“Nokia Gambles on a Microsoft Lifeline”

Blog Assignment 5

http://online.wsj.com/article/SB10001424052748703786804576137470685432438.html?mod=WSJ_Tech_LEADTop

Nokia Corp and Microsoft Corp are on the frontline to fight the competition with Apple Inc. and Google Inc.

On Friday 10 February, Nokia Chief Executive Stephen Elop “struck a broad alliance with Microsoft that seeks to establish a third major player in the intensely competitive smartphone race where Apple Inc. and Google Inc. are quickly pulling ahead” said Christopher Lawton, a Wall Street Journal journalist.

Under the rivalry competition among the major carrier companies in the telecom industry, Nokia has made an alternative approach; that is, adopting Windows Phone as its principle smartphone operating system while abandoning its own so called Symbian software. “The is a big gamble” noted Mr. Elop who had announced the risks that both companies are facing. Since Nokia’s Symbian software has long been losing ground to Apple’s iPhone and smartphones that run Google’s Android, the world’s biggest maker of handsets and Microsoft have stumbled in the fast-growing smartphone business.

In the emergence of this new software and phone carrier, both Nokia and Microsoft have found mutual benefits from each other and they are seeking to drive up their economic profits with their partnership. Though “Two turkeys do make an Eagle” said Google’s executive Vic Gundrota, successful entrepreneurial companies are willing and able to overcome the risks.

For Microsoft, the partnership with Nokia presents a great opportunity to boost an effort to establish a leading position in the telecom industry. While the company was an early entrant in the smartphone business, Microsoft has stalled in the market. Overall, new technology will dictate and attract customers’ fashion and taste as new carrier companies enter the competitive race in the mobile market.

Miki Ishibashi

Reliance Communications’ Cup of Woes

This WJS's article is about a company in India called Reliance Communications, lately this company is having lots of problems, such as: numerous, large debts and customer problems.

This is because a top government auditor accused the company of involvement in the 2G scam.

In a report, Reliance Communications was again accused by the government of violating the country's telecommunication licensing rules.

the second- largest mobile phone operator was also accused by receiving unfairly favored treatment.

After all those accusations the company rejected and denied all of them.

This issue is troubling to investors and customer.

This makes me think that this company has 177 million wireless users and still cant get rid of their debts. What would this company do when it begins to lose their customers and investors?

Would it continue to be the second- largest mobile phone operator?

I think if this issue get worsens Reliance Communications may lose much of its clientele, this can affect both the company and the customers.

http://blogs.wsj.com/indiarealtime/2010/11/18/reliance-communications’-cup-of-woes/?KEYWORDS=telecommunication

- Sapir

Competition: VERIZON VS AT&T

http://www.smartmoney.com/investing/stocks/iphone-stock-curse-says-favor-att-over-verizon-1296772690759/?print=1

Since the epic launch of Iphones in June 2007, AT&T has been its exclusive carrier. The Iphone granted AT&T greater sales in shares than one of its major competitors, Verizon. Thanks to the Iphone, AT&T shares have increased 22% versus the Verizon’s 13%.

However, speculation, made by the Wall Street Journal in October 7, 2010, perdicted Verizon will begin selling the device starting Feburary 10, 2011. This speculation has caused an increase in Demand for Verizon shares (11%), and a slight decrease in demand for AT&T.

Professional investors—like Sergey Dluzhevskiy, who is currently a telecom Analyst for Gabelli & Company, a N.Y investment firm—strongly believe Verizon will gain plenty of costumers because of their new approach in business. This year, 12 million people will line up and buy iphones sold by Verizon. 9 million of the costumers will consist of existing Verizon users who are looking forward to the upgrade, 2 million are users stolen from AT&T, and 1 million will come from other carriers. Due to a certain amount of customers switching from iphones sold by AT&T to Verizon labled iphones, one can expect a decrease in demand (10%) and price of iphones sold by AT&T in stores, and an increase in demand and price of Iphones sold by Verizon—if all other factors remain equal. Because of the expected decrease in price of AT&T products, investors will naturally expect their profits to decrease as well.

Professionals believe the decrease in demand for AT&T iphones should not be expected to go below 10% due to a high level of brand loyalty from existing users and the expensive cost of switching. According to Dluzhevskiy, 80% of AT&T users applied for business or family plans, “which makes switching akward,” and nearly half of them already activated the device within the past six months, making switching expensive.

Gadget Reviewers Walt Mossberg and David Pogue updated consumers on Verizon’s and AT&T’s Iphone. AT&T has a higher percentage of smart phone customers, which usually comes with pricey data plans. Unless AT&T finds a way to make their iphones less expensive in the long run, the data plans would probably scare off consumers to the cheaper Verizon Iphone, closing the gap between the two companies in the future.

In the short term , AT&T is expected to have higher earnings than Verizon. Investors are naturally overly focused on the short term earnings targets. Thus the title of my source, “Iphone Curse Says time to Favor AT&T stock.”

Ralph Tsmith

“AT&T to Push Atrix 4G to Counter Verizon iPhone”

Blog Assignment 3: Economics of the Industry

http://online.wsj.com/article/SB10001424052748704376104576122052452789160.html?mod=WSJ_Tech_LEFTTopNews

As Verizon introduced Iphone in the beginning of February, AT&T is seeking to attract new customers with the latest Motorola Atrix 4G Smartphones.

