Market Talk

Newswires telecom reporter Roger Cheng reports:

With Nokia (NOK) cutting its financial targets for the second time in three months, it isn’t surprising that the mobile handset giant cited competition in the high-end smartphone market as a chief culprit for the disappointment.

Nokia has been stubbornly slow in taking large strides forward with its smartphones. Take its recently unveiled N8, a multimedia powerhouse that a few years ago would’ve been eagerly snapped up. It’s the first device to run on the new version of the Symbian operating system. Symbian 3, however, isn’t the quantum leap many industry observers say is needed to match the likes of Apple (AAPL) or Google (GOOG). Despite a few upgrades and a bit more polish, the platform is showing its age relative to iOS or Android.

The competition is taking its toll. Nokia on Wednesday warned that second-quarter revenue from its mobile devices and services business would fall at the lower end of its previous guidance of EUR6.7 billion to EUR7.2 billion, citing disappointingly lower average selling prices and device volumes.

Despite a wide lead in the handset business, Nokia continues to cede market share in the high-end segment. In the first quarter, Symbian’s share of the smartphone market slipped to 44.3% from 48.8% a year ago, according to research firm Gartner. Both the iPhone and Android operating systems saw their share jump at its expense. The trend is likely to continue into the second quarter.

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- Nokia posts another disappointing quarter. That crowded smartphone market doesn’t look like it has any room for NOK these days.

- Revenue growth isn’t as shiny as 1Q profits.

- Beware of false sense of security from financial reform. “The worst outcome of all is a bill that makes people believe the system is safer when in fact the risks are still present,” Mark Thoma says.

- Hulu’s prepping to offer its paid-subscription service as early as late May for $9.95 a month. But it’s a price level that could make “both consumers and network TV guys unhappy,” Peter Kafka writes.

- Goldman’s getting all defensive to clients over SEC charges, a start contrast to its public remarks. “It suggests either hypersensitivity to bad press, or recognition of the possibility that the discovery in the SEC case will expose widespread predatory conduct,” Yves Smith says at naked capitalism.

- Jobless claims are still stuck in neutral. “Deciding if this is merely a pause that refreshes, or one that signals an extended bout of sluggish labor market activity, remains to be seen,” James Picerno writes.

- Optimism about housing on the rise…again.

- Not everyone’s on board, though, as housing may be in for a case of the DTs, Peter Boockvar speculates.

- Watch out Google (GOOG), Facebook is the new Web sheriff.

- And if that’s truly the case, Facebook’s growth should put tech giants, particularly Google and Apple (AAPL), on guard, Mark Cuban notes.

Newswires telecom reporter Roger Cheng reports:

Build a better dog collar, and the world will beat a path to your wireless packages.

Those old standby metrics for wireless carriers just aren’t reliable as they used to be.

Take AT&T, which reported a record 1.9 million net customer additions for the first quarter, up from a 1.2 million net gain from a year ago. Impressive, right? It’s less so when you consider that much of the growth—1.1 million—was driven by connected devices, or any non-cellphone with a cellular connection, like an e-reader, which chip in far less revenue than your average phone bill.

The most common examples of connected devices are e-readers and netbooks, but the Apple iPad will be also be counted in the second quarter once the 3G version launches on April 30. While there has been a lot of noise about wireless dog collars (really, we’re talking about actual dog collars that use a wireless signal,) a significant amount of the applications are found in businesses such as inventory tracking systems or vehicle monitoring.

AT&T has been aggressive with the business, and it’s paid off with strong growth in the first quarter.

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Newswires telecom reporter Roger Cheng checks in with this report:

OMG! I dropped my phone!

Remember Sony Ericsson? With all the talk of Palm sinking into oblivion or getting scooped up, it’s easy to forget some of the other handset vendors that have been swept away by the great smartphone wave.
The mobile handset manufacturer—a joint venture between Sony and L.M. Ericsson Telephone—reported a slight profit in the first quarter, which represented a rare bright spot for a company that continues to lose market share and post declining sales. But the company is a long way away from a true comeback, and continues to stand on the precipice of irrelevancy.

