Wireless

Nokia said Friday that a streamlining effort could result in the elimination of as many as 330 positions from its research and development staff, or about 2 percent of its global R&D workforce.

Microelectronics research at Nokia.

(Credit: NOkia)

The changes will likely hit up to 230 workers in the company's Oulu site in Finland and roughly 100 at its Copenhagen site. Nokia said it plans to offer voluntary severance packages to the affected workers and to find alternative jobs for as many people as possible.

The company currently employs more than 17,000 workers in its R&D business. It has 2,000 employees at the Oulu facility and 1,000 in Copenhagen.

Though Nokia still holds the top spot in the smartphone arena, its dominance has been eroded by competition from the likes of Apple and Research In Motion. A recent In-Stat report found that Nokia's share of the smartphone market had dropped to 35 percent in this year's second quarter compared with 50 percent in the prior year's quarter.

Another report from Strategy Analytics revealed that Apple had surpassed Nokia in cell phone profits during the third quarter, the first time that Nokia had fallen to second place.

Nokia's third-quarter results showed a net loss of $832 million, while sales dropped around 20 percent. Nokia Siemens, the network equipment maker run by Nokia and Siemens, has also been a drag on its owners, recently announcing its own layoffs and cost cuts as a result of its weak performance.

In the race for mobile phone profits, Apple has overtaken Nokia, according to figures for the latest quarter.

Apple earned $1.6 billion in the third quarter from the iPhone, outpacing Nokia's $1.1 billion cell phone profit to grab the top spot among all mobile phone vendors, said research firm Strategy Analytics on Wednesday.

(Credit: Strategy Analytics)

This is the first quarter that Strategy Analytics has seen Apple surge past Nokia in mobile phone profits, according to Alex Spektor, the author of the research, who spoke with CNET News.

The contest between Apple and Nokia for top phone profits has been tight in recent months. ... Read more

Henry Tirri

(Credit: Nokia)

HELSINKI--It will take years and a technology "breakthrough on multiple fronts" before the battery lives of smartphones will reach "good" levels, according to the head of Nokia's research center, Henry Tirri.

By "good," Tirri meant phones that can last on a weekly power charge, which will support battery utilization closer to what basic phone models require today, he said at a media interview here Tuesday.

Lamenting the current state of smartphone battery life, he noted that most high-performance models with large screens do not last more than eight hours of constant usage on a single charge....

Read more of "Smartphone batteries need 'breakthrough'" at ZDNet Asia.

Nokia is replacing potentially dangerous phone chargers for free, the mobile giant said Monday.

The recall affects 14 million chargers, according to the Associated Press.

The affected chargers are manufactured by third-party suppliers, Nokia said. A loose cover could potentially expose the charger's internal components and thus pose an electrical shock hazard if accidentally touched during use, the company said.

Chargers involved in the exchange are 2-pin types and include the AC-3E and AC-3U models manufactured between June 15 and August 9, 2009, as well as the AC-4U model made between April 13 and October 25, 2009. A Nokia site offers more information.

Read more of "Nokia rolls out charger exchange program" at CNET Asia.

Consumer demand for smartphones seems to be unstoppable.

In the third quarter, vendors shipped a record 43.3 million devices, up 4.2 percent from last year's third quarter and up 3.2 percent from this year's second quarter, says a report released Thursday by market researcher IDC.

(Credit: IDC)

Among smartphone vendors, Nokia still enjoys the greatest market share, according to IDC, with a 37.9 percent slice for the third quarter. ... Read more

In the battle between LTE and WiMax for wireless broadband, LTE may have just gotten another boost.

A group of leading telecom service and equipment providers, including AT&T, Verizon, Nokia, and Samsung, announced a new standard Thursday for delivering compatible voice and messaging services using Long Term Evolution (LTE) networks.

The standard, dubbed the One Voice initiative, offers a set of technical functionalities that telecommunication companies can use in their LTE services and products to provide both voice and Short Message Services (SMS).

The group of companies setting up One Voice (which also includes LTE proponents Orange, Telefonica, TeliaSonera, Vodafone, Alcatel-Lucent, Ericsson, Nokia Siemens Networks, and Sony Ericsson), see the standard as a way to provide interoperability for broadband voice and SMS services. The goal is to give telecom providers and manufacturers a convenient technical profile for working with each other and save customers from wrestling with different and conflicting LTE technologies.

LTE has been fine at supporting data, which uses IP-based packet switching. But it's faced challenges trying to incorporate traditional circuit-based switching voice and SMS services onto IP-based networks. One Voice is the group's attempt to resolve that issue.

