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.

Three views of the Dell Mini 3

(Credit: Dell)

Dell said Friday that it's ready to enter the smartphone business with the Android-based Mini 3.

Long rumored to have a smartphone in the works, Dell said that the first two carriers to sell the Mini 3 will be China Mobile and Brazil's Claro.

In China, the Mini 3 will use OPhone, China Mobile's customized version of Google's Android operating system. "We are excited for Dell to be among the first manufacturers to introduce new technology based on the OPhone platform," an unnamed China Mobile representative said in Dell's press release.

Dell would not offer any specifics about the software on the Brazilian phone, saying simply that "the initial Mini 3 smartphones are designed around the Android platform."

The company also did not provide technical specifications or pricing information for the phone, saying those would be revealed when the devices arrive in stores--probably late November for China Mobile and by year's end for Claro. It also did not say when the phone would arrive in the U.S. or other markets.

Dell did confirm that the Mini 3 has a 3.5-inch high-definition touch screen, a detail that Michael Tatelman, a Dell sales and marketing executive, had earlier told the Associated Press. The Mini 3 sold in China won't have Wi-Fi at the start, but Tatelman said that would come later.

Similarly, Apple's iPhone late last month made its official debut in China sans Wi-Fi.

China Mobile has more than 500 million customers, and Claro serves more than 42 million people in Brazil as part of the America Movil network, Dell said.

Dell did tout its "existing agreements with other leading global telecom providers," including Vodafone in Europe; AT&T and Verizon in the U.S.; M1 and Starhub in Singapore; and Maxis in Malaysia.

The Texas-based PC maker also played up the Internet connectivity angle of small mobile gadgetry.

"Our entry into the smartphone category is a logical extension of Dell's consumer product evolution over the past two years," Ron Garriques, president of the Dell Global Consumer Group, said in a statement. "We are developing smaller and smarter mobile products that enable our customers to take their Internet experience out of the home and do the things they want to do whenever and wherever they want."

But does the world need a smartphone from Dell? The device will have plenty of company: Android phones have begun arriving on the market in larger numbers in recent months.

Most notably, U.S. carrier Verizon Wireless last week began selling the much-hyped Droid, made by Motorola, and the more modest Droid Eris, made by HTC.

Updated at 5:31 a.m. PDT with more details and background information, and again at 8:08 a.m. PDT with clarification on the use of China Mobile's OPhone and confirmation of the screen size..

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.

Beginning Nov. 15, Verizon subscribers looking to get out of their smart-phone contracts early will pay $350 for the privilege. That early-termination fee is double the current one, but Verizon insists it's justified because of the higher prices of today's phones.

"The cost of smart phones is considerably higher than feature phones for which the early termination fees were created years ago at $175," said Verizon spokesman Jim Gerace. He added that the new $350 ETF declines by $10 per month through the life of the contract and customers can avoid it by buying their devices off contract and paying full retail price.

(Credit: All Things Digital)

An interesting move for Verizon, which just last year agreed to pay $21 million to settle a class-action lawsuit filed by California consumers over the very early-termination fees it is now increasing. The plaintiffs in the suit alleged that Verizon's ETFs were illegal under California law and that they were designed to unfairly lock consumers into long-term contracts and prevent them from switching carriers. When Verizon settled the suit, it denied any wrongdoing, insisting that early-termination fees are simply a means of recovering legitimate costs. And to some extent Verizon does have a point.

Full retail price for the Motorola's new Droid is $559.99. With a two-year contract, Verizon sells the handset for $199.99. Theoretically, that's a $359.99 subsidy (I have no idea at what price Verizon purchases Droid from Motorola). So if Verizon allowed subscribers to break their contract after a month without paying an early-termination fee, the company would stand to lose money. And subscribers who did so could subsequently sell the device online and potentially make a profit, though a small one.

So it's certainly understandable that Verizon and other carriers want to protect the subsidies they dole out for these new smart phones. And as noted earlier, Verizon's new ETF drops by $10 each month a subscriber remains under contract. But at this rate, subscribers are still bound to pay a $110 termination fee in the 23rd month of a two-year contract. The contract is nearly over, the subscriber obligation to Verizon almost fulfilled, yet the company can still slap its customers with nearly a third of the full ETF if they break it at that time.

By month 23 of a two-year contract, does Verizon really stand to lose $110 if subscribers decide to switch carriers? Doesn't seem likely if subscribers can walk away just a month later without consequence, taking their handsets with them.

Since Verizon is pro-rating the ETF, why isn't it doing so in such a way that it zeroes out by the end of the contract?