Just a few years ago, Sony Ericsson was riding high on the strength of its colorful feature phones. The company had successfully used Sony’s various consumer brands, which included Walkman and Cybershot, to convey the strength and focus on a particular handset, whether it be as a music player or high-end camera phone. But like Motorola, and even larger companies such as LG Electronics, it had failed to anticipate the exploding popularity of smartphones, and that many of those “premium features” were reduced to standard features.

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- “Here we are, up 70% or so from the lows of over a year ago, and there is no uniformity of thought – which is probably a good thing,” Barry Ritholtz says.

- Treasury’s Geithner insists a resolution authority will help manage a failure of a large cross-border financial institution. “It simply will not,” former IMF chief economist Simon Johnson writes. “Mr. Geithner wanted to sound tough. But is he really coming out to fight? Or did he and his colleagues already throw in the towel?”

- Palm hopes distribution deal with AT&T (T) will boost sagging smartphone sales, but analysts aren’t so sure, John Paczkowski reports.

- “The home buying tax credit expires at the end of April and time is running out,” Miller Tabak’s Peter Boockvar says. “Bottom line, the next big test for this phase of the housing recovery is just ahead.”

- February existing home sales are proof the home buyer tax credit “has run out of gas,” Karl Denninger writes at the Market Ticker.

- Year-over-year decline in housing inventory is getting smaller. “This is something to watch,” Calculated Risk says. “This slow decline in the inventory is especially concerning with 8.6 months of supple in February – well above normal.”

- “Once upon a time, you could set your watch with the Google-Goldman super-tell duopoly,” Todd Harrison says at Minyanville. “As both are pointing due south today, it’s worthy of a mention.” Google (GOOG) drops 1.5% to $549; Goldman Sachs (GS) drops 0.8% at $174.83, but the Dow Jones Industrial Average rises 103 points.

- UK authorities arrested of six men, including an employee of hedge fund Moore Capital and another from Deutsche Bank, in what’s being billed by the government as a major crackdown on insider trading, WSJ reports.

- Solar stocks, which got hit hard during the bear market, have been really struggling during the recovery, Bespoke notes. For solar stocks over the last six months, “it’s not a pretty sight,” firm says. “Is now the time to buy or will solar continue to trade lower?”

- Jeff Saut, Barry Ritholtz, Bob Doll and Mike Santoli all correctly called the bull market, Josh Brown writes at The Reformed Broker.

- Microsoft (MSFT) doesn’t want to talk about the Courier, a rumored response to Apple’s (AAPL) iPad, but it’s willing to concede the blogosphere is a great way to read about it. All Things Digital says MSFT’s JobsBlog tells those looking for a job to check out “online chatter” about, among other things, “the upcoming Courier digital journal.” The JobsBlog links to a post on Engadget that claims exclusive pictures and details.

(UPDATE: Looks like someone at Microsoft’s (MSFT) JobsBlog might be in trouble. MSFT has now deleted a reference to its rumored Courier tablet from a JobsBlog post. “Hilarious,” All Things D’s Peter Kafka tweets. The post is still on JobsBlog but no longer mentions the Courier.)

Palm's wild ride may not have happy ending.

I hate to use this cliche, but it has certainly been a roller coaster ride for Palm’s stock throughout the last 15 months. Unfortunately, a happy ending doesn’t seem to be in the offing for shareholders.

Palm traded as low as $1.30 in December 2008, with few bright spots on the horizon. But the stock started spiking when word circulated it was coming out with a killer smartphone and operating system that would resurrect the company.

Palm ultimately released the Pre and Pixi smartphones, compatible with its webOS operating system, that had reviewers gushing and market watchers predicting huge success. The stock went gangbusters, trading as high as $18.09 in September. For all you mathematicians, that’s a 1,291% gain over a nine-month stretch.

Too much too fast? You better believe it.

