But what if all of this changed? What if consumers actually enjoyed signing contracts? What if carriers just gave away phones — all of them —  for free?

What do consumers get?

Carriers need to rethink the current model of phone ownership. It’s not working for them or consumers. So let’s propose a new one: phone leasing. It would work like this. A consumer can get a free phone, any model they would like, and can keep it for 12 months. No charge aside from their monthly bill. If there are any issues with the phone, they would most likely still be covered by the manufacturer’s warranty. And any reasonable issues not covered by the manufacturer’s warranty would be covered by the carrier for free.

What’s the catch?

The carrier owns the phone, and it must be returned after the 12 months is up. Moreover, instead of signing a two-year contract, consumers would have to sign a four- to five-year one. But, and this is a big but, when a consumer gives that 12-month-old phone back to the carrier, they’ll get a brand-new one of their choice — every single year of the contract.

What do carriers get out of this model?

Three things: More phone “sales” — lowering the cost of phone acquisition will lead to more contracts; longer contract means more customer loyalty; and leasing instead of selling phones means the phones can be resold once the 12 months is up (a typical iPhone goes for 0-400 on Craigslist). So instead of a carrier purchasing a phone for, say, 0 from a manufacturer and only getting 0 at retail from a consumer, losing 0 in the process, they’ll be able to resell that phone after 12 months for 0-400. This process will be repeated until the contract ends.

But why would a carrier go this route when the churn rate (the percentage of consumers leaving) is so low? More profit. Smartphone adoption is growing, but it would be growing much faster if smartphones were free. Moreover, carriers are basically competing with the same phones (barring T-Mobile, which still doesn’t have the iPhone) and very similar monthly plans. Adding such a plan would be a game-changer that would provide a worthy competitive advantage. Lastly, churn may be low — Verizon, for instance, reported 1.1 percent among 88 million contract subscribers. That equates to 88,000 people, or nearly half the population of Richmond, Va., leaving every quarter. With each subscriber worth .89 of revenue, .8 million worth of churn walks away each quarter.

Why not prepaid instead?

Of course the prepaid phone market is an option, but for most consumers it is not a tantalizing one. Part of the reason could be due to the lack of cachet; the perception remains that prepaid users don’t have good enough credit to get a contract. But an even greater reason is the lack of cutting-edge phones the prepaid market offers. For instance, the iPhone (as well as many popular phones) isn’t available as a prepaid option. And for carriers, on average, prepaid has a higher churn rate and creates less revenue.

Carriers have little choice but to shake up the cellphone market. It’s ripe for a revolution.

John S. Wilson is a freelance writer who focuses on technology, politics and health policy. He writes for NewsOne, The Loop 21, and Mediaite, and can be reached on Twitter: @johnwilson

Image courtesy of Flickr user jason.lengstorf.

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Well well, it looks like Samsung let the cat of the bag a hair early. The company’s Galaxy Note is indeed headed to AT&T, confirmed by several posters in the public area of the Las Vegas Convention Center.

Developing…

AT&T Galaxy Note confirmed at CES, carrier branding and four-button controls originally appeared on Engadget on Sun, 08 Jan 2012 14:13:00 EDT. Please see our terms for use of feeds.

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Continue reading Cricket LTE goes live in Tucson, introduces the Huawei Boltz

Cricket LTE goes live in Tucson, introduces the Huawei Boltz originally appeared on Engadget on Wed, 21 Dec 2011 14:09:00 EDT. Please see our terms for use of feeds.

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We’ve come across an internal document from Bell Mobility that’s bound to raise the hopes of a few good Canadians. Yes folks, we’re talking Ice Cream Sandwich. The carrier to the north estimates that it’ll have Android 4.0 ready for the Sensation in February, which is to be followed by the Raider’s update in March — this handset may be more familiar to AT&T customers as the Vivid. Pulling up the rear, users of the Galaxy S II are to expect the upgrade in April, and while the Optimus LTE is also mentioned, there’s no specific time frame for that one. Certainly estimated release dates don’t always come to fruition, but at least we know what Bell’s aiming for, anyway.

Bell Mobility hints at Ice Cream Sandwich release dates for Galaxy S II, Raider and Sensation originally appeared on Engadget on Sat, 17 Dec 2011 17:17:00 EDT. Please see our terms for use of feeds.

