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  • Clearwire: Assessing The Impact Of The iPhone 5, The Earthlink Deal, And The Road Ahead [View article]
    the Qualcomm MDM9615 baseband chip used in the iPhone 5 is capable of supporting TDD-LTE however there is no radio in any of the 3 versions of the iPhone 5 that is capable of supporting the 2.5/2.6ghz frequency range that CLWR's EBS/BRS frequencies reside, except for a low power wifi radio in the 2.4ghz range nearby.

    i would have much preferred that the new iPhone 5 would have been capable for CLWR's network but there are many design tradeoffs and it was evidently not Apple's priority to support a network that is yet to exist. the problem is that this upgrade cycle "locks in" these customers on sprint to devices that are not enabled for CLWR until the end of 2014 and so CLWR only benefits from future prospective devices that are enabled for its TDD-LTE flavor (most eventually can) AND the specific frequency band in which CLWR will operate. the challenge becomes when the new CLWR network comes up in 2nd half of 2013, CLWR is dependent upon Sprint's success to secure a new generation of handset devices that can be compatible with CLWR's network -- it would have been much better had the subscriber base been "seeded" with TDD-LTE devices well ahead of CLWR's network launch. So who knows, maybe the iPhone 5S or even the iPhone 6 -- historically Apple has lagged the other OEM's in being at the forefront on new radio configurations, so it's unlikely that CLWR's network will benefit from a lot of loading from Sprint iPhone devices until Apple actually chooses to support the EBS/BRS frequency band.
    Sep 18 09:35 AM | Likes Like |Link to Comment
  • Clearwire: Assessing The Impact Of The iPhone 5, The Earthlink Deal, And The Road Ahead [View article]
    InvestorRick, but you owuld be wrong. If some EBS license holder that was part of a 20mhz wide carrier (each EBS channel come in 6mhz increments), let's say in New York (these were originally protected by 35 mile raidii licenses), chose to not renew, all of a sudden you dont have a 20 mhz carrier in NYC any more. And that license holder doesnt have to band together ewith another licensee in Dallas, or Tulsa, or Podunk Iowa to have any "leverage" - the ability to crush the value of an 18 million pop market is plenty of "leverage". That's why CLWR either can only sell the unencumbered BRS spectrum or otherwise find a buyer willing to assume the hold-up risk posed by the leased spectrum. Of course the EBS lessor's primary leverage is to destroy value as opposed to finding value elsewhere for a regionally bound 6mhz channel (since FCC auctioned the "white space" encumbered by precedent licensees), and thus the industrial logic for when CLWR and Sprint NExtel combined their aggregate EBS/BRS holdings so any individual licensee would know that they individually did not have the clout to "hold up". But this dynamic changes when you actually try to split up the channels into separate bands in order to monetize value. the leverage on the leased spectrum (because you are now making it scarce as part of 20mhz or 40 mhz bands) then goes to the counter-party and it dramatically increases the risk to the carrier-operator that is using the spectrum to run his business.

    Do you really believe that there would be some bus dev guy at either AT&T or Verizon that will go to his board and say "come on, these lessors will 'play nice' of course; don't worry, be happy" -- "who would ever try to hold us up?" LMAO
    Sep 17 05:36 PM | Likes Like |Link to Comment
  • Motorola Mobility (GOOG) has agreed to license some of its standards-essential patents to Apple (AAPL) in Germany. The deal doesn't cover Motorola's non-standards-essential software patents, one of which led to a German iCloud ban, and 7 of which were recently asserted in an ITC complaint. The deal could be a way for Motorola, which is in a better patent position than Android rivals, to appease regulators worried about its use of standards-essential IP in patent suits. (earlier[View news story]
    Appple and Microsoft have always been willing to license Standards Essential Patents on FRAND terms. Motorola wasn't willing to license it except to demand 2.25% royalty on the end product value for what it calim was FRAND rate. So a $75K BMW automobile with built-in WiFi via a $1.25 chip would in theory should pay Motorola a royalty of $1700 for each automobile tha thad a built-in wiFi capability. It was a totally absurd position attempted by Motorola to leverage into a cross licensing agreement from the counter party that party's non-SEP patetns that are not subject to FRAND obligations.

