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January 10, 2012

AT&T and Verizon at CES - It is NOT Just about the Gadgets

By Peter Bernstein, Senior Editor

Yesterday was press conference day at the sprawling Consumer Electronics Show (CES) in Las Vegas. Today the estimated 140K visitors get down to the fun but serious business of kicking the tires of what’s new and figuring out how to capitalize on what they hear and see. It used to be that CES was all about gadgets, but the intoxication of the event has not so subtly shifted away from a device-centric view of the tech world to one increasingly dominated by ecosystem concerns. In words, how do device manufacturers, applications developers, service providers, OTTs, online gaming and store operators, adjacent markets (retailers, financial services companies), etc ., monetize what the devices can do to create differentiated value for themselves? 

A look at what AT&T (News - Alert) and Verizon are up to at CES is instructive. From outward appearances, you would think they were focused on razors (pardon the pun), when their real interest is selling the blades, i.e., services. This shift in emphasis -- also omnipresent at the show based on the predominance of cloud-related products, service concept demonstrations and speeches -- is healthy, as CES looks to keep its own standing as an event. It also highlights how Microsoft’s decision to cut its participation -- and for that matter Apple’s continued absence -- makes sense.   

Let’s briefly check under the hood of what the two large U.S. operators revealed. Hang onto your reading glasses since there is a lot to digest.

AT&T and 4G LTE

While smarting from its failure to buy the assets of T-Mobile USA and ruminating over how to get widespread 4G deployment in order to prevent customers fleeing to competitors, AT&T announced that in early 2012 there will be seven new smartphones and a tablet added to its 4G device line-up. Included were: 

Samsung

  • The Galaxy Note
  • The Samsung Galaxy S II Skyrocket HD
  • The Samsung Exhilarate -- an eco-friendly four-inch smartphone made mostly from recycled materials that will retail for under $50.

Pantech

  • The Pantech Element -- called thefirst LTE Android (News - Alert) tablet that will retail for $300 with a two-year contract starting January 22.
  • The Pantech Burst -- an LTE smartphone that will retail for less than $50 and is being bundled so that Pantech Element tablet buyers with an AT&T contract can get the tablet for $249.99 and the Burst smartphone for free.

Sony (formerly known as Sony Ericsson (News - Alert))

  • The Xperia ion -- an AT&T exclusive that will be available in the second quarter of 2012 aimed at music and video enthusiasts as highlighted by the fact it is PlayStation Certified.

Windows Phones from Nokia and HTC

  • The Nokia Lumia 900
  • The HTC Titan II

AT&T also revealed that through its partnership with Sony Computer Entertainment, when the PlayStation Vita is launched, AT&T customers will have service option of a $15 a month plan for 250MB, and a $25 plan for 2GB a month and both plans will be month-to-month and will not require any long-term contracts.  Vita users will also be able to access social networking and communications services such as Facebook, Flickr, foursquare, and Twitter.

And, in keeping with things ecosystem and cloud-centric, AT&T also announced it had became the first U.S. telecom service provider to join OpenStack, the organization started by Rackspace and NASA which has developed an open-source cloud software stack to enable developers to help enterprises create private cloud-based capabilities. This came as AT&T also launched a new cloud service geared toward mobile developers, Cloud Architect. This addition to the AT&T Hosting Services portfolio in the next few weeks will allow developers to set up public and private compute instances on dedicated or shared computing resources and, “Developers will be able to scale apps quickly and order up new services via an online service portal.”

Verizon not to be outdone

In the battle of the 4G LTE networks stars, Verizon certainly did not want to play second fiddle. Announcements included the following 4G device additions:

  • Motorola DROID 4 -- will launch with Android 2.3.5 Gingerbread but will be upgraded to Android 4.0 Ice Cream Sandwich later.
  • The LG Spectrum (News - Alert) – also launching with Android 2.3 Gingerbread with a future update to Android 4.0 Ice Cream Sandwich.
  • BlackBerry Curve 9370 – a world phone priced to go, it will launch January 19 for $99 with a two-year contract and after a $50 mail-in rebate, and is the first Verizon Curve with world-roaming support for GSM, GPRS, and EDGE networks. 
  • Samsung Galaxy Tab 7.7
  • Jetpack EuFi890 and the Jetpack MiFi 4620L-- new global-ready 4G LTE hot-spots

The company also had interesting announcements regarding support of VectraCor’s ambulatory cardiac monitor. It was revealed by VMware and partner LG as the only global carrier along with Telephonica of Spain to support a new tool that creates a virtual work phone on an employee’s own device and released a video with partner OnStar of their second research vehicle —a Chevy Volt — demonstrating streamed content from the cloud, in-vehicle and communication with OnStar's RemoteLink app, Skype (News - Alert) video calling (between car to computer and car to car) and more.

So much for the razors

As stated, the carriers are in a rush to get the latest and greatest out there to meet consumer interest in smart devices with more functionality to feed the smartphone and tablet beasts. At the end of the day it is, maybe more importantly, about 4G contracts and ensuring customers do not churn out because of a lack of 4G device options —be they Android, Windows or that 800 pound gorilla of a company whose name cannot be mentioned but will be here, Apple. If you look at the line-up additions, they cover OS, form factor, and price point holes in each carrier’s current portfolios in the race to lock in 4G customers. Lots of new razors, but don’t forget about the blades.

All of this certainly makes for an interesting snapshot on the current state of the mobile industry, which is a growing portion of CES. That said, the roles of Google (now about to have Motorola in its family), various global intellectual property disputes, the position and fair payment of developers and device makers that can sustain the rate of innovation and competition, and the role of the carriers in the value-chain as something more than fast-but dumb pipes, all remain as narratives for 2012 that are yet to be written. 

The announcements also happen to present an interesting snapshot of the state of CES. With on-line gaming roiling that market, smartphones overhauling the camera market, the acceleration of the reinvention of the TV experience (device and service), HTML5 impacts on the future of app stores, SOPA/PIPA legislation overhanging the future of the Internet in the U.S., mobile wallets taking hold, the impact of social networking on marketing and time spent online, and a host of other major disaggregation trends hitting increasingly fragmenting markets and redefining business models, CES is likely to be a very different looking show even as early as next year.  In fact, all of the uncertainty validates the reasons why CES, assuming it changes with the times and there is no reason to suspect it will not, is likely to be the place to go for many years to come.

Don’t forget to stop by the TMCnet booth #70603 in the Venetian Ballroom if you are at the show. A great place to rest and get caught up on what’s hot even in the middle of winter.

 Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO East 2012, taking place Jan. 31-Feb. 3 2012, in Miami, FL. ITEXPO offers an educational program to help corporate decision makers select the right IP-based voice, video, fax and unified communications solutions to improve their operations. It's also where service providers learn how to profitably roll out the services their subscribers are clamoring for – and where resellers can learn about new growth opportunities. For more information on registering for ITEXPO registration click here.

Stay in touch with everything happening at ITEXPO. Follow us on Twitter.


Peter Bernstein is a technology industry veteran, having worked in multiple capacities with several of the industry's biggest and best known brands, and has served on the Advisory Boards of 15 technology startups. To read more of Peter's work, please visit his columnist page.

Edited by Rich Steeves
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