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On Monday, Carrier IQ released detailed information about what IQ Agent can and cannot do, (You can read the full document as a PDF here), revealing its software can track information ranging from URLs to the frequency of application and SMS use, depending on how far down Agent is implemented in the OS. In its most embedded form, IQ Agent can even monitor radio-signaling data. Carrier IQ, however, vehemently denies that IQ Agent tracks keystrokes, contrary to the original findings of whistleblower Trevor Eckhart. This infographic, designed by the EEF’s Parker Higgins, shows keystrokes actually being logged in some devices with IQ Agent installed. We explain why that is below the graphic.

In the EEF’s blog, Peter Eckersley explains that the in some Carrier IQ implementations, keystroke data is being recorded in the log file, but that data isn’t sent back to Carrier IQ and the operators’ database. However, since other applications have access to that log file, that keystroke data could be making its way to other companies. Here’s Eckersley’s detailed but rather technical explanation:

Unfortunately, our current belief is that the layer-4 logging that has been observed, which goes to Android system logs, is in fact being inadvertently transmitted to some third parties and otherwise made available to other applications on the device. This happens when crash reporting tools collect copies of the system logs for debugging purposes. The recipients of such transmissions are unlikely to have anticipated receiving keystrokes, text messages, URLs or location information through such channels, but that can in fact happen on some of the phones to which Carrier IQ has been ported.

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Yankee Group research director Sheryl Kingstone concluded that Carrier IQ and its partners did a horrible job when it came to the public implementation of its diagnostic platform, but she found that there was no nefarious intent behind it. The report also states that keystroke-logging tool found rooted in the depths of Trevor Eckhart’s HTC smartphone was not Carrier IQ’s phone performance monitoring software, but rather a factory testing app that HTC failed to deactivate before shipping.

If Carrier IQ had done a better job at educating customers about the presence and purpose of its app, it might have been welcomed by the public, rather than sued, Kingstone said. The Yankee Group’s consumer survey found that 85 percent of mobile phone using respondents wanted their operators to have access to detailed information about their device’s performance when they contacted a call center with a problem.

Yankee also asked what consumers’ expectations were when they called their operator with a problem. The top three answers were: 1) fixing the problem immediately, 2) remotely diagnosing the problem, and 3) empowering the call center agent to remotely fix it. If you go by Yankee’s data, consumers don’t just want their operators to know what’s going inside their phones, they want them to actively poke around inside whenever there’s a problem. Here’s what Kingstone said on Yankee’s mobile blog:

“It’s an issue of transparency, not malicious intent. Carriers — and especially consumers — want the best possible customer experience, and Carrier IQ’s software aims to do just that. Where it, and device vendors and carriers, erred was in their lack of transparency and failing to enable end-users to opt out of the service. If they had taken the opposite tack, revealing the existence of the software to end-users and providing them a potential option to opt in to ensure a better level of care, there would be no controversy, just better customer service. And that would be a win-win for all involved.”

Carrier IQ needs to be honest about its business model

I agree with Kingstone’s conclusions, so long as Carrier IQ is used only as a diagnostic tool. Networks are complicated things that require endless fine tuning, and on-device performance testing would be critical tool for optimizing those networks. I’d prefer my operator to let me know it’s recording actions on my phone, and then give me a chance to opt out, but the truth of the matter is my operator already knows plenty about me even without software like Carrier IQ’s. It knows where I am, where I’ve been, every SMS I’ve ever sent and every person I’ve ever called. We consumers have no problem with this, otherwise we would have freaked out the first time we ever saw our highly detailed phone bills.

But Carrier IQ is doing more than just selling network diagnostic info to operators, it’s selling — or at least trying to sell — to marketing analytics companies, which don’t own networks to diagnosis. Nielsen is working with Carrier IQ to integrate its device performance data with its own mobile metrics, though it will only to do so only on an opt-in basis, just as it recruits participants for all of its other measurement panels.

And Carrier IQ is definitely shopping its service around to other marketing and analysis companies. Kingstone said the Yankee Group last year investigated the possibility of buying data from Carrier IQ and other network measurement firms, but ultimately decided against it — the data was too technical to be of any much use while privacy concerns would have required Yankee to seek explicit permission from each consumer involved, she said. (The Yankee Group said that it has no current or former relationship with Carrier IQ.)

When Carrier IQ says it’s only selling data to the operators it’s either straight-up lying about the full extent of its business model or its misleading the public about its future intentions. It’s very possible this side business is innocuous, requiring explicit permission from the owner of any phone Carrier IQ tracks. Even if that’s the case, Carrier IQ needs to be upfront about that business model. Hopefully we’ll know more next week, when Carrier IQ is expected to respond to U.S. Senator Al Franken’s (D- Minn.) very detailed questionnaire about its activities.

