Saudi Arabia calls for Blackberry ban this week

Mobile service providers must cease service by Friday. Research in Motion doesn't meet "regulatory requirements"

By Adam Schreck and Erika Kinetz, Associated Press

Topics:Smart Phones

Saudi Arabia is ordering its mobile operators to halt BlackBerry services throughout the kingdom this week, heightening tensions between device maker Research in Motion Ltd. and governments demanding greater access to data sent on the phones.

The Saudi state news agency SPA said in a report late Tuesday that the country’s telecom regulator has informed mobile service providers in the country that they must halt BlackBerry services starting Friday.

The regulator, known as the Communications and Information Technology Commission, couldn’t immediately be reached for comment to provide details of the ban or say how it would be enforced.

It said the suspension of service was being implemented because BlackBerry service “in its present state does not meet regulatory requirements,” according to the SPA report.

RIM could not immediately be reached for comment.

Word of the ban comes just days after the neighboring United Arab Emirates announced it was planning to shut down e-mail, messaging and Web browsing on BlackBerrys starting in October.

India is also in talks with RIM over how information is managed on the devices. Like the UAE, it has cited security concerns in pushing for greater access to encrypted information sent by the phones that gets routed through the Canadian company’s computers overseas.

Saudi Arabia did not spell out its concerns about the devices, though its government is also wary of security threats. As in the UAE, Saudi BlackBerry phones are popular both among businesspeople and youth who see the phones’ relatively secure communication features as a way to avoid attention from the authorities.

Earlier on Tuesday, RIM denied that it had agreed to heightened surveillance of its corporate clients by the Indian government, as talks continue over access to e-mails and other data sent on the devices.

“We won’t compromise on the security architecture of our corporate e-mails,” said RIM’s India spokesman, Satchit Gayakwad. “We respect the requirements of regulatory bodies in terms of security, but we also look at the customer’s need for privacy.”

India’s internal security chief U.K. Bansal told reporters last week he hoped the issue of BlackBerry monitoring would be sorted out soon, after widespread reports that the government had threatened to ban the devices.

Analysts say RIM’s expansion into fast-growing emerging markets — and the UAE’s recent public showdown with the company — is threatening to set off a wave of regulatory challenges, as RIM’s commitment to information security rubs up against the desires of local law enforcement.

RIM has said its discussions with the more than 175 countries where it operates are private. Gayakwad did say, however, that the Indian government has other ways of cracking data if security concerns arise. It can rifle through an Indian company’s e-mail server, for instance, or monitor phone calls, text messages or Web-based e-mails sent from Blackberry devices.

India and the UAE aren’t alone in wanting more control over BlackBerry messaging. Bahrain has threatened to crack down on spreading news using the devices. And industry experts say they believe RIM offered China some concessions before the BlackBerry was introduced there.

“Clearly to acquiesce to the service’s launch … the (Chinese) government has had to reach its own comfort level regarding security concerns,” said Duncan Clark, chairman of BDA China Ltd., a technology industry research firm in Beijing. “What precisely that involves we can only speculate.”

RIM issued a statement Tuesday denying it has given some governments access to BlackBerry data.

“RIM cooperates with all governments with a consistent standard and the same degree of respect,” the company said. “Any claims that we provide, or have ever provided, something unique to the government of one country that we have not offered to the governments of all countries, are unfounded.”

RIM said its technology does not allow it, or any third party, to read encrypted e-mails sent by corporate BlackBerry users. (The consumer version has a lower level of security.)

The mounting regulatory pushback has prompted concern from the U.S. and advocacy groups.

U.S. State Department spokesman P.J. Crowley called the UAE’s action “a move in the wrong direction.”

“It’s not about a Canadian company. It’s about what we think is an important element of democracy, human rights, and freedom of information and the flow of information in the 21st century,” Crowley told reporters Monday.

Arvind Ganesan, who follows business issues at Human Rights Watch, urged RIM to be clearer about the standards it has for dealing with national governments, and what types of data access arrangements have been agreed.

“Governments throughout the world are trying to get at personal information for a variety of reasons,” he said. “There have to be real safeguards in place to ensure governments don’t use this for nefarious purposes.”

The UAE’s telecommunications regulator did not respond to a request for comment Tuesday.

Yousef al-Otaiba, the Emirates’ ambassador to the U.S., has said the UAE is exercising its sovereign right and wants RIM to comply with its regulations, just as it does with laws in the U.S. and other countries.

——

AP Business Writer Joe McDonald in Beijing contributed to this report. Kinetz reported from Mumbai, India.

