Bulky telephone directories — frequently used as doorstops these days — would seem to be the antithesis of the digital world. But if you happen to own a directories business, don’t toss it in the recycling bin yet.

Sol Trujillo, chief executive of Telstra Corp, said phone books are at the forefront of the Australian telecoms company’s digital advertising strategy. The idea is to get phone book advertisements to digital consumers. For example, mobile phone users could draw on ads once-limited to the phone book to find a restaurant as they walk down the street.

Unlike other telecom companies like Qwest or Verizon, which sold or spun off their phone books, Trujillo said Telstra will hold on to its yellow pages. He hopes to integrate the company’s online, cellular and directory advertising to create more business for each. “That’s going to be the next wave of integration,” he told Reuters in an interview.

The CEO, who used to head U.S. West, said advertisers get more value from phone books than online advertising. He said one advertiser found that its ads on Google generated more than 3,200 click throughs (a measure of popularity of online ads) versus only 72 calls from phone book users. But these callers generated six times more value for the advertiser than the Google ad. “When you’re ready to buy, the yellow pages are where you tend to go.”

Telstra could even get a cut when a sale is generated by an ad on its mobile phones. “Ultimately it may be transactional if you make the reservation when you’re online.”

In the interview, Trujillo talked about plans to take public SouFun.com, China’s top real estate and furnishing Web site, in which Telstra has a controlling stake.

He also discussed his testy relationship with the Australian government. In a sign of how low relations have sunk, when asked about a negative report from the government-owned Australian Broadcasting Corp, the CEO told us to look at “who owns that company.“

(Photo: Reuters)

Every conversation about Motorola seems to begin and end these days with pleas for a new line-up of sexy phones from the handset maker now relegated to third place from second in the global mobile phone market it invented.

But Motorola phones need more than good looks, according to analysts, who say its next phones should scream mobile video, music and Internet and need to be wrapped in a unified marketing campaign playing up its hip data features.

Sony Ericsson has had some success, borrowing the Sony’s Walkman brand to fashion an image as a music phone-maker. So has Nokia with the N-Series multimedia phones, analysts said.

Motorola dubbed its latest phone the “media monster” when it unveiled the device in May this year and its chief executive promised in January to deliver “experiences,” potentially signaling a new approach.

But if the company’s historical patterns are anything to go by, we may have to wait some time.

American Technology Research analyst Mark McKechnie outlined some highs and lows at Motorola. The company that changed the world with mobile communications is expected to report a quarterly loss on weak phone sales on Thursday.

* 1973 - Motorola’s makes the first mobile phone call on a prototype for its first commercial cell phone DynaTAC, a much heavier version of what we now know as the mobile phone.

* 1984 - DynaTAC, becomes commercially available.
* 1989 - Motorola launches MicroTAC, its first flip-phone, according to McKechnie, who said he worked on chips for the analog phone. It had a hinged cover that flips open from the bottom of the device to reveal the keypad.

* 1994 Motorola dominated the mobile phone market with 32.5 percent share, compared to Nokia’s 21 percent, according to technology research firm Gartner.

* But in the mid-90s the first digital wireless networks were being built in Europe and because Motorola was slow to discard analog for digital it “went into a three to four year tail-spin,” McKechnie said.

* 1996 Motorola launched StarTAC, a hugely popular flip phone with a cover that flipped open from the top, the first of Motorola’s so-called clamshell phones. But it wasn’t enough to stop its steady decline in market share, which hit a low of 13 percent in 2000. Nokia snapped up a 31 percent share of the market.
* 2001- 2004 Motorola’s market share hovered around the mid-teen percentage range as it battled Nokia to win fans among the increasing number of mobile users.

* Late 2004 Motorola launches Razr (see picture at top), which became a design icon after Cingular Wireless, now part of AT&T Inc started selling it.
*By July 2006 Motorola said it had sold 50 million Razr phones and CEO Ed Zander said he eventually expected to sell 500 million versions of the phone.

