Waiting in Line for iPads...

Lines of people wrapping around the block at the SoHo Apple Store, waiting, presumably, to buy an iPad.

What will be interesting is to see how sales stack up, and I don't mean volume of sales, but whether people decide they want connectivity all the time, like a smartphone, or can live with Wi-Fi access, as iPod touch users now do.

The difference is that the Wi-Fi-only approach makes the iPad more a media consumption device, while full-time connections might make it something else.

What the "something else" might be, remains to be seen. Nobody seems to think it replaces a smartphone. Beyond that, people seem to be unsure about whether it represents an entirely new product category or "just" a new interface for a netbook or laptop.

Google Optimizes Apps For iPad: Which Raises a Question

Google says it has optimized applications for the iPad to take advantage of its large display. Using Gmail on the iPad, for example, users will see a two-pane display that mimics what they are used to seeing on PCs, notebooks or netbooks.

The YouTube and Google Maps apps are preloaded on iPads.

But those features still raise the as-yet-unanswered question: can the iPad uncover significant demand for a new category of device in between a smartphone and a netbook or notebook? Or is the iPad really going to wind up succeeding or failing as a replacement for the netbook or notebook?

Those are quite different outcomes. For me it comes down to the irreducible number of devices I must carry, both locally and when traveling. Around town, the irreducible and desired number is "one." When traveling, because when push comes to shove I use a laptop for work, the irreducible number is "two." Well, actually three, as I carry two mobiles.

Years ago, the irreducible number when traveling briefly floated up to four, when I added the iPod. That turned out to be one item too many, and I no longer travel with it, except when running.

My point is that consumers weighing use of an  iPad will have to decide what it is, before they buy. And that means an identity "crisis" has to be solved before it becomes a huge mass market success. It seems to me to be a very-good media consumption platform, crudely put, an iPod touch on steroids. That will raise the question of the physical need to add more more portable device to the purse or backpack. For some users, that will be a point of friction.

But some people very quickly are going to try seeing whether, in their circumstances, an iPad can displace an existing netbook or notebook. And that could point the way to the iPad becoming a new form of netbook, rather than creating a new category of devices people generally use.

Apple could win, in either scenario, but wins most if it can create a new product category.

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Telcos "Playing Politics" With SEC Reports and Accounting Charges? Are You Kidding?

One of the calumnies heaped upon telecom service providers is that their recent Securities and Exchange Commission notifications of charges caused by the new health care legislation are somehow a political ploy. Some even say that AT&T and Verizon, for example, are doing so as a political act, because they "contribute to Republican candidates."

As often is the case, such claims are uninformed. In its most-recent report, the Federal Elections Commission reported that AT&T gave exactly the same amount of money to Democrats and Republicans, splitting about $1.7 million 50 percent to Democrats and 50 percent to Republicans, the FEC reports.

The truly unbalanced spending was by union political action committees. The Operating Engineers Union gave 89 percent to Democrats, the International Brotherhood of Electrical Workers gave 99 percent to Democrats, the American Federation of State, County and Municipal Employees gave 99 percent to Democrats, the Teamsters 98 percent to Democrats, the International Association of Frie Fighters gave 88 percent to Democrats, the Carpenters and Joiners Union gave 90 percent to Democrats, the Plumbers/Pipefiters Union gave 95 percent to Democrats.

If you take a look at the chart, the largest telecom-affiliated PACs split their giving between Republicans and Democrats. If one correlates the spending with which political party occupies the White House, or controls the Congress, the pattern of giving by telecom PACis clear: more spending for candidates representing the party in power.

Click on the image for a larger view. 




http://www.opensecrets.org/pacs/toppacs.php

Verizon Takes $970 Million Health Care Cost Charge

Verizon will take a one-time, non-cash tax charge of about $970 million in the first quarter 2010 to account for changes to its financial obligations required by the "Patient Protection and Affordable Care Act," which became law on March 23, 2010.

AT&T announced a similar charge of about $1 billion in March. Both firms have high retiree populations, and have been providing subsidized health care benefits to those retirees under Medicare Part D.

Because of the new law, Verizon and AT&T will no longer receive a Federal income tax deduction for those expenses.

Because future anticipated retiree health care liabilities and related subsidies are already reflected in Verizon’s financial statements, this change requires Verizon to reduce the value of the related tax benefits recognized in its financial statements in the period during which the law is enacted.

Going forward, both firms will face either higher operating costs or will reduce or cancel those retiree benefits.

Some observers have questioned whether the restatements are a "political ploy." Apparently those observers are not aware of how Sarbanes-Oxley legislation works. If the chief officers of a corporation, including its CEO and CFO, materially misrepresent a company's financial position--and $1 billion in a quarter is a material fact--those executives can be sent to jail.