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Search giant completes largest acquisition in its history to up the ante in smart-phone wars

By Associated Press

FILE - In this May 11, 2011 file photo, attendees await the morning keynote address at the Google IO Developers Conference in San Francisco. Google Inc., releases quarterly financial results Thursday, July 14, 2011, after the market close. (AP Photo/Marcio Jose Sanchez, file) (Credit: AP)

Topics:Google, Smart Phones

Google Inc. is buying cell phone maker Motorola Mobility Holdings Inc. for $12.5 billion in cash. It’s by far Google’s biggest acquisition to date and a sign the online search leader is serious about expanding beyond its core Internet business.

Google will pay $40.00 per share, a 63 percent premium to Motorola’s closing price on Friday.

Motorola Mobility was separated from the rest of Motorola in January. The company has remade itself as a maker of smartphones based on Google’s Android software, but has struggled against Apple Inc. and Asian smartphone makers.

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Does your life really need more color commentary?

By Liza Donnelly

Topics:Smart Phones, Cartoon Saturday, Comics

: Liza Donnelly is a contract cartoonist for The New Yorker and contributor to CNN.com and others national publications. Her most recent book is "When Do They Serve the Wine?". More Liza Donnelly

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Merger would make AT&T the United State's wireless carrier by a wide margin

By Associated Press

AT&T to buy T-Mobile USA for $39 billion

Topics:Business, iPhone, Smart Phones

AT&T Inc. said Sunday it will buy T-Mobile USA from Deutsche Telekom AG in a cash-and-stock deal valued at $39 billion that would make it the largest cellphone company in the U.S.

The deal would reduce the number of wireless carriers with national coverage from four to three, and is sure to face close regulatory scrutiny. It also removes a potential partner for Sprint Nextel Corp., the struggling No. 3 carrier, which had been in talks to combine with T-Mobile USA, according to Wall Street Journal reports.

AT&T is now the country’s second-largest wireless carrier and T-Mobile USA is the fourth largest. The acquisition would give AT&T 129 million subscribers, vaulting it past Verizon Wireless’ 102 million. The combined company would serve about 43 percent of U.S. cellphones.

For T-Mobile USA’s 33.7 million subscribers, the news doesn’t immediately change anything. Because of the long regulatory process, AT&T expects the acquisition to take a year to close. But when and if it closes, T-Mobile USA customers would get access to AT&T’s phone line-up, including the iPhone.

The effect of reduced competition in the cellphone industry is harder to fathom. Public interest group Public Knowledge said that eliminating one of the four national phone carriers would be “unthinkable.”

“We know the results of arrangements like this — higher prices, fewer choices, less innovation,” said Public Knowledge president Gigi Sohn, in a statement.

T-Mobile has relatively cheap service plans compared with AT&T, particularly when comparing the kind that don’t come with a two-year contract. AT&T CEO Randall Stephenson said one of the goals of the acquisition would be to move T-Mobile customers to smart phones, which have higher monthly fees. AT&T “will look hard” at keeping T-Mobile’s no-contract plans, he said.

AT&T’s general counsel, Wayne Watts, said the cellphone business is “an incredibly competitive market,” with five or more carriers in most major cities. He pointed out that prices have declined in the past decade, even as the industry has consolidated. In the most recent mega-deal, Verizon Wireless bought No. 5 carrier Alltel for $5.9 billion in 2009.

Stifel Nicolaus analyst Rebecca Arbogast said the deal will face a tough review by the Federal Communications Commission and the Justice Department. She expects them to look market-by-market at whether the deal will harm competition. Even if regulators approve the acquisition, she added, they are likely to require AT&T to sell off parts of its business or T-Mobile’s business. Verizon had to sell off substantial service areas to get clearance for the Alltel acquisition.

To mollify regulators, AT&T said in a statement Sunday that it would spend an additional $8 billion to expand ultrafast wireless broadband into rural areas. Instead of covering about 80 percent of the U.S. population with its so-called Long Term Evolution, or LTE network, AT&T’s new goal would be 95 percent, it said. That means blanketing an additional area 4.5 times the size of Texas. The network is scheduled to go live in a few areas this summer, but the full build-out will take years.

The offer would help the FCC and the Obama administration meet their stated goals of bringing high-speed Internet access to all Americans. They see wireless networks as critical to meeting that goal — particularly in rural areas where it does not make economic sense to build landline networks.

AT&T said its customers would benefit from the cell towers and wireless spectrum the deal would bring. In some areas, it would add 30 percent more capacity, AT&T said.

“It obviously will have a significant impact in terms of dropped calls and network performance,” Stephenson said.

AT&T would pay about $25 billion in cash to Deutsche Telekom, Germany’s largest phone company, and stock that is equivalent to an 8 percent stake in AT&T. Deutsche Telekom would get one seat on AT&T’s board.

