Wireless Back Door

Enterprising journalists like Newsweek’s Rana Faroohar and lauded economists like Joseph Stiglitz have written extensively about the U.S.’s divergent wealth patterns, describing how the industries hit hardest by the recession were the territory of the middle class and exacerbated an already growing market trend since the 80s of a widening gap between rich and poor.

Now we’re hearing evidence of it from an unlikely quarter: the CEO of AT&T.  He tells Bloomberg BusinessWeek that  the spending patterns of wealthy and poor Americans are growing farther apart.

“An economy of haves and have-nots is evident in both the consumer and business sectors, Stephenson said in an interview last week at Bloomberg headquarters in New York. Companies and individuals with money are spending it, while the rest are more constrained than usual, he said.”

And nearly three years after the official end of the last recession, he says, the numbers of new businesses being created has lagged, a troubling sign. “I’ve never seen it like this,” Stephenson said. “Small business starts are still negative. That used to be the early warning indicator. When you saw small business starts turn positive, that was a great sign.”

Government spending and near-zero interest rates have helped keep the U.S. economy growing, even as Europe falls back into recession, but businesses are not growing fast enough to expand the telecommunications much. While larger corporations are spending more such services, those investments are going toward efficiency and not toward expansion. Smaller companies aren’t even beginning to upgrade or expand telecommunications.

The one sector who is buying up a storm is the rich, who are so eager to upgrade their iPhones and other devices that the carrier’s ability to keep up with them is being tested. When it comes to the poor, not so much. Those who are still pinching pennies three years after the recession would do well to consider buying used cell phones, which are proliferating as savvy refurbishers exploit a relatively new market. It might not save the economy, but at least it’s supporting a growing sector of small business while saving consumer money. A win-win.

In keeping with the larger-is-better screen trend, Samsung has just released its Galaxy S3, “designed by humans and inspired by nature,” so says this promo video (we’re not sure exactly what that means, but hey, it sounds cool). The video goes on to say that, “despite its large 4.8 inch screen, it fits perfectly in your hands.” Really? If you’re a 300-pound gorilla? Maybe they mean it fits perfectly because the phone, while wide, is very slim. Sure, that must be it. In any case, those who are fans of the big and bigger screen direction of smart phones in general will be stoked to pick up this new model.

On the other hand, some of us prefer a screen that’s more like 3.5 inches wide, in part because we like to put it a pocket or slide it into a purse without having to buy a purse with larger pockets (we all know what happens when women place their phone in the main compartment of their purse, which is akin to the Bermuda Triangle and three times as large). If you fit into that category of consumer – and you for some reason take issue with the Samsung Galaxy S3’s capacity to take 20 consecutive photos or execute a file sharing “bump” with one touch to another phone, you should stick with your current model.

If you’re in the market for a new one and admire the Samsung but don’t want to drop the full price tag for the new model, browse the inventory of an online retailer that offers refurbished used cell phones. There are lots of lightly used Samsungs out there – not to mention iPhones – that are nearly as cool and not as pricey. And if you must have the new S3 and its 4.8-inch screen, then by all means, go buy one!

So, who’s using smart phones and who still hasn’t graduated from the ancient, barnacle-covered legions of so-called “dumb phones?” It may not be who you think it us. Check out this recent story from the Washington Post regarding a new Nielsen study:  

The smart phone revolution is definitely here, but it’s leaving some users behind. According to a Monday report from Nielsen that asked whether users were carrying smart phones or feature phones, minorities are more likely to adopt smart phones than whites, and women are slightly more likely to carry a smart phone than men.

Asian-Americans far outstrip other ethnic categories when it comes to smart phone adoption, with 67.3 percent reporting that they own a smart phone, as compared to 44.7 percent of whites. Hispanics were next, with 57.3 percent saying they owned a smart phone; 54.4 percent of African-Americans said that they had taken the plunge.

Fascinating. It seems that not only are white folks becoming the country’s minority (and those in places like, say, Arizona are none too happy about it), they’re also falling behind when it comes to adopting technology. Perhaps the explanation is age break-down, since our population is aging in general, but Latinos and other minorities have higher birthrates and thus younger ranks of shoppers. Maybe if you interviewed Gov. Jan Brewer’s white, aging peers, most of them would be using used cell phones from 1999.

Not that we’re against white people, or used cell phones. Not at all. The thing is though, these “dumb phone” owners should be reminded that you can have a less expensive phone and still have a used one. CellularTrendz and other online dealers provide a large selection of used smart phones for nearly half the price.

It was pretty cool when the iPhone’s touch screen appeared on the market. But what about touch-free screens? That means you could issue commands to your phone and open, close and run apps with mere gestures that your phone would read, a la Star Wars. Huawei Technologies is on the case. Aiming to bring touch-free smartphones and more inexpensive cloud storage to users, the Chinese company is boosting its research and development spending in order to bring what it refers to as “disruptive” technologies to market.