    Essentially the court room gymnastics in Germany forced Motorola into the positon to agree to license its SEP patnets (since it was arguing that it was fulfilling its FRAND obligation requirement to all licensees) at a rate to be determined by the court to be appropriate for FRAND. It now doesn't have any counter balancing hammer fight against Microsoft and Apple. Apple just won a final injunction against Motorloa today on another non-standard essential patent and can pay a bond to force Motorola to not only stop selling teh offending android products in Germany but to also recall those that it has already sold.

    The noose is tightening around Android every day one little bit at a time. While Microsoft is willing to be bougtht off for licensing fees (to make Windows Phone OS relatively more attractive to OEMs) but Apple's objective is not money but primarily focused on maintaining product differentiation by forcing Android OEM's to deliver product that are noticeably different than Apple iOS devices.

    Unfortunately, Motorola doesn't have much other than the FRAND stuff, although it recently just launched a second wave of non-SEP patents to attack Apple. Presumably it finally figured out that its strategy of using FRAND encumbered SEP patents was going to get no where fast (although MMI had already ripped off Google for $12.5B in cold hard cash by waving its SEP fanny at Larry Page who was too ignorant to know the difference -- too bad for GOOG shareholders).
    Sep 13 03:03 PM | 3 Likes Like |Link to Comment
  • Amazon's New Epix Deal: The Death Of Netflix? [View article]
    DLAL is correct in that currently, Hunger Games is in the PPV window and is only available on Amazon either as a digital rental (PPV) or as digital purchase (http://bit.ly/Qk7dED). See below:

    http://amzn.to/TLAQUf

    Similarly, it also appears in Apple iTunes (both rental and digital purchase) as well as PPV on various MVPD systems such as cable and telco platforms. Shortly, the physical DVD will be available for sale in both SD and BluRay versions. All the PPV, EST, MVPD, and physical distribution channels are non-exclusive, just as the film's distribution was when the film was exhibited in theaters.

    Typically, approximately six months AFTER availability in DVD venues, the PPV venues would normally go "dark", and the subscription programming network with exclusive distribution rights, in this case Epix, would have exclusive broadcast and digital distribution rights during this "output window" for typically a 9-12 month period. In Epix's case, it has created a second additional "sub-window" after a film has appeared on Epix and Epix HD streaming service for 90 days, to make the film available through other streaming programming networks that are sub-licensees from Epix -- currently only Netflix and Amazon Prime, but doesn't preclude Hulu, Verizon, Comcast Xfinity etc or any other SVOD operator to similarly sub-license from Epix, since these are now all non-exclusive.

    So DLAL is correct that the film currently appears on Amazon only as PPV or EST, and as are you that Amazon Prime will be eventually offering it as "free", probably some time around june of 2013 (as will Netflix and others who are sub-licensing Epix's content library)..
    Sep 12 05:25 PM | Likes Like |Link to Comment
  • Amazon's New Epix Deal: The Death Of Netflix? [View article]
    Verizon/Redbox's ENTIRE capital budget for the JV is like $450MM for the first 2 years, while Netflix's annual domestic content spend for streaming is over $1.5B per annum.

    Verizon's FiOS existing licensing for linear television for its FiOS MVPD service offers NO synergies or advantages for the SVOD business, as catalog content libraries needs to be negotiated separately and for additional consideration. Exclusive content such as recent release output deals for Sony and Disney are locked up by Starz; Universal, Warner, and Fox output deals are exclusively on HBO, etc. Current season for major TV broadcast networks are quasi-exclusive on Hulu as well as some prior season content. So what is left for Verizon to license for streaming (and even to include out-of-home rezuires different licensing) is the non-exclusive content that currently appears on Hulu, Amazon Prime, and Netflix, with Netflix having the largest library (since it has the largest content budget by a factor of 3x+).

    Coinstar doesn't even add anything to the content licensing equation as its purchasing is with the studios on physical product (let alone it has zero relationships with the TV networks) so adds nothing to the equation other than a large email database for the JV to promote to.

