is a sign of failure."

Apple has a vault of valuable data that can help drive an ad business. It knows precisely which apps, podcasts, videos, and songs people download from iTunes; in many cases it has detailed customer information such as credit-card numbers and home addresses. That gives Apple a chance to blend advertising and e-commerce in new ways, particularly after the acquisition of Quattro. The startup already works with advertisers, including Ford (F), Netflix (NFLX), and Procter & Gamble (PG), to help them figure out when and where to place ads on the sites of publishers, such as Sports Illustrated and CBS News. By tying Quattro's ad-serving technology into its own, Apple would be able to tell advertisers how often and under what circumstances a person clicked on particular ads. "Apple is one of the few brands that could actually go head to head with Google," says Kevin Lee, chief executive of search marketing firm Didit. The technology could also be used on the tablet computer that Apple is expected to introduce later this month.

SAFETY IN NUMBERS

When Google introduced Android in 2007, the company said it would concentrate on developing the operating system software and let traditional phone manufacturers, such as Motorola (MOT) and HTC, make the devices. The strategy was similar to Microsoft's in personal computers, aimed at working with dozens of partners to attack every product area, geography, and demographic. "One or two devices don't matter," said Andy Rubin, head of Google's Android business, after the Nexus One event. "Twenty or thirty or a hundred devices, all running the same software—that's what matters."

Yet the arrival of Nexus One suggests that Google is concerned Android isn't gaining market share fast enough. "The volume, quality, and variety of Android phones in the market today has exceeded our most optimistic expectations," said Google Product Management Vice-President Mario Queiroz at the January announcement. "But we want to do more." The mobile market is so important that Google can't afford to depend on other companies for access; the Nexus One offensive, Google hopes, will establish a foothold in smartphones so the company can control its own fate.

Nexus One isn't without risk. Android hardware makers may balk at having to compete with their supposed partner. "If the Nexus One is any good, why would you buy anything else?" says Edward J. Zander, Motorola's former CEO, who is surprised Google would go so far as to enter the hardware fray. "At least Microsoft never built PCs."

Meanwhile, Google is aware of its vulnerability in mobile advertising and is pushing to make improvements. Schmidt believes mobile ads will one day be more important than PC advertising, largely because of personalization and localization. Although Google declined to discuss its plans for this story, Schmidt has floated the idea that eventually some mobile phones could be free for consumers, with advertising paying the bills. "If Google could do that, they'd be untouchable," says tech consultant John Metcalfe, who has worked with Google on mobile projects. "Apple wouldn't be able to come up with an answer for that."

Of course, Apple and Google could both end up thriving as computing goes mobile. But there will be losers. Microsoft is fading fast in smartphones as device makers shift attention away from Windows Mobile, which doesn't have nearly as many apps or developers as Android and Apple. Nokia, the world's largest mobile-phone maker, is struggling too; its Ovi online store toils in near-anonymity compared with Apple's iTunes store. Even Samsung and LG Electronics, Korean phonemakers long hailed for their advanced technology, are losing ground. "The older cell-phone makers never had to deal with software or software developers," says Shaw Wu, an analyst with Kaufman Bros. "It's just not in their DNA. [But] the world is moving that way."

BING IN THE WINGS?

Some analysts believe the Apple-Google battle is likely to get much rougher in the months ahead. Ovum's Yarmis thinks Apple may soon decide to dump Google as the default search engine on its devices, primarily to cut Google off from mobile data that could be used to improve its advertising and Android technology. Jobs might cut a deal with—gasp!—Microsoft to make Bing Apple's engine of choice, or even launch its own search engine, Yarmis says. "I fully expect [Apple] to do something in search," he adds. "If there's all these advertising dollars to be won, why would it want Google on its iPhones?"

Whatever happens, it's clear that Apple and Google are headed for more conflict. Android is a threat to an iPhone business that has quickly come to represent more than 30% of Apple's sales. Meanwhile, nearly all the growth in search is expected to come from mobile devices, which Piper Jaffray predicts will account for 23.5% of all searches in 2016, up from less than 5% today. That sets the stage for a new main event in the tech sector. "This rivalry is going to accelerate innovation," says Andreas Bechtolsheim, a co-founder of Sun Microsystems and an early investor in Google. "Apple goes pretty fast, but having someone chasing you always makes you go faster. This is going to be good for consumers."

Still, in a battle over the future of computing, friendship will almost surely be a casualty of progress. "You can just feel the tension rising," says Piper Jaffray analyst Gene Munster. "Until the Nexus One, the competition was at arm's length. But the iPhone is Apple's darling. Now it's personal."

