Dial Zero
A look at what's surprising, silly, scary or stupid in telecommunications and data

Friday, January 31, 2014

First Target, then Neiman Marcus, now Yahoo gets hacked.
Be careful.

  1. On December 19, 2013 Target revealed that the company had been hacked between November 27 and December 15, 2013. As many as 40 million credit and debit cards could have been compromised. On December 27 Target disclosed that debit card PIN data had also been stolen, but are "safe and secure" due to the encryption. On January 10, 2014, Target disclosed that the names, mailing addresses, phone numbers or email addresses of up to 70 million additional people had also been stolen, bringing the possible number of customers affected up to 110 million.
  2. On January 14, 2014, upscale retailer Neiman Marcus revealed that it was informed by its credit card processor in mid-December of potentially unauthorized payment card activity that occurred following customer purchases. More than 1.1 million customers were affected.The company said debit and credit cards were compromised, but not PINs, because the company does not use pinpads. Apparently malware was installed on the point-of-sale system in July and grabbed card data until the end of October.
  3. Yesterday, Yahoo announced "a coordinated effort to gain unauthorized access to Yahoo Mail accounts." The company said, "Upon discovery, we took immediate action to protect our users, prompting them to reset passwords on impacted accounts. Based on our current findings, the list of usernames and passwords that were used to execute the attack was likely collected from a third-party database compromise. We have no evidence that they were obtained directly from Yahoo’s systems. Our ongoing investigation shows that malicious computer software used the list of usernames and passwords to access Yahoo Mail accounts. The information sought in the attack seems to be names and email addresses from the affected accounts’ most recent sent emails."
A security suggestion from Yahoo: In addition to adopting better password practices by changing your password regularly and using different variations of symbols and characters, users should never use the same password on multiple sites or services.  Using the same password on multiple sites or services makes users particularly vulnerable to these types of attacks.

Thursday, January 30, 2014

Motorola moves again, this time to China.
Google lost $10 bil on Moto in 2-1/2 years. But they're happy.

Chicago's Galvin Manufacturing introduced one of the first commercially successful car radios, the Motorola, in 1930. "Victrola" and "Radiola" were popular brands at the time and Galvin followed their examples, combining "Motor" and "ola" to produce a new brand for Galvin's products. Galvin eventually changed its company name to Motorola.

Over the years, Motorola expanded into other electronics products including television, VCRs, semiconductors, military and aerospace gear, cable TV boxes, cordless phones, early car phones, police radios and, in 1984, cellular phones. 

In 1967, Motorola debuted the Quasar brand of transistorized color televisions promoted as having "the works in a drawer" for easy servicing. In 1974 Quasar was sold to Matsushita, parent of Panasonic. The brand name became a second-tier brand to Panasonic, used on a variety of products including televisions and cordless phones. The Motorola name also appeared on cordless phones over the years. If I remember correctly, one early model was quite innovative. The phone's base included a rechargeable battery so the phone could be used during a power failure.

Motorola became a dominant brand in the cellphone business, The company made "brick phones," (shown at left) "bag phones," and then the ubiquitous "flip phones."

It gradually lost favor as Asian manufacturers and Apple increased their market shares. Cellphone sales at Motorola slid a stunning 39% in the first quarter of 2008, pushing the company's global market share to a historic low of 9.5% and widening its net loss.

Motorola lost half of its market share from the end of 2006 when its popular Razr phone led the company to a 22.4% global market share. Much of that loss occurred in the US, where Moto was the leading player but the company has lost business because it failed to roll out new models with advanced features at competitive prices. As a result, when people with Moto phones wanted to upgrade their phones, they often switched to different brands.

"Motorola's been a puddle drying up in the sun," said analyst Neil Mawston of the research firm Strategy Analytics. Still, Motorola Chief Executive Greg Brown hinted on a conference call with analysts that the division had hit bottom, saying its performance in the second quarter of 2008 would be "flat to slightly up" in a growing market.

