Sprint offers two new unlimited service plans

Sprint Nextel today ups the ante in the wireless wars.

Reeling from a poor financial performance in 2007 and projecting another bad year, Sprint is trying to lure cord cutters, cell phone junkies, business professionals and other high-dollar wireless customers.

In the process, Dan Hesse, Sprint Nextel’s chief executive, is hoping to take the uncertainty out of monthly wireless bills.

The company today begins offering two new unlimited service plans offering more value for the money than those unveiled by their competitors.

A $99.99 “Unlimited Everything” plan includes voice calls, text messaging and a laundry list of Internet-based data services. An $89.99 “Talk/Message/Connect” plan offers unlimited voice calls and text messaging, but charges extra for access to the Internet or other data services.

The rates undercut competitors AT&T Wireless, Verizon Wireless and T-Mobile by as much as 40 percent. None of those companies offers unlimited access to the rapidly growing wireless data market, which includes services as diverse as phone-based TV and turn-by-turn navigation.

Hesse called the Sprint plans “bold” and “unprecedented.”

“To us, this is the beginning of a new era in wireless,” Hesse said.

According to surveys by organizations ranging from Consumer Reports to the University of Michigan to AARP, problems with mobile phone bills are one of the leading consumer complaints nationally.

After selecting plans that provide a set number of minutes for a set price, customers complain that add-on charges for navigation, Web browsing and text messaging bulk up their bills.

“Wireless today is about much more than just voice,” Hesse said. “It is about data services — texting, e-mail, video, pictures, music, navigation, surfing the Web and more. Customers want these applications, but without complexity and without having to worry about their bill.”

Wall Street, however, was less than impressed.

“I’m not seeing anything here that’s going to change the trajectory much,” said Timothy Horan, an analyst with Oppenheimer & Co.

Horan noted that T-Mobile has a plan that offers 1,000 minutes of talk, 1,000 text messages and e-mail for $55.

John Garcia, Sprint’s acting chief marketing officer, said services offered by Sprint and T-Mobile aren’t comparable.

“They are still in a fairly slow network and their data offering is primarily just text and e-mail,” Garcia said during a call with investment analysts. “And anything else you try to do is, like I said, slow.”

Some type of move by Sprint on unlimited calling plans was expected. The company’s three leading rivals announced unlimited service plans last week.

The announcement was the lone positive note Thursday in a cacophony of bad news released as the Overland Park wireless company announced its quarterly and annual financial reports.

Sprint wrote off $29.7 billion in the fourth quarter and said the company will lose 1.2 million postpaid customers during the first three months of this year.

Hesse said Sprint’s plan differentiates the company from its competitors while offering customers simplicity.

In some ways, Hesse is going back to the future.

While with AT&T’s wireless division in 1998, Hesse introduced one-price calling for cell phones, eliminating different charges for local and long distance calls. At the time, consumers were charged extra for cell phone use outside their home region or for long distance calls.

Before the plan was introduced, Hesse said, only about 16 percent of wireless consumers regularly used their phone in areas that would bring extra roaming charges.

“We penalized any customer who actually wanted to use the mobility function,” he said. “You didn’t take your cell phone when you traveled and you didn’t make long distance calls on your cell phone. The market was small because the wireless industry made sure it was small.”

The plan to standardize rates is a whole new revolution, Hesse said.

“At our rates, we feel we have struck a very healthy balance between fiscal responsibility and a broader reach, which will grow the wireless data market,” Hesse said.

William Power, an analyst with Robert W. Baird & Co., said the plan puts Sprint in a competitive position for the most lucrative customers. But, in a report to investors, he included a caveat.

“That is a relatively small piece of the overall market,” Power said.

Power noted that Wall Street had been concerned Sprint would start a wireless price war.

“On the whole, the pricing actions do not appear to be as aggressive as some had feared,” Power said. “The lack of a stronger lower-priced offering could be positive for the industry.”

Hesse conceded that only a small percentage of current customers are coughing up $100 a month for mobile phone service.

“It’s correct that today a small percentage of users spend $100 a month on wireless,” Hesse said. “But that could change. It could be that it’s because we make it difficult for users, or really very expensive, for users to use broadband capabilities on the phone.”

