The market for low-cost smartphones in India
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The market for low-cost smartphones in India
Visit link: India gets low-cost smartphone boost
While the shares fall and the smartphone wars rage, Apple’s music store keeps growing – and tying users into its platform
Steve Jobs put a new slide up on the huge screen. “We started about a year and a half ago to create a music store,” the Apple chief executive told the audience. “That meant we have to go and negotiate with the big five music companies. Now, before we did this I was reminded of a quote from Hunter S Thompson about the music industry.”
He looked up at the screen. In giant letters it read: “The music business is a cruel and shallow money trench, a long plastic hallway where thieves and pimps run free, and good men die like
Samsung Electronics posts record quarterly profit, boosted mainly by growing sales of its smartphones.
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Shares of Nokia fall 13% after quarterly sales of its Lumia smartphones failed to offset a decline in its mobile phone unit.
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Auction generated £2.3bn in June – £1.2bn short of Treasury expectations
The National Audit Office is to investigate the low amount raised by Ofcom’s auction of the 4G airwaves, which in June generated £2.3bn – a total of £1.2bn less than the Treasury had forecast, and £3bn less than the theoretical maximum.
In a letter seen by the Guardian, the NAO’s auditor general, Amyas Morse, told the Labour MP Helen Goodman, shadow minister for media and communications: “I intend to conduct a value-for-money study of Ofcom’s recent auction of 4G spectrum.”
The Treasury’s forecast of £3.5bn from the auction was included in the government finances in the autumn statement last December, and allowed the chancellor, George Osborne, to claim that government borrowing was falling.
The Guardian understands that the NAO is preparing the terms of an investigation after complaints from Goodman, who pointed to remarks by the Ofcom chief executive, Ed Richards, indicating the government had not made maximising revenues the prime aim of the auction.
“By not making maximising the auction’s revenues an objective for Ofcom, the government has failed to get value for money on this project,” Goodman complained to Morse.
The 4G auction sold off more radio spectrum than ever before to bidders including the four main mobile networks and BT. By comparison the 3G auction in April 2000 raised £22.5bn.
Figures published by Ofcom in March showed that the highest bids for 4G spectrum came to a total of £5.2bn. But Ofcom said those were only theoretical because it was using a rule whereby winners only paid slightly more than the second-highest bidder – similar to an eBay auction – a measure taken to make the auctions harder to rig.
Goodman said she welcomed the NAO’s intervention: “It is entirely right that the National Audit Office has launched this investigation. Serious questions must be answered as to why the Conservative-led government ended up £1bn short of the estimate George Osborne had provided just months earlier. When the 3G auction took place, Labour ensured that maximising revenue was an objective. The Conservative-led government did not do the same for the 4G auction, which I believe was a serious mistake.”
Some sources at bidders felt that the design of the auction, using a system known as “combinatorial clock” – which has been used in other countries to sell off 4G airwaves – not only worked against maximising revenue but was also unsatisfactory for bidders. “[Ofcom] neither raised the amount that the government was looking for, nor did it ensure that spectrum found its way into the hands of everybody who wanted it,” one bidder said.
Their dissatisfaction could also become part of the study. Morse told Goodman that Ofcom had “a responsibility to ensure that the auction delivered an economically efficient allocation of spectrum”.
The allocation after the auction means that Vodafone’s share of all UK mobile spectrum has leapt from 23% to 28%, while that of its rival O2 has dropped from 20% to 15%, and that of the smaller Three network from 18% to 12%.
Though the NAO does not have the power to order a rerun of the auction, a report will go to the Commons public accounts committee, which in turn can censure the government and demand a response from Osborne.
Ofcom defended the auction. A spokesman said: “The 4G auction was a success, which will deliver the maximum benefit to UK citizens and consumers – in line with Ofcom’s statutory duties. It will create competition, with five companies able to launch competitive 4G services. This will lead to investment in new services, greater innovation and lower prices, plus enhanced coverage with a rule to cover almost all of the UK population by 2017 at the latest.
