High profile private equity shop appears to be chatting up a new fund despite string of struggling investments.

Word is that Elevation Partners, the high-profile if poorly timed private-equity firm headlined by rock star Bono and star investor Roger McNamee, is considering raising a new fund.

Elevation's investment partners (from left): Bret Pearlman, Fred Anderson, Bono, Marc Bodnick and Roger McNamee. Photo: Elevation Partners.

As surely as dogs chase rabbits or night follows day, PE shops raise more money when the existing fund is mostly used up. (Elevation's is about 70% invested.) Yet when all you have to show for your first effort are embarrassing misses — no rabbits caught, mostly grim darkness, metaphorically speaking — it's got to be tough to collect fresh cash.

This is the tough position in which Elevation finds itself. Despite having raised $1.9 billion in 2004, the ballyhooed firm is far from a successful experiment. It's got all of one exit, a gaming-company sale to Electronic Arts (ERTS), headed by an Elevation co-founder.

Two of its investments are seriously sick. One is the online real estate dog Move.com (MOVE), better known by its scandal-ridden former name, Homestore.com. The other is Forbes Media, the parent for FORTUNE competitor Forbes Magazine, in which Elevation invested at perhaps the worst time in decades for media enterprises.

The snafus sting, of course. But the fate of Elevation's first fund rests almost solely on one investment, its $460-million stake in beleaguered smartphone maker Palm (PALM). That investment is barely in the money for Elevation. It's worth about $500 million currently.

Elevation is demonstrably in for the long term: It chose not to sell late last year when the stock peaked around $18, compared to Tuesday's close of $11.65. Palm recently raised $500 million in a stock offering, so its near term is secure.

Still haven't found what they're looking for?

But the company is a long way from a home run, unless Elevation forces a sale to a bigger player like Dell (DELL) or Microsoft (MSFT). Remaining independent is an expensive proposition, however, as Barclays analyst Amir Rozwadowski notes to clients.

"We believe that its improved cash position should enable the company to be very aggressive in its marketing efforts over the next few quarters, particularly as the company looks to improve brand recognition, carrier distribution, and overall awareness of its products," he writes. "We do however expect the company to continue to burn cash at a healthy clip in the near term, as expanding scale is at the top of management’s agenda."

Elevation declined to comment on its fundraising agenda. It needs to raise a new fund, though, in part because it recently added longtime eBay CFO Rajiv Dutta to its ranks as managing director. New bigshots typically don't get to participate in the "economics" of five-year-old funds, so if Dutta, a skilled operations and financial executive, is to make some serious money at Elevation, he'll need a fund from which to invest.

Elevation doesn't have trouble getting meetings. Endowment heads are likely to agree to a sit down if Bono shows up. Once in the room, there are few better talkers in Silicon Valley than McNamee. (A wonkish fantasy: a "talk-off" featuring McNamee, venture capitalist John Doerr and Apple's Steve Jobs. Imagine the possibilities.) McNamee and his partners will have their work cut out for them, though. One win, two disasters, a couple fresh investments and one still risky possibility. Not the strongest lineup to bring into a pitch meeting.

What critics were saying about Steve Jobs' smartphone in the months before it launched

Microsoft's Steve Ballmer. Click to play.

Three years ago, when it became clear that Apple (AAPL) was about to unveil some kind of mobile phone, critics began to weigh in on its chances of success. AAPLinvestors' Terry Gregory, building on a list of skeptical quotes begun by MacDailyNews, has put together what may be the definitive collection.

