Forget Consumers — Even Verizon Execs Can’t Figure Out Wireless Pricing

Updated: Verizon has made an art form of sending mixed messages, but it raised things to a whole new level last week when two of its senior executives made public statements that made clear the company hasn’t decided what its new mobile data pricing strategy will be. CTO Dick Lynch told the Washington Post on Thursday that the carrier was looking at some form of usage-based pricing for its next-generation wireless data service.

However, Verizon’s CEO Ivan Seidenberg told an audience of investors the day before that the carrier will focus on selling more mobile data bundles as it tries to make up for declining voice revenue. Well, Verizon, which is it? Will wireless data be bundled or will it be usage-based?

Lynch said Verizon would likely introduce a pricing scheme in which customers will be charged a base rate for using the upcoming next-generation Long Term Evolution wireless network, and then charged another fee based on how much bandwidth they use. Yet when Seidenberg was asked about the opportunity to grow data revenue, he replied by saying that Verizon was experimenting with ways to segment pricing for data consumption. He added (emphasis mine):

Frankly, we have to address this issue long term because in the final analysis, voice dilution will continue, and we either sell bundles of data or we don’t make up that difference. So I think if you look at the drivers of it, data, 35%, should go to 50% to 60% of revenues over a reasonable period of time. I think the unmeasured aspect of data will be video. The experts would suggest that maybe in five years, 50% to 60% of mobile traffic could be video. Even if that’s off by a little bit, it’s still a big number, so I think the drivers of more data and more bundles are there. The key for us is to get out in front of the architecture issues, the distribution issues, and to make sure that the market — the customer is conditioned correctly to pay for the value of that. That’s been the biggest difficulty there. But I think that’s happening.

I asked spokesman Jeff Nelson about the apparent contradiction, who said: “Dick Lynch discussed potential pricing in a 4G LTE environment. We have not rolled out a 4G network, and won’t until late 2010.” He then referred me to another spokesperson who handles pricing, who didn’t return my email.

I find it hard to believe that Seidenberg is tying five-year predictions on mobile video growth to selling data bundles without taking into account the rollout of the carrier’s LTE network, planned for later this year. Seidenberg is clearly telling Wall Street that data bundles are profitable, and that if the carrier doesn’t create bundled plans it can’t offset the decline in voice revenue.

So what’s likely going to happen is that Verizon, seeking to keep data revenues high, will come up with a plan that it calls usage-based, but is really just a misuse of the term to deliver tiered pricing in the form of data bundles. We’ve seen this before as wireline and wireless ISPs attempt to implement tiered pricing under the guise that it forces people to actually pay for what they use. Time Warner Cable made this argument the linchpin of its efforts to implement tiered pricing for broadband.

So when Lynch talks about charging customers based on how much bandwidth they use, there’s no guarantee that those charges will be on a per-gigabyte or per-megabyte basis. Customers may get stuck paying a base LTE subscription fee and then have to add on an extra data bundle so they can pay for the bandwidth they use. In fact, judging by the recent data plan pricing rumors, the cost per MB for the user will go up.

Update: Maybe we’ll get some answers on this and other rumored Verizon’s price changes during a webcast tomorrow morning when Verizon Wireless President and CEO Lowell McAdam and Verizon Chief Financial Officer John Killian will “discuss wireless strategies to drive continued growth.”  For those that don’t want to get up early, I’ll let you know what they say.

Thumbnail image courtesy of Flickr user caesararum

Who Exactly Owns Your Data in the Cloud?

Between Gmail, Google Docs, Zoho, Facebook, Basecamp, Flickr, Twitter and countless other applications, much of our data now sits in the cloud. But few people ever stop to think about where that data is stored or how it might be accessed or used. So who exactly does own your data and who has access to it? And how much privacy can you expect?

