Top World News

More than 172 million smartphones were sold in 2009, an increase of nearly 24 percent from 2008, but the number of devices based on Microsoft's Windows Mobile declined 8 percent. These findings were revealed Tuesday by Gartner, which released its annual report on the mobile phone market.

Apple, Google, Nokia and Research In Motion were the biggest gainers, according to the report. Only devices based on Windows Mobile and those based on Linux mobile operating systems saw declines.

For 2010, Gartner is forecasting low double-digit growth and a competitive market specifically around mobile operating systems.

Carolina Milanesi, Gartner's research director for mobile devices, predicts Microsoft will face an uphill battle in the smartphone market, despite announcing its new Windows Phone platform last week.

"I believe that Windows Phone is a competitive platform but not a platform that stands out among what is already in the market today," Milanesi said in an e-mail. "Hence, Microsoft will have to work on advertising around its brand as well as around enriching the ecosystem offering starting with [Windows] Marketplace. By the end of the year, the OS market will be very competitive."

Apple sold nearly 25 million iPhones last year, more than double the amount it sold in 2008, and captured a 14 percent share of the global market, up from an 8.2 percent. RIM, the No. 2 provider of smartphones behind Nokia, sold 47 million BlackBerrys, a 47 percent increase. There are now 6.8 million units based on Google's Android platform, which used to be a non-factor in 2008 when it just entered the smartphone market.

Android had a late-year effect on the market with the release of the Motorola Droid. During the fourth quarter, both Apple and RIM saw fourth-quarter share declines, seemingly a result of Google's gains, according to Milanesi.

One platform that hasn't made a huge dent in the market is Palm's new webOS. Only 1.2 million new Palm devices were sold since the release of the Pre in June. That accounted for less than 1 percent of the market. Only 1.1 million devices based on "other" platforms were sold, down from 4 million in 2008.

The smartphone pioneer reported that revenue for the fiscal third quarter would be in the range of $285 million to $310 million. For the full fiscal year, Palm said revenue would be "well below its previously forecasted range of $1.6 billion to $1.8 billion." Palm did not provide a revised forecast. The company is scheduled to release quarterly earnings March 18.

Palm's quarterly forecast fell far short of Wall Street estimates. Analysts polled by Thomson Reuters expected revenue of $425 million. Palm's disclosure spooked investors. The company's stock price tumbled more than 15% to $6.83 a share in early Thursday afternoon trading on the Nasdaq Stock Exchange.

Palm attributed its disappointing to lower-than-expected sales to consumers and orders from carriers, which are deferring orders to future periods.

"Driving broad consumer adoption of Palm products is taking longer than we anticipated," Jon Rubinstein, chairman and chief executive of Palm, said in a statement. "Our carrier partners remain committed, and we are working closely with them to increase awareness and drive sales of our differentiated Palm products."

Palm makes the Pre and Pixi smartphones that have received praise from reviewers, but have yet to catch on with consumers. Palm's troubles in part stem from its choice of carriers in launching the smartphones last year, partnering with Sprint Nextel, a much weaker national carrier than leaders Verizon Wireless and AT&T.

Verizon Wireless, a joint venture of Verizon Communications and Vodafone Group, started carrying Palm smartphones last month, and AT&T is expected to follow suit soon. Both carriers, however, are focusing their marketing muscle on the phones they sell exclusively. Verizon offers Motorola's Droid, which runs Google's Android operating system; and AT&T is the exclusive carrier in the United States for Apple's iPhone.

Palm also has fallen behind competitors in attracting independent application developers for its mobile platform. Apple and Google have done far better than Palm in attracting developers for their platforms.

Google's success at the expense of Palm is reflected in the success of Android. The OS, a relative newcomer to the market, captured a 5.2% share of the U.S. smartphone market in the last quarter of 2009, more than double the 2.5% share in the previous quarter, according to ComScore. Android phones are expected to overtake Palm in subscriber numbers.

