Carrier IQ and the continued erosion of operator trust

1Executive Summary

The Carrier IQ scandal is still unfolding, and all parties involved are trying to spin their side of the story pretty heavily. What is undisputed, however, is that on Nov. 30, a video released by a developer named Trevor Eckhart showed how software made by a firm called Carrier IQ and placed in smartphones was monitoring keystrokes and tracking the text in text messages; it could also see users’ passwords and other information when visiting secure websites. The software is said to be on more than 141 million devices, including BlackBerrys and those running the iOS and Android operating systems.

As the case unfolds, it is easy to get lost in the denials and daily news nuggets. But it is worth looking at the various players to understand who is hurt and who is helped by the kerfuffle around surreptitious smartphone data collection. This brief research note tackles the question of what the case means for consumers, device makers and, perhaps most important, the operators.

Companies mentioned include Apple, AT&T, Carrier IQ, Google, Metro PCS, Research in Motion, Skype, Sprint, T-Mobile and Verizon.

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