These questions get all the more complex because many web application providers are using cloud services from the likes of Amazon and Google, which means data doesn’t necessarily sit on the app provider’s servers. Additionally, there is an increased use of APIs to facilitate greater interoperability among web apps, meaning that your data may be used in many ways that you don’t expect. How can you learn more about the rights you have to your data, as well as the rights others have to it? GigaOM Pro (subscription required) this week has a great report by Simon Mackie that tackles these questions. The report delves into two main issues:

Data Privacy. When it comes to the U.S., the Fourth Amendment states that people should “be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures…” But web-hosted applications and cloud services are too new for the courts to have been able to provide far-reaching guidance on data privacy online. Issues related to data privacy get even more complex when data is stored outside of the country. Some cloud services, such as Amazon’s, let you choose the region in which you want your data stored; and some, such as Google’s, don’t.

Data Security. There are any number of threats to your data online. Your application or service provider could go belly up, you could fall prey to hackers or you could simply be locked out of your account. The good news is that data portability and security policies are being scrutinized closely by several organizations, and there are steps you can take to reduce your vulnerability in the could.

For much more on these and other issues pertaining to your data and the cloud, see Simon’s full report.

Haiti Text Donation Campaigns Face 90-Day Delays

UPDATED: Text-to-give campaigns have gone viral in the two days following the massively destructive 7.0 earthquake in Haiti on Jan. 12. The immediacy of texting makes it incredibly easy for those following the quake from afar to show their support by adding a small amount to their cell phone bills (especially in the U.S., where the two major campaigns are based). But at this point, it’s far from immediate that the $5 you send to Wyclef Jean’s Yele Haiti foundation or $10 to the American Red Cross actually gets to Haiti, because it’s standard practice in the young mobile giving industry for donations to be delayed by 90 days.

The Red Cross, whose campaign is being publicized by the White House and the U.S. State Department, is accepting $10 donations via texting “Haiti” to 90999 in a program powered by Mobile Accord’s mGive. As of this morning, that campaign alone had raised $3 million (see the map image below for a distribution of donations). The State Department had actually been responsible for initiating the Red Cross campaign with a call to Mobile Accord chairman James Eberhard (who had met Secretary Clinton at a dinner earlier this month, but got the call while traveling in Pakistan this week). It was activated at 9 p.m. ET on Tuesday and had raised $800,000 by 3 p.m. Wednesday.

$3 million easily tops mGive’s previous record of $450,000 donated to Alicia Keys’ children foundation, which was publicized through “American Idol.” The Mobile Giving Foundation, which is powering Wyclef’s parallel campaign and has not yet released Haiti totals, said it expected to raise a total of $2 million in all of 2009. Both organizations say neither they nor mobile carriers are taking a cut from the Haiti donations.

However both Mobile Accord (which is a for-profit company, but operates 100 percent pass-through mobile donation campaigns through the mGive Foundation) and the Mobile Giving Foundation admit it usually takes 90 days from the time of donation to the time it is received by the intended charity, in part because they are collected through each customer’s normal cell phone billing cycle. That’s eons in disaster recovery time.

Earlier today mGive posted to Twitter, “We are currently working with the carriers to reduce this window. We will tweet when he have an update on this.” A spokesperson for mGive added via email, “It would be inaccurate to talk about them as ‘carrier’ delays. The delays are just in the business processes that were set up when the mobile giving channel was created. Like all new systems, it will improve as we grow and learn.”

A spokesperson for Verizon — which like most carriers is waiving SMS fees for Haiti donations — told DailyFinance, “We understand the need to get this money into the pipeline ASAP and we’re looking at ways to do that internally. People want to give now, and the money needs to get there as soon as possible.”

Sounds like a plan. C’mon carriers — let’s get cracking!

Update: Around noon PT Friday, Verizon Wireless said it had advanced $2.98 million in mobile donations committed by its customers to Haiti. “Time is of the essence, and it makes sense for us to toss aside our normal financial processes to get money where it can do the most good, in the fastest way possible,” said Verizon Wireless president and CEO Lowell McAdam in a statement.

