After a few weeks of mysterious adverts promising a better alternative to iPhone, Motorola’s $200 Droid phone finally hit the shelves in Verizon wireless stores on Friday. Unsurprisingly, the launch failed to attract anything like the frenzy of an iPhone launch, which had people camping out for days at its peak.

Still, all the advertising, and the positive reviews from bloggers and gadget gurus including David Pogue and Walt Mossberg, did help to lure some customers to Verizon stores.

Tech website Cnet’s Marguerite Reardon said that she found about 100 enthusiasts lining up for Verizon’s special midnight opening in New York under what could hardly be described as balmy weather conditions. This morning, in a follow up story, her headline read “Slow start for the Motorola Droid?”.

In a research note entitled “Droid is no iPhone, not even Storm,” Jefferies analyst Bill Choi said the launch didn’t compare well with Verizon’s launch of the  much criticized BlackBerry Storm last year.

But Choi noted that store traffic was higher than usual in the locations he checked out and he said “anywhere between 5-7 people huddled around the Droid station at any given time.”

While some of the Droid phones being sold today are HTC’s new cheaper device, dubbed Droid Eris, Choi noted that all stores were reporting far better demand for Motorola Droid than that of HTC.

The “Motorola brand is helping and people really like the keyboard” said Choi who estimated that Verizon could sell as many as 750,000 of the Motorola Droid devices by year end.

That’s no iPhone, but it’s somethign, especially for Motorola’s Sanjay Jha who is betting the future of the entire company on Google’s Android system.

(Reuters Photo of Motorola’s Droid)

Here are some of the day’s top stories in the media industry:

Verizon Planning Its Own App Store (Business Insider)
Preethi Dumpala writes: “The main idea: Verizon wants to be the company connecting its customers with apps — not necessarily its handset partners. And it wants to avoid becoming an even dumber pipe. Depending on how it’s set up, this could clash with gadget makers’ plans.”

McGraw-Hill might ‘give away’ Business Week for nominal $1 (FT)
“McGraw-Hill might reap only a nominal $1 by selling Business Week, according to people familiar with the 80-year-old financial magazine’s record of losses. The publisher has appointed Evercore, a boutique investment bank, to sell the title after deciding it was non-core to a group that owns the Standard & Poor’s rating agency and an educational publisher, two people familiar with the decision said,” writes Andrew Edgecliffe-Johnson.

Sinclair says it might consider bankruptcy (Baltimore Sun)
“The Hunt Valley-based owner of television stations, which depends heavily on automotive advertisers for revenue, said it might be obligated to pay $488.5 million of its total outstanding debt within the next 18 months. The company said it had $1.3 billion in total debt outstanding as of March 31,” writes Lorraine Mirabella.

Minority Broadcasters Seek Federal Aid (WSJ)
Fawn Johnson writes: “A group of minority broadcasters asked Treasury Secretary Timothy Geithner Monday for financial assistance akin to the aid that has been extended to the financial and auto industries. ”Minority-owned broadcasters are close to becoming an extinct species,” the letter said. “Even in better economic times, minority broadcasters have historically had difficulties accessing the capital markets.”

In other news:

• Earnings Preview: A tough 2Q expected for Gannett (AP)
• New York Times to sell NYC radio station (Reuters)
• CHART OF THE DAY: Users Spent A Billion Hours On Facebook In June (BI)

In a wide-ranging interview with Charlie Rose earlier this week, Verizon CEO Ivan Seidenberg danced around questions about cellphones but was more forthcoming about the U.S. telecom giant’s long-term expansion ambitions.

Asked to confirm a report that Verizon will sell an Android-based phone from Motorola this year Seidenberg said, “It might be true what you said. I can’t quite disclose…”

And as for any plans to sell iPhone, the executive said that would be Apple’s decision.

Seidenberg was more comfortable talking about his dreams of global expansion and seemed to hint that the company would aim for an overseas acquisition in wireless.

“We want at some point a global retail play in wireless,” said the executive, whose wireless unit is 45 percent owned by U.K. based international service provider Vodafone. Verizon has long said that it would like to buy out Vodafone’s stake in Verizon Wireless, a move that Soleil analyst Michael Nelson said would likely be its first acquisition priority.

Instead of asking how Verizon might expand overseas, Rose questioned the executive about whether he would consider buying Sprint. But Seidenberg said Verizon is already big enough in the United States.