Google phone would break industry model

Image via CrunchBase

In challenge to Apple, plans call for it to operate on any network

By Cecilia Kang
Washington Post Staff Writer
Tuesday, December 15, 2009

With Google's disclosure over the weekend that it would launch its own cellphone, the online giant is staking claim to a piece of the fast-growing mobile marketplace and making a direct challenge to Apple's swift rise in the sector.

Google said in a corporate blog on Saturday that it has developed a phone based on its Android mobile operating system and distributed it to employees to try out. Soon after, pictures of the phone surfaced on the Twitter feeds of employees and outside bloggers with details that the device would be launched next month and sold directly to consumers. The new phone would be capable of operating on any network, according to a source close to the company who was not authorized to comment publicly.

Google's approach would run counter to the current practices of handset makers and carriers that partner up in exclusive deals to market and sell phones, and provide mobile service. AT&T, for instance, has been the sole provider of service for Apple's iPhone since the device was launched in 2007. Sprint tied up with Palm for its Pre smart phone earlier this year, and Verizon exclusively runs several versions of Research in Motion's BlackBerry.

In iPhone's case, the exclusivity agreement goes far beyond the choice of service provider. Apple tightly controls the applications that are available for the phone through its iTunes store, and its decision to block a voice application from Google sparked an inquiry by the Federal Communications Commission.

How Google's phone would connect to wireless networks was not clear Monday, and the company declined to comment on its plans beyond its Saturday blog posting. Apple also declined to comment.

But Google's latest plans appear to be aimed at countering that "closed loop" business model with a product that can run any application on any network -- a tactic that reminds experts of the battles between Microsoft and Apple over computer operating systems in the 1980s.

"This is a replica of the open-versus-closed war of the IBM mainframe versus the Macintosh for the mobile space," said Tim Wu, a professor of law at Columbia University. "And Google is settling in for a long war here."

The diverging approaches of Google and Apple, however, touch upon several regulatory debates playing out at the FCC. The agency is reviewing wireless industry practices, including exclusive handset agreements, and examining roaming deals after rural carriers asked for help in forcing bigger providers to share their networks.

Industry experts say any attempt by a carrier to block Google's phone could raise questions about net neutrality in the wireless industry. The FCC is considering proposed new rules that would prevent Internet service providers from blocking content. Wireless carriers have argued that those rules shouldn't apply as strongly to them and that such rules shouldn't prevent carriers from blocking certain devices.

"It will be interesting to see if Google or other handset manufacturers raise concern that consumers might be blocked from using unlocked handsets," said Jason Oxman, senior vice president the Consumer Electronics Association, an Arlington-based trade group. "Whether that is the case today -- that carriers can block you -- is unclear."

Google's apparent approach is the standard practice in Europe, where customers typically pay higher upfront prices to buy phones but can carry them on any network at lower costs and without contract obligations. It's unclear how Google would price the phone, but industry experts say that if the company decides to charge more upfront for the phone, consumers may balk.

"We're not starting with a clean slate here," said Larry Downes, a non-resident fellow at Stanford University Law School. "The question is, who will pay the subsidy?"

Carriers subsidize a large portion of the cost of a phone to attract customers to buy new gadgets. The iPhone, for example, is estimated to cost AT&T about $350 in subsidies in order to offer the device to consumer for $199. In return, it asks consumers to sign one-to-two-year contracts to ensure it recoups the costs of those subsidies. Such exclusive contracts have come under fire recently, with the FCC asking Verizon to explain why it recently increased its penalty for customers who leave contracts early. Last month, Verizon began charging customers $350 instead of $150 for early-termination fees.

And even with the iPhone, its fastest version was initially priced at $599 in 2007 before AT&T began dropping the price. Thirty-three million iPhones have been sold worldwide.

"So this is a very, very different model, but if anyone can pull it off, it would be a Google, because of its brand awareness and ability to market it," Oxman said.

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Mossberg Solution: Iphone vs. BlackBerry

Image via CrunchBase

• By KATHERINE BOEHRET

The old adage that the grass is always greener on the other side of the fence can be extended to our technology cravings. Even the person holding the shiniest new gadget can't help but eye a neighbor who has a different device and wonder, "What does that do that mine doesn't?"

Thoughts like these are especially prevalent when it comes to the devoted owners of BlackBerrys and iPhones. All too often, the people carrying these smart phones are curious about what one device has that the other lacks. This week, I'm going to save you the trouble and outline some of the personal usage ups and downs to each device.

