According to a Billboard report on Tuesday, Apple Inc. (NASDAQ: AAPL)'s newly introduced iPhone will not feature a new method to download music from iTunes. Instead, users will only be able to "access and download music" from iTunes with the phone's WiFi connection. Luckily, the new 3G phone will allow a better connection to access the store and download music, but Billboard speculates that Apple has not improved the method because the company is "less enthusiastic" about sharing profits from iTunes purchases with the operator, in this case AT&T Mobility, a part of AT&T Inc. (NYSE: T).

AT&T Mobility apparently expanded and constructed much of the 3G network the iPhone will use over the course of the last year, when the iPhone was first being readied for release. The original iPhone worked on AT&T's slower EDGE network and utilized WiFi hotspots, but "the upgrade allows for faster Web surfing from any location in At&T's 3G coverage area." Ideally, using the upgraded network would also provide users with better access and faster downloads.

It's no surprise that Apple would keep the music features on the iPhone the same as on the previous model, since the improvements made to the new iPhone make it much better over the previous model. At the same time, it seems unlikely that record companies would object to this similarity either, since it means they can still seek out new deals and arrangements with the phone carriers outside of Apple (in this case).

When Sprint Nextel Corp. (NYSE: S) releases its own Apple, Inc. (NASDAQ: AAPL) iPhone competitor this month, all eyes will be on deck to see if this new phone can save the Titanic that is Sprint from sinking. The wireless carrier has been in terrible shape for over a year now, losing millions of customers and just struggling to maintain its customers. Although an Apple iPhone -- by its nature -- invites copycats from all over the globe, this new handset from Sprint looks like the most serious effort yet.

The wrinkle is this: Sprint will require a calling and data plan of at least $69.99 per month to activate and use the new Samsung Instinct phone. There are so many data features that Sprint decided to tack on quite a hefty minimum monthly bill. Hey, AT&T, Inc. (NYSE: T) is doing this with the iPhone, right? This may be the start of a new trend: minimum monthly plans (high minimums) for all these new whiz-bang phones soon to be released. Will customers bite, or will they choose phones with similar capabilities but without the large minimum monthly charge? We'll soon see.

Sprint believes the target customer for the new Samsung Instinct phone may have concerns about being "nickel and dimed" to death on all the charges needed to make the phone work with all its functionality intact. So, the carrier decided to have a flat-rate price and get rid of those concerns. Fair enough -- but don't automatically force the customer to a $70 plan. In Sprint's defense, that larger minimum hasn't swayed iPhone customers from buying gobs of that device with AT&T. But again, this is no iPhone -- it just looks like one. It appears to be packed with many more features than the iPhone, but just as thousands of competitors before it have shown, Apple is Apple -- nobody else is. Can it save Sprint? Hardly.

On Friday, French wireless operator Orange said it has signed a deal with Apple Inc. (NASDAQ: AAPL) to sell its iPhone in the Middle East, Africa and several European countries. Well, wasn't it just Monday that we've heard that Apple has signed deals with Singapore's Singapore Telecommunications Ltd and three of its affiliates to bring the iPhone to four Asian countries later this year? And wasn't it last week that Vodafone Group (NYSE: VOD) signed a deal with Apple to sell the iPhone in ten of its markets? That was just what I remembered offhand. Seems like Apple has pretty much signed deals with companies to sell the iPhone nearly worldwide. Let's check that:

• From the Vodafone deal we have: Australia, the Czech Republic, Egypt, Greece, Italy, India, Portugal, New Zealand, South Africa and Turkey
  
• From the SingTel deal we have: Singapore, India, the Philippines and Australia
  
• From the Orange deal we have: Austria, Belgium, the Dominican Republic, Egypt, Jordan, Poland, Portugal, Romania, Slovakia, Switzerland and African markets
  
• Also, America Movil SAB (NYSE: AMX) will start selling the iPhone in 16 countries in Latin America and the Caribbean
• Rogers Communications Inc (NYSE: RCI) signed a deal to sell the iPhone in Canada
• Telecom Italia SpA will also sell the iPhone in Italy
• The iPhone is already being sold by AT&T Inc. (NYSE: T) in the United States, O2 in Britain, T-Mobile in Germany and Orange in France.

So The Wall Street Journal reports today -- according to its favorite "people familiar with the situation" sentence -- that wireless provider Sprint Nextel Corp. (NYSE: S) is considering spinning off or selling its Nextel unit. This is when I hear the screeching sound of a needle scraping a record. Say what? Should we play that again?