And isn't the fast pace of innovation in the smart-phone sector such that prices-for both component and device-are dropping so quickly that high ETFs aren't really justified? Remember, you can get Apple's iPhone for $99 today. When the iPhone debuted in 2007, it commanded a price of $499/$599, depending on model.

I've put those same questions to Verizon and will update here when I hear back. In the meantime, here's what Consumers Union policy analyst Joel Kelsey has to say on the matter: "When people want to switch wireless services, the biggest cost they face is early termination fees. These fees are designed to lock people into long-term contracts and stop them from getting better deals. Early-termination fees make the marketplace less competitive. Verizon's move is painful proof that it's time for lawmakers to crack down on these fees."

UPDATE: Verizon Wireless spokesperson Nancy Stark offers the following answers to the questions I posed above:

Your first question regarding the balance at month 23 or 24 assumes that, at that point, we have recovered all of our subsidy and up-front costs for every device. That simply is not so.

On your second question, while the pace of innovation plays a role in prices coming down somewhat, it also plays a role in driving up costs as more and more complexity that customers want is added to phones-from premium HTML browsers to high-resolution MP cameras with optical zoom; videoplayers; music players; dual processor chipsets; WiFi; very high display resolution, operating systems such as BlackBerry, Windows Mobile, Palm, Android-ALL with the added value (vs a desktop) of mobility, and ALL in one tiny device that ALSO allows you to talk to anyone from anywhere. phew! (by comparison, I recently paid $200 for a camera and all it can do is take pictures, and it has only middle of the road capabilities.)

But getting back to ETFs specifically. The most important point is that Verizon Wireless customers do not have to have an ETF at all if they do not want to. ETFs allow customers to have it either way: They can have no ETF and pay full retail for their device. OR, they can get a greatly discounted device by having an ETF.

Story Copyright (c) 2009 AllThingsD. All rights reserved.

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

As Apple and Research In Motion have won a greater share in the Wi-Fi handset market over the past year, Nokia has lost share.

Though Nokia is still the leading vendor for dual-mode smartphones (Wi-Fi and cellular), its market share dropped to 35 percent in the second quarter, compared with 50 percent in the same period a year ago, according to a report released Monday from In-Stat.

The report "Wi-Fi in Mobile Phones: Dual Mode Becomes the In Thing" tracked the major Wi-Fi phone vendors, including Nokia, Apple, Research In Motion, HTC, and Samsung. Among those, Apple has enjoyed the greatest growth in market share, from 3 percent in the second quarter of 2008 to 20 percent in this year's second quarter.

Market share for both RIM and Samsung has also weakened the past few quarters, though less so than Nokia's. RIM's 15.7 percent chunk of the market for the second quarter of the year was down from its first-quarter high of 17.6 percent. Samsung's share has been relatively flat but usually dips a bit from the first to the second quarter, notes In-Stat.

In sheer unit volume, Nokia has done well the past few quarters, with 9.3 million Wi-Fi handsets shipped in the second quarter of the year compared with Apple's 5.2 million shipments. However, Nokia's shipments have dropped since the first quarter of 2008 when it saw 12 million units fly out the door. Over the same period, Apple, RIM, and HTC have seen their shipments grow.

As the No. 2 Wi-Fi handset vendor, Apple has also outsold third-place RIM in dual-mode phone shipments, says In-Stat. Though RIM still has a larger market presence, not all of its Blackberry devices include Wi-Fi. HTC and Samsung rounded out In-Stat's list as the fourth and fifth top Wi-Fi handset vendors, respectively.

(Credit: In-Stat)

The report also detailed the growth of the Wi-Fi smartphone market overall. The industry shipped 37 million handsets in 2007, and 103 million units in 2008. That rise is because of several factors, notes In-Stat, including greater functionality, lower prices, and carrier promotions. Initially targeted to the business market, smartphones are also now an entrenched hit with consumers, which In-Stat attributes to the success of the iPhone.

Wi-Fi handset shipments are expected to rise just 25 percent to 128.4 million units for 2009. That compares with a nearly 180 percent jump in 2008.

But In-Stat sees gains ahead. By 2010, the growth rate is likely to climb to 43 percent. Though that rate may not be sustainable, it should remain strong in the coming years. Wi-Fi will also become more prevalent in mobile phones. This year, 11.5 percent of handsets include Wi-Fi; by 2012, that figure will grow to 25 percent, predicts In-Stat.

To compile the report, In-Stat relied on its own data as well as interviews with Wi-Fi equipment vendors.

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.