Dark Side Arises for Phone Apps

Dark Side Arises for Phone Apps
Security Concerns Prompt Warnings

By SPENCER E. ANTE

As smartphones and the applications that run on them take off, businesses and consumers are beginning to confront a budding dark side of the wireless Web.

Online stores run by Apple Inc., Google Inc. and others now offer more than 250,000 applications such as games and financial tools. The apps have been a key selling point for devices like Apple’s iPhone. But concerns are growing among security researchers and government officials that efforts to keep out malicious software aren’t keeping up with the apps craze.

In one incident, Google pulled dozens of unauthorized mobile-banking apps from its Android Market in December. The apps, priced at $1.50, were made by a developer named “09Droid” and claimed to offer access to accounts at many of the world’s banks. Google said it pulled the apps because they violated its trademark policy.

The apps were more useless than malicious, but could have been updated to capture customers’ banking credentials, said John Hering, chief executive of Lookout, a mobile security provider. “It is becoming easier for the bad guys to use the app stores,” Mr. Hering said.

Unlike Apple or BlackBerry maker Research In Motion Ltd., Google doesn’t have employees dedicated to vetting applications submitted to its Android store. Google said it removes apps that violate its policies, but largely relies on users to alert it to bad software. “We check reactively,” said a Google spokesman. “There is no manual bottleneck.”

As more companies, governments and consumers use wireless gadgets to conduct commerce and share private information, computer bad guys are beginning to target them, according to government officials and security researchers.

Read the rest of the story here.

Verizon Still Wants the iPhone (Despite those Droid Ads)

Despite a recent slew of negative ads dissing the Apple iPhone in support of Verizon’s new Android-based device, Verizon chairman and CEO Ivan G. Seidenberg told investors on its earnings call today that the company still covets the iPhone.

“This is a decision that is exclusively in Apple’s court,” said Seidenberg. “We obviously would be interested in any point in the future they thought it would make sense for them to have us as a partner. And so we’ll leave it with them on that score.”

This statement jives with my feeling that Verizon’s embrace of the Google Android operating system is just as much a negotiating tactic as a hedge against the iPhone.

Without the iPhone, a game-changing devices that is the world’s single hottest smart phone, Verizon is pursuing a sort of spread-your-bets strategy in which they offer a whole range of new devices, including most importantly a series of Blackberry handsets.

For example, Verizon this week is launching the Storm 2, an updated version of the first touchscreen Blackberry, which is getting much better reviews than the first one. And the Motorola Droid, a super-thin phone that uses Google’s Android operating system, will be unveiled on Wednesday.

“We have expanded our base of other devices,” explained Seidenberg. “So our view is to broaden the base of choice for customers and hopefully along the way, Apple as well as others will decide to jump on the bandwagon.”

BusinessWeek Launches Blackberry & iPhone Apps

Over the last week, BusinessWeek entered the wireless application market and launched its first two apps. Last week, the BusinessWeek for Blackberry app was released, and yesterday we launched an iPhone app.

I have not seen the iPhone app yet but I just downloaded the Blackberry app. To get the app, I would recommend going to this Web site, instead of downloading it from the Blackberry app store. I tried to download it from the app store but it did not work. On the other hand, the Web-based download process worked fine.

The BW app features three main sections: Latest news, a watch-list of stocks, and another channel list that organizes the headlines based on the subject matter (e.g. Top News, Finance, Technology, Innovation, Management, etc.)

The app and stories download fast. The user interface is clear and iis easy to navigate. And the stock ticker feature works, though it was a bit slow when I used it this morning. It is also easy to add stocks to your watch-list by clicking on a link. That’s all good.

For future iterations, I would like to see a tab that zips you to the Most Read or Most Emailed stories of the day. That is one of my favorite features of the Bloomberg app. And it would be cool to be able to watch our videos on the mobile app as well. Congrats to the BW team for launching these apps. I look forward to hearing feedback from users, which you can easily pass along via a link at the bottom of the app.

RIMM and Blackberry Got Their Mojo Working Again

Late yesterday, Research In Motion reported blow-out earnings, and increased its sales and profit forecast for the current quarter. The beaten-down stock promptly jumped off the carpet and sprung back to life with a 22% surge in after-hours trading.

