Palm hires top designer to compete with iPhone

Palm is getting serious about design: The handset maker, which has been the target of acquisition rumors lately, has hired a top Silicon Valley designer who got his start at Apple in the late ’80s. Paul Mercer, an ex-Apple computer engineer, started working at Palm three weeks ago on a line of new products, but the company won’t disclose further details on the products. Mercer brought two other designers to Palm from his firm, Inventor. Palm has made it clear it did not acquire the design firm, which Mercer founded.

“He’s the best of the best in this space,” said Paul Saffo, an adviser to Samsung. “The guy has a knack for designing complex systems in ways that are accessible.”

Palm’s maneuvering may be in response to the buzz generated by the stylish iPhone. Analysts believe the iPhone’s debut earlier this year has shifted the handset industry’s focus from hardware to software design.

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Carriers insist on fewer operating systems

It’s a well known fact that the multitude of mobile operating systems has made it difficult for the mobile content industry as well as carriers who need to configure the phones they sell. Recently, however, more carriers worldwide have been speaking out about the problem: “We need to reduce the number of operating systems on phones. I’m not saying bring it down to one, but several. With fewer operating systems, it will be easier for content delivery,” Vodafone’s CEO Arun Sarin said last month. Vodafone declared late last year that it would eventually only support Windows Mobile, Symbian Series 60 and Linux. NTT DoCoMo has also called for less OSs and is focusing on Symbian and Linux, but the carrier recently teamed up with Intel for a multi-OS handset.

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AT&T unveils BlackBerry, Treo in red

Is the enterprise ready for a red phone? AT&T thinks so. Today, the carrier unveiled the first AT&T branded handsets (not Cingular) from the merged company: A “ruby” red BlackBerry Pearl and a “crimson” red Treo 680. Why the color: “Think of it as corporate going color. Color devices have been around for a while for consumers. But now we’re starting to see it in these B2B oriented devices that appeal both to business customers and consumers,” AT&T spokesperson John Kampfe said in a statement.

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A la Mobile pushes convergence platform

One major criticism of converged services is the small number of handsets. Only about a dozen handsets are on the market, and they aren’t that exciting. A la Mobile said it has designed a new Linux system stack that is supposed to make it easier for handset vendors to quickly build and deliver converged phones that can enable VoIP over WiFi and GSM voice services. The pre-integrated and pre-tested software stack includes a SIP-based VoIP client and applications that include a browser, email and Java. Gupp Technologies, a Malaysian phone maker, is the only manufacturer to license A la Mobile’s platform. The handset maker plans to begin selling the phone some time during the second quarter.

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Microsoft buys Tellme Networks

Microsoft bought into the mobile voice recognition market, acquiring Tellme Networks for an undisclosed sum. Tellme’s technology is used in dial-in applications that can be incorporated into mobile phones, PCs, PDAs and other specialized clients. Microsoft says Tellme’s enterprise IVR experience would give the company immediate advantages in enterprise applications. Eventually, business productivity solutions would be enabled across Vista, Windows Mobile and other environments. 

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Morgan Stanley advising as Palm seeks buyer

Investment bankers from Morgan Stanley are advising Palm on its options as the maker of the Treo smart phone seeks a buyer, according to several sources familiar with the situation.

Shares of Palm rose 11 percent on Friday to as high as $18.08, their highest level in eight months, on renewed speculation that leading mobile phone maker Nokia was eyeing the company.

A technology banker, who spoke on condition of anonymity, said on Friday there was potential interest from both strategic and private-equity buyers in bidding for Palm, and a separate banking source said the company was up for sale.

But the technology banker said the company’s stock run-up made it more challenging for private equity to bid for the company versus strategic bidders, who have more opportunities to cut costs.

On Sunday, a third source told Reuters that Morgan Stanley was advising Palm on its options.

Shares of Palm have vaulted more than 25 percent this year, boosted by persistent rumors it is a takeover target. The rally has lifted Palm’s market capitalization to about $1.7 billion, slightly more than total revenue in its last fiscal year, which ended in May 2006.

Palm has long been seen as as a target. Speculation increased last week when technology news Web site Unstrung said Nokia or a private equity firm may be the leading candidates to buy Palm at around $20 a share, citing unnamed sources.

Motorola, the No. 2 handset maker, has also been mentioned as a potential buyer for Sunnyvale, Calif.-based Palm, which makes personal digital assistants as well as a line of mobile phones that keep track of appointments, data and e-mail.

Morgan Stanley declined comment. Palm was not available for comment.

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Wireless number portability hits Canada soon

Four years ago the U.S. implemented wireless number portability, on March 14 Canada will finally do the same. Wireless number portability (WNP) will allow Canadians to keep their existing phone number when changing wireless carriers, but it will also allow Canadian consumers to move their landline phone number to a wireless number and vice versa. In December 2005 the Canadian Radio-television and Telecommunications Commission (CRTC) decreed that Telus, Rogers Wireless and Bell Mobility had to make WNP available by next week in British Columbia, Alberta, Ontario and Quebec. All carriers must have WNP available no later than September 12 of this year, according to the CRTC.

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Beware of hype surrounding dual-mode phones.

Dual-mode handsets that switch between a Wi-Fi and cellular network may not sell as well as some handset makers may have hoped, according to a new report published this week.

The research firm Ovum predicted in a report released Tuesday that by the end of 2010 only a little more than 2 percent of all mobile subscribers, or fewer than 5.5 million people, will have purchased dual-mode services. These services allow subscribers to automatically switch between a cellular phone network and a Wi-Fi network used in their home or in a public place like a coffee shop or airport.

“Equipment vendors have been fixated on dual-mode phones as the key form of fixed-mobile convergence,” said Jan Dawson, the analyst who wrote the report. “But the people responsible for implementing this at the carriers are really skeptical that the devices and solutions are ever going to be ready for prime time.”

Dual-mode services may be an especially hard sell in the U.S., where consumers are accustomed to getting low-cost plans with large buckets of minutes. So the need to conserve voice minutes by switching to a Wi-Fi network may not be compelling enough for most subscribers.

“We don’t see a case for Wi-Fi phones being used for voice,” said Jeffrey Nelson, a spokesman for Verizon Wireless. “We just don’t think we should start with a solution looking for a problem that can be solved.”

But some operators are pushing forward. T-Mobile in the U.S. is testing its dual-mode service that allows people to use their home Wi-Fi network in their house and the cellular network when outside the home. Several carriers in Europe, including Telecom Italia and Orange, have also been launching dual-mode services.

Dawson warns that mobile operators should focus their attention on other ways to tie wireless and traditional wireline phone services together instead of focusing exclusively on dual-mode services.

For example, carriers could allow customers to use a single identity for their mobile phones and their wired devices so that they have a single phone number, e-mail address, username and password. They could also allow wireless devices to provide remote access to wireline services. These services could allow subscribers to remotely program digital video recorders or check home monitoring systems.

The four cable companies working with Sprint Nextel have already been developing these services. Comcast and Time Warner announced public pilot programs in 2006. They, along with the other two companies, Cox Communications and Advanced Newhouse, will launch services this year.

Dawson said mobile operators risk being left behind unless they start incorporating more of these features into their services.

“Overall, it’s time for a reality check and for carriers to move on to the forms of fixed-mobile convergence which have real potential for commercial launch,” he said.

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