Brown also said the company was proceeding with spinoff plans for the division, a decision pushed by activist shareholder Carl Icahn. Brown admitted it would be costly to separate cellphones from the rest of the company. Icahn argued that carving out the mobile-devices division would make it easier for the business to find new management to help with a turnaround. The division had been reeling from management turnover, thousands of layoffs and product missteps. It posted a $418 million operating loss for the first quarter of 2008, compared to an operating loss of $233 million a year earlier.

Moto eventually brought out smart phones using Google's open-source Android mobile operating system, notably the Droid line, introduced in 2009. 

In  2011, Motorola split into two separate companies, each with "Motorola" as part of its name. Motorola Solutions concentrated on police equipment and commercial products. Motorola Mobility became the cellphone and cable TV equipment producer.

  • OUCH! On August 15, 2011, Google announced that it would purchase Motorola Mobility for about $12.5 billion. On January 29th, 2014, Google announced that Motorola Mobility would be sold to Lenovo for under $3 billion, showing a rapid and huge drop in value from the purchase price.
We’ve just signed an agreement to sell Motorola to Lenovo for $2.91 billion. As this is an important move for Android users everywhere, I wanted to explain why in detail. We acquired Motorola in 2012 to help supercharge the Android ecosystem by creating a stronger patent portfolio for Google and great smartphones for users. Over the past 19 months, Dennis Woodside and the Motorola team have done a tremendous job reinventing the company. They’ve focused on building a smaller number of great (and great value) smartphones that consumers love. Both the Moto G and the Moto X are doing really well, and I’m very excited about the smartphone lineup for 2014. And on the intellectual property side, Motorola’s patents have helped create a level playing field, which is good news for all Android’s users and partners.

But the smartphone market is super competitive, and to thrive it helps to be all-in when it comes to making mobile devices. It’s why we believe that Motorola will be better served by Lenovo -- which has a rapidly growing smartphone business and is the largest (and fastest-growing) PC manufacturer in the world. This move will enable Google to devote our energy to driving innovation across the Android ecosystem, for the benefit of smartphone users everywhere. As a side note, this does not signal a larger shift for our other hardware efforts. The dynamics and maturity of the wearable and home markets, for example, are very different from that of the mobile industry. We’re excited by the opportunities to build amazing new products for users within these emerging ecosystems.

Lenovo has the expertise and track record to scale Motorola into a major player within the Android ecosystem. They have a lot of experience in hardware, and they have global reach. In addition, Lenovo intends to keep Motorola’s distinct brand identity -- just as they did when they acquired ThinkPad from IBM in 2005. Google will retain the vast majority of Motorola’s patents, which we will continue to use to defend the entire Android ecosystem.

The deal has yet to be approved in the U.S. or China, and this usually takes time. So until then, it’s business as usual. I’m phenomenally impressed with everything the Motorola team has achieved and confident that with Lenovo as a partner, Motorola will build more and more great products for people everywhere.

From the New York Times:

Selling a major portion of the business would be a concession of defeat for Google and particularly for Mr. Page. Motorola has continued to bleed money, aggravating shareholders and stock analysts, and its new flagship phone, the Moto X, did not sell as well as expected.

However, this is the second divestiture Google has made from the assets it acquired after buying Motorola Mobility, which was its largest ever acquisition. In 2012, just months after that deal, Google sold Motorola Home, which included its set-top boxes and cable modems, to Arris for $2.35 billion.
Google will also retain most of the patents it acquired as part of its original deal for Motorola, while granting Lenovo a license to use certain ones for its new handsets. 

For its part, Lenovo appears to be building a comprehensive business in simple computers. Once known primarily as a maker of personal computers, last week Lenovo paid $2.3 billion for a big part the computer server business of IBM. Already the world’s largest maker of PCs, the IBM purchase got Lenovo about 7.5 percent of the world market for low-margin servers based on off the shelf semiconductors.

Lenovo’s shopping spree may be driven by the necessity of moving into other markets. Last year, the world PC market contracted by 10 percent, according to IDC, to 314.5 million units.The reason is that people now buy smartphones and tablets instead of PCs. While IBM executives said they could not make a sufficient profit in commodity servers, Lenovo may hope to build an economy of scale buy buying chips for both PCs and servers in even greater bulk. 