Even medium-sized firms can incur costs of about $1 million a year to comply with Sarbanes-Oxley, by the way, imposing a huge financial drag on enterprises across the United States. And one reason many start-up firms say they will not, or cannot "go public" is the cost of Sarbanes-Oxley compliance costs.

Nor does it appear Sabanes-Oxley has prevented even a single case of corporate malfeasance. Our recent financial crisis does not seem to have been impeded one single bit. But it is a measure of how out of touch some observers seem to be that required accounting for financial obligations is considered a political act.

Zerista Aims at Small Community Mobile Social Networking

Zerista is a new platform for managing smaller mobile communities, allowing groups to create schedules, send messages, conduct chats, take payments, support checkin operations, send invites, show maps and browse member lists.

This new mobile platform is either an informal or formal mashup of Ning, Eventbrite, Twitter and Foursquare for small groups, in other words.

The business model currently provides free use of the application for groups of 250 or less, then a charge for using the platform to support larger groups, such as convention or trade show groups.

Zerista believes there is a gap in the marketplace between social software for large groups, such as Facebook and Twitter, which are well suited to large macro communities. But those tools might not especially meet the needs of local or "mirco"-sized groups such as soccer leagues, wine clubs or agents working for a single realtor, for example.

In the mobile context, the issue of community "size" is important if you consider the cost of creating a mobile app that could do this, or even several versions of the app to work on a couple major mobile operating systems. Zerista is set up as a "cloud" application that can be published for use by mobile devices without the need to create a special app.

Free Polycom Phones With Speakeasy Offer Through May 31, 2010

Speakeasy, owned by Best Buy, is offering free IP phones to new business customers.until May 31, 2010. Speakeasy is including, free of charge, Polycom SoundPoint IP 321 VoIP-enabled phones to new business customers who purchase unlimited or global Hosted Voice calling plans and have a minimum of five lines.

To the extent that the need to buy new IP phones has been a barrier to adoption, the promotion eliminates that concern.

In addition to offering a free Polycom SoundPoint IP 321 to new customers (MSRP $139), Speakeasy is also announcing their new hardware lineup including two new Polycom phones and three new Cisco phones. Speakeasy's phone lineup now includes the Polycom SoundPoint IP 335, 650, 670, and SoundStation IP 6000; as well as the Cisco SPA 504G, SPA 509G and SPA 525G. Special prices are available for a limited time only for customers wishing to upgrade from the free phone offer to one of these new models.

http://www.speakeasy.net/press/pr/Speakeasy_offers_free_phones.php

Conflicting Employment Numbers in March: What the Heck Does That Mean?

There are conflicting numbers on unemployment coming out. The number of people applying for unemployment benefits fell 6,000 in the week ended March 27, 2010 to a seasonally adjusted 439,000, the Labor Department reports.

On the other hand, A day after the monthly ADP survey showed a private sector job loss of 23,000 compared to a predicted 40,000 gain, employment consulting firm, Challenger Gray, said employers cut 67,611 jobs last month.

The ADP and Challenger numbers indicate that after an improvement in the unemployment picture in January and February, March employment numbers began to decline again, though the Labor Department figures suggest a continued recovery.

So far, the recession has caused the loss of 7.2 million jobs, and the Administration $787 billion stimulus package may have slowed the rate of attrition, but it has not begun to reverse it.

The importance of the unemployment numbers is obvious enough. Consumer spending drives at least 66 percent to 70 percent of all gross domestic product. Until consumer spending recovers, the economy cannot recover.

If the jobless numbers begin to deteriorate again, there will be serious concern about the viability of the recovery.

"The March jobs picture may be the beginning of a trend that America cannot afford to live through for a second time, if there is any hope of a recovery this year," says financial analyst Douglas McIntyre of 247wallst.com.

There is some possibility that the difference between the Labor Department figures and the ADP and Challenger Gray numbers is that the latter are biased to private sector employment, and there obviously has been an increase in temporary jobs caused by the hiring of workers taking the U.S. Census.

The worrisome implication is that private sector employment continues to struggle, and might even have worsened in March 2010, if that is possible.

All of this matters to every citizen, and obviously to any business that sells products to consumers, including communication and video service providers. Historically, voice, broadband, mobile and video services have held up quite well in recessions, and that seems to be the case for the most-recent recession as well.

That is not to say market share shifts halted, or that some legacy products struggled while rising new products gained. Voice market share continued to shift away from telcos and to cable operators and wireless; mobility overall did well while use of smartphones and mobile broadband grew as if there was no recession. Cable operators generally continued to lose video market share to telcos and satellite providers. But all those trends were in place before the recession, and are not caused by it.

If the housing market remains stalled, and unemployment remains high, it seems unlikely there will be too much change in consumer markets. Business markets could be another matter. Most businesses can put off making needed investments for a year or two. But no business can afford to postpone required investments indefinitely.

That suggests business investments could be a brighter spot for service providers in the business segments.

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