Haiti-related mobile fundraising campaigns, via Mobile Giving Insider:

  • Text HAITI to 90999 to donate $10 to the American Red Cross
  • Text HAITI to 25383 to donate $5 to International Rescue Committee
  • Text HAITI to 45678 to donate $5 to the Salvation Army in Canada
  • Text YELE to 501501 to donation $5 to Yele
  • Text RELIEF to 30644 to get automatically connected to Catholic Relief Services and donate money with your credit card
  • Text HAITI to 864833 to donate $5 to The United Way
  • Text CERF to 90999 to donate $5 to The United Nations Foundation
  • Text DISASTER to 90999 to donate $10 to Compassion International

Photo for the feature slot courtesy of mGive. You can send your money using their website as well.

Will Android Pay for Google’s Moves in China?

British scribe Paul Carr is not one to mince words. For him, Google’s newfound morality around censorship and China is too little, too late. Four years too late, to be precise. And I agree with him — up to a point. Morality has to be absolute; it cannot be used as a tool of convenience. That said, and despite being a born cynic, I’m actually unable to view Google’s decision through the same lens.

I mean, if as a society we’re all too ready to forgive steroid-enhanced baseball players when they come clean, how is that we can’t give a company a second chance when it finally decides to do the right thing? Moreover, the company is risking a lot of money by adopting what Carr describes as “scorched earth diplomacy” — especially when it comes to Android.

J.P. Morgan estimates that Google’s move is going to cost it some $600 million in 2010 revenues. UBS puts the sales loss forecast in the $400-$500 million range. Others estimate that it could be even lower — between 1 and 1.5 percent of 2010 revenues. Citibank, meanwhile, believes that nearly 1 percent of Google’s profits are at risk.

The wide variance in the loss estimates makes clear that no one really knows how big a financial gamble this decision is. And that alone makes it a brave move.

But while many argue that it isn’t logical for a publicly traded company to take a stance that’s going to hamper its ability to capture the opportunities offered by such a fast-growing Internet market — China currently has 298 million Internet users (and 99.4 million connections) representing just 22 percent of its population — as far as I’m concerned, the biggest impact of Google’s decision will be on its mobile efforts. With more than 638 million wireless users (according to Telegeography), China has already emerged as the world’s largest mobile market. Sales of mobile phones in the country are expected to grow 21 percent this year alone.

The bottom line is that Google’s decision to take on the Chinese political establishment means that it no longer controls Android’s destiny in China. In theory, Android is open source and as such, handled by the Open Handset Alliance. But in reality, it is closely associated with Google. For starters, the banning of would close a marketing channel for Google’s Nexus One device, if and when it was launched in China.

The country was well on its way to helping Google grow Android. Chinese handset makers such as Huawei and ZTE have been some of the earliest supporters of the upstart OS. China Mobile already sells its own version of an Android-based phone system called OPhone. Motorola is making a big push into the Chinese market with smartphones based on the Android OS. And China-based Lenovo has developed numerous Android-based products, including the LePhone. Any undue pressure from the establishment would mean that most of these companies would have to abandon Android in favor of other mobile operating environments.

Google’s willingness to risk not only its present (search) but also its future (mobile), shows that as a company it’s willing to go where no Western company has gone before: in China’s face. The next few months will determine whether Carr is being too harsh or I am being too generous in our respective judgments. For now, at least on this one decision, I am on the side of Larry & Sergey.

Citrix’s GoToMyPC (Finally) Remotely Controls Macs From Anywhere

Citrix’s GoToMyPC, among the most widely used applications for controlling remote computers, has always had a glaring hole: an inability to connect to Mac systems from anywhere. That’s changed with a free version of its remote control software for use with Macs and is favored by many users and IT administrators. LogMeIn is also Apple-friendly enough to offer a remote control application that works on iPhones and iPod touches. WebEx’s PCNow also offers iPhone control of remote Mac computers. (Citrix still doesn’t offer a version of GoToMyPC for the iPhone.)

GoToMyPC is available for $19.95 a month for use from one computer; the plan for two computers runs $29.95 a month. Businesses can take advantages of volume pricing deals, which vary. You can watch a demo of how GoToMyPC works here.