I guess I shouldn't really be that surprised since the $35 billion acquisition of Nextel Communications Inc. in 2005 has always seemed, to say it mildly, challenging. This would be, as the Journal puts it, "a dramatic acknowledgment" that the merger has actually been a failure.

Well, only Monday we heard that Deutsche Telekom AG (NYSE: DT) may be interested in Sprint. Could it be that either Deutsche Telekom demanded such an action, or that Sprint management decided such an action could entice DT to indeed go forward with an offer (despite the probable problems such a merger could face, as Jonathan Berr outlined in his post Monday)? Without Nextel, Sprint would rid itself of much debt. It is also considered to have better handsets and fewer dropped calls, making it a more attractive target.

Shares of Sprint Nextel Corp. (NYSE: S) are rising on a Wall Street Journal (subscription required) report that Deutsche Telekom AG (NYSE: DT) is poised to make a bid for the wireless telecommunication company. If the report is accurate, Sprint's long suffering shareholders should do as the Steve Miller Band song suggests "take the money and run" because the deal may not happen.

For Sprint, though, this may be its only hope. Sprint shares have slumped almost 40% this year as the Overland Park Kansas-based company tried in vain to gain marketshare against larger rivals including Verizon and AT&T Inc. (NYSE: T). The commercials starring the company's affable CEO Daniel Hesse haven't helped much either. Remember when Hesse was named CEO last December, board member Irvine O. Hockaday Jr. remarked that Hesse "has the board's full support to take decisive actions necessary to improve our performance."

Does that mean a sale to the former German telecom monopoly? The deal makes sense in theory because combining Sprint and Deutsche Telekom would create the top wireless company with more than 82 million customers. Verizon, which is a joint venture between Verizon Communications Inc. (NYSE: VZ) and Vodafone Group Plc. (NYSE: VOD) has 67.2 million customers while AT&T has about 71 million wireless subscribers.

But as Bloomberg News points out, analysts argue that integrating the Deutsche Telekom and Sprint Nextel networks wouldn't be easy. Moreover, the U.S. Department of Homeland Security may not look kindly on a foreign company taking over a U.S. telecom provider for national security reasons, the news service notes.

Even so, the arguments for the merger are so compelling that it might be worth the risk.

AT&T Inc. (NYSE: T) today posted strong first quarter results thanks to the continuing popularity of the iPhone and its ability to squeeze more savings from the BellSouth merger.

Net income rose to $3.46 billion, or 57 cents a share, from $2.85 billion, or 45 cents. Sales climbed 6% to $30.7 billion. On an adjusted basis, profit was 74 cents. The results matched the estimates of analysts surveyed by Thomson Financial, which in this market is good news. Shares of the telecommunications company were trading up in early morning market action.

"Revenue growth continues to ramp, we have good momentum across key growth areas, major cost initiatives are on track, and our operational results reinforce the confidence we have in our outlook," said Chief Executive Randall Stephenson in the earnings release.

Among the highlights:

• Total wireless revenue increased 18.3% year-over-year to $11.8 billion. Wireless service revenue, which excludes handset and accessory sales, grew 17.1% to $10.6 billion. Growth was driven by strong subscriber gains and continued improvement in ARPU (average monthly revenues per subscriber).
• Wireless data revenues grew 57.3% to $2.3 billion, reflecting surging demand for Internet access, e-mail, messaging, data access and media bundles.
• The first quarter net gain in wireless subscribers totaled 1.3 million. AT&T ended the quarter with 71.4 million subscribers.
• AT&T's broadband revenue grew 13.2% in the first quarter to $1.4 billion.
• Total video connections, which include AT&T U-verse service and bundled satellite television service, increased by 264,000 to 2.6 million.

The mean price target of Wall Street analysts is $44.39, well above where it currently trades. Perhaps investors are expecting the next earnings report to show signs of a slowdown.

Sprint Nextel Corp. (NYSE: S) -- with a name that sounds somewhat ironic today -- posted a mammoth $29.5 billion loss today as it wrote down $29.7 billion of the $36 billion 2005 purchase of Nextel Communications Inc. and other companies. In essence, acknowledging it paid (way) too much for that acquisition.

If that was the only ugly number in this fourth-quarter report, then perhaps investors wouldn't have reacted the way they did. Sprint's stock is down some 8% today, following the report, after the company had already lost over 57% of its value in the past 52 weeks; 37% in 2008 alone.