A sample:

“We’ve learned and struggled for a few years here figuring out how to make a decent phone. PC guys are not going to just figure this out. They’re not going to just walk in.”
Palm CEO Ed Colligan, commenting on then-rumored Apple iPhone, 16 Nov 2006

“Apple is slated to come out with a new phone… And it will largely fail."
Michael Kanellos, CNET, 7 December 2006

"The only question remaining is if, when the iPod phone fails, it will take the iPod with it.”
Bill Ray, The Register, 26 December 2006

"Apple will likely have a tough time convincing application vendors to build specialized clients for the iPhone until the volumes are there, and the volumes could be limited by the lack of third-party applications – a Catch 22.”
Jack Gold, J. Gold Associates, 10 January 2007

“The iPhone is nothing more than a luxury bauble that will appeal to a few gadget freaks."
Matthew Lynn, Bloomberg, 15 January 2007

"Five hundred dollars? Fully subsidized, with a plan? It is the most expensive phone in the world and it doesn’t appeal to business customers because it doesn’t have a keyboard which makes it not a very good email machine… So, I, I kinda look at that and I say, well, I like our strategy. I like it a lot.”
Steve Ballmer, Microsoft CEO, 17 January 2007

I am not sure how it will stand against Sprint’s Wimax (when it successfully launches) and its phones, which I am looking forward much more than over-hyped Apple iPhone.”
Bhaskar Chitraju, Indews Broadcast, 18 January 2007

"iPhone may well become Apple’s next Newton.”
David Haskin, Computerworld, 26 February 2007

“Apple should pull the plug on the iPhone… What Apple risks here is its reputation as a hot company that can do no wrong. If it’s smart it will call the iPhone a ‘reference design’ and pass it to some suckers to build with someone else’s marketing budget. Then it can wash its hands of any marketplace failures… Otherwise I’d advise people to cover their eyes. You are not going to like what you’ll see.”
John C. Dvorak, 28 March 2007

“There’s no chance that the iPhone is going to get any significant market share. No chance. It’s a $500 subsidized item. They may make a lot of money. But if you actually take a look at the 1.3 billion phones that get sold, I’d prefer to have our software in 60% or 70% or 80% of them, than I would to have 2% or 3%, which is what Apple might get.”
Steve Ballmer, Microsoft CEO, 30 April 2007

“How do they deal with us?”
Ed Zander, Motorola CEO/Chairman 10 May 2007

“Apple begins selling its revolutionary iPhone this summer and it will mark the end of the string of hits for the company.”
Todd Sullivan, Seeking Alpha, 15 May 2007

"What does the iPhone offer that other cell phones do not already offer, or will offer soon? The answer is not very much… Apple’s stated goal of selling 10 million iPhones by the end of 2008 seems ambitious.”
Laura Goldman, LSG Capital, 21 May 2007

“We Predict the iPhone will bomb. Which means that when the iPhone comes, Digg will likely be full of horror stories from the poor saps who camped out at their local AT&T store, only to find their purchase was buggier than a camp cabin.”
Seth Porges, The Futurist, 7 June 2007

“The forthcoming (June 29) release of the Apple iPhone is going to be a bigger marketing flop than Ishtar and Waterworld combined. Because its designers forgot Platt’s First, Last, and Only Law of User Experience Design (“Know Thy User, for He Is Not Thee”), that product is going to crash in flames. Sell your Apple stock now, while the hype’s still hot. You heard it here first.”
David S. Platt, Suckbusters!, 21 June 2007

“God himself could not design a device that could live up to all the hype that the iPhone has gotten.”
Harvard computer science professor David Platt, 25 June 2007

More than 33 million iPhones, 100,000 apps and 2 billion downloads later, the death watch continues. To see AAPLinvestors' full collection — including comparisons to such "iPhone killers" as the Palm (PALM) Pre, Research in Motion's (RIMM) BlackBerry Storm and Motorola's (MOT) Droid — click here.

[Follow Philip Elmer-DeWitt on Twitter @philiped]

The iPhone leads the pack, Android is gaining, everybody else is losing share

Click to enlarge. Source: AdMob

It's been a year since Google (GOOG) released Android OS, the open-source smartphone operating system widely perceived as the most likely to overtake Apple's (AAPL) iPhone in the long run.

As it happens, Google this month also purchased AdMob, the world's largest purveyor of mobile phone advertising. So this seemed as good a time as any to take a snapshot of the changing smartphone marketplace, as measured by ad requests to AdMob's network.

We reviewed a year's worth of AdMob data — including the October numbers released Monday — and charted it on the graph at right (reproduced full-size below the fold).