    At the end of the day, success will be defined by the product offering and its value proposition to consumers, and there is nothing that Verizon/Redbox can offer that neither Hulu, Amazon, or Netflix don't already offer. In FiOS's MVPD business, average cost per sub for programming is over $30/sub/mo -- you can't assume that such linear broadcast content is transferable (besides being uneconomic to serve a $8/mo service) as many of these licensing agreements don't even allow outside the home delivery.

    In addition, success as a SVOD programming network involves more than simply the content offering -- it's taken alot of time and effort (and cost) for Hulu and Netflix to get its service available on many hundreds of connected television and mobile devices, and that doesn't happen overnight. Similarly, Netflix, when it last reported, had developed scale in its sales and distribution engine to genreate gross adds at around $15 per gross customer addition. I can easily assure you that nothing in Verizon's broad product portfolio does it have any business where its cost per gross customer addition comes close to $15 per gross add. So you add that to the fact that the JV has no current installed customer base to fund tthe content opex, along with a very limited capital investment commitment by the partners, and no established distribution or device partnerships for the venture, then it becomes readily apparent that the challenges are fairly significant and that it will take many years in order for Verizon/Coinstar's JV to successfully build a customer base for this new service offering.

    So as it relates to Verizon's imminent threat to Netflix, Hulu, and Amazon,...yawn, and double yawn.
    Sep 12 03:29 PM | Likes Like |Link to Comment
  • Amazon's New Epix Deal: The Death Of Netflix? [View article]
    Epix content was already "non-exclusive" since it was already on Epix and available through Epix HD's streaming. Besides Amazon Prime, Epix will also likely be licensed to Verizon's RedBox Instant as well. The net result is that this will LOWER Netflix's cost for Epix content --- while it will help Epix, as multiple non-exclusive licensees are expected to pay more in the aggregate than what Netflix was willing to pay Epix for the faux-exclusivity. Most of these writers evidently don't actually subscribe to any of the services that they write about. Their brain is too small to think about that maybe the programming world is not a zero sum game. Our household subscribes to each of Hulu Plus, Netflix, and Amazon Prime, and we also get Epix HD (only on our two TV's connected to Roku streamers, but not on the 3 other TV's connected to Apple TV boxes), along with each with access to HBO, Showtime, and Starz channel pkgs from Verizon's FiOS.

    Anybody that actually uses Amazon Prime knows that Amazon's strategy is to inter mix its Prime Instant Video content (free with SVOD) with much larger library of its PPV (rental ala carte) offerings. It's really somewhat annoying, as opposed to Apple TV, where I know when I go to iTunes, I'm looking at pay-per-rent offerings, but that I can go to either Hulu Plus or Netflix for my subscription offerings. On Amazon, I'm instead constantly didsappointed by which program that i clicked instead is a pay rental rather than part of my Prime subscription.

    So the "death of Netflix" blah, blah, blah is so much ado over nothing. You are not going to wrestle away Netflix from my kid's iPads and get them to watch Amazon Prime (oops, forgot, Amazon Prime is not available on their iPads) because the content they watch isn't on Amazon Prime, and even if it were, they are perfectly happy with what they already have from Netflix in terms of user interface and ease of use, and this despite the fact that we are ALREADY Amazon Prime subscribers as well.

    Why don't we get rid of one streaming service offering versus the other then? Because they do different things and are imperfect substitutes (and always will be given the licensing regime) for each other! I can't get free shipping with my Netflix subsciption for my Amazon purchases, I can't get decent streaming selection, quality user interface, and access via the various devices that are conencted to our various TV's to use Amazon and in order to cancel Netflix, and I can't get rid of Hulu Plus because it offers current-season catch-up TV and last season whole season binge/discovery viewing of key broadcast networks. Although I can only stand so much of Hulu because it forces us to watch ads but it will never be replaced by the other gusy given how the content is split among the different platforms. And for what, to save $8/mo - easier for me to cut out Starbucks one day every 2 weeks instead.