Roger Entner, vice president of the communications sector for IAG Research, applauded Sprint’s plan.

“It’s enough to give them differentiation, but not enough to make everybody freak out and start a price war,” Entner said.

Entner said Sprint’s plan also offers another benefit overlooked by other wireless companies in their unlimited plans — families.

Sprint’s plans give families a $5 incremental discount for each line on a family plan. A second line costs $94.99; a third, $89.99.

“It’s on the right path,” Entner said of the plan.

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Sprint goes unlimited

---

$99.99
Unlimited voice and data, including texting, Web browsing, push-to-talk, navigation, TV, radio and other services.

$89.99
Unlimited voice calls, push-to-talk and texting, but no free access to other data services.

$89.99
Unlimited data, including texting, Web browsing, navigation, TV, radio, push-to-talk and other services, and 900 minutes of talk time.

$69.99
Unlimited texting and push-to-talk, and 900 minutes of talk time.

$49.99
Unlimited texting and push-to-talk, and 450 minutes of talk time.

Source

Wireless Price War a Boon to Enterprise Mobility

Top-tier providers roll out fixed-price plans, as workers gain service leverage.

The fixed-rate war raging between wireless service providers could benefit enterprises that aim to save money and gain even deeper data and Internet services for mobile workforces.

AT&T, Verizon Wireless and T-Mobile ignited a pricing battle two weeks ago when all three announced fixed-price unlimited calling plans for $99.99. T-Mobile even added unlimited texting.

Sprint Nextel remained eerily quiet until yesterday when it rolled out unlimited voice, data, text, e-mail, Web access, GPS service, as well as Sprint TV, Sprint Music, and Direct Connect and Group Connect options in one plan for the same price.

In a statement, Dan Hesse, Sprint president and CEO, said the plan reflects the sea change in cellular services and users' data needs.

"Wireless today is about much more than just voice. It is about data services. Customers want these applications," he stated. Sprint says the move to unlimited plans that include data signifies an industry turning point.

"Nationally accepted measures of voice quality now show very little, if any, difference among the top wireless providers," the provider acknowledged in its statement.

And that simple statement is exactly why enterprises are in a great position when it comes to shoring up data services at more economical prices, say industry experts.

The price battle proves "data is the new voice" and that "today's cell phone is tomorrow's smartphone," Carmi Levy, senior vice president of strategic consulting at AR Communications, told InternetNews.com. Both trends, he said, bode well for corporate mobility needs.

Enterprises should call their providers and begin negotiating better price point and data service plans.

"It's time to crack open that existing deal and realize some cost savings. IT leaders should be asking their providers 'what are you going to do for me?' And they should be prepared to jump to another carrier as it could prove very cost-effective," said Levy, who expects prices to keep dropping.

"IT needs to be proactive and get the biggest bang for their technology buck. Mobility is a critical business tool," he said.

But whether data services become a fixed price option anytime soon is up to the carriers. Verizon Wireless recently announced a new "unlimited" data plan that has a maximum cutoff at 5GB. Users who go beyond that will pay 49 cents for every megabyte of data over the limit and could get their throughput reduced.

Levy compares this type of strategy to the initial ISP approach when the Web came into play. At that time most ISPs offered minutes-based pricing plans. The industry, Levy said, finally realized that charging per minute wasn't the best business strategy.

"That was a ridiculous approach -- using a meter to charge people -- and it's the same now with data minutes," he said. "Providers need to offer an 'all you can drink' data plan for the enterprise."

And given Sprint Nextel's "brilliant" marketing move, the analyst expects such changes could come quick.

"Competitors can't afford to stand on the sidelines at this point," Levy said. "They all have to balance marketing efforts with better data plans and expanded coverage as mobile workers expect to have service wherever they are."

Source

U.S. Stocks Decline on Economic Concern; AIG, Sprint Retreat

U.S. stocks tumbled, capping the market's fourth-straight monthly drop, after a report showed business activity fell to the lowest level since 2001 and UBS AG said losses in credit markets may top $600 billion.