There's a bias in the data, since AdMob ads run better on iPhone OS and Android devices than on, say, Research in Motion (RIMM) BlackBerries. But the trends are clear.

Over the past year, Nokia's (NOK) Symbian has lost the largest raw market share, down to 25% last month from 59% the same month a year earlier. In percentage terms, Windows Mobile (MSFT) is the biggest loser, down 70% in 12 months, with Symbian, Palm's (PALM) Web OS and BlackBerry OS close behind.

These numbers are based on worldwide ad requests. Apple's lead is even greater when AdMob zeroes in on the U.S. and U.K. markets. For a look at how the iPhone's share of the U.S. and worldwide markets have grown, see the chart prepared by MacRumors' Erik Slivka here.

Below the fold: A full-size fever chart of AdMob's worldwide data for all the major smartphone operating systems.

[Follow Philip Elmer-DeWitt on Twitter @philiped]

Source: AdMob

Touchscreen phones are on fire, comScore reports, and Apple is leading the pack. For now.

Three months ending Aug. 2009. Source: comScore MobiLens

There's a thundering herd of imitators behind it, but Apple's (AAPL) iPhone still dominates that fastest-growing segment of the U.S. smartphone market, according to a comScore report issued Tuesday.

Touchscreen mobile phone adoption in the U.S. grew at a breakneck 159% rate last year, comScore reports, easily outpacing the 63% growth of the broader smartphone market.

By last August, nearly 34 million Americans were carrying smartphones, 23.8 million of them touchscreen devices. And of those touchscreen phones, 32.9% were iPhones.

“The iPhone clearly set the trend in the industry for touchscreen devices, so it’s no surprise that it has the largest share of the market,” said comScore VP Mark Donovan. “But as other players have entered the touchscreen market with compelling devices, competition is clearly heating up.”

Donovan mentioned Google's (GOOG) Android platform in particular, although the closest Android contender in August was the T-Mobile (DT) G1 running a distant seventh after two proprietary LG phones, the BlackBerry (RIMM) Storm, the Palm (PALM) Pre and the Samsung Instinct.

Below the fold, comScore's spreadsheets, including one that shows preference by age group. (The smartphone sweet spot seems to be ages 24 to 34.)

Apple gains, RIM drifts, Palm holds steady in the latest ChangeWave survey

Source: ChangeWave

Research in Motion's (RIMM) BlackBerry, with a 40% share, is still the most popular smartphone among the 4,255 owners who responded to a ChangeWave survey in September. But Apple's (AAPL) iPhone is gaining fast, according to research director Paul Carton.

"Apple (30%) has seen a huge market share jump since the previous survey," he writes in a release issued Tuesday. "Not only has the iPhone 3GS release enabled them to gain 5-pts overall — for the first time it has also placed them within striking distance of the number one spot in the consumer market."

Palm (PALM) remains far behind at 7%, Carton notes, but adds that "this is the first survey in nearly two years where their share hasn’t fallen – and that’s a clearly encouraging sign."

ChangeWave surveys are often dismissed as unrepresentative — which they are. But in this case, the so-called ChangeWave Alliances' 20,000 professionals "who spend their everyday lives on the frontline of technological change," according to its website, represent the sweet spot of RIM's and Palm's target market.

For more results — good and bad — from the survey, see the charts below the fold.

Apple continues to lead on the customer satisfaction front, with 74% of iPhone owners describing themselves as "very satisfied."

Source: ChangeWave

However, when asked whether they were planning to buy an iPhone, BlackBerry or Pre in the next 90 days, the BlackBerry gained, the Pre held steady and the iPhone fell sharply in comparison with a similar survey conducted in June.

Source: ChangeWave

Carton attributes the fall in iPhone purchase plans as a natural "settl[ing] back" after the "huge spike of excitement" that accompanied the iPhone 3GS launch in June. He notes that the 8-pt drop between June and September (from 44% to 36%) is a lot less than the 22-pt drop he picked up a year ago after the July 2008 launch of the iPhone 3G.