    The whole point is that none of these streaming "networks" are direct competitors to each other and will each evolve to find a content library position thatare complementary and which serves their own best self-interest to maintain and expand their subscriber base, not a mutually exclusive market. It's the silliest thesis to think that Amazon getting 20 recent movie releases a year that Netflix already has will be the deathknell of Netflix, or any one else for that matter and reflects a lack of knowledge of what each of these streaming networks' value proposition actually offers to the customer.
    Sep 12 01:00 PM | 3 Likes Like |Link to Comment
  • Assessing Clearwire's Liquidity Today And Recoveries In A Bankruptcy [View article]
    first of all, 5x5 is a function of through-put and you can't assess capacity unless you overlay the cell site footprint. Sprint is implementing 5x5 LTE over its ENTIRE 38,000 CDMA cell site footprint as part of Network Vision upgrade. Verizon is implementing 10x10 LTE via its 700mhz frequencies over a small fraction of that foot print -- because it doesn't need to give better RF propagation for coverage -- but this is deficient for capacity purposes and it will then overlay an additional 10x10 using its AWS frequencies, mostly in major metro centers and high usage "hot spots" or "hot corridors". Sprint similarly will add its 5x5 800mhz SMR frequencies via LTE-Advanced (which binds non-adjacent frequencies to synthetically create one fat pipe) in 2013 to supplement its G-Block LTE deployment. The end-result is analogous to Verizon's LTE plant - effective 20x20 in the case of Verizon with 700mhz for coverage and 1.7ghz/2.1ghz for capacity, but in Sprint's case, effective 10x10 with 800mhz for coverage and 1.9ghz for capacity, except that Sprint will have first built out its capacity sites already (since it deployed on the entire existing mature CDMA cell site network). From a capacity standpoint, Verizon has 2.5x the post-paid subscriber base than Sprint's post-paid sub base so it will be RELATIVELY less capacity than Sprint assuming that Verizon will have deployed LTE at every single one of its 45K cell sites -- which it will not have.

    Lastly, the FCC should rule within the next 4 months on the resolution of DISH's waiver request and if the price of approval is to move Dish's spectrum in order to clear up the H-block. Sprint would be the most advantaged as the H-block is contiguous to SPrint's G-block and would be other wise an island for everyone else (and requiring different cell site infrastructure to support the band for others than where they are deploying LTE). Thus Sprint frankly has other strategic options, including the other 1.9ghz PCS spectrum (30mhz in all the top markets) it has that will eventually be re-farmed from CDMA (such as what MetroPCS is planning to do).

    The point is not that CLWR's spectrum is not strategically valuable, particularly in time when there is both an infrastructure and device ecosystem that will make it viable, and that Sprint may not be uniquely positioned to take advantage of 2.5ghz (since it will be the furthest along in supporting both devices and a network infrastructure that can support TDD-LTE at 2.5ghz) but you should not make an investment decision on CLWR premised upon that CLWR enjoys some particular leverage on Sprint. That was the attitude that frankly got CLWR in trouble and forced Sprint to pursue a LTE network under its own control (plus it finally got real world experience on the shortcomings of relying solely on 2.5ghz freq bands for 4G wireless broadband as the coverage and in-building penetration was poor and would require a non-competitive capital build). The challenge is that CLWR's spectrum has value to an EXISTING network operator as an overlay for supplemental capacity but its unclear that its wholesale carrier's carrier business model (and the opex overhead and capital cost burden to earn a return on a separate network) is viable. If you want "option value", you should look instead at the unsecured bonds -- the bondholders are chomping at the bit for a filing so that they can get impaired, clean up the balance sheet, and take all the equity of the company.
    Sep 7 10:45 AM | Likes Like |Link to Comment
  • More on Apple-Samsung: The jury rules Samsung (SSNLF.PK) owes Apple (AAPL) $1.05B in damages. Apple has been declared innocent of all of Samsung's software patent infringement claims, and Apple has been barred by patent exhaustion from enforcing two patents. No damages for Samsung. AAPL +1.3% AH. Expect Samsung to open lower in Seoul on Monday. Mobile patent plays such as InterDigital (IDCC) and VirnetX (VHC) could rally on the verdict. (more) (live blog[View news story]
    I kinda of feel sorry for Samsung since, excepting the trade dress issues, all the software utility patents were due to Google's Android being the culprit for grand theft.