American International Group Inc., the world's largest insurer, declined the most in two weeks after posting the widest quarterly deficit in its 89-year history. Sprint Nextel Corp. slumped to an almost six-year low on concern more customers will defect from the third-biggest U.S. wireless carrier. All 10 industries in the Standard & Poor's 500 Index retreated, led by banks and phone companies.

The S&P 500 fell 37.05 points, or 2.7 percent, to 1,330.63, its biggest drop since Feb. 5. The Dow Jones Industrial Average slid 315.79, or 2.5 percent, to 12,266.39. The Nasdaq Composite Index lost 60.09, or 2.6 percent, to 2,271.48. Eleven stocks fell for every one that rose on the New York Stock Exchange.

``There is certainly no shortage of negative news out there,'' Michael Magiera, senior analyst at Manning & Napier Advisors, which manages $17 billion in Fairport, New York, said in an interview on Bloomberg Television.

The S&P 500 extended its February decline to 3.5 percent after the National Association of Purchasing Management-Chicago said its business barometer contracted as production and employment weakened, boosting concern the worst earnings slump in six years will continue. The four-month losing streaks for the S&P 500 and Dow are the longest since 2002.

Global Slump

Shares in Europe and Asia retreated on concern that the U.S. economy is tipping into recession. Europe's Dow Jones Stoxx 600 Index retreated 1.4 percent, while the MSCI Asia Pacific Index lost 1.2 percent. The MSCI EM Latin America Index dropped 4.5 percent, the most in almost six weeks.

Profits at S&P 500 companies fell 23 percent on average in the fourth quarter of 2007, and analysts surveyed by Bloomberg expect a 3 percent drop in the first quarter followed by profit growth of 13.7 percent for the year. Two months ago, the forecasts were for increases of 4.7 percent in the first quarter and 15.1 percent for the year.

AIG tumbled $3.29, or 6.6 percent, to $46.86 after posting a fourth-quarter net loss of $5.29 billion, or $2.08 a share, following an $11.1 billion writedown on investments linked in part to subprime mortgages. AIG said it expects more writedowns this year.

``Fridays are tough days'' because investors don't want to be long stocks in case more bad news is reported over the weekend, said David Goerz, chief investment officer of Highmark Capital Management, which oversees $22 billion in San Francisco. ``The news with AIG just put everybody in a foul mood.''

Citigroup Inc., the largest U.S. bank, slid $1.30 to $23.71. Goldman Sachs Group Inc., the biggest securities firm, fell $7.07 to $169.63.

`Cancer in the Market'

Credit-market losses will climb to at least $600 billion from about $160 billion written down so far as investments funded with borrowed money are unwound, UBS credit strategist Geraud Charpin wrote in a note to clients.

``Leveraged risk positions are a cancer in this market and the sooner it is treated the better,'' Charpin wrote. AIG's writedown ``is also the clearest indication that banks are not the only ones to suffer potential losses.''

Lehman Brothers Holdings Inc. and Bear Stearns Cos. fell after Deutsche Bank AG analyst Michael Mayo forecast further writedowns of subprime assets and lowered first-quarter profit estimates for the firms. At least five other analysts have cut their first-quarter analysts for banks and brokers in the last two weeks. Lehman fell $3.69 to $50.99. Bear Stearns lost $4.36 to $79.86.

September 2002

Financial shares in the S&P 500 fell 4 percent today and tumbled 11 percent in February, the steepest monthly loss since September 2002.

Ambac Financial Group Inc. fell 66 cents to $11.14 after CNBC reported that a deal to boost capital at the second-largest bond insurer hit a snag Feb. 27. The group of banks engaged in the bailout will come back with another proposal to keep Ambac together, the financial news network reported. CNBC cited people familiar with the situation.

MBIA Inc., Ambac's larger rival, decreased $1.09 to $12.97. The company is writing ``very little'' new bond insurance business as borrowers balk at buying a guarantee from a money- losing company without stable AAA credit ratings. MBIA said losses on mortgage-backed securities will probably increase this year and expand beyond subprime mortgages.