“The auction was designed to promote competition and ensure coverage, rather than to raise money.”
A Treasury spokesman said it was the Office for Budget Responsibility, not the Treasury, that estimated the auction would raise £3.5bn. He also said that, even if the actual figure raised had been available at the time of the autumn statement, the Treasury would still have been able to say it was on course to lower borrowing.
When our two sons needed new smartphones to take on their travels, we had to lend them our own
I tried to order smartphones for my two teenage sons and an iPhone 4 for myself. I was told by Vodafone that there would be a wait for the iPhone, but the phones for my sons were to be delivered the next day. I spent several days waiting for couriers who didn’t turn up, only to be told that I had rejected the delivery; that the phones were back at the warehouse; that the salesman hadn’t put the order through in the first place. The excuses of the courier not being able to find the house were negated by the fact that the iPhone was delivered within days by the same firm.
My sons needed their new phones to go travelling, so I lent one son my new iPhone and my husband lent his exisiting iPhone to the other. Both were used on our iPhone contracts. We then had to pay extra costs to use old Nokia phones out of the back of the drawer. I was then promised two refurbished iPhones instead of the missing smartphones. DR, Cumbria
Vodafone appears aghast at its own incompetence and immediately sends the two missing phones, but too late. Your sons have grown wedded to their borrowed iPhones and you prefer to buy two replacements for you and your husband elsewhere. The only good news is that Vodafone has offered you a discounted price plan as hard-won compensation.
If you need help email Anna Tims at email@example.com or write to Your Problems, The Observer, Kings Place, 90 York Way, London N1 9GU. Include an address and phone number.
Reports of children running up bills for hundreds of pounds by clicking through to paid-for content sparks investigation
Free iPad and smartphone games which can result in children running up hefty bills for their parents through expensive in-game features are to come under scrutiny from the Office of Fair Trading.
More than a quarter of children aged between five and 15 now own smartphones according to Ofcom, and many more have access to their parents’ devices. A whole industry has grown up around apps for them. Many are based on popular characters including the Smurfs and Playmobil and while the initial game can be downloaded for free, players are offered a range of costly upgrades.
Reports of children running up bills for hundreds of pounds by clicking through to this paid-for content are increasingly common, and in one case a parent reported being hit with charges of more than £3,000.
“We are concerned that children and their parents could be subject to unfair pressure to purchase when they are playing games they thought were free, but which can actually run up substantial costs,” said Cavendish Elithorn, the OFT’s senior director for goods and consumer.
The regulator will look into the marketing of these “in-app purchases” – additional content such as virtual currency, extra levels and upgraded features which can cost anything up to £70 a time. On the Smurfs Village game, for example, a wagon of Smurfberries costs £69.99. It has written to games developers and hosting services, and is asking parents and consumer groups to contact it with information about any potentially misleading or commercially aggressive practices they are aware of.
The OFT has not estimated the size of the market, but it said that of the 100 top grossing apps in the Android store, 80 were offered for free and made their money through sales of additional content. In a further indication of how much the market could be worth, in February Apple agreed to pay around $100m compensation to parents in the US whose children ran up huge bills using free apps downloaded from its iTunes store.
Justine Roberts, founder and CEO of the parenting website Mumsnet, said she had seen regular complaints about children unwittingly running up gigantic phone bills. “It’s all too easy for children to get sucked into games and before you know it they’ve racked up huge costs buying coins, berries and doughnuts,” she said.
Many of the parents reporting unexpected bills have talked about the ease of making a purchase, with children only having to click on a link to buy content if the device is already logged in to the Apple or Android store. However, the OFT’s initial investigation will not focus on the mechanisms of making a purchase, but on whether the way the add-ons are marketed breaches consumer law.