Palm's troubles come despite double-digit growth in the smartphone market. Globally, sales of the advanced phones jumped 24% year over year in 2009 to 172 million units, according to Gartner.

Palm halted production of its handsets in Taiwan earlier this month, setting off speculation about the company's viability. A company official said in an email: "Palm regularly adjusts its product manufacturing levels to manage inventory. In anticipation of the Verizon Wireless launch and Chinese New Year, we increased production levels prior to February, and anticipate ramping production back up after the Chinese New Year ends."

Thomson Reuters Corp., the financial news and information provider created by a 2008 merger, said fourth-quarter profit fell as revenue declined in the division that includes sales and trading and media.

Net income dropped to $182 million, or 21 cents a share, from $566 million, or 67 cents, a year earlier, New York-based Thomson Reuters said today in a statement. Excluding some items, earnings of 44 cents a share met the average estimate of 13 analysts surveyed by Bloomberg.

Excluding the impact of currency, revenue in the markets unit, the largest, declined 5 percent to $1.91 billion. The professional division, which includes the Westlaw data service, boosted revenue by 1 percent on the same basis to $1.44 billion.

“The year has started well for us in sales, though given the lag inherent in our subscription-based model this will not turn into reported revenue growth until later this year,” Chief Executive Officer Thomas Glocer said on a conference call with reporters.

Thomson Reuters fell 68 cents, or 1.8 percent, to C$36.38 at 4:10 p.m. on the Toronto Stock Exchange. The shares have gained 7.2 percent this year.

Revenue in the three months through December declined 1.1 percent to $3.36 billion, compared with the $3.31 billion average estimate of 10 analysts surveyed by Bloomberg.

The underlying operating profit fell 16 percent to $661 million from $788 million, the company said. Profit on that basis excludes items such as amortization of intangible assets, impairment charges, integration program costs and the results of disposals.

Full-year revenue, excluding currency fluctuations, will be “flat to slightly down” because of a decline in net sales in 2009, Thomson Reuters said. Operating profit margin will be about unchanged, it said.

The company said it increased its quarterly dividend by 1 cent to 29 cents.

Google has announced the “next generation of ad serving technology for online publishers” with its upgrades to the DoubleClick online advertising system, known simply as DoubleClick for Publishers (DFP).

In essence the upgrade combines the current DoubleClick display advertising model with better Google-optimised algorithms and analytics which will maximise DoubleClick ad performance online and allow users to track the progress of adverts more easily.

To put it simply, the search engine has finally come around to properly integrating DoubleClick into the Google family. Since Google acquired DoubleClick in March 2008, the service has remained largely unchanged – a bolt-on to the seemingly inexhaustible list of Google products; now DoubleClick has been “Googlefied” to mesh the product into the Google brand.

The new features of DFP include a brand new interface which has been changed to make it more intuitive, user-friendly and to reduce errors. Customers will have access to more detailed reporting and analytics as well as future forecasting to measure the effectiveness of current online advertising campaigns and to make the most of future campaigns.

Google has upgraded the DoubleClick algorithm to optimise ad performance and relevance as well as making opening up the API which will allow developers to add their own apps and modifications to the system.

The DFP will come in two separate packages, one for large online publishers and social media networks, and one for developing publishers and small businesses. The version for small businesses will be free to download, the full DFP will have to be paid for by the larger publishers.

Mainland China’s stock market, open for the first time since the weeklong Lunar New Year holiday, slipped on Monday, while markets elsewhere in the region rallied as investors digested the impact of recent moves by the U.S. and Chinese central banks.

The Shanghai Composite Index slid in and out of positive territory to eventually end down 0.5 percent, defying fears of a more dramatic decline after the Chinese central bank scaled back lending by state-owned banks right before the Lunar New Year holiday.

