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Amazon acquires 3D mapping start-up company UpNext

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July 4, 2012

Here's a tidbit of news that nobody was waiting for-- Amazon said late yesterday that it has acquired 3D mapping start-up company UpNext for an undisclosed amount.

The acquisition was unexpected, and places Amazon with other tech giants all trying to squeeze themselves into this rapidly growing but crowded segment of the industry.

Apple also acquired another 3D mapping start-up several years ago and will release a native mapping app in three dimensions sometime in the early fall. The new Apple mapping system for iOS version 6 will boot off Google Maps on the iPhone and the iPad.

The UpNext 3D software had already existed as an app on the Kindle Fire, the iPhone and a few Android devices prior to this acquisition. Founded in 2007 by a few high school students who drew on backgrounds in economics modelling, games design and business studies, UpNext had been running off its own funds until it picked up $500,000 in venture capital funding for the 3D part of its business in March of last year.

The mapping applications in 3D go far beyond helping tourists find the nearest coffee shop. Future trends such as the internet will make detailed 3D rendition much more valuable, and the potential to pull in real-time information could soon enable a whole new generation of mobile apps of all kinds.

UpNext's real ability to map areas within buildings could have more obvious and immediate business applications as well. Soon, UpNext could provide a mapping service for Amazon's Kindle Fire tablet, though that lacks GPS functionality.

Playing against Google's immense expertise in the area, and Apple's huge R&D funds this is not an obvious next move for Amazon but then it is probably not a massive investment either.

In other mobile news

Last Friday, Ericsson and the GSMA (GSM Association) teamed up to offer the media a tour of Ericsson’s customer demonstration center at the company’s Kista headquarters, addressing the team work both parties are currently doing in support of the GSMA’s Connected Living initiative in Europe and elsewhere.

While the day’s activities covered various topics, the part addressing the methods in which wireless users are adopting the connected lifestyle today, and how mobile operators are going to need to charge for it going forward deserve more coverage.

During his session, Michael Bjorn, head of research at the Ericsson Consumer Lab presented recent survey results that indicated some of the standard fare as to why people buy smartphones-– to surf the internet, check some emails, use applications, etc.

But one of the more interesting results indicated that according to U.S. survey respondents, more than 15 persent of mobile users indicated that they buy smartphones to help them “manage their lives better”. This signals a fundamental change in the way people are viewing their devices.

And globally, about 70 percent of respondents indicated that they want to mobilize routine transactions associated with things like loyalty cards, event tickets, commuter passes, and various financial transactions.

But the question then becomes “How can wireless carriers take action on this information to generate added revenues?” Here’s where the Ericsson’s report provides several interesting insights. The most appealing concepts offer control over costs, data utilization and the plans used.

Consumers today don’t understand exactly what they pay for and what kind of experience they can actually expect. Instead of using terms like megabit and megabyte, operators should explain what different levels of service will enable users to get what they need.

It's no secret that wireless carriers in the United States are struggling with the need to move subscribers off all-you-can-eat (AYCE) data plans, especially as 4G and LTE subscriptions are increasing. And moving subscribers off of AYCE plans will require a delicate touch.

It will require providing mobile subscribers with meaningful data on how their particular usage patterns would impact their monthly invoice under a non-AYCE pricing scheme.

And while most consumers are used to the AYCE model, and will naturally resist attempts to take that away from them, there is some hope in the near term. Ericsson’s report also pointed out that the number of unlimited services was a more important factor than the data cap to U.S. consumers surveyed.

Wireless carriers can offer unlimited utilization to their subscribers depending on the specific services that are most important to them, alongside added services for more experimental use, encouraging the formation of new habits. This requires operators to gain a deeper understanding of their users, what they want and what they are willing to pay.

If wireless carriers can supply their subscribers with unlimited access to the handful of key apps that they use the most, then applying a metered approach to some up and coming and/or lesser used apps, then those operators could have the opportunity to deliver the core value that people are looking for while still opening up the possibility of growing revenues as new apps usage patterns emerge.

It also highlights the need for mobile operators to tailor some customized offerings to certain users. This speaks directly to some of the more advanced Customer Experience Management (CEM) capabilities that we’ve been hearing about for the past 1 1/2 year.

If one of the fundamental advantages of advanced CEM solutions is to be able to target specific offerings to specific customers at specific times, then CEM also becomes a fundamental enabler of Connected Living.

In fact, there's actually no shortage of CEM solutions available. But effectively implementing those solutions to not only mine the appropriate customer data that will identify customized offerings, but also deliver that customized experience seamlessly will be the key to success.