It said it would look in particular at “whether these games include ‘direct exhortations’ to children – a strong encouragement to make a purchase, or to do something that will necessitate making a purchase, or to persuade their parents or other adults to make a purchase for them”.
It will also consider whether the full cost of some of these games is made clear when they are downloaded or accessed.
Eithorn said the OFT was not looking to ban in-app purchases, but that the games industry needed to ensure it was complying with the relevant regulations. “We are speaking to the industry and will take enforcement action if necessary,” he said.
The OFT expects to publish its next steps by October 2013.
Experts hail rapid development of handsets, particularly in internet access – and say there is a lot more innovation to come
Mobile phone technology has come a long way since the first mobile phone call was made 40 years ago – but there is a lot more innovation ahead, according to one expert.
It was on 3 April 1973 that Motorola employee Martin Cooper made a call in New York on a Motorola DynaTAC – dubbed a “brick” due to its size and weight – which was widely regarded globally as the first public mobile phone call.
The device was 9 inches tall, comprised 30 circuit boards, had a talk-time of 35 minutes, and took 10 hours to recharge.
Four decades on, a worldwide telecoms industry with annual revenues of £800bn has grown rapidly based on wide choice, falling prices and an array of technologies, resulting in the average mobile being used to take photos, play music and games, send emails, download maps, watch video clips, all as well as talking and texting.
Mike Short, an expert from the Institution of Engineering and Technology, said Cooper’s phone call is the first public call people recognise as being a cellular mobile call.
He said the 10 years following that first call were “very much developmental”, with research being carried out in laboratories before services were launched in 1981 in the US.
“Since its first use 40 years ago, the mobile phone has completely changed our lives. The first decade was a research or a ‘demonstrator’ phase, rapidly followed by analogue networks deployed over 10 years from the early 1980s largely based on carphones and used in business in the developed world.
“This soon led to the digital decade mainly between 1993 and 2003 when consumerisation and globalisation of mobile really took off.
“This led to a further data adoption phase with the arrival of 3G and during 2003 to 2013 access to the internet and the wider use of smartphones became a reality,” he said.
The two most significant developments in mobile phone technology have been the widespread availability of devices and their ability to access the internet, Short said.
“In the early days of mobile, consumerisation was not considered. It was made for men in suits in business, whereas consumerisation followed much later.
“And then access to the internet followed much later again. The first smartphones weren’t until about five years ago. So the pace of change has actually sped up over the 40 years, particularly in the past 15 to 18 years,” he said.
Short expects mobile technology to continue to evolve and said people can expect even more developments in future.
“More changes are expected. The early days of mobile were all about voice, whereas today it’s much more about data.
“And the point about data is that we can carry voice calls over the data channel, but in future we’ll move towards fuller data services such as video – much more video to video calling, much more screens on the wall in your home, maybe more video television downloaded, catchup TV, that sort of thing.
“So there’s a lot more innovation to come, particularly in the data and video worlds,” he said.
Mobile phone users will have noticed these changes in the last few years, as phones have become more affordable and sit lightly in the palm of their hand – but innovators are working to enhance these aspects of modern devices further.
Short said: “The cost has already fallen a long way. What tends to happen is you get more functionality per pound spent.
“That would include more memory, that would include more features, that would include more capability to access the internet at higher speeds.
“The weight has dropped dramatically already, but we’re seeing, probably this year, the first watch-based phones.”
With improvements and changes implemented so frequently, Dr Short said it is hard to know what exactly to expect in the next 40 years, but it is safe to assume millions more people in the world will have access to mobile phones.
“It’s very difficult to predict 40 years’ time because the pace of innovation is speeding up. I would say that we’ll all be mobile, globally, everyone will be mobile.
“I’d also say that we’ll be connecting many more machines via wireless mobile technology as well.
“The world of around 7bn devices connected today should be in excess of 70bn connected devices in 40 years’ time,” he said.
Mobile phone maker Blackberry says it sold one million of its new Z10 smartphones, but has lost three million users.
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