[Follow Philip Elmer-DeWitt on Twitter @philiped]

Daniel Eran Dilger finds anti-Apple bias in Gartner's research

"Looking into its crystal ball, Gartner Group has predicted that Google’s Android will become the second largest smartphone platform by 2012," writes Daniel Eran Dilger in the one-man blog he grandly calls Roughly Drafted Magazine. "Problem is, nobody’s talking about how terrible Gartner is at predicting things, or that Gartner’s 'research' has historically been paid for by special interests."

So begins Dilger's reaction to an interview with Gartner analyst Ken Dulaney that appeared Tuesday in Computerworld and was picked up uncritically by more than half a dozen tech websites.

Drawing on historical records and making generous use of internal Microsoft documents made public during antitrust proceedings, Dilger attacks not only Dulaney's numbers, but the credibility of the entire Gartner research group.

The result is a 1,700-word screed that may be the most thorough take-down of a tech industry analyst — and his employer — since Eliot Spitzer went after Henry Blodget.

At issue is Dulaney's forecast that has the major smartphone operating systems divvying up the 2012 market as follows:

• Nokia's (NOK) Symbian: 203 million devices (39% market share)
• Google's (GOOG) Android: 76 million (14.5%)
• Apple's (AAPL) iPhone: 71.5 million (13.7%)
• Microsoft's (MSFT) Windows Mobile: 66.8 million (12.8%)
• Research in Motion (RIMM) BlackBerry: 65.25 million (12.58%)
• Miscellaneous Linux devices: 28 million (5.4%)
• Palm's (PALM) WebOS: 11 million (2.1%)

Dilger finds it hard to believe that Android market share will grow 400% while the iPhone's stands still, but he is hardly a disinterested observer. He pens a pseudonymous column for AppleInsider and has written a book about Mac OS X Snow Leopard to be published next month by Wiley. His blood runs Apple red.

But he knows his stuff, and he has mined those Microsoft documents for some pure gold. He points to evidence, for example, that Microsoft paid Gartner — along with IDC and Forrester — to tilt results and publish reports putting Microsoft products in a favorable light.

One document, according to Dilger, shows that Microsoft spent hundreds of thousands of dollars in an effort that “successfully lobbied and changed the Gartner Group TCO [Total Cost of Ownership] model to show Windows as providing the lowest overall TCO [in comparison to so-called Network Computers].”

Now, Dilger claims, Microsoft's support for Windows Mobile is running dry and Gartner is looking for a new customer with equally deep pockets. Someone like Google.

The best quote in the piece, taken from Microsoft’s manuals on evangelism (and not necessarily directed at Gartner in particular):

"Analysts sell out – that’s their business model. But they are very concerned that they never look like they are selling out, so that makes them very prickly to work with."

You can read the Roughly Drafted piece in its entirety here.

Gartner has not yet returned a request for comment.

[Follow Philip Elmer-DeWitt on Twitter @ philiped]

Company wants to make its Flash technology available everywhere — and that means penetrating mobile devices.

Flash is coming to most mobile phones - except the one that starts with "i." Image: Adobe

Flash is finally coming to your smartphone—and so is Adobe (ADBE). With today's launch of the newest version its software, Adobe Flash Player 10.1, the San Jose-based company is making an aggressive push to get its product onto any gadget that allows for web browsing–Blackberry devices, netbooks, increasingly even TVs.

Crucially, Adobe has signed on a number of key launch partners for the product including Google (GOOG) and Research in Motion (RIMM). By the first half of next year, consumers can expect Flash on nearly every smartphone operating system including Google’s Android, Nokia’s (NOK) Symbian, Palm’s (PALM) webOS and Microsoft’s (MSFT) Windows Mobile.

This is great for developers, who have long had to use different software to make their applications work on different devices. And it’s even better for consumers, for whom web browsing will get faster and more consistent regardless of the device.

Flash is the graphics-rich software responsible for many of our most alluring web experiences. Three-quarters of online videos are delivered in Flash. Nearly as many of the web games we play are created using it. And it’s also responsible for some of the best graphics online. One tech analyst who enjoys the Washington Redskins is constantly annoyed that he can’t read Washington Post coverage of the team on his ‘berry because parts of the paper's online version, washingtonpost.com, are delivered in Flash.