Subscriber Losses

Sprint slid 98 cents to $7.11. The company said it will likely lose 1.2 million subscribers in the first quarter. That was triple the number Stanford Group Co. analyst Michael Nelson in New York had forecast and represents 2.2 percent of Sprint's wireless customers.

Exxon Mobil Corp. and Chevron Corp. fell as crude oil retreated from a record and natural gas declined from a two-year high in New York. Exxon lost $2.37 to $87.01. Chevron tumbled $2.36 to $86.66.

Novell Inc. posted the biggest gain in the S&P 500, adding 91 cents, or 14 percent, to $7.45. The second-biggest seller of Linux operating-system software in the U.S. reported a fiscal first-quarter profit that beat analysts' estimates after cutting costs by eliminating jobs and changing sales tactics. The company raised its full-year sales forecast.

Gap Inc. rose 72 cents to $20.17. The largest U.S. clothing retailer said fourth-quarter profit advanced for the first time in three years and forecast further gains this year after it sold more full-priced sweaters and jeans during the holiday season.

3Com Buyout

3Com Corp. jumped 38 cents, or 13 percent, to $3.29. Bain Capital LLC and Huawei Technologies Co. plan to reapply within several weeks for U.S. approval to acquire the networking systems and services provider for $2.2 billion, the Wall Street Journal reported, citing people familiar with the matter.

Today was the most active trading day on the NYSE since Feb. 1, with 1.76 billion shares changing hands. Over the past three months, average daily volume has been 1.59 billion shares.

The National Association of Purchasing Management-Chicago said its business barometer dropped to 44.5 in February from 51.5 a month earlier. Figures less than 50 signal a contraction.

Consumer spending in the U.S. rose more than forecast in January, reflecting a jump in prices that is eroding buying power. The 0.4 percent rise in spending followed a revised 0.3 percent gain in December, the Commerce Department said. The Federal Reserve's preferred measure of inflation climbed 0.3 percent, the most in four months.

Treasury Yields Fall

Yields on Treasury securities slid, sending the two-year note under 1.7 percent for the first time since April 2004, as investors increased bets on interest-rate cuts by the Federal Reserve.

Interest-rate futures indicate traders for the first time assign a higher probability to a three-quarter-point cut than to a half-point cut at the Fed's next meeting on March 18. The odds of a three-quarter point cut implied by futures prices rose to 70 percent from 36 percent yesterday and 2 percent a week ago. The remaining bets are on a half-point cut.

The central bank has lowered its target for the overnight lending rate between banks five times since September, most recently to 3 percent on Jan. 30.

``The market has been of the belief that the Fed's aggressive easing action would relieve the pressures,'' said Henry Herrmann, president of Waddell & Reed Financial Inc., which manages $65 billion in Overland Park, Kansas. ``The complications are not diminishing, they're growing.''

Economic Slowdown

Stocks slid yesterday after slower-than-forecast economic growth, rising jobless claims and Federal Reserve Chairman Ben S. Bernanke's warning of possible failures among smaller banks deepened concern that the economy has tipped into a recession.

U.S. equities, as measured by the S&P 500, fared the worst among the world's 10 largest markets in February on concern that a recession is inevitable. Japan posted the second-biggest decline, with a drop of 1.6 percent in the Topix index.

Six of the 10 biggest markets have fallen more this year than the S&P 500, which is down 9.4 percent in 2008. Canada's Standard & Poor's/TSX Composite Index has lost 1.8 percent and Brazil's Bovespa fell 0.6 percent.

The S&P 500 trades at less than 14 times expected earnings, the lowest valuation since October 1990, reflecting investors' lack of confidence in profit estimates.

Financial companies and telephone stocks posted the biggest drops among 10 S&P 500 industries in February, declining 11 percent and 9.6 percent, respectively.

The Russell 2000 Index, a benchmark for companies with a median market value 22 times smaller than the S&P 500, dropped 2.8 percent today to 686.18. The Dow Jones Wilshire 5000 Index, the broadest measure of U.S. shares, fell 2.6 percent to 13,455.96. Based on its decline, the value of stocks decreased by $450.9 billion.