The timing of that announcement — it was the second time in a month that the People’s Bank of China raised the so- called reserve requirement ratio for banks — surprised many analysts. But it was widely interpreted as a continuation of Beijing’s efforts to rein in inflation.

Previous tightening moves by the authorities have made investors jumpy, but the effect was limited on Monday.

Among the losers on Monday were Industrial and Commercial Bank of China, which slipped 0.6 percent in Shanghai, and Bank of Communications, which sagged 1.6 percent.

Many analysts caution that further tightening moves, as well as global nervousness over the precarious state of Greece’s finances, are likely to keep stock markets volatile in coming weeks.

“The fine-tuning of monetary policy to curb asset and consumer price inflation has imparted volatility to financial markets since August 2009,” analysts at ING wrote in a note on Monday. “We expect this state of affairs to continue.”

Elsewhere in the region, stock markets rallied as investors digested the implications of the U.S. Federal Reserve’s decision late on Thursday to raise the rate on loans made directly to banks.

That move, seen as a small step toward exiting the emergency stimulus measures implemented during the financial crisis, had shaken markets across the Asia-Pacific region on Friday, but investors in Europe and the United States later took a more positive view late on Friday. The main markets in Europe reversed early losses to end higher on Friday, and opened slightly higher on Monday.

On Monday, the Nikkei 225 index in Japan closed 2.7 percent higher at 10,400.5 points, reversing a 2.1 percent tumble on Friday. Shares in Toyota, which have slumped this year amid a massive vehicle recall at the car maker, gained 1.2 percent.

Japan’s market is due to see a major new listing on April 1: Dai-ichi Mutual Life Insurance, a leading life insurer, announced on Monday that it would sell about $11.7 billion worth of shares in what will be the country’s largest market debut in years.

The main market gauges in Hong Kong and South Korea rallied 2.1 percent and 2.4 percent, respectively.

The Straits Times index in Singapore edged up 0.3 percent, the S.&P./ASX 200 in Australia rose 1.8 percent and the benchmark Sensex index in India gained 1 percent during the morning.

The Taiex index in Taiwan, which was also closed all last week for the Lunar New Year holiday, finished the day with a 1.6 percent gain.

Data published Monday showed the country’s economy roared ahead during the last quarter of 2009 thanks to recovering demand for its exports, from China in particular. The island’s economy expanded 9.2 percent from a year earlier, easily beating analyst expectations.

Almost one in five televisions shipped during the third quarter of 2009 had a Samsung label on it. That's according to DisplaySearch, a market research company that tracks sales of TVs. As The Wall Street Journal noted on Wednesday, Samsung's 17.2 percent--and growing--share of the worldwide TV market is a big deal. No company has had a 20 percent share of televisions since TVs were first sold.

The speed with which Samsung has overtaken its competitors is fairly remarkable as well. Just four years ago, the company lagged behind Sony, who was then the king of the new flat-panel scene. Since passing Sony in sales, Samsung has doubled the number of TVs it ships every year. Samsung shipped 38 million TVs last year, according to DisplaySearch, and a goal for 2010 is to sell 45 million TVs.

Sony, meanwhile, has floundered in the market it once dominated. Its worldwide market share of flat-panel TVs is 5.9 percent, according to DisplaySearch. That's behind LG (14.8 percent), Panasonic (6.9 percent), and TCL Electronics/RCA/Thomson/Alcatel (6.6 percent).

For Samsung, broad consumer acceptance of flat-panel technology has been a boon, and it appears that the company plans to milk it. Of the 38 million TVs the company shipped last year, 27.5 million were liquid crystal displays, or LCDs, and 3.5 million were plasma displays. An executive told the Journal that Samsung wants its total number of flat-panel sets to increase to 39 million this year.

Samsung has been one of the major manufacturers pushing LCD technology with light-emitting diode, or LED, backlighting, as well as Web-connected sets, and focusing less on new display technologies such as organic light-emitting diode, or OLED, technology.