Like Sprint, T-Mobile has been struggling to compete with much larger rivals AT&T and Verizon Wireless, and its revenue has been largely flat for three years. Bellevue, Wash.-based T-Mobile USA’s subscriber count has stalled at just under 34 million, though it posts consistent profits.

Deutsche Telekom has been looking at radical moves to let it get more value out of its U.S. holding, including a possible combination with a U.S. partner.

There was a big hurdle to a T-Mobile USA-Sprint deal: The two companies use incompatible network technologies. The same hurdle would apply in a Verizon Wireless-T-Mobile USA deal. But the networks of AT&T and T-Mobile use the same underlying technology, so to some large extent, AT&T phones can already use T-Mobile’s network, and vice versa.

The deal has been approved by the boards of both companies. Dallas-based AT&T can increase its cash portion by up to $4.2 billion, with a reduction in the stock component, as long as Deutsche Telekom receives at least a 5 percent equity ownership interest in the buyer.

The agreement doesn’t leave room for other buyers to jump in with a higher bid, AT&T said.

AT&T would finance the cash part of the deal with new debt and cash on its balance sheet and will assume no debt from T-Mobile.

AP Technology Writer Joelle Tessler contributed to this report from Washington, D.C.

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It's never too late to network at Austin's South by Southwest tech meet-up

By Drew Grant

Are you cool enough for SXSW?

Topics:Satire, Apple, Google, Internet Culture, iPad, iPhone, Smart Phones, Video Games, Television

Though the interactive portion of Austin’s South by Southwest festival just ended, there is still enough time to squeeze a week’s worth of 2.0 fun and networking into the final moments before the music portion of the event begins! Below, our guide to maximizing your “SXSW” (as the kids write it) experience before the end of the weeklong geek rave you’ve somehow convinced your employer to send you to “on business.”

Schedule:

9 a.m.: “Crowdsourcing Interactive Strategic Content Design and the Ubiquitous User Experience” (lecture) — Learn this year’s hottest empty buzzwords to use in presentations to possible investors of your start-up from the leading self-proclaimed experts in the industry, none of whom you’ve ever heard of.

10:30 a.m.: “Malcolm Gladwell: Genius or over-rated hack who has no idea what he’s talking about?” (panel) – Several professors and more experts you’ve never heard of will tell you exactly why it’s not cool to like “The Tipping Point” anymore.

12:00 p.m.: Lunch – Use your FourSquare, GroupMe and GroupOn apps to make the most out of your dining experience and piss off everyone else in your friend network who happen not to be in Austin right now but still have to receive updates on how you’re now the mayor of a coffee kiosk. (Tip: Try the coffee! Bring 10 friends and get a 25 percent discount on your next cup!)

1:30 p.m.: Five-hour nap because nothing interesting is happening until tonight’s parties anyway.

6:30 p.m.: Wake up, check Twitter. Find out that while you were asleep, Google and Apple announced they were joining forces to create world’s first sentient iPad with GPS locators for everyone in your social network and, additionally, not in your social network. Shit.

8:00 p.m.: Mobile Showcase of Something on 6th Street — Everyone else was lining up outside this van and you heard that Dennis Crowley might be involved with whatever’s happening inside, so may as well check it out. Turns out to be Porta Potty sponsored by Miller Lite. It’s still worth it, as someone hands you a free USB drive with the Miller logo on a lanyard as you exit. Free shwag!

9:30 p.m.: Party time! — Check out the awesome, open-bar events thrown by everyone from Gizmodo to Vimeo to Wired Magazine to Funny or Die. Wait in line for an hour before being told at the door that you’re wearing the wrong colored wristband. It’s OK, these guys are just looking for the secret code phrase that will allow you to gain entrance to this year’s hottest tech parties. (The phrase is, “Wow, I guess guys who make iPhone apps for a living really are the next rock stars!” or, if you’re attending a Gawker party, “Brett Favre’s penis.”) Definitely do not use the word “amazing” at these events, since the Guardian has declared that adjective officially “over” at South by. (And if you don’t know to call it South by, you don’t deserve to be there.)

12:00 a.m.: Stumble home after making out with a guy who you thought was Digg founder Kevin Rose, but was actually a local high school student who sneaked in with his dad’s press pass. Your pants pockets are heavy with the weight of hundreds of business cards given to you by strangers, all of who have promised to add you to their social network feed. Your iPad blinks once, red and ominous.

(Photo via Flickr)

: Drew Grant is a staff writer for Salon. Follow her on Twitter at @videodrew. More Drew Grant

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World's largest mobile maker will use Window's software as the main platform for its smartphones

By Matti Huuhtanen, Associated Press

Smartphones like the Nokia 5800 will now be programed with Microsoft Window's Phone software in a partnership aimed at taking consumers away from iPhones and Androids.