Source

Verizon Sales Miss Estimates as Home-Phone Users Fall

Verizon Communications Inc., the second-largest U.S. phone company, reported fourth-quarter sales that missed estimates as home-phone users defected to cable rivals and wireless service.

Net income climbed 3.9 percent to $1.07 billion, or 37 cents a share, from $1.03 billion, or 35 cents, a year ago, the New York-based company said today in a statement. Revenue rose 5.5 percent to $23.8 billion, less than the $24 billion average estimate of analysts in a Bloomberg survey.

Chief Executive Officer Ivan Seidenberg's plan to spend $23 billion over seven years to offer TV service and higher Internet speeds hasn't yet stemmed customer losses to cable companies. Investors are worried that an economic slowdown could cause more phone-line losses for Verizon and larger rival AT&T Inc., said Jeff Brimhall of National City Private Client Group.

``They both face a little bit of a challenge because they obviously have significant exposure to the consumer,'' the Cleveland-based analyst said in an interview. His firm manages $34 billion, including Verizon and AT&T shares. ``Line loss to wireless and to cable is a concern going forward, but the macroeconomic situation just adds uncertainty.''

Profit, excluding items such as severance pay for fired workers, was 62 cents a share, meeting the average estimate of 21 analysts in the Bloomberg survey. The wireless unit's operating margin, the percentage of sales remaining after deducting the costs of providing service, expanded to 26.2 percent from 25 percent a year ago.

Line Losses

Verizon rose 35 cents to $38.11 at 4 p.m. in New York Stock Exchange composite trading. The stock is little changed in the past 12 months.

Verizon lost 875,000 phone lines in the quarter, including 476,000 primary home-phone lines, as customers switched to cable voice plans or began using wireless service exclusively. Some of those mobile users are Verizon Wireless customers. Total phone lines dropped 8.1 percent from a year ago to 41.4 million, accelerating from an 8 percent drop the previous quarter.

AT&T also reported fourth-quarter revenue that fell short of analysts' estimates. While San Antonio-based AT&T blamed the results on shutting off service to nonpaying customers, Verizon pointed to competition from cable companies such as Comcast Corp.

U.S. retail sales fell last month, unemployment climbed, and factory production has slowed. The Federal Reserve cut the benchmark lending rate Jan. 22 in its first emergency reduction since 2001. President George W. Bush is working with lawmakers to pass an economic stimulus package to avert a recession.

Growth Concerns

After a 17 percent gain in 2007, Verizon shares have fallen 13 percent this year amid investor concerns about economic growth. AT&T said a slowing economy cost it about 100,000 of the 656,000 primary home-phone customers it lost last quarter. Verizon hasn't detected a similar trend, company president Denny Strigl said.

``Whether they face a challenge or not, investors are concerned by the fact that they are going to,'' Brimhall said.

Verizon continued to trim jobs. The company recorded a charge of 16 cents a share in the fourth quarter for severance pay to fire 9,000 phone-line workers from last quarter through the end of this year. Verizon has about 235,000 employees.

``It's not related to any kind of economic trend,'' Chief Financial Officer Doreen Toben said in an interview. ``When lines go down, when you have less lines, you have less need for force.''

Selling Businesses

The company is awaiting regulatory approval for a $2.72 billion deal to hand over about 1.6 million phone lines in the northeastern U.S. to FairPoint Communications Inc. Verizon spun off a directories unit and sold assets in the Dominican Republic, incurring expenses of 22 cents a share in the quarter.

Verizon added 226,000 TV subscribers to its fiber-optic network, fewer than the 234,000 projected by UBS AG analyst John Hodulik in New York. The company also recruited 245,000 fiber Internet customers, missing Hodulik's 284,000 estimate.

The fiber-optic network, called FiOS, is now available in parts of 17 states, the company said today. Verizon plans to make it available to 18 million homes by the end of 2010, about twice last year's total. Customers are less likely to cut phone lines when they order TV and fiber-based Internet services, Toben said.

``It sounds like, as video continues to roll out, the retention should improve,'' said Jonathan Atkin, an analyst at RBC Capital Markets in San Francisco. He said he expects the shares to perform in line with the broader market.