As my colleague Arik Hesseldahl reported, RIMM just went a long way towards restoring its once-sterling reputation with investors:

The upbeat forecasts and better-than-expected results went a long way toward alleviating concern that RIMM was sacrificing profitability in its battle with iPhone maker Apple (AAPL). RIM’s stock has tumbled from an all-time high of 148.13 in June as the company raised spending on tricked-out phones designed to better compete with the popular music-playing, Internet-connected iPhone. RIM has had a lot to prove to investors, says RBC Capital Markets analyst Mike Abramsky. “The first is coming out of the penalty box on margins,” Abramsky says. “The second is a reset with investors of their confidence in RIM’s leadership in the smartphone industry. Tonight’s results will help them do both.”

Check out the rest of his story here.

Broadband Battle: Verizon’s Fiber Strategy Working But Enterprise Disappoints

A quick thought on this morning’s earnings from Verizon. The most noteworthy news out of the announcement, besides the fact that Verizon’s business model is mostly holding up during the recession, is the strong performance of the company’s audacious fiber optic investment. Still, Wall Street seems to be focusing more on the negative data points, as its stock is down around $2, or 5%.

A few years ago, Verizon took a lot of heat from Wall Street for announcing it would invest more than $10 billion in upgrading its -network from copper lines to much faster fiber optic cables. Now, that investment looks like it is starting to pay off. Growth of its two fiber products, Internet access service and TV, is accelerating. Meanwhile, DSL service continues to fade like an 8-track player in the 1990s. Conclusion: American consumers want their broadband fast, and they want it now.

Verizon said its FiOS TV and Internet service, which competes with cable service providers, grew at its fastest pace ever. It reported 303,000 net new FiOS TV customers, compared with 226,000 in the fourth quarter 2007. The company had 1.9 million FiOS TV customers at year-end 2008, adding nearly 1 million FiOS TV customers since year-end 2007.

Verizon added 282,000 net new FiOS Internet customers, compared with 244,000 in the fourth quarter 2007. The company had nearly 2.5 million FiOS Internet customers at year-end 2008, adding nearly 1 million FiOS Internet customers since year-end 2007.

These two revenue streams are becoming meaningful. Broadband and video revenues from consumer customers totaled nearly $1.2 billion in the fourth quarter 2008 — representing year-over-year quarterly growth of 42.0 percent. This means Verizon is starting to pose more of a threat to the cable industry, which has had far more success poaching phone customers from the telcos to date.

The FiOS numbers also helped cushion the blow from sales declines at its enterprise business unit and slightly slower growth in subscribers at Verizon Wireless, owned by Verizon and Britain’s Vodafone Group Plc.

Most investors wanted to know how many Blackberry Storms the company sold but it declined to specify the number. Given that the company only signed up 1.4 million wireless customers in the fourth quarter (down from 2 million subscribers a year ago), I would take that as a sign that the launch was not a smashing success–certainly it doesn’t compare to the iPhone launch, which sold more than 2 million units. I have also heard anecdotal reports that Storm customers like the device less and less as they use it; most of the complaints are about its new touch screen.

Verizon’s enterprise unit, which serves corporate customers, saw its sales decline 2.2%, compared to Sanford Bernstein’s forecast of a 1% decline. In a research note this morning, Bernstein analyst and telecom bear Craig Moffett wrote that enterprise is “the most cyclically exposed part of the portfolio” and the poor performance suggests a “full-year ’09 decline that is significantly worse than our below-consensus (3.3%) forecast.

Still, Moffett gave Verizon’s earnings a “passing grade” and said that its overall results were “significantly better than what most companies can expect.”

Update: In a story in the Wall Street Journal today, Verizon President and chief operating officer Denny Strigl said the company sold 1 million units since the Storm was released in late November. This means Storm launch sales could approach iPhone launch sales, since the phone was introduced in the middle of the fourth quarter.

Verizon Wireless Unveils the Blackberry Storm

So RIM unveiled its new touchscreen phone yesterday and the reviews are coming out.

The bottom line: It’s no iPhone killer but it is a very good phone with an innovative new screen that gives users the sensation of pressing a button. The entire display is actually a giant button covered with a sheet of thin glass. WSJ Walt Mossberg was not totally impressed with the technology but he gave the phone a thumb’s up.

Other advantages: It does have a stronger battery than the iPhone, though. It has a higher resolution screen. And Storm’s camera is much better than the iPhone’s, at 3.2 megapixels, versus just 2 megapixels for the Apple device.