At the same time, Amazon.com, seller of the Kindle e-book reading device, may boost digital book sales by 83 percent this year to $248 million from $135 million last year, the analysts said in a note today. By 2015, those sales should reach $775 million for a market share of 35 percent, they said.

“We envision a scenario where Apple, Amazon and Google eventually split the market,” Spencer Wang, Kenneth Sena and John Blackledge said.

Industrywide, digital sales will grow to 20 percent of the book market by 2015, compared with about 1 percent last year, the analysts said. They said they expect e-books to represent about 3 percent of total book sales in 2010.

Seattle-based Amazon.com may face more pressure to raise prices of e-books sold for the Kindle after some publishers said they want more control over pricing, the analysts said.

Many new e-books cost $9.99 on the Kindle, compared with the $12.99 and $14.99 some book publishers seek. Last month, Amazon.com said it would cede some pricing control to Macmillan, a unit of Verlagsgruppe Georg von Holtzbrinck GmbH.

Apple’s Revenue Plan

For its iPad, Apple said it will grant publishers 70 percent of revenue from e-books sales and keep the remaining amount. Macmillan, News Corp.’s Harper Collins and Lagardere SCA’s Hachette say they want system that mirrors Apple’s, Credit Suisse said.

“All other publishers who have signed up with the iPad are likely to follow course,” the analysts said. Apple announced on Jan. 27 that it had agreements with Macmillan, Hachette, Harper Collins, Pearson Plc’s Penguin and CBS Corp.’s Simon & Schuster to sell books through a new online retail store.

Amazon.com, the largest Internet retailer, fell $2.13, or 1.8 percent, to $117.53 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have lost 13 percent this year.

He made the remarks as Samsung unveiled the Wave, the first phone to run on its new Bada operating system, at a press conference in Barcelona, where Mobile World Congress kicks off Monday.

The event is the largest annual gathering of the wireless telecoms industry and is considered by many handset makers as the best stage from which to launch new handsets.

Samsung's global market share topped 20% last year, up from 17% in 2008, and Shin said the firm targets at least the same market-share gains this year. Samsung is already number one in a few countries including South Korea, its home market, the U.S. and France.

Shin on Sunday said Samsung, which until recently was known for its sleek featured phones but had little presence at the high end, plans to bring so-called smart phones to everyone, regardless of location and economic means.

"We plan to democratize smart phones," he said.

Smart phones have an operating system and processing power that make them similar to a pared-down computer. In addition to serving as telephones, they can usually be used as a camera, digital music player, Internet-browsing and personal-navigation device.

Their price so far, however, has meant that smart phones have been confined to a small fraction of the mobile-phone-owning population. But as chips and other components gets cheaper, Samsung believes the smart phone will expand down-market.

Shin said he believes the price of a smart phone will drop to below $200 this year. Many, including Apple's latest iPhone models and top-of-the-range handsets from the likes of Nokia Corp. and HTC, cost at least twice as much.

About 20% of the 1.2 billion phones predicted to be sold in 2010 will be smart phones.

Samsung did not reveal the price of the Wave on Sunday.

Despite its ambitions in the smart-market, Shin said Samsung has no plans to drop any of the four different operating systems for which it makes phones.

Industry observers have long argued that there are too many operating systems out there for the industry's own good and that some will disappear in the next two years as they fail to sustain the attention of developers. It's also very expensive for a manufacturer to make phones on several platforms.

Samsung makes phones that run Symbian, Microsoft's Windows Mobile, Google's Android and now Bada, but Shin said the diversity, although it comes at a financial cost, is important for the company to retain a global presence in all segments of the market.

Toyota Motor Corp.'s big recalls could cost the Japanese automaker a point of market share or more this year, say analysts who predict Ford Motor Co. and Honda Motor Co. will benefit the most from Toyota's troubles.