The same case could be made for phones, where Apple and Samsung have taken share from almost all other suppliers. According to NDP Group, in the U.S. market, the largest for high-end smartphones, Apple and Samsung have 68 percent of the market. The rest is divided up among a number of players, including Motorola Mobility, HTC, and Blackberry. While phones use different kinds of chips than PCs or servers, many parts and much of the contract manufacturing is done by the same companies. With more products, Lenovo can squeeze its suppliers harder.

“We will immediately have the opportunity to become a strong global player in the fast-growing mobile space,” Yang Yuanqing, Lenovo’s chief executive, said in a statement. “We are confident that we can bring together the best of both companies to deliver products customers will love and a strong, growing business.”

Away from the United States, Lenovo may be concerned about the rise of the smartphone market in its home country. China’s smartphone market includes, aside from the U.S. players, such local manufacturers as Huawei, ZTE, and Xiaomi. Products from all of these manufacturers are increasingly well-regarded, and have made inroads in several markets outside the U.S. 

“It makes strategic sense for both Google and Lenovo,” said Andrew Costello, a principal at IBB Consulting. “It will give Lenovo a strong brand in the mobile space outside of China that they don’t have today, and it gives them deep operator relationships with AT&T and Verizon. And for Google, they’re able to focus on the services side, which is what they’re best at, and retain the patent holdings.”

Google will receive $660 million in cash, $750 million worth of Lenovo shares and a three year promissory note worth $1.5 billion.

From GigaOm:

When Google bought Motorola Mobility for $12.5 billion in 2011, many people said it was all about the patents — and they were right. Now, on news that Google sold the device maker for just $2.9 billion, it’s worth examining if the deal made sense, and what role the patents played.

The short answer is that the deal, including the patent part of it, worked out just fine. A look at the math, and the competitive landscape, shows that the purchase and sale of Motorola made strategic sense for Google, even at that $12.5 billion price tag.

The final outcome of the Motorola deal validates Google’s strategy at a time when most patents are business weapons unrelated to actual innovation. It also provides yet another reminder of how badly America needs patent reform.

Recall that one month before the acquisition, Google’s rivals — including Apple, Microsoft and BlackBerry — had snapped up a coveted patent portfolio at auction, giving them a new stick to pummel Google in a global and ever-sprawling legal battle over smartphones.

The deal, then, gave Google a chance to counter-attack or at least hold its ground thanks to Motorola’s intellectual property, which reportedly amounted to 17,000 issued patents and 7,500 applications. Google has never been a big booster of a patent system that awards patents for inventions like a “method of swinging on a swing” but, given the context, this was a case of if you can’t beat ‘em, join ‘em.

Sure, Google bought the company for $12.5 billion and sold it for around $3 billion, but that doesn’t necessarily mean it was a bad deal from a patent perspective. While the spread suggests Google lost its shirt, the amount it will actually spend on Motorola at the end of the day is around $4 billion — and it’s keeping the patents.

The $4 billion figure, as analyst Benedict Evans, the New York Times and Bloomberg noted, results from the fact that Motorola had around $3 billion in cash on hand, and from the $6 billion Google recouped from selling off units of the device maker.

Page’s words are a reminder that while some of the Motorola patents didn’t pan out in court, there are still thousands more of them that Google can unleash at any time, including newly issued ones (recall that Motorola had 7,500 applications at the time of the deal). And, at $4 billion, the price doesn’t appear to be crazy, especially when considering that’s less than the amount that Google rivals paid at auction for the patent portfolio of Nortel (which took place shortly before Google acquired Motorola).

More importantly, the Motorola patents don’t stand alone; they are part of Google’s swelling intellectual property portfolio, which now includes access to Samsung’s patents as well as the rapidly increasing number of patents Google is obtaining internally.

All of this means that Google is in position to wage the smartphone patent wars for years to come. Even if the Motorola patents don’t give it a knock-out victory, the patents will allow Google to inflict incredibly expensive litigation on rivals since, under America’s bloated patent system, it can take years to invalidate even the flimsiest patent.