The new specification will use existing functionality known as IP Multimedia Subsystem (IMS), which already defines how to provide data, voice, and other content over an IP-based network. IMS was established by the 3rd Generation Partnership Project (3GPP), a group comprised of telecom industry associations trying to set standards for 3G mobile networks.

"Open collaborative discussions have concluded that the IP Multimedia Subsystem-based solution as defined by 3GPP, is the most applicable approach to meeting the consumers' expectations," said One Group in a statement.

In recent years, LTE has been duking it out with WiMax to be crowned the upcoming broadband wireless standard. In one corner has been telecom giants like AT&T and Verizon, both of which have announced plans to deploy 4G wireless networks using LTE.

In the other corner has been Sprint, which is eyeing a rollout of its own 4G network using WiMax. Sprint owns a majority stake in WiMax provider Clearwire, a wholesale distributor of 4G services. Clearwire recently unveiled a huge WiMax testing sandbox in Silicon Valley where developers could play with the technology.

However, Clearwire has been waffling on the choice between LTE and WiMax. In a recent interview with Dow Jones Newswires, Clearwire CEO Bill Morrow said he would be willing to switch to LTE if helped the company.

Damaged by lower sales, huge operating losses, and a falling market share, Nokia Siemens Networks is pinning its hopes on a major reorganization.

The network equipment maker, jointly owned by Nokia and Siemens, announced Tuesday that it will lay off 5,700 employees and cut its five business units to three as part of a plan to slash expenses by 500 million euros ($740 million) by the end of 2011.

The layoffs will represent around 7 percent to 9 percent of the company's 64,000 global employees and is likely to be felt across all countries in which Nokia Siemens has a presence. The company did not state which jobs would be affected but did say that any disruption to sales positions that deal directly with customers should be limited.

The three new revamped business units are expected to launch on January 1 and will include Business Solutions, Network Systems, and Global Services.

"As our customers make purchasing decisions, they want a partner who engages in issues well beyond a traditional discussion of technology," said Rajeev Suri, chief executive officer of Nokia Siemens Networks, in a statement. "Business models, innovation, growth and transformation are now very much front and center when it comes to the selection of a technology partner - and our planned new structure will position us well in this changing market."

The company said it's also looking at potential new acquisitions and partnerships that could enhance its product line or expand its customer base. In June, Nokia Siemens bought Nortel's wireless technology for $650 million.

"We recognize that we are operating in a market where customer needs are evolving fast," said Mika Vehvilainen, chief operating officer of Nokia Siemens Networks, in a statement. "We see acquisitions and expanded partnering as important tools to help meet these needs in the fastest, most efficient way possible."

Formed in early 2007, Nokia Siemens has seemed cursed from the start. Its launch was initially delayed a few months due to a bribery scandal involving several former Siemens executives.

The new company had hardly gotten off the ground when it announced it wouldn't meet financial expectations. And it's struggled since then, hurt by the economic downturn and increasing competition.

Third-quarter sales fell 21 percent to 2.8 billion euros, while its operating loss widened to 1.1 billion euros. Parent Nokia was recently forced to spend 908 million euros to write down the value of the deteriorating business.

Nokia, the world's largest cell phone maker, is under assault as companies like Apple challenge it in the increasingly popular smartphone market.

The Finnish device maker says it's fighting back with its own cool phones and an Internet services platform called Ovi that will allow consumers to buy digital content, such as music and videos, get maps for navigation service, and manage contacts and photo files online.

Niklas Savander, Executive Vice President, Services

(Credit: Nokia)

The Ovi storefront is now up and running in eight countries: Australia, Germany, Ireland, Italy, Russia, Singapore, Spain, and the United Kingdom. And as of May it was available on an estimated 50 million Nokia devices across more than 50 Nokia phone models, including the flagship Nokia N97.

In available countries, customers can access the Ovi Store by selecting the Ovi Store icon in the "Download" folder on their device. The mobile client is available in English, German, Italian, Russian, and Spanish.

In May, Nokia said that AT&T plans to make Ovi Store available to its customers in the U.S. later this year. So far, it hasn't come yet.

CNET News recently sat down with Niklas Savander, Nokia's executive vice president of services, to get the latest scoop on Ovi and to hear more about Nokia's services strategy. In a candid interview, Savander shared his thoughts on everything from lessons learned from Apple to why the Ovi store still isn't available on AT&T's network.