Palm’s famed bet on Pre and Pixi hasn’t lived up to expectations, with Palm failing to gain significant traction against Apple’s (AAPL) iPhone, Google’s (GOOG) Android-powered phones and BlackBerry smartphones. The stock has cliff-dived as a result.

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- A total of 130 companies in S&P 500, or 26% of the index, hit 52-week highs yesterday, while no companies hit fresh lows, Bespoke says. “While net new highs had been struggling to expand in recent months, today’s reading marks a new bull market high.”

- Sirius XM (SIRI) gets a delisting notice from Nasdaq. “An ominous threat, but one not likely to be carried out,” Digital Daily blogger John Paczkowski says, noting Sirius is appealing the notice and seeking an extension from Nasdaq. “Frankly, with over 3.7 billion shares outstanding, there’s little reason to fear Sirius will be booted from Nasdaq.”

- Can’t sugarcoat it: The aughts were awful. Atlanta Fed’s macroblog looks at trough-to-trough periods based on real GDP growth, and determines 2002-09 period was one of the worst since 1930s. “No other previous period comes close.”

- What exactly does the VIX tell us? FT Alphaville weighs in on the debate.

- Weekly jobless claims and consumer prices data suggest “the heavy lifting of rebuilding the economy is upon us,” James Picerno says.

- “Congress did not need to deregulate Wall Street – they only had to defund the SEC – which is what effectively happened,” Barry Ritholtz writes. “Hence, the chief cop on the Wall Street beat was outgunned, overmatched, undermanned and out-lawyered by the industry they were supposed to be regulating. How can that possibly have been any good for investors?”

- HTC has flimsy defense against Apple, John Paczkowski says. Its main argument: it’s been making smartphones longer than Apple. “While it’s certainly possible that might be the case, it’s hard to accept that argument without a list of patents to back it up. Harder still, when HTC says nothing about its legal strategy for dealing with Apple’s assault.”

- More bailed out banks failed to pay a quarterly dividend to the government in February. The number hit 82 last month, up from 55 in November 2009.

- Apple’s (AAPL) already pre-sold hundreds of thousands of iPads in anticipation of April’s official release, WSJ reports.

- First upset of the NCAA Tournament’s already in. No. 11 Old Dominion defeats No. 6 Notre Dame in the opening round.

In an earlier post we pondered whether Apple (AAPL) was trying to steal some of Google’s (GOOG) thunder today. If that was truly its goal, it failed miserably.

Apple bragged this morning about selling three million apps, then the news about the acquisition of mobile ad company Quattro Wireless hit the wires. But all of it has been dwarfed by the unveiling of Nexus One, Google’s hip new super smartphone.

Reviews of Google’s device are starting to pour in, and most of them are extremely positive. WSJ’s Walt Mossberg calls it the “bold new face in super-smartphones” and says it’s the first phone he could consider carrying as his everyday hand-held computer.

“I like it a lot,” he says, noting it could attract people away from their iPhones or BlackBerrys.

TechCrunch says Nexus One is “a superior mobile device” that doesn’t have any obvious flaws or compromises. Engadget is also positive about the device, saying its “up their with the best of the breed.” But the blog remains a bit guarded and isn’t ready to give it a perfect-10 review.

“It’s not in any way the Earth-shattering, paradigm-skewing device the media and community cheerleaders have built it up to be,” blog says, noting if it had to choose between Nexus One or the Droid, it would choose the latter.

For what it’s worth, I had the opportunity to play around with Nexus One a few weeks ago but wasn’t at liberty to write about it at the time. I’m certainly not a phone wizard, but it was sleek and definitely seemed on par, if not better, than the iPhone.

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Hype surrounding the Palm Pre and the stock’s 180% gain this year as the device’s launch date approaches seems way too optimistic.

With an aging product portfolio and nothing else in the pipeline, Palm’s essentially betting on Pre to help the company return to its heyday. But a crowded smartphone market and a weak economy don’t necessarily bode well for its prospects, regardless of how great Pre turns out.

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