Fortunately, this may not be Google’s goal. According to a person familiar with the company, Google’s patent partnership with Samsung is part of a larger plan to defuse the patent wars over smartphones, and promote industry-wide cross-licensing deals instead. If this is the case, the $4 billion that Google paid for Motorola’s patent will help give it the necessary strength to promote peace.

At the end of the day, the Motorola patent purchase was a sane response to a patent system that is so irrational that all three branches of the US government are now trying to reform it.

From Bloomberg BusinessWeek (Brad Stone):

It looks like a rare misadventure of Google’s Larry Page era is about to come to an end. Google  says it is selling its Motorola handset business to the Chinese computer maker Lenovo  for around $2.91 billion.
In May 2012, Page, then the newly installed chief executive of Google, acquired the storied handset maker Motorola Mobility for $12.5 billion. The company appointed longtime executive Dennis Woodside to the helm of the new subsidiary and talked about using the new hardware arm to push the boundaries of its Android mobile operating system.

But there were two other factors behind the merger that are key to understanding why it unraveled. Google, like so many other companies, had Apple envy—and wanted to exert the same control over design and manufacturing as its Silicon Valley rival has over the iPhone. Google also wanted to get its hands on Motorola’s deep patent portfolio and to neutralize the threats Motorola was making against Google and other members of the Android world.
Google succeeded in avoiding an all-out Android legal apocalypse. But as a way to mimic Apple, acquiring Motorola was a failure. Phones such as the Moto X have not performed spectacularly; at the same time, Google’s ownership of Motorola irritated other handset makers, such as Samsung Electronics.

Chetan Sharma, a mobile analyst, said that Google wanted to relieve so-called channel conflict between Motorola and other big Android manufacturers, such as Samsung. “It didn’t make sense when they acquired them from a product point of view, and it was creating a lot of tensions in the ecosystem.”

Sharma added: “I think they very quickly realized they cannot compete on a global scale with Apple under the Google or Motorola brand.”

Meanwhile, Lenovo is rapidly expanding in the U.S., and in Motorola the Beijing-based company gets a valuable brand in the smartphone world

- - - - -

Motorola TV photo from http://www.motioncontrolsrobotics.com. Thanks. 

Wednesday, January 29, 2014

Just because they sell it doesn't mean they use it

A while ago, the French government financed a marketing outpost in New York City to help French telecom manufacturers sell their products in the US.

At that time, French phones were as laughable as French cars, but the government and "France Telecom" were determined to change their unfortunate image.

Naturally, the office needed a phone system for the French folks to use while spreading the word.

They couldn't take a chance on phone failure, so instead of using one of the French systems they were trying to sell, they bought an ITT phone system, made in the good old USA.

Tuesday, January 28, 2014

TXT MSG can save stolen car

A text-message to your stolen car, ordering it to shut down, is being heralded as a new way to thwart auto thefts. Engineering students at Canada's University of Saskatchewan say they have developed a program that integrates cellphone technology and the computer system on most cars.

Michael Siourounis and two classmates devised the system as a project for their senior-year studies. "You text your vehicle and inform it that it has been stolen," Siourounis explained. "It will actually initiate a sequence of events that causes the car's internal computers, that we don't modify at all, to think that the car has overheated."

Shae Pederson, one of the other engineering students on the project, said the first signal to the engine tells it to go into a limited power mode. Pederson said the reduced power provides a measure of safety to the driver.

"That 30 seconds gives them the time — the thief or whoever — time to pull over. And then after that it will shut the car down right away."

The next signal comes from the car back to the cellphone, the students said.

"Then an onboard GPS unit on our device texts you back the location of the vehicle," Siourounis said. "So then you can send the police to go recover it or go get it yourself," he added.

Siourounis said the prototype cost about $600, but expected the price would come down if it were commercialized. (info from CBC)

Monday, January 20, 2014

Coming back to life

After a hiatus of nearly four years, I expect to re-start this blog soon. Check back to see what's new.