The news is unpleasant. Sprint reported a fourth-quarter net loss of $10.36 a share. While excluding the writedown Sprint earned 21 cents per share, beating the 18 cents per share expected by analysts surveyed by Thomson Financial, its sales fell 5.7% to $9.85 billion, missing analysts' estimates. The third-biggest U.S. wireless carrier also had to borrow $2.5 billion under a credit line to get access to cash, although it claimed it made the move due to current credit market conditions.

And that's not all. Sprint is losing customers, specifically 683,000 valuable customers (contract, or "post-paid") during the quarter. While it saw an increase in customers through its Boost prepaid brand, recently appointed CEO Dan Hesse said the company would lose 1.2 million customers during the first quarter and would see additional losses in the second quarter. Also, subscribers on long-term contracts spent $58 a month on their bills, down from $60 a month last year. Somehow, the churn rate remained unchanged at 2.3% (most likely offset by Boost).

Sprint has announced it would stop paying dividends for the foreseeable future.

"Given the uncertainties, our strategy now is to focus on stocks with minimal downside risk in a weak economy, says Harry Domash who has added AT&T (NYSE: T) to the portfolio of his Winning Investing.

"Telecom giant AT&T is in a recession resistant businesses and pays a high dividend, which are the characteristics we need for this market. The stock provides and estimated dividend yield of 4.2%

"SBC Communications adopted the AT&T name when it bought long distance carrier AT&T in 2005. AT&T purchased BellSouth in 2006 and now provides landline Internet and telephone services in 22 U.S. states.

"With BellSouth, AT&T gained full control of Cingular, the largest wireless carrier in the U.S., and changed its name to AT&T Mobility. Wireless services account for most of AT&T's growth. Last year AT&T became the exclusive service provider for Apple's new iPhone.

"In 2006, AT&T launched a fiber-based network, called 'U-verse,' which offers video and higher speed Internet services.

"AT&T reported December quarter (continuing) earnings of $0.71 per share, up 16% vs. year-ago. Thanks to its BellSouth purchase, revenues rose 91% to $30.3 billion. The stock is an addition to the 'Masstress Stuffers' portion of our model portfolio."

Each day, Steven Halpern's TheStockAdvisors.com offers the latest market commentary and favorite investment ideas from the nation's leading financial newsletter advisors.

Tom Taulli wrote Tuesday about Verizon (NYSE: VZ)'s unlimited wireless calling plan, and competitors AT&T, Inc. (NYSE: T) and T-Mobile (part of Germany's Deutsche Telekom) followed suit with unlimited wireless calling plans for U.S. customers. This is a first in the wireless industry for the major carriers, but it's a welcome one for many consumers. Both AT&T and T-Mobile will offer unlimited calling starting by the end of this week -- T-Mobile starting today and AT&T starting tomorrow.

Where is Sprint Nextel Corp. (NYSE: S), you may ask? The carrier also announced unlimited calling plans two weeks ago, but just in a few select markets -- and starting at $119.99 per month. Although the unlimited calling plans vary from carrier to carrier, generally, there is a $99.99 per month price of admission with all of them. T-Mobile offers the best value, with all call minutes and unlimited text messages included. Why did all the carriers -- except Sprint -- unveil unlimited calling within just a few days of each other?

Something has to keep growth churning along in the wireless industry. With 85% of Americans now owning a cellphone, wireless is heading for commodity status (it may already be there), where price wars will begin erupting and "me too" marketing campaigns following shortly thereafter. The PC industry knows all about this. But price wars only help the consumer -- not the wireless carrier. Yes, many of us heavy wireless users may soon have lower bills, but the carriers may have lower bottom lines as well. What wireless company stocks do you have in your portfolio? Will this cause more customers to abandon landline telephones and switch to unlimited-minutes wireless only, pumping in growth into the wireless sector for the time being? Food for thought.

Google (NASDAQ: GOOG) is getting a lot of traffic to its mobile search applications from the Apple (NASDAQ: AAPL)'s iPhone. That does not quite add up since the iPhone "accounts for just 2 percent of smartphones worldwide, according to IDC, a market research firm," writes The New York Times.

The data would seem to show that iPhone users will access internet search features 10 to 20 times more than customers with other smartphones. Based on the industry's perception of how good the handset's interface is for going online, that is possible.