“Sprint is U.S based and we’re thinking global. I don’t know that that would make a lot of sense. We’re thinking differently, and bigger,” he said, suggesting that the “home run” would be to have global communications companies with the same kind of scale as companies like Fedex.

However this dream will likely take time and Seidenberg noted that the bulk of his company’s growth should come from internal projects. Around half to two thirds of growth will come organically with only about a third coming from acquisitions, he said. The executive noted that Verizon had grown from a small New York utility to become a major U.S. company. “In the next 10 years we may figure out how to go past that,” he said.

(Reuters photo of Ivan Seidenberg in July 2008)

I’ve been pretty excited about the new BlackBerry Curve 8900 that my office handed me to replace a prehistoric 8800-series machine. Now there’s a new BlackBerry device, the Tour, which is making its debut this summer. So naturally, I rushed to check out the specs on the web to see what I missed.

Here’s what it’s got: 4.4 inches tall, 2.4 inches wide and 0.6 inch thick. There’s a 3.2 megapixel camera, enhanced media player with 256MB built-in memory, video playback and recording capability, and other consumer-friendly features. At under 5 ounces, it’s a little heavier than the Curve 8900, but it doesn’t look that much different.

But Research in Motion Co-Chief Executive Jim Balsillie told Reuters this latest phone is a “big step forward.” They’re calling it a “world phone”, which means globetrotters can easily access voice and data services on networks outside their home country.

Like the Curve, the Tour is meant to appeal to both executives and regular folks, i.e. those who don’t wear suits but like to surf, e-mail and take pictures on their smartphones.

The Tour will launch with Verizon and Sprint in the US, and Telus and Bell in Canada. But long before then, we’ll get a temperature check on RIM. It’s due to report earnings this week. And analysts expect the Canadian company to do just fine, although it remains to be seen how Apple’s aggressive new pricing on the iPhone will impact BlackBerry sales going forward.

Keep an eye on:

• Amazon’s Kindle will support more book formats in the future. (NYTimes Bits)
• What will Eric Hippeau do as HuffPo CEO? (The Wall Street Journal)
• Boston Globe and a key union continue to discuss concessions. (Reuters)
• Spending on digital entertainment will fuel growth in the sector in the next few years. (Reuters)

Photo: BlackBerry Tour, courtesy website

Verizon Communications Chief Financial Officer John Killian had a lot to say about how well his company's smartphone and data business is doing, but skirted the elephant in the room at the Reuters Global Technology Summit: Is his company going to strike an iPhone deal with Apple?

Killian refused to comment on whether Verizon is talking to Apple about selling the iPhone once rival AT&T's exclusive contract with the iPhone maker ends next year.

"Our PDA, smartphone and data business is growing incredibly nicely," Killian said. "Our strategy is to have multiple devices. I'm not going to comment on Apple or the iPhone, but... we don't feel we're going to be at a market disadvantage in the PDA space as we go through today or 2009."

So, no iPhone deal, then? Again, Killian avoided answering directly.

"We have a range of different devices with different manufacturers, and we're continuing to evolve that. We're going to have a series of introductions this year, we're not dependent on any one vendor."

But surely, Verizon must miss the publicity that all things iPhone get? After all, the iPhone -- and Apple products in general -- seem to drive people into paroxysms of delight, especially at trade shows like CES and CTIA. Does Verizon not feel the pressure to do something big and showy?

Killian's response: "I don't want buzz, I want volumes, cash flow, profitability. I want things that allow us to do that and I think our lineup is allowing us to do that."

Spoken like a true CFO.

(Photo: Reuters)

Is WiMax wireless technology headed for the same fate as Betamax, which lost the battle against VHS as the video cassette standard in 1980s? A senior Verizon executive thinks so.

Recall that WiMax and Long Term Evolution (LTE) are key technologies for operators to cope with surging data traffic from smartphones and laptops with mobile data cards. At the moment, it’s a heated fight to become the industry standard.

“It’s going to be like VHS-Betamax thing,” Stuart Curzon, vice president of Verizon Business unit, told a news conference in Helsinki, Finland. “WiMax has been around for a few years now. If it would’ve taken off, it would’ve done it by now.”

Verizon itself aims to be one of the first in the world to roll out LTE network starting next year.

Another industry executive, Nokia’s sales chief Anssi Vanjoki, also weighed in with a WiMax-Betamax comparison just last month.

“I don’t think the future is very promising [for WiMax]. This is a classic example of industry standards clashing, and somebody comes out as the winner and somebody has to lose. Betamax was there for a long time, but VHS dominated the market. I see exactly the same thing happening here,”  Vanjoki was quoted as saying by the Financial Times.