Verizon's capital expenses in 2008 should fall below the $17.5 billion it spent last year, Toben said.

Wireless Customers

Verizon Wireless, jointly owned by Verizon and Vodafone Group Plc, added 2 million customers, including 1.6 million on long-term contracts. Subscribers who sign contracts are more profitable because they're more likely to stay with the company over time than those who pre-pay for service.

Verizon Wireless took subscribers from smaller rival Sprint Nextel Corp., which lost 683,000 contract customers last quarter. AT&T, owner of the biggest U.S. mobile-phone service, added 2.7 million users in the quarter, including 1.2 million on contracts.

Wireless customer turnover, or churn, narrowed to 1.2 percent from 1.3 percent in the previous quarter. The company has kept users by spending to maintain the quality of its network, said Todd Rosenbluth, an equity analyst at Standard & Poor's in New York.

``It was a strong quarter, driven by wireless,'' Rosenbluth said. He had estimated Verizon Wireless would add 1.5 million subscribers. ``They continue to be the most efficient operator out there.''

Source

Panel split over ban on hand-held phones in cars

Sen. Michael G. Lenett is sponsor of the bill to ban use of hand-held phones while driving.
It's talking on the phone, not holding it in your hand, that leads to auto accidents, opponents of a ban on hand-held cell phone use while driving told lawmakers yesterday.

But proponents of the ban - who have been trying for nearly a decade to enact legislation restricting cell phone use while driving - said that handling phones and the increasingly prevalent practice of typing messages on them while behind the wheel increase the likelihood of driver distraction, which accounts for more than a million car crashes a year.

Lawmakers appeared split on the issue during a committee hearing yesterday, and proponents said the measure is within one vote of success or failure.

Gary M. Horewitz, a government affairs representative for Sprint Nextel, said the Maryland law would "lead to greater risk on the highway" because it would encourage drivers to talk on hands-free devices - and that it is the potentially distracting conversation, not the handling of phones per se, that is the real danger.

"The bill will potentially lead to more crashes, not less," he said.

The legislation, sponsored by Sen. Michael G. Lenett, a Montgomery County Democrat, would allow drivers to use wireless communication devices only with hands-free accessories, such as headphone sets equipped with microphones.

At least five states and the District of Columbia have passed bans on driving while talking on hand-held cell phones, according to the Maryland Department of Transportation. Among them are Connecticut, New Jersey and New York.

After yesterday's hearing, Lenett said the proposed ban - variations of which have deadlocked Maryland's legislature since 1999 - faces a tough hurdle in the nine-member Judicial Proceedings committee.

"It's extremely close, maybe within one vote," Lenett said. But he maintained hope that support from Gov. Martin O'Malley's administration as well as a national trend toward similar bans would swing the issue this year.

But Sprint lobbyists and several Republican committee members pointed to accident statistics from the Maryland State Police that list cell phones as causing only one half of 1 percent of all crashes.

Sen. Brian E. Frosh, the Montgomery County Democrat who chairs the committee considering the bill, said he supports the measure but added that it is too early to predict whether his members would vote to send the legislation to the Senate floor for a full hearing.

"It's a very controversial issue, one in which people are going to try and figure out how their constituents feel about it," Frosh said.

If the bill does make it out of committee, leaders in the Senate and House of Delegates said it stands a good chance of becoming law.

Both Senate President Thomas V. Mike Miller and House Speaker Michael E. Busch said yesterday that they would support the ban.

If it passes the Senate, Busch predicted the bill would have a "strong possibility" of support in the House, though he said the law would be difficult to enforce.

"I know it would be a great inconvenience to many, but it's a life-saving measure," Miller said. "I'm sure people will give it a fair shot."

Sen. Nancy Jacobs, a Republican representing Harford and Cecil counties, told members of the Judicial Proceedings Committee yesterday that she believed using a cell phone while driving could actually save lives in some circumstances.

"When somebody's whizzing by me at 100 miles an hour, I'll often call the police and report the license plate," Jacobs said to Lenett during the hearing.

Emergency calls would be exempted from the ban, he responded.

"What about a call from one of your children to you because of what they thought of as an emergency situation?" Jacobs asked.