Because I regularly use both gadgets and am accustomed to their different features, I have included fresh observations from five people who recently switched from BlackBerrys to iPhones. At my request, these people kept track of their impressions, noting the things they missed on their BlackBerrys along with things they preferred on the iPhones. This column isn't meant to promote one device over the other; rather, it is a summary of some people's sentiments, combined with my own observations in hopes of enlightening readers. I inevitably left out some differences.

The most outstanding observation from my switch group in favor of the iPhone was an appreciation for its applications, or apps.

They used things like driving directions for the first time because these apps looked and worked better on the iPhone than on the BlackBerry. And they went through a downloading frenzy during which time they found all sorts of apps for the iPhone, such as games, entertainment and those that enhanced business-travel productivity. "Browsing for games. Probably should leave the office now," said one person's notes.

Though Research in Motion's BlackBerrys also run apps (including some of the same ones as for the iPhone), BlackBerry's App World offers only a little better than 2,000 apps. Apple's App Store boasts more than 65,000. A shortcut to the App Store ships preloaded on iPhones. BlackBerry App World is preloaded or virtually preloaded by carriers at their discretion, so a shortcut to App World may not be visible.

My switchers were frustrated by the iPhone's battery life and complained of running low on battery. One person said, "I need to charge my iPhone a couple of times throughout the day which can be inconvenient, especially when traveling. With my BlackBerry I just charged it while I slept and it was good to go for the day."

Granted, these people were all using the iPhone 3GS and had previously used various models of BlackBerrys that ran on slower networks and had smaller screens—two features that require less battery. Still, worrying about running out of juice is a hassle. One person said his iPhone's weak battery was a tribute to the fact that he used it more often and for more things than he did the BlackBerry.

The most obvious difference between iPhones and BlackBerrys are the keyboards. The iPhone uses an on-screen keyboard, while the BlackBerry (except the touch-screen Storm model) uses a tactile QWERTY keyboard. As expected, the switchers had trouble using the iPhone keyboard—especially for the first few days. But after about a week, most people in the group had adjusted well to the on-screen keys and the iPhone's auto-correct feature that fixes mistakes as long as you keep typing rather than stopping to fix an error. One person said, "I was a skeptic, and didn't think the typing would work for me at all, but it actually hasn't been too bad."

Another said typing can be a real challenge at first, but that this could be overcome with a bit of practice.

Several people said they were still able to use their thumbs for iPhone typing as they did on the BlackBerry, though most preferred turning the screen horizontally to do this with slightly larger keys. Some said that they weren't typing quite as fast as with the BlackBerry's QWERTY keys but that they weren't too far off.

The BlackBerry keyboard's static position below its screen means all letters, numbers and symbols must come solely from pressing those keys; this is done by pressing ALT or Shift keys for numbers and symbols. Some switchers noted that pressing a button to change the iPhone's on-screen keyboard from letters to capital letters or numbers took a bit longer than on the BlackBerry.

My switchers were ecstatic about using the iPhone's Safari Web browser. They enthusiastically said searching, browsing and reading were all made much better and more visually pleasing compared with their experiences on the BlackBerry browser.

If you are a BlackBerry user, you know that all received and sent emails are listed on the same screen. The iPhone behaves more like a computer, storing sent emails in a special folder you must back up to open. This takes a little while to get used to.

Some switchers said they wished the iPhone had something like BlackBerry Messenger, the always-on messaging system that works to allow communication between all BlackBerrys.

The iPhone automatically changes its time when you enter a new time zone. BlackBerrys remain set to their home time zone for time stamping all emails with that time—unless you change the time in settings.

RIM prides itself on being able to run multiple applications at once; the iPhone allows this with its own preloaded programs like Mail and Safari, but not with other apps.

One switcher, for example, was frustrated that Pandora, a radio-like app that plays music according to user likes and dislikes, turned off when he opened Mail to read emails while listening to songs.

The BlackBerry's AC adaptor takes up two power outlet spots, while the small, square iPhone plug occupies only one outlet, making it more versatile and able to charge in more locations.

The iPhone only works on one cellular service: AT&T. The BlackBerry is available from Verizon, AT&T, T-Mobile, Sprint and other carriers. My group used T-Mobile before changing to the iPhone's AT&T service.

There will always be something on someone else's device that looks more appealing than the one in your hand.

But the experience of using apps on the iPhone—and the huge selection of apps in the App Store—significantly enhance Apple's device.

RIM is continually improving its own store, but it needs to move quickly to keep its loyal users contented.

—Edited by
Walter S. Mossberg—Email:
mossbergsolution@wsj.com