Earlier this year, Nokia pulled from market its only product using WiMax, an Internet tablet, which was sold only in a couple of places in the United States.

Intel, the father of WiMax, strongly disagrees with Verizon and Nokia — how about you?

(Photo: Reuters)

Looking to expand its options for video content,  Verizon has quietly started to emulate DVD video technology in its FiOS television system. This means that its on-demand video offerings will eventually include interactive options such as extra chapters, subtitles or files with information about the actors in a show, just like movie DVDs have offered for years.

It’s also a way for the company to offer interactive advertising, currently on display under the marketplace option in its FiOS TV service menu. So if you like a car ad, you could click on a option to see more before you buy.

And because the adverts can be made in the DVD format it means “advertising sooner, easier and cheaper,” according to Joseph Ambeault, consumer video product development director of Verizon.

He says that because “more than 70 percent of consumers who use DVDS use the extras” Verizon sees the technology becoming very popular and “opening up a larger pool of content.” That potentially includes user generate content that could be sent to a FiOS1 local station, like the one due to launch soon in New York.

While Verizon is fond of adding “this is not something you find on cable” after describing its FiOS features, it looks like interactive advertising on cable rivals is right on Verizon’s heels.
In a story dated April 7, Associated Press describes how Ford could potentially send you an information packet on its new Mustang car after you’ve simply clicked on the yes button during an ad, a feature the wire service describes as “the future of cable TV advertising”

(Photo: Reuters)

The CTIA’s annual U.S. wireless technology showcase in Las Vegas was quieter than usual this year as vendors sent fewer employees and rented less floor space for their booths in an effort to crimp spending due to the recession.

Aside from a lot of talk about cellphone applications and a software store launch from BlackBerry maker Research In Motion, the show offered few surprises.

A handful of operators and vendors, however, offered insights into their technology strategies — even if they were less than keen to indicate how their businesses were faring exactly. Some even launched new gadgets.
    
AT&T, the exclusive operator for the iPhone, used the show as an opportunity to talk up application sales for its less fancy phones, which have brought it $1 billion in revenue in the last few years. In comparison, it does not get a revenue share for iPhone apps, which kicked of the craze for application stores when they launched last year.

However, the carrier noted that its more traditional phones are a much bigger business than high-profile, advanced devices like iPhone.

“About 25 percent of our portfolio is smartphones. That means that 75 percent of them are not,” AT&T chief marketing officer David Christoper told reporters at a lunch on the sidelines of the show on Thursday.
    
AT&T, behind only Verizon in subscriber numbers, also talked about the need to offer new pricing options for mobile data in future. It is expected to be a year or more behind Verizon Wireless in upgrading its network to a high-speed technology known as “long term evolution”.

But when it does, likely in 2011, it expects to cut data access fees and stop charging for phone calls by the minute. Instead it may charge data access fees based on how much netwok capacity a customer uses up.

“It will be an environment where people buy the amount of data they need,” Ralph de la Vega, the head of AT&T’s mobility business, told reporters. “We’ll be able to sell them a lot more data than we do today for a lower price.”

Qualcomm investor relations executive Bill Davidson declined to comment on prospects for a general return for chip demand, but in an interview with Reuters, he said that the company is expecting big growth from markets such as China and India.

While China is often cited as the emerging market for wireless growth, Davidson said the expected award of licenses to build 3G high-speed networks in India, could bring even more growth.

“The Indian market is going to be a very good market for 3G, even more so than China, because its under-served on the wireline side,” Davidson said in an interview.

At its booth, Qualcomm showed a prototype consumer electronics charger called eZone, which could charge as many as five gadgets such as phones, cameras or music players simultaneously. The gadgets are placed in no particular order on a flat rectangular plate that is plugged into a power source.

Qualcomm said it is talking to different device manufacturers about incorporating the technology in their devices. If it brings the product to market it would likely have partner companies manufacture the device.

(Reuters Photo: Ralph de la Vega  at CTIA by David Becker)

Robbie Bach, President of Microsoft’s Entertainment and Devices Division, sat down to talk to Reuters at CES in Las Vegas, ahead of the big keynote address by CEO Steve Ballmer. Topics discussed ranged from the Windows 7 beta and eventual launch, Microsoft’s mobile search deal with Verizon, and how the tough economic environment is affecting the company.