Minnesota sues Sprint Nextel in dispute over customer contracts

Minnesota Attorney General Lori Swanson has filed a lawsuit against Sprint Nextel Corp., accusing the cell phone company of extending customer contracts without consent.

The suit alleges that Reston-based Sprint Nextel violated Minnesota's consumer protection laws by extending consumers' wireless-phone contracts for up to two years without giving adequate disclosure.

In a press release, Swanson's office said it was responding to complaints the state had received.

When customers made small changes -- like adding extra minutes, replacing a phone, responding to solicitations for additional services or receiving courtesy discounts -- they were given unwanted contract extensions. Some consumers were threatened with early termination fees of up to $200 when they tried to cancel the wireless service.

"In a normal transaction, you have two parties coming together and making an agreement about a purchase," Swanson said in a statement. "For these consumers, there was no real meeting of the minds. Rather, the company has tricked consumers into unknowingly extending their contract simply because they made a basic change to their plan."

Swanson is seeking restitution for victims and civil penalties of up to $25,000 per incident.

A Sprint spokesman could not be reached for comment.

SOURCE.

Palm introduces the Centro, a smaller, low-cost smart phone

Palm Inc. has introduced the Centro, its first low-cost, consumer-oriented smart phone, a product the company hopes will help it tap into the growing demand for more powerful multimedia handsets.

Palm chief executive Ed Colligan, speaking at the DigitalLife conference in New York on Thursday, said that by putting advanced smart phone capabilities into a standard-size cell phone, Palm hopes to appeal to mainstream phone users who are ready to upgrade to a more versatile device.

The Centro, he said, "is meant to be the center of your life, both your business and personal life. We're trying to reach a new demographic."

The phone will sell for $99.99 and has a compact design, considerably smaller than Palm's Treo devices, which have remained largely unchanged for several years. The Centro offers instant messaging, personal and corporate e-mail support, media player, touch screen, QWERTY keyboard and high-speed 3G data access.

The phone, which runs on a Palm operating system, will be available in mid-October exclusively with a two-year service agreement from Sprint-Nextel. It comes in black and red, and will feature Sprint's live TV service as well as easy access to Web sites such as YouTube, Yelp and Google Maps.

Danny Bowman, Sprint's vice president of customer equipment, said the Centro combines a wealth of features at a low price, which should make it popular for the holiday season.

The heat has been on Palm to keep up with competitors like Research In Motion, Nokia, Motorola and, more recently, Apple with its iPhone. Critics have wondered when Palm was going to refresh its lineup of phones, which have sold solidly to business users but haven't kept up with the growth in the overall smart phone market.

The growing competition has not been kind to Palm. The company's profit slid 43 percent to $15.4 million in its fiscal fourth quarter, which ended June 1.

But Colligan said the future is bright for Palm as it competes in a fast-growing market. Market research firm IDC is projecting that U.S. smart phone shipments will grow from 13.8 million in 2007 to 74.4 million in 2011.

Analysts aren't sure that the Centro alone will turn Palm's fortunes around. But the device is a good start, said Tavis McCourt, an analyst with Morgan, Keegan & Co.

"This is the direction Palm needs to go in," he said. "It may not be as successful as the BlackBerry Pearl, but it's nice incremental growth for Palm. It certainly answers some of the critics. They're saying they get it, that customers want things smaller - thinner phones with more multimedia features."

Miro Kazakoff, an analyst with Compete Inc., said the Centro will help Palm stay in the burgeoning smart phone game. He said his research has found that now 20 percent of consumers say they are at least casually considering buying a smart phone for their next cell phone purchase, up from 5 percent at the beginning of last year.

"We used to call these 'enterprise devices,' but now we're seeing general consumers shop for them," Kazakoff said. "Now, all the smart-phonemakers need to make devices that are oriented toward consumers."

News of the Centro sent Palm stock up 6.3 percent, or 97 cents, to close at $16.40 per share.

Palm Unveils $99 Smart Phone

(financialwire.net via COMTEX) -- RIMM | charts | news | PowerRating -- October 1, 2007 (FinancialWire) Palm (NASDAQ: PALM | charts | news | PowerRating) has unveiled a low cost smart phone designed to appeal to a broader range of customers.