The news raises two important issues. The first is that the iPhone is only available on the AT&T (NYSE: T) 2.5G network now. Later this year, it is likely to work on the faster 3G network, which could increase access to online services even more.

Beyond that, fees from using an interent browser and downloading data can be fairly significant. In other words, Apple and AT&T could be bringing in more revenue than most analysts think.

Douglas A. McIntyre is an editor at 247wallst.com.

Shares of AT&T Inc. (NYSE: T) had their biggest decline in more than 5 years after the largest phone company warned of "softness" in its consumer business and that more of its customers have had their service disconnected for failing to pay their bills.

In late afternoon trading, the exclusive seller of the iPhone, was down $3.51, or 8.6%, to $37.52. The company's mobile phone and corporate business has not been hurt by the slowdown, Bloomberg News quotes Chief Executive Randall Stephenson as saying.

Shares of AT&T have jumped 12% over the past year. This year, though, the picture is different. The Nasdaq Composite Index has plunged about 8% in the early days of 2008 amid declines by stalwarts such as Google Inc. (NASDAQ: GOOG), Apple, Inc. (NASDAQ: AAPL) and Microsoft Corporation (NASDAQ: MSFT). AT&T has dropped almost 9%. The tech index hasn't had a positive day yet this year.

What's going on here? I don't think it can all be profit taking. Investors seem to be concerned that the slowdown in consumer spending will hit corporations as well. That won't be clear for another few months. It certainly kills some of the buzz from the Consumer Electronics Show.

TheStreet.com's Jim Cramer says you've got to look at individual stories here rather than just go with the prevailing sentiment.

The presumption behind everything I read is that everyone is going to stop using and buying everything. Yet none of it is in the numbers.

That's right. Demand for everything from semiconductors and disk drives to cockpits and train brakes is collapsing. And none of it is in the numbers.

But when I look at the individual companies I don't see it.

Nevertheless the orthodoxy will be in full force today because of industrial production numbers from China that show some slowing. I am sure that will cause a new wave of trembling about copper and paper and coal and iron ore to join the reservations about everything else that is not being bought. So what's my problem with this?

Few deny that the current market contains considerable uncertainty: a subprime mortgage and related asset default issue which seeks a solution, declining corporate earnings, high energy prices and a wary consumer have put investors and citizens on guard.

Sound business decisions in these choppy waters require research, careful planning and verve, and on Tuesday, AT&T (NYSE: T) may have accomplished just that.

AT&T announced that it would buy back $15.2 billion of its stock, and also said it would increase its quarterly dividend by 12.6% to 40 cents from 35.5 cents. AT&T's shares surged $2.02 to $39.92 Tuesday at mid-day on the news.

The company also set a long-term target of 30 million subscribers by 2010 for its TV service, which is delivered over phone lines.

Cell phones and VoIP are killing the regular old home phone business. Reviewing a new study from a Citigroup analyst, Barron's said, "The telcos continue to lose residential phone subscribers to both cable VoIP and wireless subscriptions at a steady 7%-8% a year."

The number of consumers who use only a wireless phone at home is expected to hit 27% in 2010. And the penetration of cable VoIP is expected to be 25% by then.

It might seem bad news for AT&T (NYSE: T) and Verizon (NYSE: VZ), but both do have large wireless businesses that should help offset attrition among home phone users. They are also selling new fiber-to-the-home broadband, which will also supplement revenue.

One of the hottest names in tech, Apple, Inc. (NASDAQ: AAPL), and its wireless partner AT&T, Inc. (NYSE: T), have been sued by Klausner Technologies Inc. for patent violation. Although patent litigation is far and away the joke of the law business these days, this one involves the "Visual Voicemail" feature found on the iPhone, which lets customers visually see their voicemails and go directly to any of them (instead of the standard chronological order most wireless carriers offer).

Kluasner Technologies claims that two of its patents are being violated by Apple and AT&T, and that it is entitled to $360 million in total damages, including future royalties from both companies based on continued usage of the visual voicemail feature by iPhone customers.

From the actions by Klausner Technologies this week, it seems that the company is a patent litigation hound more than anything. The company also filed suits against eBay Inc. (NASDAQ: EBAY)'s Skype unit, Comcast Corp. (NYSE: CMCSA) and more for violation of Klausner's VoIP (Voice over Internet Protocol) patents. It wants an additional $300 million in those lawsuits. Klausner settled with more companies last year over its VoIP patents and this year it looks to be continuing the trend.