Topics:Smart Phones, Apple, Internet Culture, Microsoft

Technology titans Nokia and Microsoft are combining forces to make smart phones that might challenge rivals like Apple and Google and revive their own fortunes in a market they have struggled to keep up with.

Nokia Corp., the world’s largest maker of mobile phones, said Friday it plans to use Microsoft Corp.’s Windows Phone software as the main platform for its smart phones in an effort to pull market share away from Apple’s iPhone and Android, Google’s software for phones and tablets.

The move marks a major strategy shift for Nokia, which has previously equipped devices with its own software. Analysts said the deal was a bigger win for Microsoft than Nokia, whose CEO Stephen Elop in a leaked memo this week compared his company to a burning oil platform with “more than one explosion … fueling a blazing fire around us.”

Nokia said the partnership would “deliver an ecosystem with unrivaled global reach and scale.” However, it warned that the new strategy would also bring “significant uncertainties,” and said it expects profit margins to be hit by strong competition from rivals.

Nokia’s share price plunged 9 percent to euro7.43 ($10.11) in afternoon trading in Helsinki.

Elop, a Canadian national, joined Nokia from a senior executive position at Microsoft last year. The first non-Finn to lead Nokia, he is under intense pressure to reverse the company’s market share losses to North American and Asian competitors.

“Nokia is at a critical juncture, where significant change is necessary and inevitable in our journey forward,” Elop said. He added the company was aiming at “regaining our smart phone leadership, reinforcing our mobile device platform and realizing our investments in the future.”

Speaking later to analysts in London, he declined to say when Nokia would introduce a new device running on Windows Phone. But he said Nokia won’t bury its own Symbian operating system or the new Meego platform that it is currently developing.

The Symbian technology is being used in 200 million phones with 150 million more expected on the market, Elop said.

Android surpassed Symbian to become the world’s No. 1 smart phone software in the fourth quarter of last year, according to the Canalys research firm.

Microsoft CEO Steven Ballmer said the partnership would give the team “more innovation, greater global reach and scale.”

“We need to, and we will, collaborate closely on development … so we can really align and drive the future revolution of the mobile phone,” he said.

The key challenge will be to come up with devices of a quality level and hip factor that helps position Windows Phone as an attractive alternative to iPhone or Android.

Windows Phone 7, which was launched last year, still has a lot of catching up to do in terms of both the number of users and the number of “apps” available for the phones.

Nokia said its expertise in developing new software with Microsoft will be “on top of the platform in areas such as imaging, where Nokia is a market leader.” Its map services will be a core part of the new device as will Microsoft’s Bing search engine, Nokia said.

Neil Mawston of London-based Strategy Analytics said Microsoft was the big winner in the partnership, by teaming up with the biggest mobile hardware vendor in the world.

“In terms of expanding their distribution reach, this is a huge win for Microsoft,” he said.

For Nokia the deal leaves uncertainty about what will happen to its current Symbian operating platform. Mawston said he expects it to be phased out within two years and “completely, or at least mostly, replaced by Windows Phone.”

Although Nokia still is the mobile industry’s biggest handset maker, its market share has plummeted from a high of 41 percent in 2008 to 31 percent in the last quarter of 2010.

It has also lost its innovative edge in the fiercely competitive top-end sector and is virtually invisible — with a 3 percent share — in the world’s largest smart phone market, North America.

Apples’ iPhone has set the standard for today’s smart phones and Research In Motion Ltd.’s BlackBerrys have become the favorite of the corporate set. More recently, Google Inc.’s Android software has emerged as the choice for phone makers that want to challenge the iPhone.

“Today, developers, operators and consumers want compelling mobile products, which include not only the device, but the software, services, applications and customer support that make a great experience,” Elop said.

He warned of further layoffs and restructuring, saying Nokia must “improve the speed and nimbleness and agility of the organization … by taking significant steps in how we operate.” He gave no details.

The company said it will announce a new leadership team and organizational structure “with a clear focus on speed, results and accountability.”

Nokia, which claims 1.3 billion daily users of its devices, said it hopes the “broad, strategic partnership” with Microsoft will lead to capturing the next billion users to join the Internet in developing growth markets.

Jyrki Ali-Yrkko, from the Research Institute of the Finnish Economy, described Nokia’s cooperation with Microsoft as “surprising.”

“The strengths will be in Microsoft’s strong position in various corporate solutions and server solutions, but its weakness is that Microsoft perhaps doesn’t have a broad, user-oriented group of developers like those around Android or Apple,” Ali-Yrkko said.

——

Online:

Nokia: http://www.nokia.com