Verizon Droid Bionic launches Sept. 8, $299

Verizon launched the Droid Bionic, another 4G LTE phone, on Wednesday, just a day before the handset will be available in stores. The Bionic, built by Motorola, complements 4G network support with a dual-core processor and a large, high-resolution touchscreen. Verizon will offer the Droid Bionic for a contract price of $299 starting on Sept. 8.

This high-end handset was shown off by Motorola back in January at the Consumer Electronics Show, where Sanjay Jha, Motorola’s CEO, said it would launch in the second quarter of 2011. That didn’t happen, but Android enthusiasts on Verizon’s network may forgive the carrier based on the hardware features and functions in the Bionic:

Similar to the Motorola Atrix that debuted earlier this year on AT&T’s network, Verizon will offer a lapdoc solution for the Bionic. The $300 accessory is an 11.6-inch notebook shell that is powered by the smartphone when docked. A $99 dock option charges the phone and pipes video to a connected HDTV.

Stay tuned for a first-look video and full review of the Droid Bionic; we have a review unit in-house and will follow up with more details and impressions of Verizon’s newest LTE smartphone.

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US DOJ files suit to block AT&T, T-Mobile merger

AT&T is now facing a huge potential roadblock on its proposed merger with T-Mobile: Bloomberg reports the U.S. Department of Justice has filed an anti-trust suit to block the deal. Claiming the merger would “remove a significant competitive force from the market,” the filing suggests the deal would create an anti-competitive environment if allowed to proceed. AT&T has recently taken steps to alleviate such sentiment, saying Tuesday it returned 5,000 onshore customer service jobs from offshore locations as a result of the merger.

T-Mobile stands to gain quite a bit if the deal doesn’t go through. Deutsche Telekom, the parent company of T-Mobile USA, will earn a $3 billion payoff, while T-Mobile USA will receive a small portion of AT&T’s existing wireless spectrum and reduced roaming rates on AT&T’s network.

It will take time before we see the outcome of the just-filed suit, but I can’t help but think back to Om’s thoughts when the proposed merger was announced; they echo the thoughts of the DOJ:

The biggest losers of this deal are going to be the consumers. While AT&T and T-Mobile are going to try to spin it as a good deal to combine wireless spectrum assets, the fact is, T-Mobile USA is now out of the market.

T-Mobile USA has been fairly aggressive in offering cheaper voice and data plans as it has tried to compete with its larger brethren. The competition has kept the prices in the market low enough. This has worked well for U.S. consumers. With the merger of AT&T and T-Mobile, the market is now reduced to three national players: AT&T, Verizon and Sprint.  Net-net, U.S. consumers are going to lose.

Handset makers, competitors and Google all have much to lose by the deal as well, but if the $39 billion merger doesn’t go through, it looks like the biggest loser will be AT&T. The carrier will lose cash, spectrum holdings and the ability to add T-Mobile’s unique 1700 MHz frequency to AT&T’s LTE network expansion plans.

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$699 with contract? Good luck, HTC Jetstream tablet

On Wednesday AT&T announced the HTC Jetstream, the company’s first Google Android tablet that will support the carrier’s upcoming LTE network. Similar to other tablets running Android 3.1, the Jetstream uses a 10.1-inch display, but with a twist: The capacitive touchscreen works with the HTC Scribe digital pen accessory for note-taking and drawing.

AT&T is supplementing the Jetstream with a new 3-GB data plan that costs $35 a month. Customers who agree to a two-year contract on the new plan will be able to purchase the Jetstream for $699, a subsidized price likely to put many consumers off.

To a gadget addict like myself, there’s much to like about the Jetstream on paper: a 1.5 GHz dual-core Snapdragon processor, support for today’s HSPA+ mobile broadband networks as well as future LTE networks, a new version of HTC Sense software for improved usability and dual camera sensors, including an 8-megapixel rear camera, to name a few key specifications.

But AT&T seems to be betting on LTE as a key differentiator here and perhaps as justification for the relatively high subsidized price of the Jetstream. I think that’s a mistake. We’ll see when the tablet hits stores on September 4, at $699 with contract, reportedly $849 without.