What is the status of Windows 7? Is it still on track for its launch debut?
It’s absolutely on track for the debut that we won’t tell you the date of. Three years from the last one. (Vista shipped in the fall of 2006 to businesses, and early 2007 to consumers). The date has some range in it for that reason. It’s a very good product.

What have you learned from the ups and downs of the Vista launch?
We learned that people’s early experience with the product when it ships is important. Initially when it shipped, we didn’t have as much compatibility as we would like. And that frustrated some people early on. That’s all gone now. But certainly with Windows 7 we want to get that right from the start.

How has the economy’s problems affected Microsoft plans?
The economy is going through a reset. There is no question about that. In the short term that means that every business is having some impact. Our general approach is to say that this is a reset, we are going to manage through that and come out the other end of that reset a much stronger company with a great product lineup. And you are going to see us continue to invest in technologies. But (we have) tremendous optimism about where the market is going and what the opportunities are over the next 5 years.

There are rumors out there about job cuts at Microsoft. What can you say about that?
We are not gong to comment about rumors. We will see how that plays out. You will see how that plays out in the market.

Netbooks are big at CES this year. Are netbooks (many run on Linux) hurting your Windows business at all?

In the economy, people are going to be more value driven, and we understand that. But over time you are going to see us invest in Windows both from a netbook all the way up to highest-end server that you can imagine. That’s sort of how our business model works. You are going to see us continue to do it. That will create some fluctuations, plus or minus, in different parts of the business. But it’s important to have the full range of products. Netbooks in the marketplace today, about 85 percent of them are running Windows.

Tell about your mobile advertising and search deal with Verizon.

This is a deal where we will be providing search and advertising services for all of their search capable mobile phones, not just Windows mobile phones, across their spectrum of phones. Search and mobile is in a very early stage and we think it has a huge potential, but we also don’t think it is going to be like search on the desktop. This is an opportunity for both Verizon and Microsoft to really build a great search experience in he mobile space.

Does this displace Google in any way?
Today they do their advertising with a variety of people. I certainly think that Google would have been the competition for that business. I think that’s a safe assumption. It gives us a pole position in mobile search.

Does the Verizon deal mean you are gunning for Google?
It’s not a big secret that Google and Microsoft are going to compete in the market place in a lot of different places.

But this is a big win, right?
Yes, it’s an important win. The reality is that because we are so early in the mobile area of search, to me, the success of this deal is not about us versus Google. That’s not why it is important to us. The reason it is important to us is to work with somebody like Verizon to really build out what the search experience on a phone is like and that fundamental work can lay the foundation for a whole new business for us and for Verizon. Neither one of us has a big business there today, in fact nobody has a big business on mobile search today.

(Photo: Robbie Bach at CES 2008)

Does Ivan Seidenberg, Verizon’s top executive, fancy himself the next media mogul with a pro-sports team, a la Mark Cuban, the Dolan family and Paul Allen?

He hinted as much at the Dow Jones Media and Money conference  conference in New York. The trouble is the team he mentioned — The New York Knicks — are owned by Cablevision, a chief rival of Verizon. So pretty much kiss that idea goodbye.

Seidenberg hinted at the very, very unlikely possibility of buying the Knicks during a back and forth at the conference Michael Burgi of MediaWeek. Burgi asked Seidenberg to discuss his “content strategy.”

“People keep asking, when are you going to go vertical and add a lot of content?” Seidenberg said. “Content gets to the customer in a lot of (ways). We like to think of ourselves as bundling it, packaging it, formatting it, helping to store it if that’s what you need, helping to send it … to your PC, to your television (and so on).”

Burgi then asked whether Verizon was actually interested in creating content.

 “No,” Seidenberg answered. “Having said that, if somebody came up with the perfect killer service, that we could invest in, we can do it. It’s not necessarily a strategic imperative that we do it — we’d do it to annoy the hell out of everybody.”

At that point, Seidenberg said that it wouldn’t be in the shareholders’ best interest to buy just any content, but if the right thing came along he’d look at it. And here’s the killer quote…

“If I could buy the Knicks and fix them, I would do it. But we can’t do it.”

(Allow me take a moment with a message for Mr. Seidenberg. Millions of Knicks fans — especially rabid, win-starved ones like yours truly – would welcome, how do I say it, new leadership for the legendary team. We have not had a winning season since 2000-2001. You’re a local product. I can tell that you’re are fan, too. So, hey, don’t give up the dream. That’s all.)

(Photos: Reuters)