* But in late 2006, with Razr being discounted to the extent that some carriers were giving it away to customers who signed service contracts, Motorola earnings and revenue starts to disappoint investors.
* July 2007 - Some shareholders have demanded Zander’s ouster as Motorola prepares to report its second quarterly loss in a row.

(Photos: Razr, Reuters file; all others, Motorola.com)

After waiting in line for hours, iPhone fans were relieved to finally get hold of their devices at a Manhattan AT&T store. “We’ll activate it, like, tomorrow. We’re tired right now,” said Nick Gonzalez, 19.

Gonzalez said he was going home for a nap because waiting in the fifth spot in line since morning was enough of an accomplishment for one day.

His girlfriend Christina Stevens, who is studying to be a make-up artist, also bought a phone and planned to spend a lot of time using it to watch YouTube videos.

“I think the coolest feature is the YouTube,” she said.

Both put their AT&T plastic bags containing the phones out of view in their own bags rather than walk around the city streets advertising the fact they were carrying devices worth at least half a grand.

“I’m really excited,” said Alan Pueblos, 36, a New York restaurant manager who planned to activate the phone and load his pictures and music on it that evening.

“I’m not big on waiting on lines, but I figured once in my life I’d do it for a new product I love Apple,” said a smiling Pueblos whose girlfriend waited with him and then on an impulse also decided to buy a phone.

Jewelry business operator Courtney Crangi, 34, waited in line for two-and-a-half hours with her partner Sheri and their 8-month-old baby Coco. Crangi said she has held onto a taped-together Treo phone she described as a “piece of crap” for about 1.5 years while waiting for an Apple phone.

“I’m totally embarrassed I’ve been waiting for this device, but I’ve wanted it from the day they announced it — before that,” said Crangi. ”Now I have to hide it,” said Crangi, who was worried about getting mugged if she walked around with the telltale AT&T bag in her hand.

Just before 2 p.m. Eastern, four hours before Apple  set to start selling the iPhone from its Soho story in New York City, about 200 hipster hopefuls had lined up in hope of buying the iPhone. Some were more creative than others in entertaining themselves during the wait.

Apple’s upcoming iPhone is being hailed by many as the sexiest new gadget in years. Now, Hugh Hefner’s Playboy is looking to add a dollop of real sex to the combination cell phone, video player and Internet access device.

The lifestyle brand company that was built out of a glossy girlie magazine is offering a free set of 12 wallpapers featuring scantily clad Playmates to anybody who buys the device.

The magazine, which is of course most famous for its articles, is offering iPhoners the suggestive but non-nude images, an episode of its radio show “The Playmate Hour” and a Playboy video.

Playboy, which didn’t work with Apple on the offer, normally sells cell phone wallpapers for about $2 a pop. So can the pictures be downloaded to a rival cell phone?

“It’s sized for the iPhone,” Playboy spokesman Matt Kalinowski said.

No word if Playboy is exploring innovative uses for the iPhone’s touch-sensitive screen.

No. I didn’t get to spend two weeks with an iPhone. But I did manage to steal a few moments to play with one on loan to USAToday’s Ed Baig this afternoon, but not enough time to get the hang of typing on its virtual keypad.

Tapping out ”Hi” turned up “Ho”. 

It was also long enough to check the weather in Cupertino and to watch a video on YouTube after waiting the better part of a minute for it to download.

And it was enough time for this reporter to suspect the possibilities for developing finger blisters after sliding my callus-free finger across the screen enough times to scroll through Baig’s digital album. (cute baby pics!)
     
The consensus, from Ed and a few others who have spent more time with the device, is positive. Not much of a surprise, they all think it’s pretty cool, but not perfect. AT&T’s network impressed no one.

Video of Baig playing with the iPhone here. 
     
Wall Street Journal’s Walt Mossberg (subscription): 
“Our verdict is that, despite some flaws and feature omissions, the iPhone is, on balance, a beautiful and breakthrough handheld computer.” 

