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Square, the mobile payment acceptance tool, is getting a lot more useful for merchants with version 2.2, which brings loyalty rewards for Square Card Case users, hardware integration with cash drawers and receipt printers and more back-end tools. The new app, which is debuting Tuesday on iOS  and Android , continues the momentum for Square, which is now up to 800,000 customers using the app since launching last year.

With Square 2.2, merchants who integrate with Square’s mobile wallet app Card Case, will be able to now identify and reward loyal users. They can set rewards based on a number of visits or a total amount spent at the business, and when the customer reaches that mark, the merchant can apply a discount to their purchase. It could be something like a 50 percent off discount or a free item. Merchants can tell a customer of the deal when they order and the discount will be noted in a user’s Card Case app.

I just talked with Megan Quinn, Square’s director of products earlier this month about the hands-free payments for Card Case users and I mentioned that there still needed to be a way to reward regular users. Little did I know Square was working on that feature. Quinn said it’s all part of trying to improve the experience between merchant and customers, to turn their interactions into less of a transaction and more of a conversation that builds loyalty over time.

“Meaningful sustained loyalty happens when people visit places where they have a great experience and feel comfortable. We want to turn customers who walk in once into someone who walks in every day,” Quinn said.

This underscores what Square founder Jack Dorsey said at GigaOM’s Roadmap conference last week about how technology tools like Square can highlight and strengthen our humanity by creating more face-to-face interactions. Unfortunately, users aren’t able to track their progress toward a reward on their Card Case app. That seems like a missed opportunity to really displace loyalty punch cards, which not only reward visits but encourage more of them as you close in on your next reward. I’m sure future versions of Card Case will include something like this.

The other improvements in 2.2 include the ability for Square to connect wirelessly to certain cash drawers and receipt printers. So far Square merchants have been giving out email or text receipts, but this will allow them to hand out physical receipts for customers that want it. It also helps Square work better in an existing business that uses certain cash drawers. Square will work initially with the Star Micronics receipt printer and the APG cash drawer Vasario Series.

And 2.2 also offers the ability to better track sales history, resend receipts, and provide refunds. There’s also a new feature that lets merchants customize their tip percentage options.

I like the updates to Square, both in this release and with the earlier improvements to Card Case. It shows that Square is really trying to innovate on both the consumer and merchant side. And it’s emphasizing really frictionless interactions and building consumer loyalty, which I think is key for merchants. People want more value and features but they really don’t want it to bog down their experience. I wish more merchants were accepting Card Case and perhaps with loyalty rewards, they might get into it. But overall, the latest updates show that Square is building out a more robust platform for businesses to work off of. The Square system still appeals mostly to smaller merchants, but as Square adds more features, it’s able to dream about moving on to bigger businesses.

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The word on the street is that Sprint is betting the farm on an exclusive for the iPhone 5. It will commit almost billion to Apple for 30.5 million iPhones and it won’t even start to make money till 2014. Crazy? Yes and no!

Apple has to love this deal–it basically ensures a nice revenue stream for them, even if the world goes into recession and demand for mobile phones stalls. Second, it takes away some of the Android momentum at one carrier where Android has done well. (I know T-Mobile wants an iPhone too, and too bad they are not getting it.) Now for Sprint, I agree there are risks, but they are calculated risks. The exclusivity of iPhone 5 to Sprint is what reduces the risk around this arrangement.

For starters, globally, the average revenue per user for iPhone is about 1.5 to 2 times the average ARPU for all other phones. The numbers are better in the U.S. On an average, in the U.S., average revenue per user for iPhone is about a month, according to Chetan Sharma, principal at Chetan Sharma Consulting. That works out to about ,080 a year.

Now if  Sprint manages to match Verizon’s performance (it added 2.2 million iPhones during the first two months of the launch of the iPhone 4) during the first six months and another million iPhone users in the next six months, it can attract about 3 million iPhone customers to its roster. I am presuming these will be new customers who would switch to Sprint because of the “exclusive” availability of the device on the Sprint network, or they are fed up with AT&T or Verizon.

That works out to about .2 billion in revenues. And given that analysts estimate Sprint to clock in revenues of around billion in 2012, what we are talking about a nice 10 percent bump in revenues for the company. The presence of the new iPhone would also reduce the churn on Sprint’s network and thus would provide the much-needed stability to their revenue stream.

So as I said –crazy yes, but not completely loco!

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Almost everyone who has some product or strategy to optimize on “the cloud.” And now momentum is gathering around the next big technology trend to drive buzzwords: Big data. VMware is no exception, as I found out during an on camera interview with Steve Herrod, CTO at VMware, when he explained what VMware is doing to help databases and data analytics run on virtualized machines.

Herrod didn’t have any products to launch but he said the company is working on ways to run a Hadoop cluster on a virtualized machines, even machines that might be running other workloads. The idea of an elastic Hadoop cluster that can be used on-demand or perhaps in the evening for big analytics jobs, is compelling, and Herrod expects to share more information on this next year, maybe even at our Structure Data conference in March 2011. Check out the video below and see for yourself.

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Amid lackluster BlackBerry PlayBook sales, 1,000 production line workers have been let go at Quanta in Taiwan where the tablets are made. Quanta confirmed the layoff figures to DigiTimes, although the company didn’t comment on specific clients or activities of the former employees. The figure of 1,000 workers is estimated to be half of the total production resources used to manufacture Research In Motion’s tablet computer.