AT&T needs only to look at the tablet pricing of its rivals Verizon and Motorola Xoom to get an idea of how well a tablet with a two-year contract will sell at $700 or more. Simply put: It won’t, at least not well. Granted, the Xoom certainly faced other issues outside the initially high price, because it was rushed to market with some key flaws: general instability, a limited number of tablet-optimized applications and a promised LTE hardware upgrade where “coming soon” meant six months later. In a sense, LTE support for the Jetstream is also “coming soon,” because AT&T hasn’t yet launched its LTE service. And when it does, it will only be in 5 markets to start and 10 more by year-end.

While I expect that HTC’s hardware and software won’t face the same problems as the Xoom, it still needs to answer a key question: What justifies the price premium over an Apple iPad 2, which can be had without a contract?

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Pre-paid, wholesale subs keep Sprint afloat ahead of LTE

Sprint announced Thursday it gained 1.1 million subscribers in the second quarter in addition to its lowest churn rates ever for both pre- and post-paid customers. That good news on the customer side was offset by another quarterly financial loss: The no. 3 carrier in the U.S. experienced a net loss of $847 million on $8.3 billion in revenues. Sprint did report higher overall average revenues per user as more consumers added 3G and 4G data plans, but it still lost money due to its mix of customers.

In a statement today, Sprint CEO Dan Hesse focused on the positives:

Sprint’s second quarter results, including our fourteenth consecutive quarter of improved customer care satisfaction, our best ever postpaid churn, more than 1 million net wireless subscriber additions and wireless service revenue growth, validate that our focus on providing simplicity, value and an unmatched customer experience is working.

Hesse’s statement is correct and factual, but unfortunately, overlooks other facts contributing to Sprint’s current challenge. Although the company gained 1.1 million net subscribers adds, net post-paid consumers declined by 101,000. That means the bulk of the new customers would be from less profitable segments. Indeed, 519,000 of the new subscribers are wholesale or affiliate customers, while 674,000 were added through pre-paid channels. That’s a problem, because ARPU on the pre-paid side actually declined slightly to $28.

Part of the issue here for the more lucrative post-paid side could be due to Sprint’s choice of 4G technologies. Sprint initially opted for a WiMAX network it opened for business in October 2008, but the speeds are getting leapfrogged by LTE and HSPA+ networks from competitors. Sprint is now turning to LightSquared’s spectrum, and bank account, to build out an LTE network. As a result of the deal, also announced today, Sprint will receive $9 billion over the next 11 years from LightSquared, and will be able to offer competitive speeds and coverage as its grand WiMAX experiment comes to an unprofitable close.

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Motorola Xoom LTE upgrade reportedly due in September

Seven months after launching with the promise of using Verizon’s LTE network, the Motorola Xoom tablet is finally going to deliver the goods. The Droid-Life blog has a screenshot indicating that Xoom owners will be able to upgrade their Android tablet in September to gain access to Verizon’s faster 4G network. Verizon has said the upgrade would be shortly after the Xoom’s launch, which was back in February. I suspect that news of another LTE tablet launching this week, the Samsung Galaxy Tab 10.1, might have added pressure to offer the upgrade sooner rather than later.

The hardware upgrade will be free although there is some inconvenience involved: Xoom owners must send in their tablet for the upgrade. The device return can take up to six business days, after which time it can access the LTE network, which supplements the device’s Wi-Fi and 3G connections. There is no price increase from Verizon (as of yet) to use the operator’s 4G network, so Xoom owners who do upgrade will gain faster speeds at no extra monthly charge.

My testing of the network has routinely shown mobile broadband speeds between 10 Mbps and 12 Mbps, making it fast enough even to potentially download an entire operating system. Of course, faster speeds often means greater overall network use; after the LTE upgrade, Xoom owners could bump up against their monthly bandwidth tiers and pay $10 for each additional GB of data.

With the mail-in process and lengthy amount of time it has taken to get an LTE radio in this device, I still feel the Xoom, and Honeycomb for that matter, was simply rushed to market. As the first Android Honeycomb tablet, the Xoom could have shined out of the gate. Instead, I found the software to be buggy with many application crashes, the 4G wasn’t enabled and the memory card slot wasn’t usable. This being the first year for the new Motorola Mobility spin-off, I expected a bit more. Regardless, current Xoom owners will finally get what they were promised nearly half a year ago.

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