Last year, says the above story, the company spent US$3.76 billion on research and development, resulting in 11,000 new employees hired for the company’s R&D efforts. For this year, Huawei’s R&D spending is expected to grow by 20 percent to about $4.5 billion.

From the above Network World story: One technology the company has been working on is touch-free smartphones, allowing the devices to read users’ hand gestures in order to initiate commands. “What if you use the camera of a tablet or a smartphone and use it to capture the visualization of your hands,” he said. “So imagine instead of touching a smartphone, you can actually have a three-dimensional interaction with it.”

Touchscreen smartphones and tablets currently allow for the use of several fingers to issue certain commands when pressed on the display. But users only have five fingers on a hand, limiting the number of commands that can be made, Roese said. Using hand gestures, however, would allow users to more easily bring objects forward, push them back or rotate them within the smart phone’s graphical user interface, he said.

That’s a market development that anyone in the industry, whether you sell or buy tablets, iPhones or used cell phones, should keep an eye on.

Chris over at CNET.com has a good point about the shifting wants of moms on Mother’s Day. Apparently, they’re getting a bit weary of the unsurprising bouquets of flowers delivered to them on that particular day. Tablets and phones are inching their way up on the wish lists of mothers ’round the world, according to a survey by Harris Interactive on behalf of Ebates.com.

As Chris says, “It contained within it so many poignant revelations that it almost brought me to tears, depressed at the misunderstandings that plague human relationships. Here is what men think women want for Mother’s Day, in order: Flowers, Jewelry, Spa Day, Candy. Yes, candy. Here is, according to this survey, what women (with kids under the age of 18) really want, in order: “Spa Day, Flowers, Jewelry, Tablet/Smartphone. So you see how little women are understood by members of the opposite sex. Women want a rest from being mothers. They want to be indulged.”

He also points out that while it may seem that the tablet/smart phone desire came in a distant fourth on the list, there was only a 6 percent gap between the devices and jewelry.

Not to make an obvious statement, but we all know that an iPhone costs just a tad more than a dozen roses. And for some folks, a $650 phone isn’t exactly in the budget. Perusing the online selection of used cell phones is a great way to find a high-level smart phone that Mom would love, without spending nearly $1,000. And she’ll still love it legions more than the usual bunch of flowers or box of chocolate.

Somehow, the idea of making an account transfer or paying a bill on one’s mobile phone seems a little bit sketchy. Of course someone could break into your apartment and make off with your laptop and its rather unsecure list of account passwords, but it just seems less likely than a suspicious character on public transportation grabbing your iPhone and jumping off before the next stop. Not to mention the much more likely risk of absent mindedly leaving the device on the train and remembering only once you’re home. Either way, if someone gets his or her hands on it, your accounts could be vulnerable.

Yet one of every five Americans used their mobile phone for some sort of banking activity last year, and about the same proportion say they will probably use mobile banking in the future, a Federal Reserve study recently found as reported in this New York Times piece. It seems a lot of folks don’t see the need for mobile banking (is it really necessary to do that deal on the run as opposed to waiting to get back to the office?), and many – like us – are dubious about the level of security regarding mobile banking. Of those users who haven’t yet adopted mobile banking, roughly half said they were “concerned” about security.

And actually, with recent reports about the vulnerability of phones to hackers (more so than laptops or desk devices, which have become more heavily protected), such worries are pretty well-founded. Because here’s the thing – If and when someone steals your phone, you can always go buy a used cell phone on the cheap. It’s not as easy to recover from a nasty episode of bank hacking.

Do you have that skinny woman at your gym, too? You know, the one who is so impossibly skinny that you just can’t imagine how she has any muscle – much less energy – to propel her body along on the treadmill or the recumbent bike (and let’s be honest, she doesn’t last long). Well, apparently, just as some men have a preference for that sort of thing, so do digital consumers have a thing for skinny phones. According to HTC, most of its dedicated users would prefer a slimmer phone over a longer battery life.

As the above piece notes, that’s likely why the company manufactured the ultra-slim One Series. It, like our Slim Fast friend, is hard-pressed to make it through the day without a re-charge. At an event in Seattle, Bjorn Kilburn, the guy who heads up HTC’s Portfolio Strategy, said it’s important to have a balance between shape and battery life, but that ultimately (as in this case), something has to give. The HTC One Series, especially the One S, is just too slim to have a large battery. This has drawn criticism, but not across the board and not from all corners of the digital universe. To whit:

“With all this power and a huge screen, you’d expect the battery to be the area where the phone critically fails. The 1800mAh cell might not be the largest when set alongside rivals from Motorola, but it performs pretty well in reality,” Chris Hall, Pocket-lint’s editor said in his HTC One X review. “It saw us through a long working day with plenty of calls and data use, along with typical use of the camera and some HD video capture, offering around 13 hours of use. If you work it hard, play a lot of games on your commute, constantly listen to music or make lots of calls, you’ll see the battery fall away, but it’s better than we expected. On light days, we’ve had no battery worries at all, but you’ll still be charging every night.”