Speaking at the CTIA Wireless show last April, Ericsson’s Grant Lenahan summed it up nicely when he said that the key to serving customers in the future is not on how I can take a mass service an roll it out to 20 million people all at the same time, but how can I take 1,000 custom versions of that service and roll it out in a way that is very efficient but without having to rebuild the whole system.

In other mobile news

The bad news never seem to stop at Research in Motion. The struggling maker of the BlackBerry smartphone said late yesterday that its first quarter finally turned out to be worse than actually expected. RIM will suffer even more because the company said its BlackBerry 10 platform will slip into the first quarter of 2013, instead of being ready sometime in the fall of 2012, another piece of bad news that investors on Wall Street were not pleased to hear. RIM reported a first-quarter loss of $518 million, or 99 cents a share, on revenue of $2.8 billion, down 33 percent from $4.2 billion in the same quarter a year ago.

Adjusted loss, which excludes goodwill charges, was $192 million, or 37 cents a share. Wall Street was expecting a loss of just 4 cents a share on revenue of $3.07 billion.

RIM had already issued a profit warning for the first quarter and analysts were expecting the worst. The delay of the BlackBerry 10 devices, which were supposed to come in the second half of 2012, sets up a serious cash flow concern going forward.

The delay may set in motion a worst-case scenario. RIM's services business is still a bit profitable for now, but those profits could soon be gobbled up by a hardware money pit.

Morgan Stanley analyst Ehud Gelblum earlier this week laid out a scenario where RIM would have to shrink dramatically to survive. Today, RIM has less than $2.18 billion in cash and equivalents, but that war chest could soon evaporate quickly the longer the company takes to deliver new products. RIM shares fell more than 18.3 percent in afterhours trading, and they are expected to fall even more in the next few days.

RIM maintains that the BlackBerry 10 platform is its "number one priority." Specifically, RIM CEO Thorsten Heins said: "RIM's development teams are relentlessly focused on ensuring the quality and reliability of the platform and I will not compromise the product by delivering it before it's fully ready. I am confident that the first BlackBerry 10 smartphones will provide a ground-breaking next generation smartphone user experience."

RIM's challenge is that there will be many new phones from Apple, Samsung, Nokia, and a whole slew of others to worry about in the very short term.

As for the near-term outlook, RIM said it "expects the next several quarters to continue to be very challenging for its business based on the increasing competitive environment, lower handset volumes, potential financial and other impacts from the delay of BlackBerry 10, pressure to reduce RIM's monthly infrastructure access fees, and the company's plans to continue to aggressively drive sales of BlackBerry 7 handheld devices."

In other words, RIM will see an operating loss in the second quarter as well, on top of Q1. Wall Street is currently expecting RIM to report a loss of 6 cents a share on revenue of $2.84 billion and then turning in a meagre profit in the third and fourth fiscal quarters. But those estimates are likely to be cut dramatically according to what is out there.

RIM added that it is rolling out its cost savings plan, which includes outsourcing as well as layoffs. Given the BlackBerry 10 delay, RIM said it may "increase the scope and magnitude of these programs."

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Specifically, RIM plans to outsource its repair operations, cut management, streamline its supply chain and cut 5,000 workers by the end of the fiscal year. Those moves are considered to be minimum requirements.

RIM shipped just 7.8 million BlackBerry smartphones in the quarter. It shipped 260,000 PlayBook tablets. RIM's App World store has more than 89,000 applications, claims the company. Subscribers at the end of the quarter checked in at 78 million, according to RIM.

There's no question that RIM is struggling hard to remain in business. The little cash it has left can barely take it another seven to eight months according to various Wall Street estimates that are out in the open. The next two quarters will be extremely important to the ultimate survival of the company.

In other mobile news

Apple has finally launched its new AirPort Express base station system in the field of wireless routers. The new device features dual-band networking support. It also looks good compared to competing products we've seen. Priced at $100, the new wireless router will make a capable addition to your house, condo, apartment or even your office, offering you a more versatile network than the previous AirPort Express, thanks in part to its new dual-band capability.

Other dual-band routers such as the Asus RT-N56U and the Linksys E-3200 offer more features than the AirPort Express for the same price or even less.

Measuring just 3.9 inches by 3.9 inches by 0.9 inch, the new AirPort Express seems a bit smaller than the already-compact first and second generations and now no longer comes in the wall-wart design. Instead, it's a mini version of the AirPort Extreme base station system and shares the same power cord as well as support for true dual-band Wi-Fi.

Overall, dual-band wireless networking means that a router broadcasts signals in both the 2.4 GHz and the 5.0 GHz frequency bands. The difference between the two bands mostly comes down to the fact that 5 GHz generally offers better real-world performance thanks to the fact that it uses higher frequencies than other home appliances, such as microwaves or cordless phones.

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