Who else will get caught in the fallout?

Meanwhile, the voices calling for Carrier IQ’s head are growing deafening. On Friday Google CEO Eric Schmidt condemned the company at a conference in the Hague, saying that Google not only disapproved of Carrier IQ’s implementation into Android – it can not be uninstalled or de-activated – or the company’s methods, which he described as keylogging, the Telegraph reported.

Carrier IQ will most likely become a casualty of its own controversy, but whom else will it drag down? In a GigaOM Pro report, Stacey Higginbotham examines what other entities would suffer (subscription required) if Carrier IQ’s monitoring software winds up being more than it claims to be. Operators’ already fragile reputations are on the line, but Stacey concludes that consumers could wind up being the biggest losers. As faith in the operator and handset vendor erodes, consumers will be less likely to embrace new technologies and services that require a degree of trust to function. Emerging industry like mobile payment and finance as well as telemedicine could be the first casualties.

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The phone includes a pentaband radio, meaning it works fully on both AT&T’s and T-Mobile’s networks. I haven’t tested it on AT&T yet, but a popping a T-Mobile SIM card in has already provided download speeds of 9.4 Mbps.

I shared a brief video overview of the Galaxy Nexus within 24 hours of it arriving, so I was still learning the ropes of Android 4.0. It impressed me then and continues to do so with more usage. The phone has very capable hardware to power Google’s mobile operating system: a 1.2 GHz dual-core processor, 1 GB of memory, fast mobile broadband and a gorgeous 4.65-inch Super AMOLED display with 1280 x 720 resolution. See for yourself:

But no phone is perfect and some may not care for the 5 megapixel camera sensor Samsung used for the Galaxy Nexus. With limited use, I find it to be more than adequate for still images in good light and also for high-definition video capture up to 1080p resolution. During the next week, I’ll try to connect the phone to my HDTV to see the output on a larger screen.

Where there may be gaps in the hardware, the software is excellent. Android 4.0 is the best attempt yet for any company to compete against Apple’s iOS 5 operating system. Google has refined the user interface by bringing the most positive aspects of Android 3.x (aka: Honeycomb) to the smartphone screen. Gmail’s revamp is superb as is the overall consistency of the entire user interface.

It’s not all peaches and cream though: There’s an issue with Facebook integration and I’m seeing some strange text formatting problems in the otherwise very impressive stock browser. And I love how my Google Chrome bookmarks on the desktop are kept in sync with the Galaxy Nexus. In fact, I like Android 4.0 so much, I’m going to install it on my old Nexus One smartphone when time allows.

This week wasn’t all good news though. A demonstration of software called Carrier IQ showed the service to be collecting data from smartphones; mainly on Android devices. The story continues to develop, but some are concerned — rightly so — about Carrier IQ’s lack of transparency. The service is apparently installed at carrier’s requests and consumers aren’t aware of this. Nor is there a choice to opt-out or shut down the service; it simply runs silently in the background.

This type of practice is one of the several reasons I’d rather have a Nexus phone, which doesn’t include any carrier software. My bigger reasons were faster Android updates and the ability to easily customize the phone with other Android software, but diagnostic tools that are hidden in the background got added to my list this week.

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The final chapter of the Carrier IQ saga has yet to be written, but at this juncture, even the rosiest of rose-tinted observers would be hard pressed to find a silver lining. The specter of federal investigation looms larger by the day. Implicated carriers and manufacturers are washing their hands with Macbethian fury. Al Franken is on the verge of going Al Franken. And at the epicenter of all this sits Carrier IQ — a California-based analytics company that has already gone to great lengths to defend its innocence. First, it sought to discredit Trevor Eckhart’s ostensibly damning research with a cease-and-desist letter. Then, CEO Larry Lenhart flatly denied Eckhart’s findings with an impassioned YouTube address. In recent days, the company has markedly softened its stance, arguing that its apps are only designed to meet operator demands and to “make your phones better.” Now, Carrier IQ has elaborated upon these arguments with a more detailed breakdown of how its software functions, and a more substantive defense of its practices. Head past the break to read more.

Continue reading Carrier IQ VP says software poses no threat to user privacy, backs up his argument with metaphor

Carrier IQ VP says software poses no threat to user privacy, backs up his argument with metaphor originally appeared on Engadget on Sat, 03 Dec 2011 09:19:00 EDT. Please see our terms for use of feeds.

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