Until now, Adobe has offered separate products for the personal computers and mobiles. Developers had to rely on Adobe Lite, a dumbed down version that didn’t allow for the rich experience of the web.

The new version of Flash has been in the works since Adobe launched its Open Screen Project in May 2008. Started with 25 partners, the project now has more than 50 that include everyone from chipmakers like Qualcomm (QCOM) to content providers like MTV networks.

With this move, Adobe hopes to transform Flash from a simple developer’s tool to a platform in and of itself. “Instead of writing for tv or phone or computer, developers can write in Flash across multiple screens and locations,” says Michael Gartenberg, an analyst with market research firm Interpret.

But just because an application will run on any device doesn’t mean it will be optimized for every device. There is still much work to be done before developers can truly create and deliver one application for any platform. And there is one Flash holdout, a company that has managed to deliver great video experiences and superb graphics on its phones so far without Adobe’s help: Apple. (AAPL)

Palm Pixi

The clearest indication at whom Palm is aiming its newest smartphone, dubbed Pixi, is the new Facebook application that debuts in the younger, smaller sibling to the Palm Pre. If that is your thing, then perhaps your gadget has arrived.

At a meeting in San Francisco Tuesday afternoon, Palm chairman and CEO Jon Rubinstein kept the Pixi half hidden in the black and orange slipcover that comes with the Pre. The top half of Pixi looks a lot like its older sibling, but when Rubinstein performed the full monty as it were, the device revealed itself as a candy bar-type phone that echoes the Pre’s styling without the slide-out keyboard.

Matte black, with the same sticky keys as the Pre, the Pixi is noticeably thinner and a tad smaller than Pre. Slick was my first impression, and still is. When I put my Blackberry Bold down on the table, it looked chunky by comparison. Rubinstein didn’t noticeably gloat, but pointed out that Pixi is more than 10% thinner than Apple’s iPhone 3GS, and 20% more svelte than any Blackberry device (there is a reason that Pixi is launching at New York’s Fashion Week after all).

What Pixi is designed to do is message.  Message like a teenager with a crush, a band to see, or a class to skip. That’s not exactly the way Rubinstein put it, but in the end that may be the demographic who gets most excited by the phone. Pixi is not designed to go up against the iPhone or the latest Blackberry. That’s Pre’s job. “This is meant to hit a more affordable segment of the market,” Rubinstein says. “Who buys the phone is a matter of personal preference, we are giving them a choice.”

If that choice is Pixi, it includes a 2-megapixel camera, Bluetooth, but no WiFi (with the launch carrier Sprint at least). The touch screen is smaller, and the resolution is not as sharp as the Pre, but unless they are side-by-side it’s hard to get too picky. Will Pixi get rolled out in the corporate world? Not likely. “I will carry a Pre,” says Rubinstein. “For me it’s my workhorse.”

Pixi will be available “for the holidays” from Sprint Rubinstein says, with no more detail on whether that means October or November. Nor did he put a price on the phone, but you can expect it will be priced lower than the $150 you can snag the Pre for (starting today) with a two-year Sprint contract.

The phone runs the same webOS that the Pre does, with a few new additions that Pre users will get “some time in the future,” Rubinstein says. One is the Facebook application, that lets you update your status, read news feeds and message with your FB friends easily from the phone. Other new features include synching with LinkedIn and Yahoo contacts.

Rubinstein has promised a series of products featuring Palm’s webOS, and Pixi makes it a family of two. Like Pre it shows a good deal of promise, especially if it can attract a crowd that can’t afford (meaning their parents won’t spring for it) an iPhone or a Blackberry. Pre hasn’t had an easy time competing in a world dominated by Apple and Research in Motion, and analysts are getting more pessimistic in their projections for Pre sales. If Sprint comes up with a pricing plan on its end that makes the whole Pixi commitment cheaper, this phone could be a monster hit.