BW tech columnist Steve Wildstrom reviewed the phone. His bottom line:

“What’s my choice? I’m an e-mail guy, working in an environment that supports BlackBerry but not corporate mail on an iPhone, so it’s a no-brainer. But to get the best of both worlds, I also have an iPod touch, which isn’t a phone but runs most of those cool iPhone programs.”

Verizon Wireless and RIM Unleash Storm

Today I published a story in BusinessWeek about the new phone from Research In Motion, the Storm. Verizon Wireless and Vodafone struck a life-time exclusive deal to offer the first Blackberry touchscreen device.

I also break the news that Verizon Wireless has jumped on the latest wireless trend: It is setting up an online bazaar where customers will be able to download a range of games, tools, and other applications for use on the Storm. On Oct. 9, the company will release a toolkit designed to help software developers build applications for the application store, dubbed the App Zone.

Blackberry vs. Apple: The Battle Heats Up

Big news in the smartphone wars today. My colleague Arik Hesseldahl broke the news that the makers of the BlackBerry are stepping up efforts to court consumers, further moving onto Apple’s iPhone turf.

On Sept. 11, Research In Motion is unveiling features that make it easier for users to connect to social network MySpace. The Canadian smartphone manufacturer also plans to announce tools that let subscribers control their TiVo video recorders and view programming that’s been saved via Sling Media’s (DISH) Slingbox.

As I’ve said before, I think this battle benefits both Apple and RIMM. Why? Because the increased innovation stemming from the war is generating a lot of excitement and demand for smartphones, growing the overall market more than it would have without the competition.

The other newsflash: Google announced on its Mobile blog that it has released Google Mobile App for BlackBerry, replacing Google Updater for BlackBerry. Google Mobile for Blackberry gives cell phone owners a comprehensive phone app that bundles many key Google features into one streamlined application.

The Google blog says the app will allow consumers to do the following:

* Fast Google search – enter queries without waiting for a browser to load
* Search history – easily access and amend your previous queries
* Google Suggest – complete queries with less typing
* Easy access to Google products for your phone – click once to download and install our applications for BlackBerry, and get immediate access to our web-based services
* Google Apps support – get direct links to your Google Apps Calendar and Documents/Spreadsheets (select Menu, Options, Use Google Apps Domain: yes, and then enter your domain name)
* Update alerts – learn about new versions of downloadable Google mobile applications and upgrade with just one click

Can RIMM Beat Back Apple? Is Wind Power for Real?

In this week’s Digital Dish, BusinessWeek reporters Spencer Ante, Heather Green, Steve Hamm and Catherine Holahan decode RIM’s earnings, discuss the promise of wind power and evaluate Yahoo’s reorganization.

Check out the video here.

Nokia Embraces Openness; Welcome to Openness Wars

Today, in yet another sign that open networks are coming to the US wireless world, Nokia announced it will purchase the remaining stock it doesn’t own in Symbian and then migrate the solution to an “Open” platform.

First question: why are they doing this? According to ABI Research vice president Stuart Carlaw: “There has been financial pressure on Nokia to move in this direction at some point. The sheer economics of the number of devices it ships with the OS versus the value it gets out of its historic shareholding clearly indicated that such a `rescue’ was inevitable at some point.”

The second question of course is: How open will the platform be? “Perhaps this is an admission that the pressure from the Linux industry is really forcing Nokia and Symbian to change their game,” adds Carlaw. “Questions remain as to whether the solution will be truly open and what the cost of a Symbian Foundation membership will be.”

ABI research director Kevin Burden believes Nokia may still maintain a proprietary operating system for high-end mobile devices. “It’s very possible that Nokia will eventually position the Symbian platform for mid-tier devices with another platform powering its high-end devices – a position that Sony Ericsson has already taken,” says Burden.

Om Malik has a good post on what it means. My bottom line is that there is clearly going to be a war to dominate the open wireless platform. And it’s probably going to take a few years for all of this to settle out. In the meantime, innovation will flourish but not as much as if the industry had already decided upon a single open platform. Get ready for the next standards war featuring Android by Google, Symbian by the Symbian Foundation, Blackberry by RIMM, OS X by Apple, Windows Mobile by Microsoft and the LiMo by the LiMo Foundation. It’s enough to make your head spin!!!