How Microsoft Can Get Back in the Mobile Game

LG says it’s betting heavily on Android to help the handset maker build its smartphone business, a move that contrasts starkly with last year’s vow to make Microsoft’s Windows Mobile its primary operating system. But in doing so, LG joins a small army of fellow manufacturers that have shifted their focus away from Microsoft’s mobile OS — among them HTC , Sony Ericsson, Motorola and Palm — and, with the lone exception of Palm, toward Android. And the revelation comes on the heels of rumors that the launch of Windows Mobile 7 may be pushed back yet again, to 2011.

In the meantime, as the mobile skies continue to darken over Redmond, we’ve compiled a few ideas that could get Microsoft back in the game:

  • Make Windows Mobile free to manufacturers. That’s a strategy our friend Chetan Sharma examined more than a year ago; since then Microsoft has continued to lose market share as open-source OSes gain traction in mobile. Making WinMo free — but not open source — might encourage some manufacturers to at least reconsider moving away from the platform.
  • Acquire (or adopt) another operating system and ditch WinMo. Building a mobile OS from the ground up is a Herculean task, but Microsoft has the deep pockets to pick up a newer platform and throw WinMo on the scrap heap. While rumors of a takeover of RIM seem outrageous given the price tag, Microsoft could pick up Palm’s webOS for substantially less. And while Microsoft has historically feared Linux — upon which webOS is based — it last year began indicating it may be softening its stance regarding open-source software.
  • Build a top-notch app store designed for business users. Consumer-focused mobile app stores have quickly become a kind of Moroccan bazaar where users are confronted with a dizzying number of offerings on the cheap. Microsoft — like RIM — could set its Marketplace for Mobile apart from the crowd by combining high-end enterprise and productivity apps with a small library of the best entertainment titles.
  • Make Windows Mobile 7.0 a worthy competitor with a focus on the enterprise. Mobile malware is sure to cause more problems as the popularity of the iPhone and Android-based devices continues to surge. In addition to making WinMo more user-friendly, Microsoft should position it as an ultra-secure platform designed to ensure the safety of mobile data for high-end executives. To sweeten the deal, maybe it should give out a free golf shirt with every WinMo device sold.

As we’ve said before, it may simply be too late for Windows Mobile to re-emerge as anything but a niche play for a small number of business users. If the gang in Redmond has begun taking mobile seriously, though, it should consider some of these ideas as a way to regain relevance in the increasingly competitive smartphone space.

Related GigaOM Pro Research: As Windows Mobile Stumbles, Which Smartphone OS Will Seize the Lead?

Could Ovi Support Lead to a Subsidized N900 in the U.S.?

Nokia  yesterday extended support for its Ovi Store to its N900 via a firmware update, enabling users of the Maemo-based gadget to browse the shelves and download applications. It’s a move that may finally help the manufacturer score the carrier deal it needs to gain traction with its flagship device in the U.S.

The N900, which is Nokia’s first device to run the Linux-based Maemo 5 operating system, debuted late last year to positive reviews (which Om took as a sign that the Finns were beginning to get things right). Nokia has staked its future to Maemo — at least on high-end devices — in an effort to better compete with Apple’s iPhone, RIM’s BlackBerry and the Android OS. But while the N900 is supported by T-Mobile USA’s 3G network, the carrier doesn’t subsidize the gadget, leaving it with a price tag of $550-$700 — far out of the range of most consumers.

As Kevin noted over at jkOnTheRun, the store is a substantial improvement over the handset’s embedded Application Manager, which requires users to add software repositories in order to download new apps — a time-consuming process that many mainstream users don’t know how to do. While the selection of Maemo apps in the Ovi Store is still pretty thin, that is sure to change as Nokia expands its portfolio of Maemo-based devices later this year and beyond.

Nokia’s carrier relationships have never been its strong suit, but support for the Ovi Store may just be enough to entice T-Mobile to pony up some cash to defray the cost of the N900 and give it more mass-market appeal. And that would go a long way toward helping Nokia get back in the game in the U.S.

In-post image courtesy Flickr user SpeednutDave.