If you’re wedded to a super-skinny phone, you may have to purchase one brand new and sacrifice some battery life. But if you can go medium on the skinny factor, you’d be surprised by the high-quality steals you can find at online shops that specialize in lightly used cell phones. They say with products as with people, it’s all about the package deal – getting the most bang for your buck without sacrificing any major must-haves. So, that’s a personal buying conversation you have to have with yourself.

Wasn’t once-popular deejay Howard Stern at one point relegated to the backwaters of HD Radio? Up and coming as it has been, the area has been viewed by many as non-mainstream and out of sight out of mind (or, rather, out of range, out of mind). But a new chip enables HD Radio on smart phones.

The low-power, low-cost , high-processing “HD chipset” is available due to a joint project between the NAB, iBiquity, Intel and Emmis Interactive. It was shown recently at the NAB Show in Las Vegas, where its developers hailed it as “revolutionary for our industry,” according to the aforementioned story. The chip will work in cell phones, tablets, and other mobile devices — as well as in cars. This means a host of opportunities for advertisers and broadcasters (not to mention a whole new and huge audience). Carriers in the past rejected offers to install HD Radio on their devices, but this partnership was clearly able to present the possibility in a more appealing light. How so? Money, of course:

From the story: “Emmis CEO Jeff Smulyan says the new chipset will change the conversation with carriers, due to potential revenue sharing opportunities it opens up.”

It’s unclear whether the chips would be compatible with older generation used cell phones, but with people purchasing new devices at a rapid clip, it sounds like we’ll soon be listening not only to people gabbing on their phones in the hallways and in airport lounges, but we’ll also be subjected to people’s HD Radio news and favorite deejays. Yay.

Samsung Electronics Co., the Asian giant of the wireless industry, seems to have surpassed Nokia as the top handset seller, according to this Bloomberg news story. This is the first time Samsung has overtaken the Finnish company, and analysts say they owe their win to Galaxy smart phones.

Samsung, out of South Korea, shipped around 92 million mobile phones during the first quarter, according to the median of five estimates in a Bloomberg News survey. Nokia, in contrast, sold 83 million units in that same three-month period, with 12 million smart phones and 71 million low-end models. As Bloomberg notes, “The gap could end Nokia’s 14-year reign in the global mobile-phone market. While Samsung has been benefitting from the popularity of Galaxy phones running Google Inc. (GOOG)’s Android operating system, Nokia has been losing market share as consumers choose the iPhone from Apple Inc. (AAPL) and Android devices over products using its Symbian software.”

Poor Nokia. The numbers aren’t looking good for the company, and neither are the analyst comments sounding good. Another slap from the article: “Samsung is displacing Nokia fast,” Lee Sun Tae, a Seoul- based analyst at NH Investment & Securities Co., said by phone. “Nokia, with no competitiveness in smart phones, will keep losing ground.”

With consumers fleeing Nokia for iPhones and Galaxy smart phones, those following the herd can opt for brand new versions of the Apple and Samsung devices – or, they can save themselves some money and buy used cell phones. Even the dwindling ranks of Nokia fans could go that route if they wanted to save.  Whether you want to go with the underdog or the winner, you can do either and still pay less than your average retailer. And who doesn’t want to do that?

Since the feds are suing five major publishing houses and Apple for price-fixing, it looks like Amazon will be left standing as the media monster who can do as it pleases, prompting critics to say that the government’s apparent quest to break up monopolies will actually result in Amazon remaining as an intractable, enormous and unaccountable one. It’s first move? Slashing e-book prices, which consumers would be hard-pressed to argue about. The question is, will it actually be a trend that continues if Amazon has no checks on its power?

From this week’s New York Times story: “Publishers and booksellers argue that any victory for consumers will be short-lived, and that the ultimate effect of the antitrust suit will be to exchange a perceived monopoly for a real one. Amazon, already the dominant force in the industry, will hold all the cards.”

Amazon announced plans to lower prices on e-books, with the price of some major titles falling to $9.99 or less from $14.99. One thing’s for sure: Whether or not that makes for lasting boon for readers and consumers, devouring books on handheld devices is only going to become more popular, whether people are getting their yarns from Kindles, iPhones or used cell phones.