"It now seems clear that Ford will overtake Toyota to reclaim its position as the second biggest automaker in the U.S. market," Jessica Caldwell, senior analyst at automotive research firm Edmunds.com, said Thursday. Ford lost its longtime U.S. second-place ranking in 2008.

Edmunds expects Toyota's U.S. market share to fall this year to 16.45 percent from 17 percent in 2009. Prior to the Jan. 21 recall of 2.3 million Toyota vehicles to fix accelerator pedals that could stick, Edmunds forecast its share would rise to 17.6 percent.

Nissan Motor Co., South Korea's fast-growing Hyundai Motor Co. and General Motors Co. also are likely to take some of Toyota's lost sales, analysts said.

"This recall crisis will probably cost Toyota at least one percentage point of market share in the U.S.," said Jesse Toprak, an analyst at pricing firm TrueCar.com. He estimates Toyota's share this year will fall to 16 percent.

Based on 2009 sales, a point of market share represents just over 100,000 light vehicles.

Toyota officials say the recalls are affecting sales but it's too early for the company to assess the full-year impact.

Deutsche Bank analyst Kurt Sanger said the loss of one point of share would cost the company between $900 million and $1 billion in annual pre-tax earnings.

Sanger's estimate did not include the effects of declining pricing power resulting from damage to the Toyota brand and higher discounts this year.

Most analysts estimate Toyota's incentives will rise to $2,000 per vehicle, on average, from about $1,400 last year.

Toyota dealers are offering cash, loyalty coupons of around $500, and low financing rates to retain customers. But analysts say Detroit rivals have increased incentives even more to capture prospective Toyota customers.

Toyota's market share is expected to drop dramatically in February because the company can't sell recalled models until pedals have been checked and repaired.

Depending on how fast its U.S. dealers can make the repairs, Toyota could lose anywhere from three to nine points of market share this month, Toprak said.

Analysts did not venture to estimate how Toyota would fare beyond this year. If the repairs are carried out smoothly, and no more issues surface, its position in the market may stabilize next year, Toprak said.

Investment firm J.P. Morgan shares that view. "We think Toyota's recalls will affect its U.S. market share in the near term, but they are unlikely to have a material impact in the long term," it said. "Toyota's share losses will primarily accrue to Honda and, perhaps Nissan and Hyundai."

Edmunds believes GM, Ford and Honda will pick up most of Toyota's lost sales, while Toprak predicts Honda and Ford will be the biggest beneficiaries.

Ford CEO Alan Mulally has said he now expects more consumers to put Ford models on their consideration list.

Microsoft's new Internet search engine Bing slightly increased its share of the US search market in January, the eighth month in a row of modest gains, online tracking firm comScore said Wednesday.

Sony's "It Only Does Everything" PlayStation 3 campaign, combined with stellar exclusives and the all-important price drop, has resulted in a definite surge around the globe.

As reported by Industry Gamers, Research and Markets has released a new report that deals with "the growth trends of video consumer devices, including gaming consoles." According to the results, the PS3 has been outselling the Xbox 360 in Europe since June 2008 and furthermore, Sony's machine "is also steadily increasing its market share in all other regions across the globe, including in the North American market." And although the 360 still sells more in this region, PS3 sales have been rising quickly (up 44% over the holidays) and SCEA senior vice president of Marketing and the PlayStation Network, Peter Dille, insists that some day, the PS3 will reach and surpass the competition. As for all the console makers, the report says the Americas should remain the largest through at least the next few years. However, although the PS2 continues to sell in less established markets around the world, sales have certainly fallen off in the major markets like the US, UK and Japan. In other words, it seems clear that the transition between PS2 and PS3 is essentially complete in the most important regions.

It's good to see the PS3 continue its upward swing and provided the exclusives continue to resonate with critics and gamers alike, it seems inevitable that Dille's claim will come true at some point in the near future.

Acer believes its notebook market share in China will have a chance to reach 10% in the second half of 2010 from around 7-8% in the fourth quarter of 2009, according to company CEO Gianfranco Lanci.