Likes:
* Virtual keyboard: lack of physical keys was a “nonissue” except that typing error correction “didn’t seem as clever as the one on Blackberry” 
* Web browser: best “on a smart phone”, flies on Wi-Fi 
* Impressive battery life, memory, display. 
* Visual Voicemail 

Dislikes: 
*The “pokey” cellular network it runs on, “not great” quality of voice calls 
*lack of a removable battery 
*lack of a way to search the phone’s contents 
*lack of common methods to edit or change documents 
*lack of video games. 
     
USA Today’s Edward Baig: 
“Apple’s iPhone isn’t perfect, but it’s worthy of the hype” 

Likes: 
*The display: How it changes from vertical to horizontal depending on how you hold it 
*The virtual keyboard: Took just a “few days” to get used to. Making calls on it was  “surprisingly easy” 
*Visual voicemail, which tells you who’s left a message - “one of the best features” 
*Music player - Did not miss the iPod scroll wheel. Liked Web surfing while listening 
*Photo display: ”Looks fabulous” 

Dislikes: 
*Voice coverage was so-so 
*Web surfing on AT&T’s network, which he also described as ”pokey” and the phones “Achilles heel” 
*No voice recognition or voice dialing 
*No memory slot to add more music 
*No extra ringtones available to purchase, no way to  use own songs as ringtones 
*Found taking pictures “a tad awkward” 
     
New York Times’ David Pogue: 
“It does things no phone has ever done before; it lacks features found even on the most basic phones.” 

Likes: 
* How it looks: “so sleek and thin, it makes Treos and BlackBerrys look obese.” 
*The software: “It’s fast, beautiful, menu-free, and dead simple to operate.” 
*The Browser: “You get full Web layouts, fonts and all, shrunk to fit the screen .. can double-tap to enlarge a block of text for reading”

Dislikes: 
*Slow Web browsing: The New York Times’ home page takes 55 seconds to appear; Amazon.com, 100 seconds; Yahoo. two minutes. You almost ache for a dial-up modem” - Ouch! 
*The virtual keyboard: “Tapping the skinny little virtual keys on the screen is frustrating, especially at first.”  “The Blackberry won’t be going away any time soon.” 
*The phone: making a call takes “as many as six steps” and “Call quality is only average.” 
*No video recorder 
*No picture messaging

Jim Ryan, former head of data services for AT&T Inc, worked for two years to clinch the phone company’s deal as the only other retailer of iPhone besides Apple. Then he quietly left AT&T two months before iPhone’s grand entrance on June 29.

Ryan, who now heads mobile messaging company Mobile Campus, said he left “one of the cooler jobs in the country if not the world” because he wanted to go work for start-ups before iPhone exploded onto the scene and made it difficult for him to leave for another year when Reuters caught up with him on Friday.   

How big will iPhone be?
“I don’t think that ultimately iPhone takes over the world.” (He predicted that the $500 and $600 phone will be a “small to reasonable” percentage of AT&T phone sales.)
    
Will it have big influence?
“I think it helps set the bar … You’ll see real competition in the phone market.”
    
Did AT&T give up too much in replacing its typical data service offering with handpicked Apple services on the phone?
“The thing that I do really take pause with … is stories about how Apple’s getting one over on AT&T. You really have to take a step back and look at the tremendous value AT&T is getting out of this.”
    
He compared the Apple agreement to the way carriers work with Research In Motion, whose Blackberry is loved for Rim’s mobile e-mail service rather than wireless company’s data offerings and said wireless carriers should be more open to these kinds of partnerships.
    
“You start from that premise and you really want to delight your customer and you try not to make ego part of the equation you’re going to give them the best service you can … If there are people who want an Apple experience on their phone why shouldn’t they.”
    
Speaking of egos, why could Ryan not stick around another year to usher in the most famous phone in history?
“That seemed like a bridge too far.”