Q: Nokia has had a services business for a long time. But with all the hype around the iPhone and Apple's App Store, you'd think that Apple was the first to have an application storefront. What do you think about that?
Savander: Actually, we had our own application store three years before Apple did. But I have to give Apple credit. They taught the industry a painful lesson. First, you need discoverability. The App Store is right there on the iPhone. It's not hidden in some menu. It's very prominent. Also the billing is done automatically through the iTunes account. Apple already knows who you are when you come to the App Store because you have to activate it through iTunes. And the third thing is that it is a very good implementation of an app store. And it works very well.

So are you saying that Nokia didn't do these things?
Savander: We were falling short on all three. Take our download service. Every carrier had one, too, and the stores and the applications were not easy to discover. It was cumbersome to register. And the implementation was limited by the device software platforms. Believe me, I've had long discussions about this with my team. It's disappointing that we needed a company external from the industry to shake us off our comfortable path. The App Store came along and we had to accelerate our own plans.

I have to admit I wasn't really sure what Ovi was when Nokia first talked about it over a year ago. It seemed a bit confusing. Can you briefly explain what it is?
Savander: There was a reason to go out with the Ovi story early, but in hindsight we probably went out too early.

The cell phone sales slump may soon be over.

The global cell phone industry captured mild gains in the third quarter, with total shipments reaching 287.1 million units, according to a report released Friday from IDC. That number marked a 6 percent decline from the same quarter in 2008 but a 5.6 percent jump over 2009's second quarter.

With the third-quarter figures, the mobile phone business is likely showing the first signs of a rebound since the recession, according to IDC's "Worldwide Mobile Phone Tracker." During the third quarter, the industry pushed older devices at lower prices, leading to greater demand and higher volume, said IDC.

Another report released Friday, this one conducted by Strategy Analytics, offered similar findings and forecasts for the cell phone trade. The report, called "Q3 2009 Global Handset Market Share Update," pegged cell phone shipments for the third quarter at 291 million, slightly higher than IDC's number.

Since the rate of decline was slower than in the previous quarter, Strategy Analytics expects the industry to see positive growth in the fourth quarter as the recession winds down.

"We forecast 300 million handsets to be shipped worldwide in Q4 2009, growing 3 percent from 294 million units in Q4 2008," said Strategy Analytics Director Neil Mawston in a statement. "We believe this will be the first time the industry has returned to positive growth since Q3 2008, signaling an end to the handset recession after four quarters of decline. Consumers and handset vendors are gradually regaining a little confidence."

(Credit: Strategy Analytics)

In North America, the U.S. enjoyed solid results in the third quarter, with smartphones and prepaid handsets driving growth. But the Canadian market showed a downturn for the third straight quarter due to a weak economy and sluggish demand for traditional mobile phones.

Latin America's third-quarter recovery was also less than stellar, hit by weak consumer demand and a decrease in cell phone subsidies. The industry suffered in Asia/Pacific as well, with China, India, and Indonesia seeing slight declines, though demand for smartphones remained strong.

The brightest spot was in Western Europe, where third-quarter sales of traditional mobile phones and smartphones grew over both the second quarter and the third quarter of 2008.

"Although some regions are still reeling from problems associated with the economic crisis, the third quarter served to cleanse the channel while providing the signs of stability necessary for additional improvement in the fourth quarter," says Will Stofega, research manager of IDC's mobile devices team, in a statement.

IDC also reported on the quarterly activity of key mobile phone makers.

Nokia continued to struggle, hit by a 20 percent decline in sales for the third quarter. As part of one strategy to stem the tide, the company kept busy with several acquisitions, including Dopplr, Cellity, and part of Plum Ventures, a developer of social networks.

Samsung fared considerably better. The company hit a new quarterly record by shipping more than 60 million cell phones in the third quarter, thanks to demand for both touch-screen and QWERTY messaging devices. During the quarter, Samsung grabbed a 21 percent share of the market, said Strategy Analytics.

LG Electronics also hit a new mark, shipping 30 million units for the quarter. But a paucity of smartphones and prepaid handsets kept the company from benefiting from those segments.

Though Motorola slipped in its ranking among cell phone makers, the company trimmed its operating losses through a restructuring program. Shifting its focus away from traditional cell phones to smartphones, Motorola has high hopes for its new Droid phone, due to hit Verizon stores next week.

Strategy Analytics also tracked Apple's stellar third quarter, reporting a solid 7.4 million iPhones sold worldwide and a record 2.5 percent market share.