    Ever wonder why the Windows devices, from Nokia, and those same Windows smart phones even from Samsung and HTC are not being sued for patent infringement -- because Microsoft knows how to negotiate licenses as opposed to the brats from Googleplex who think they can steal from everyone and that it's their God-given right to steal.
    Aug 28 06:33 PM | Likes Like |Link to Comment
  • More on Apple-Samsung: The jury rules Samsung (SSNLF.PK) owes Apple (AAPL) $1.05B in damages. Apple has been declared innocent of all of Samsung's software patent infringement claims, and Apple has been barred by patent exhaustion from enforcing two patents. No damages for Samsung. AAPL +1.3% AH. Expect Samsung to open lower in Seoul on Monday. Mobile patent plays such as InterDigital (IDCC) and VirnetX (VHC) could rally on the verdict. (more) (live blog[View news story]
    Jerry, not according to 9 jurors deciding unanimously on "willful", because as opposed to you, the jurors actually read the evidence.
    Aug 28 06:28 PM | Likes Like |Link to Comment
  • Samsung (SSNLF.PK), unsurprisingly, plans to appeal its harsh legal loss to Apple (AAPL). Apple's response to the jury's verdict: "We applaud the court for finding Samsung’s behavior willful and for sending a loud and clear message that stealing isn’t right." Samsung's response: "It is unfortunate that patent law can be manipulated to give one company a monopoly over rectangles with rounded corners, or technology that is being improved every day by Samsung and other companies." (more[View news story]
    IncomeYield, "hope is not an investment thesis". Why don't you review the 12 patents in various jurisdictions that Android devices have been found to have violated Microsoft or Apple patents, .. and yes, all the cases in Germany, in particular, are adjudicated by highly specialized technical judges.

    See here for the list of Android violations found in various jurisdictions worldwide: http://bit.ly/OaZc4S
    Aug 24 09:43 PM | 4 Likes Like |Link to Comment
  • More on Apple-Samsung: The jury rules Samsung (SSNLF.PK) owes Apple (AAPL) $1.05B in damages. Apple has been declared innocent of all of Samsung's software patent infringement claims, and Apple has been barred by patent exhaustion from enforcing two patents. No damages for Samsung. AAPL +1.3% AH. Expect Samsung to open lower in Seoul on Monday. Mobile patent plays such as InterDigital (IDCC) and VirnetX (VHC) could rally on the verdict. (more) (live blog[View news story]
    Microsoft already claims that OEM's making 70% of the Android smart phones already have taken a MSFT license -- because Google is an "Equal Opportunity Stealer". GOOG needs to finally come clean and negotiate licenses from those that it has stolen from in order to allow Android to prosper. But the boyz at Goggleplex are too wed to their "Do Only Evil" motto and don't seem to have the adult supervision required to respect the property of others.

    And that $12.5B of cash pissed down the toilet for Motorola has done wonders to "protect" Android. Guffaw as in GMAO!
    Aug 24 09:26 PM | 1 Like Like |Link to Comment
  • Samsung (SSNLF.PK), unsurprisingly, plans to appeal its harsh legal loss to Apple (AAPL). Apple's response to the jury's verdict: "We applaud the court for finding Samsung’s behavior willful and for sending a loud and clear message that stealing isn’t right." Samsung's response: "It is unfortunate that patent law can be manipulated to give one company a monopoly over rectangles with rounded corners, or technology that is being improved every day by Samsung and other companies." (more[View news story]
    none of the software patents that the jury found Samsung violated willfully (actually it was Google that violated them) had anything to do with "rectangles with rounded corners". It's just too bad that Samsung's lawyer hung its case on a cute "sound bite" but the jurors were smart enough to know to see through it.