On its most recent quarterly investor call just last week, RIM reported shipping a scant 200,000 PlayBook tablets. In the prior quarter, the first one that included PlayBook shipments, the company shipped 500,000 units. Bear in mind that shipped doesn’t mean sold and the company hasn’t yet said how many tablets have actually been sold. Regardless, there’s a few problems here.

In a fast growing tablet market, PlayBook shipments should be growing, not shrinking. DigiTimes sources indicate that RIM expected to build and ship between 4 and 5 million PlayBooks in 2011, but it’s clear that the actual figure will be a small percentage of that number. And QNX, RIM’s future operating system for phones, is the featured platform for the tablet; if it fails to impress or doesn’t sell devices, the company is at risk for losing momentum before it ever gets QNX on BlackBerry handsets.

When RIM cut 2,000 jobs back in July, I noted that the company was taking too long to transition from its legacy BlackBerry OS to the more modern QNX platform. At the time, I said:

The entire situation reemphasizes that RIM has been too slow to change in a market that’s moving fast. The BlackBerry Storm, an attempt at an all-touchscreen device, was met with fanfare in 2008, but it never materialized as a solid competitor to Apple’s iPhone. Last year’s BlackBerry Torch was more evolution than revolution.

And the company’s plan to run future phones on a QNX-powered platform makes sense, but RIM bought QNX in April of 2010 and there are still no handsets announced for the new operating system. Instead, new Bold handsets are the latest offerings announced; they appear delayed and will run a new version of BlackBerry OS, not QNX. They’re also not expected to be upgradable to QNX either.

QNX runs great on the PlayBook and I actually enjoy using it. What the PlayBook can do, it does very well; the bigger problem is what it can’t do. Although there’s a software update expected next month to address some of these problems, the device still has no standalone, native email application and doesn’t yet run the promised Android apps that will help offset a relative lack of third-party software.

In hindsight, RIM should have focused its QNX efforts on handsets before trying to compete in the tablet market.  Early this year, RIM suggested that QNX is best suited for dual-core chips, but given that the QNX-powered Colt handset is expected to use a single-core chip, that justification to push tablets first now seems weak at best.

As it stands today, it appears that the company tried to jump in to tablets first in order to leverage the market’s fast growth. But as Google Android Honeycomb tablets have illustrated, you can’t simply show up for the race and expect to win. It takes a full-featured solution, a broad ecosystem, and smart marketing to gain sales. And as much as the tablet market is growing, it is still dwarfed by smartphone sales.

RIM would have gained more bang for the buck if QNX was first put on its smartphones. Instead, it appears that the first run of the PlayBook is a relatively lost cause for the company and it will have to hope that software updates are enough to have consumers take a second look at RIM’s first tablet.

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Research in Motion struggled through a tough transitional quarter — with revenue, profits and shipments down as it waited for a new generation of handsets to kickstart sales. The smartphone maker reported second quarter fiscal 2012 revenue of .2 billion, which was down 15 percent from the previous quarter, and down 10 percent from the year-ago quarter. Profit plummeted to 9 million, down from 5 in the previous quarter and 7 million a year go.

Shipments of handsets came in at 10.6 million units, down from 12.1 million devices a year ago. And the PlayBook tablet mustered just 200,000 units, about what Apple manages in a couple days of iPad sales.

The results fell considerably short of already lowered analysts expectations. Wall Street analysts had expected earnings of 88 cents a share on revenue of .47 billion. Excluding one-time charges, RIM reported adjusted earnings of 80 cents a share. Analysts had also expected 12 million phones and 600,000 tablets. This was after the company lowered its guidance for the second quarter during its last earnings call, to revenue of .4 to .6 billion and estimates of 11 million and 12.5 million phone units.

But there was some good news: RIM said its new BlackBerry 7 devices, which went on sale toward the end of the quarter, were selling well. The company is also still profitable, and reported services revenue of billion for the first time. But RIM’s performance was dragged down by older devices that aren’t moving. And its tablet is having a hard time getting acceptance on the market. RIM is now hoping that it can build off its BlackBerry 7 launch and look ahead to more momentum when it transitions handsets to its QNX-based operating system next year.

Looking ahead, RIM projected third-quarter revenue between .3 to .6 billion, while unit shipments of handsets will be somewhere between 13.5 and 14.5 million units. Adjusted earnings per share for fiscal 2012 is expected to be closer to the low end of the previously guided range of .25 to a share. That’s way below previous projections of .50 a share.

RIM has its work cut out for it. It faces a big iPhone launch in the coming weeks and an onslaught of Android smartphones, including the latest Samsung Galaxy S II, which will debut on three of the four major carriers. Its BlackBerry 7 OS, while improved, still doesn’t match up to more modern platforms. We’ll know more this quarter if its audience of users stick with it, though it seems like many might not jump on a BlackBerry 7 device if the next generation of QNX devices is already on the horizon. That will be a big challenge for RIM, as it continues to manage its transition and move products based on its existing platform while gearing up for more advanced phones.

With each quarter that RIM waits for QNX, it just puts more pressure on itself. It is still somehow selling 10 million phones a quarter, but it has to hit a home run with its new operating system. And it has to hope that home run comes sooner rather than later.

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