Rubinstein, for his part, says he is happy with the progress Palm has made in the three months since Pre launched. He expects to keep the momentum moving forward with Pixi. “When anyone talks about smartphones, we are now part of that conversation,” Rubinstein says. “We’ve earned a seat at the table (alongside Apple, RIM and others), now we all duke it out.”

The Full Specs:

-Connectivity (EVDO Rev. A)

-2.63-inch multi-touch screen with18-bit color 320×400 resolution TFT display

-Exposed QWERTY keyboard

-Messaging support (IM, SMS and MMS capabilities), including Google Talk, AIM and Yahoo! IM

-Integrated GPS

-Multimedia options, including pictures, video playback and music, and a 2-megapixel fixed-focus camera with LED flash, and a standard 3.5mm headset jack

-Email, including Exchange ActiveSync (EAS) (for access to corporate Microsoft Exchange servers), as well as personal email support (Google push, Yahoo! push, POP3, IMAP)

-Bluetooth^® 2.1 + EDR with A2DP stereo Bluetooth support

-8GB of internal user storage (~7GB user available)

-USB mass storage mode

-MicroUSB connector with USB 2.0 Hi-Speed

-Qualcomm’s new MSM7627™ chipset

-Proximity sensor, which automatically disables the touch screen and turns off the display whenever you put the phone up to your ear

-Light sensor, which dims the display if the ambient light is dark, such as at night or in a movie theater, to reduce power usage

-Accelerometer, which automatically orients web pages and photos to your perspective

-Removable, rechargeable 1150 mAh battery

-Dimensions:  2.17 in. (W) x 4.37 in. (L) x 0.43 in. (D)

-Weight: 3.51 ounces)

The way consumers use Apple's mobile phone (i.e., constantly) means big headaches for carrier AT&T. And more smartphones are on the way.

Randall Stephenson, chairman, CEO, and president of AT&T, holds up his Apple iPhone

At the South by Southwest music, film, and interactive fest in Texas earlier this year, the iPhone was all the rage — and not in a good way.

The device proved so popular with Internet-addicted attendees that AT&T's wireless network in the city of Austin buckled under the strain, all but shutting down both voice and data service for many customers.

iPhone users bashed the phone company on Twitter and in blogs, and AT&T (T) had to haul in extra network equipment just to ease the gridlock.

As it turns out, smartphones are double-edged swords for phone operators. They attract big-spending customers who purchase highly profitable text-messaging and unlimited-data plans.

But they also tax networks designed for simpler times. Now the wireless providers hawking those Internet-enabled mobile devices are experiencing the digital equivalent of being proprietors of an all-you-can-eat buffet: It seems like the perfect business until the sumo wrestlers show up.

No carrier is feeling the pressure more than AT&T, the exclusive U.S. provider of the iPhone. Users of Apple's device are the hungriest mobile Internet consumers of all: Not only do they send e-mail messages and access the web, they also view maps and YouTube videos and download iTunes purchases.

Independent telecom analyst Chetan Sharma estimates that the typical wireless subscriber consumes 120 megabytes each month; typical iPhone owners use four times that.

Accommodating all that data is one challenge for operators such as AT&T, but the real issue with smartphones is that their users are always moving from one location to another, tapping into the network constantly, sometimes for a few seconds, other times for hours on end. And when a big group gathers — the lunch crowd in Manhattan, say, or South by Southwest revelers — the effect can be total gridlock.

"3G networks were not designed effectively for this kind of usage," says John Donovan, AT&T's chief technology officer, referring to the current generation of broadband wireless. "We fight the day-to-day guerrilla warfare as the customers move around." Not that AT&T is complaining. "The iPhone," adds spokesman Mark Siegel, "is a problem that other carriers would love to have."

New data guzzlers
And they soon will — sort of. AT&T is in the hot seat now, but an influx of Internet-savvy phones could easily strain other carriers' networks in the near future. By 2010, global mobile data traffic is expected to exceed 200 terabytes per month, six times last year's levels, according to Cisco Systems.