    All the other OEM's relying on Android have the same dilemma. The only solution is for Google to work around a solution (assuming that it doesnt violate some other Apple patent instead) or otherwise negotiate a license with Apple and Microsoft to allow the features that it wants to retain in Android.
    Aug 24 09:19 PM | 13 Likes Like |Link to Comment
  • More on Apple-Samsung: The jury rules Samsung (SSNLF.PK) owes Apple (AAPL) $1.05B in damages. Apple has been declared innocent of all of Samsung's software patent infringement claims, and Apple has been barred by patent exhaustion from enforcing two patents. No damages for Samsung. AAPL +1.3% AH. Expect Samsung to open lower in Seoul on Monday. Mobile patent plays such as InterDigital (IDCC) and VirnetX (VHC) could rally on the verdict. (more) (live blog[View news story]
    Samsung was also found by jury to have "willfully breached" so besides damages, not clear who adjudicates the punitive compensation.

    the issue was never regarding money in any case. It was with respect to injunctive relief, i.e. whether the Judge's injunction against the Galaxy Tab can be extended across to Samsung's smartphone line-up. Will be interesting. The bulk of what samsung was found to have violate in terms of software parents, as opposed to design patents, is really violations by Android of Apple's software patents.
    Aug 24 08:13 PM | Likes Like |Link to Comment
  • Netflix (NFLX +0.5%) crosses over the 1M member milestone in the UK and Ireland. The company says 10% of the population in the region gives up two hours or more of their day to watching TV shows delivered via the Internet. Though competition is stiff with Amazon's Lovefilm and BSkyB offering up online content, it appears the market may be broad enough to feed all three companies. [View news story]
    Interesting concept. What happens to the TV ratings of other shows that you fall asleep to? Does Nielson have a sleep detector to know that you've stayed awake to watch all the commercials that you were supposed to?

    I fell asleep last night watching the DVR but it reverted to television channel that my wife was watching previously -- so it must have stayed on the HGTV channel all night long. I guess Scripps execs must be doing cartwheels now that their ratings have doubled from all the people that have fallen asleep to their programs.

    But then premium pay channels such as HBO, Showtime, Netflix, etc. don't have ads but are instead subscription services so not really sure what the impact is from falling asleep while watching either Showtime or Netflix would be.
    Aug 20 11:23 AM | Likes Like |Link to Comment
  • Surprise, surprise: court-directed mediation talks between Apple (AAPL) and Samsung's (SSNLF.PK) CEOs failed to achieve a resolution to the companies' wide-reaching patent dispute. Among the reported points of contention are differing opinions on the value of Samsung's standards-essential patents. Perhaps a bigger issue is that Apple isn't interested in licensing many of its own patents, and instead wishes to use them as a hammer to wage "thermonuclear war" on Android. (yesterday)  [View news story]
    Cameron, I actually don't own any AAPL but I used to own GOOG, until I saw total stupidity being exhibited by the MMI acquisition. Ronin is correct in that it was easier to target the OEM's (particularly in certain venues such as the ITC where you have to establish a "domestic industry" in order for Section 337 violations of the Tarriff Act to be germane for ITC suits). However, it is all moot since GOOG has consummated on its "impulse purchase" of MMI, ostensibly for Motorola's patents in order to "protect Android". Why does Android need "protecting" if Google is as confident as you are that Android will win any patent litigation. If that were the case, we could have saved $12.5B of shareholders' money (I'm still speaking from past tense when I was a sharehodler of GOOG) and not pissed it down the drain. Evidently GOOG's executive management knows a bit more about its patent exposure than perhaps you do. Oh, and why over 70% of Android OEM's already are now paying license fees to Microsoft.

    Why dont you get yourself educated a bit, and read the following blog by Florian Mueller that documents all the cases involved in the smartphone wars in past 3 years. http://bit.ly/Oj6mUX

    After you have conducted your due diligence, I would love to then understand your perspective of why you think this is "hogwash" and that Google is assured to win. By the way the Oracle-Google case was largely over the issue of copyrightibility of API's (and Google actually lost and found by jury to have infringed but Judge Alsop issued after-the-fact JMOL that the 37 API's were not copyrightable, a judgement that is now under appeal). And of course, I don't need to explain to you the differences copyrights, versus trademarks or trade dresses, design patents, and utility patents.
    Aug 15 03:54 PM | 1 Like Like |Link to Comment
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