To counter the increasing profits of Verizon’s new Iphone, “AT&T is cozying up to Motorola Mobility Holdings Inc.” said Shayndi Raice, a Wall Street Journalist. The new Motorola Atrix 4G will be the new dominating strategy to draw the public’s attention. By introducing this new Motorola Atrix phone, AT&T is providing a variety of phone choice. Because technology is advancing everyday, a wireless smartphone is very much a necessity. In other words, AT&T is seeking for more opportunities in maximizing their abnormal profits in the long-run by offering different kinds of smartphones to meet the new customers’ needs and preferences.

The competition between Verizon Wireless and AT&T has continuously benefited us in various ways. One of the evidence we see in this article is that both companies are introducing new phones to maximize their customers’ satisfaction. The competition also has increased a better customer service.

The competition among Verizon Wireless and AT&T has significant impacts on Motorola and Apple as well. As customers demand more smartphones, they are interested in supplying more mobile phone products in a cheaper price. This can in fact be applied to the law of demand and we are able to see how these leading companies are capable of generating their revenues.

Moreover, as both Verizon and AT&T introduce their new phones, other mobile devices will become cheaper attracting customers from the middle class. The new contract deals are targeting different class of people where people who are affluent may be able to demand new products in the first time while people who are less affluent may need to wait until the prices of these phones decrease.

Overall, it is clear that the pre-order of Iphone in Verizon Wireless is increasing quickly, allowing Apple to supply a larger number of Iphone; on the other hand, Motorola will be able to increase their Atrix 4G phone supply as AT&T customers increase their demand.

Miki Ishibashi

blog 3- IPHONE FOR VERIZON

 Article: http://online.wsj.com/article/SB10001424052748704709304576123892196020886.html?KEYWORDS=telecommunications

            Verizon Wireless has finally got the iphone onto their network. It is stated in the article that they had the most sales in the first day than they had with any of their other phones such as the Storm and Driod. Now that they got the iphone it will most likely make their overall revenue increase. They also may gain customers back who went to AT &T when they first got the iphone. The economics of the cellular industry is give and take because it is based upon who has better coverage and who has obtained the rights to the best new technological devices. To choose a provider based on coverage is based solely upon where one resides, therefore if they move they might change cellular services.  Cellular companies compete through the devices but also through prices. A lot of people will choose what cellular provider to use based upon the better/cheaper deals. Do you think the price of the iphone will decrease since AT&T now will be competing with Verizon? 

“Alcatel-Lucent Pays $137 Million To Settle FCPA Probe”

I found this WJS article very interesting, its about a french telecommunication company called Alcatel- Lucent that admitted to do bribery. The company agreed to pay 137$ in penalties for the illicit payments done in several countries. The company earned about 48.1$ million by charging improper fees. Alcatel said it was going to pay 45$ million of those 48.1$ million to Securities & Exchange Commission. Another penalty of 92$ million to settle Justice department charges. They seem really serious in this matter, they already have the money set according to documents that have been found.

Subsidiaries of Alcatel earned 8$ million by dealing and bribing with other government officials to obtain good contracts and deals.

In the 1990’s Alcatel was persuading it business the most.

In addition, Alcatel also violated the law passed in 1977 about bribery and the record provisions of the FCPA.

Alcatel also had agents all over the world to have connection with the country and be able to do bribery and perform illegitimate work.

I think this is an unethical business and many people are willing to change from this company to another more ethic and more trusted.

In the other hand, this company changed all its management and terminate all its agents and consultants. For some people it may deserve another opportunity.

- Sapir

Blog 2- Google's Corporate Social Responsibly

Blog 2- GOOGLE’s Corporate Social Responsibility

http://online.wsj.com/article/SB10001424052748703956604576110332331598572.html?KEYWORDS=telecommunications

            I picked this article because it is interesting how Google responded to their crisis, which shows an aspect of their corporate social responsibility.  Google claims they had no intention for their satellites to pick up personal information such as e-mail addresses and passwords. Their spokeswoman openly apologized and informed the public that once they realized the Street View cars were picking up this data they terminated it while informing the authorities. This exemplifies how Google is willing to be honest and it is admirable that they have apologized for their mistake.

            The Federal Communications Commission is currently probing whether or not Google broke public law.   However, the Federal Trade Commission ended its probing saying that Google has taken sufficient steps to prevent a reoccurrence. Nevertheless, in other counties Google is facing probing for collecting this data. Even though Google does not openly admit to breaking U.S. law, they understand how their mistake from the software collecting private data is negatively affecting the company by not allowing a subpoena to hand over the collected information. This unwillingness to fully corporate makes me question how much they are willing to follow their corporate social responsibility. As of now they need to regain the trust of many countries as well as the trust of the users by enhancing this corporate responsibility. I wonder is an apology enough for the users to regain their trust within the company? In my personal opinion, how they responded immediately to their crisis shows they are following their corporate responsibility but they need to do more to regain the trust of the users to ensure this will never happen again.

-Rachel