The Palm Centro is designed to be comparable to Research in Motion's (NASDAQ: RIMM | charts | news | PowerRating) Blackberry Pearl, but is lower priced than other devices currently on the market. The Centro features a full keyboard for typing text message or email, and a touch screen similar to one found on Apple's (NASDAQ: AAPL | charts | news | PowerRating) iPhone.

According to Palm CEO Ed Collgan smart phone consumers currently account for around 5% of all cell phone users, and many potential customers are turned off by the high price of the devices.

The Centro will launch in October and Sprint Nextel will be the exclusive carrier of the device for the first few months.

Shares of Palm, which has struggled recently against competition from other smart phone makers, rose 5% on the news Friday.

Disney Ends Cell Phone Service for Kids

LOS ANGELES (AP) — The Walt Disney Co. will pull the plug on its branded cell phone service by the end of the year, the company said Thursday.

Disney said customers liked the product that allowed parents to determine the location of a child carrying a phone, but that it was having problems getting the phone into large retailers.

"We decided that changing strategies was a better alternative to pursue profitable growth in the mobile services area," Steve Wadsworth, president of the Walt Disney Internet Group, said in a statement.

The company will end sales immediately and continue to service the handsets until the end of the year.

Disney is talking to major cell phone carriers about offering some of its most popular services, such as tracking the location of phone users.

Disney subscribers bought special handsets for their children and the service provided Disney ring tones, video and other branded content. The service used Sprint Nextel Corp.'s network.

The phones were equipped to display the location of a user's handset on a map, limit when and how the phone was used and set limits on expenditures.

The company said it became clear it would have to invest far more in the product to boost sales than could be justified.

Exclusive deals cut between large retailers and mobile carriers made it too hard for Disney to get its product in front of customers, the company said.

"It became obvious that the cost of continuing became greater than we wanted to bear," Disney spokesman John Spelich said.

The company would not say how many subscribers it had or whether there would be a write-off associated with ending the stand-alone operation.

About 120 people could lose their jobs, although Disney is working to place them elsewhere in the company.

It's the second failure Disney has had in the highly competitive mobile phone industry. Disney dropped its ESPN-branded cell phone service last year after it did not prove profitable. The company shifted the content developed for the service to Verizon Wireless.

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Motorola Shows Off WiMax Chipset For Mobile Devices

The cell phone maker expects to use the technology in its own products, as well as equipment from other mobile manufacturers starting in 2008.

Motorola (NYSE: MOT) on Tuesday showed off its WiMax chipset, which the handset maker plans to include in mobile phones next year.

The chipset, shown at WiMax World in Chicago, is designed to support WiMax wireless wide-area networks, which are under construction in dozens of metropolitan areas across the nation. WiMax is seen as an alternative to Wi-Fi in delivering data and voice services to mobile devices, such as smart phones and handheld computers. WiMax's biggest advantage is a bigger, faster pipe for moving data, and its ability to carry over far greater distances.

Motorola said it plans to start delivering WiMax-enabled handsets to carriers around the world in 2008. One such carrier is Sprint Nextel (NYSE: S). The company's Xohm business unit is building with partner Clearwire a nationwide WiMax network. Sprint has said it expects to have WiMax available in about 30 U.S. metropolitan markets next year.

Motorola says its chipset modem is designed for WiMax 802.16e compliance. The hardware has been tested in Motorola's own infrastructure products, as well as equipment from other mobile manufacturers, according to Motorola.

"With this chipset, Motorola has been able to redefine what is possible for WiMax mobile devices, enabling a wider portfolio of devices, from voice-centric handsets to multimedia terminals," Gary Koerper, VP of platform planning and systems architecture at Motorola, said in a statement.

Motorola is providing WiMax infrastructure technology to 12 commercial systems, and has been involved in more than 40 trials worldwide since late 2006, the company said.

A major challenge to WiMax is likely to come from wireless carriers building out their cellular networks to deliver data faster. Those services, however, have been expensive. WiMax supporters believe the technology can beat rivals in price, as well as speed.

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