Please check out Reuters’ ongoing coverage of the iPhone launch here.

The iPhone hits stores at 6PM local time on June 29 in the United States. Some 2,000 additional temporary AT&T employees will be there to greet you.

But will you be there?

iPhone frenzy has reached a fevered pitch just days away from the debut of what’s been hailed as the most eagerly anticipated consumer electronics device since the invention of the telephone.
  
It’s gotten so bad, tech blog Engadget has even provided ways to help readers block all Apple and iPhone-related news from its site. (On the flip side, Engadget has also given readers a way to tune out everything but iPhone / Apple news.)

In anticipation of the teeming throngs of gadget lovers, AT&T has also reportedly prepped store managers on how to deal with local landlords — just in case.

But do you really think the $500 and $600 gadgets will live up to expectations? 

Here’s what we want to know to help with our ongoing coverage:

• Why will you buy an iPhone? Why won’t you ever buy one?
• How early do you plan to get in line to snag one?
• Would you travel to the East Coast to be among the first to own an iPhone?

Please check out Reuters ongoing package of stories that aims to document just about every angle of the story here.
Read CNET’s story with tips on the “the great iPhone hunt”, here.

Faced with Apple Inc.’s widely expected June iPhone launch and likely market share losses to other rivals already this year, Motorola Chief Executive Ed Zander told analysts on a conference call on Wednesday they planned to fight back with a new product strategy in a details-light discussion peppered with some choice barbs for rivals.

Motorola designers are now focused on bringing the Internet and “rich experiences” to mobile phones, he said, highlighting features such as music and video.

On Apple:
Zander bemoaned how the company failed to take advantage of its early access to Apple’s iTunes music software, which were offered on its highly anticipated but unpopular Rokr phone in 2005. ”We were the first ones to have iTunes a couple of years ago, and I think the team just did not pick up on that …. That is where I think the action is,” he said.

Zander also hinted that the iPhone’s touch-screen user interface may also influence Motorola’s future product strategy. Users control touch-screen phones by tapping a touch sensitive screen instead of keypads buttons. Motorola has successfully sold its touch sensitive Ming phone in China for about a year and a half, but has not yet sold it in the United States.

“I don’t know what the big deal is with touchscreen,” said Zander. “We have tried touch-screens here in the US before. They have not worked. Maybe they will work now.”

On design:
Slim good looks once made Motorola’s Razr phone famous and put the company on a fast track to growth. But Zander suggested that this was another era, as the company would now focus less on dreaming new phone shapes or form factors than on new features and “utility.”

“The brouhaha about the product that’s going to be introduced in the west coast … is not so much about the form factor it’s what it does,” he said in another thinly veiled reference to Apple.

On rival Samsung:
Without naming names he dismissed as “very hard to use” a rival phone with traditional keypad on one side and buttons dedicated to a music player on the opposite side. Samsung Electronics recently unveiled a phone that fits this description.

“We have got to be careful as the company that invented cool and the company that invented design language, we don’t start building things that foldout like Swiss Army knives and turn upside-down and do whatever,” Zander said.

Tensions escalated on Thursday between Qualcomm and Nokia ahead of the expiration of their license pact for technology behind high-speed wireless Web access for mobile phones.

Qualcomm effectively compared Nokia to a quasi-shoplifter because Nokia had paid a lower price than Qualcomm expected for use of its patents.

“Nokia has no more right to unilaterally set a price than the average consumer has a right to walk into a store, take a product off the shelf, and walk out with it after leaving only a fraction of the established price on the counter,” Qualcomm said. “Leaving some money on the counter does not make the act any less unlawful.”

Morgan Stanley analyst Ehud Gelblum compared the quarreling parties to two Dr. Seuss characters in a note to clients on Thurday, saying they’re “as intransigent as the Zaxes.”

Those, of course, would be the northbound Zax and the southbound Zax who end up buried under a new highway a couple of years after they refuse to yield to one another.