Lanci also pointed out that Acer has good relationships with its notebook partners and is maintaining communication with its suppliers; therefore, labor and component shortages in China will not affect the company's shipments.

As for the question about whether the bond crisis that is currently rising in the Southern Europe countries, Greece, Portugal, Spain and Italy, will impact Acer, which is the largest notebook vendor in most of those countries, Acer chairman JT Wang said it will not be seriously affected since revenues from the countries are not very high, and it has insurance on its accounts receivable.

Lanci also added that Acer has not yet seen any problem in its sales in those countries.

Lanci pointed out that Acer expects its notebook shipments to drop 10% sequentially in the first quarter of 2010, better than the same period in previous years. The company has also increased its on-year shipment growth forecast for 2010 from the original expectations of 30% to 35-40%, up from IDC's estimates that Acer shipped 30.8 million notebooks in 2009.

In addition to its smartphone business, the company is also preparing for products such as e-book readers and Google Chrome netbooks, Lanci pointed out, but he did not reveal further details.

Apple's share of the Smartphone market has drawn much closer to that of BlackBerry creator RIM in the past year, IDC found in a study today. Apple had the fastest growth of all major smartphone makers and jumped from 11.2 percent in late 2008 to 16 percent in late 2009. Its shipments also almost exactly doubled from 4.4 million iPhones a year ago to 8.7 million in the fall.

Despite shipping about 10.7 million BlackBerries, a large jump from about 7.6 million, RIM's market share stayed largely flat at 19.6 percent. Nokia felt the same effect as its leading share actually dropped slightly to 38.2 percent even though it shipped more than a third more phones, at 20.8 million.

The success of the Droid helped Motorola see a rare gain in Smartphone share. It took 4.6 percent of the market (2.5 million phones) and actually overtook HTC, whose continued partial dependence on Windows Mobile contributed to a drop to 4.4 percent even as it shipped slightly more hardware.

For all of 2009, the positions of the top three were unchanged and saw Nokia, RIM and Apple get 38.9, 19.8 and 14.4 percent respectively. HTC held on to fourth place, or 8.1 percent, and Samsung was fifth with 5.7 percent as Motorola had few real Smartphone options until the last few months.

Smartphones represented 174.2 million of the total phones shipped in 2009, or about 15.4 percent. The figure is a boost from 12.7 percent in 2008 and is expected to be topped once again in 2010. Besides simple demand, the future performance is expected to get help from new versions of Symbian and Windows Mobile that are centered around touch.

The stock market was boosted by upbeat economic reports on manufacturing and personal incomes that raised hopes for a quicker recovery.

The Dow Jones industrial average gained 118.2 points, or 1.2 percent, to finish at 10,185.53. Energy stocks led the way after a strong earnings report from Exxon Mobil Corp. and a $1.54 a barrel increase in crude oil prices on the New York Mercantile Exchange.

Airline stocks often fall when oil prices rise because fuel is one of their biggest costs. But the surge in energy stocks didn't hurt airlines on Monday.

The Amex airlines index rose 3.4 percent, with all 13 of its components closing higher.

Shares of American Airlines parent AMR Corp. rose 50 cents, or 7.2 percent, to $7.42, despite bad news from the Federal Aviation Administration. The FAA moved to fine AMR's American Eagle unit $2.5 million for allegedly failing to keep close enough tabs on weight and balance of baggage and other cargo, which can lead to problems controlling planes on takeoff and landing.

Continental Airlines Inc. gained 90 cents, or 4.9 percent, to $19.29; United Airlines parent UAL Corp. rose 52 cents, or 4.3 percent, to $12.75; Delta Air Lines Inc. added 40 cents, or 3.3 percent, to $12.63; Southwest Airlines Co. picked up 24 cents, or 2.1 percent, to $11.57; and US Airways Group Inc. rose 29 cents, or 5.5 percent, to $5.60.