Why? One reason is that other phonemakers are catching on to the touchscreen craze that made the iPhone a hit. Users of phones with Google's Android operating system spend roughly as much time online as iPhone users, according to mobile advertising company AdMob.

To date, only two devices use the Android platform, including the HTC myTouch 3G launched by T-Mobile (DT) last month. But Android phones from Samsung, LG, and Motorola (MOT) are due in stores by early 2010. The data-oriented Palm Pre, which operates on Palm's (PALM) WebOS platform, is already on Sprint (S) and should be in Verizon stores early next year.

With all the money AT&T and other carriers are making from smartphones, why don't they simply upgrade their existing systems to handle more traffic? Because increasing wireless capacity is like adding lanes to a road; it takes months or years to get local permission to build new transmission towers.

Ultimately all carriers will move to faster next-generation networks that are designed for data traffic. But those so-called 4G systems won't be available nationwide for years.

In the meantime, carriers are likely to get pickier about the applications they'll allow on their networks. When Apple (AAPL) unveiled the latest iPhone software in June, developers collectively groaned after the company revealed that AT&T wouldn't immediately support two of the most exciting (and bandwidth-hungry) new features: MMS, which uses the text-messaging system to send media such as photos and video, and tethering, which allows a phone to share its Internet connection with a nearby computer. (AT&T says MMS will arrive at summer's end, when the network is deemed ready.)

Some carriers may try to offload data traffic. PCCW, the Hong Kong operator, has started using Wi-Fi hot spots to ease the load from smartphones and its digital TV service.

Pricing will probably change too. In private meetings, AT&T CEO Randall Stephenson has said that the most active 5% or so of data users are causing problems for the other 95%. AT&T is working on a revamped data plan whereby light data users would pay less, and heavy users would pay a premium rate — or leave.

A few carriers in Europe already have moved away from unlimited-use data plans. And once one U.S. operator makes the move, it is likely the others will follow suit — and the sumo wrestlers of wireless might have to do without the buffet.

Jon Rubinstein. Photo: Palm, Inc.

"We must do whatever we can to stop this."

That's how Apple (AAPL) CEO Steve Jobs is reported to have asked then Palm (PALM) CEO Ed Colligan to enter into a possibly illegal agreement to stop trying to hire away each others' top engineering talent.

If accurate, it may be one of the most stilted attempts to collude ever recorded.

Colligan's answer, according to Bloomberg's Connie Guglielmo, who says she has reviewed the two-year-old communications:

"Your proposal that we agree that neither company will hire the other’s employees, regardless of the individual’s desires, is not only wrong, it is likely illegal."

Is this really how conspirators talk?

Apparently so in Silicon Valley, where hiring practices long overlooked have come under increased scrutiny by the Obama administration.

In June the New York Times reported that the U.S. Department of Justice had begun an antitrust investigation into whether Apple and Google (GOOG) had a written agreement not to go fishing in each others' talent pool — a deal that could be considered a collusive restraint on trade.

Google's anti-poaching smoking gun

Such an agreement between Apple and Palm could be even more problematic, since at the time the two were gearing up to compete head on in the smartphone market. In his Aug. 2007 communication, Colligan claimed that Apple had hired away 2% of Palm's workforce to help develop the iPhone.

Palm, meanwhile, had hired Jon Rubinstein, the former Apple engineering VP who headed the team that built the original iPod. Rubinstein, in turn, had begun recruiting Apple engineers and marketing experts to work on the Palm Pre.

That's what Jobs was allegedly trying to stop.

Apple vs. Palm: Geeks with grudges

According to Bloomberg, the exact details of what Jobs proposed to Colligan aren’t known; Jobs didn’t mention a proposal in the communications reviewed by Guglielmo. He did say that Apple had a lot of patents and more money than Palm if the companies ended up in a legal battle.

According to Bloomberg, the Justice Department may investigate the exchange between the companies even though Palm rejected Apple’s proposal.  “If I were at DOJ, I would definitely be interested,” Daniel Rubinfeld, a former deputy assistant attorney general for antitrust, told Guglielmo.

Apple has declined to comment. And Jobs, according to Guglielmo, has not returned her e-mail.