Make no mistake, that surge has been massive. Says AT&T (T): “Since 2008 AT&T’s network in the San Francisco area has experienced a 3G data traffic increase of 2,000 percent.”

Wow. No wonder my calls kept dropping at that last Apple (AAPL) event in San Francisco (yes, an iPhone 3G repeatedly dropping calls at Apple’s Sept. invitation-only music gathering). In any event, the upgrade, which includes the bolstering of backbone infrastructure, should result in better coverage, 3G performance and in-building penetration.

“More than ever before, customers look to wireless communications to stay in touch with family, friends and business colleagues,” said Terry Stenzel, AT&T vice president and general manager for Northern California/Reno. “The additional spectrum helps to enhance the 3G network so that our customers have the best experience when they make a call, check an e-mail, download a video or song, access applications or surf the Internet on their AT&T device.”

Google (GOOG) claimed 65.4 percent of the domestic search market in October, up from 64.9 percent in September, according to comScore. Meanwhile, Microsoft’s (MSFT) share rose to 9.9 percent from 9.4 percent in September. A modest bit of growth for the month, but quite impressive year over year. Search volume was up 30.8 percent from October 2008.

And Yahoo (YHOO)? Well, the company’s search market share slipped to 18 percent in October from 18.8 percent in September. Below, a table showing comScore’s (SCOR) search volume and market share data, via JP Morgan analyst Imran Khan (click to enlarge):

Cuts at Adobe (ADBE) will occur worldwide and are intended to bring costs in line with its 2010 budget and “the realities of the business environment,” the company said in a statement. They follow a similar round of cuts made in 2008 that claimed the livelihoods of about 600 people.

Third-quarter chip sales totaled $61.9 billion, down 10.1 percent from the same quarter last year, but up nearly 20 percent from the second quarter of 2009. No doubt about it, the market for chips is improving (see chart below; click to enlarge).

“Global semiconductor sales in the third quarter were above expectations,” SIA President George Scalise said in a statement. “September sales were in line with historical patterns, reflecting increased demand from end-users as they began the build for the holiday season.”

“Amid signs that we are in the early stages of recovery in the global economy,” Scalise added, “semiconductor sales continue to reflect normal seasonal patterns. Sales are running well ahead of the worst-case scenarios projected early in the year, and we are optimistic that total sales for 2009 will be better than our mid-year forecast.”

Sales are running well ahead of the worst-case scenarios? Well, I suppose any reassurance is a good one when your industry is down 10 percent year-over-year.

Never mind that it faces some particularly long, historic odds. That it has launched a new bet-the-company product in the worst economy we’ve seen in 50 years, for example. That with the Pre, it is challenging Apple’s (AAPL) iPhone, one of the most successful mobile phones in history. That it’s competing in a market crowded by the likes of Research in Motion (RIMM) and Nokia (NOK), which shipped an astonishing 468 million phones in calendar 2008.

Never mind all that. Because, according to RBC Capital Markets analyst Mike Abramsky, Palm (PALM) has the “special sauce”–the means of orchestrating a second act, perhaps even one of Jobsian proportions.

“Following a period of decline and facing oblivion, we believe Palm has the potential for a remarkable smartphone turnaround,” Abramsky writes in a lengthy research note on the wireless industry that I mentioned here yesterday as well. “With its new strategy, WebOS product line and under the direction of a new management team headed by ex-Apple executive Jon Rubinstein, Palm (like RIM and Apple) is, in our opinion, well-positioned for smartphone leadership.”

Abramsky sees a promising future: “Our outlook calls for Palm to quickly recover, growing from an estimated 1.3 percent data-centric smartphone shipment market share (0.2 percent TAM) or 2.2 million units in calendar 2009 to 3.6 percent share (1.3 percent of TAM) or 18.2 million units in calendar 2012. Targeting the PIM-centric segment of the Palm legacy, Palm in our view faces near-term risks, but has the ’special sauce.’” (Click on table below to enlarge.)

And what, exactly, is that? The stuff that goes between the two all-beef patties and the lettuce and cheese?

Not quite. Abramsky’s idea of special sauce includes vertical integration, “controlling the end-to-end smartphone software and hardware platform, a ground-up developed smartphone OS platform with unique innovations like multitasking, Synergy (user data integration), developer-friendly SDK, and compelling and clever hardware/software designs [that] all combine to offer a unique, iconic smartphone experience, differentiated from incumbent vendors.”

A hell of an ingredient list. But it’s one that the Pre and Palm’s webOS largely deliver on–despite some drawbacks. And if Palm can improve on that list, the company should have little trouble wooing back disenfranchised users and winning new ones.

Abramsky, again: “The huge positive reception to the launch of Palm’s Pre, its first WebOS device–despite the already broad awareness of iPhone–illustrates pent-up demand for innovative, non-intimidating smartphone user experiences. The accolades for Pre also show Palm has the potential to provide that rare iconic smartphone experience, above competitors, some incumbents and in the company of RIM and Apple.”

Which is pretty much what Palm has set out to do, as CEO Jon Rubinstein noted in the company’s last earnings call. “There is room for three to five players in this space,” he said. “We don’t have to beat one another to prosper.”

You do have to execute, though. And execution hasn’t historically been one of Palm’s strong suits. Perhaps it will improve with the addition of that special sauce Abramsky’s talking about.

PREVIOUSLY:

• Palm: The Turnaround Story of the Year
• Pre Makes Palm a New Man in Only Minutes a Day
• Palm: Execution Is Everything

iLaunch day 2009 was one for the record books, as AT&T customers scrambled to get their hands on the fastest, most powerful iPhone yet.

Here’s a look at some of the milestones we achieved:

• Best-ever sales day in our retail stores
• Second-largest traffic day in our retail stores
• Most transactions processed via our IT systems in a single day
• Most upgrade eligibility checks in a single day
• Largest order day in att.com history
• Largest features sales day in att.com history

On this year’s launch day, iPhone sales exceeded sales recorded on 2008’s iPhone launch day, Black Friday 2008 and Dec. 26, 2008–all heavy-volume sales days. In fact, this year we surpassed 2008’s launch day sales at about noon Central time, and sustained our previous peak hour record, also set in 2008, for 11 straight hours.

[Image credit: Gizmodo]

But it’s getting closer.

Interfax reports that Apple (AAPL) is near to obtaining the Network Access License from the Ministry of Industry and Information Technology that would allow the iPhone to be sold in the country. Once the license is secured, Apple needs only to finalize a distribution deal with China Unicom to make good on Cook’s promise, though that has proven problematic.

Apple’s discussions with China Unicom have reportedly been troubled by the company’s distaste for the idea of China Unicom preinstalling non-Apple software–a media player other than iTunes, for example–on its iconic handset. That said, Apple is apparently confident enough in a positive outcome that it’s begun staffing up for a launch. Last week the company posted an ad to its recruitment Web site looking for someone to oversee “iPhone training” across Asia. The position, which will be based out of Beijing, is responsible for designing training programs for iPhone sales teams and retail channels partners.

It would appear that Intel’s loss is, for the most part, AMD’s gain. Intel’s (INTC) shipments declined 16 percent while those of its rival increased 13 percent. Great news for AMD (AMD), which has been having a rough time of it lately with more than two fiscal years of losses and little sign of an upturn.

And what of the broader chip market? IDC says it remains weak, but believes a bottom may be in sight. Overall, shipments were down, but their rate of decline appears to be slowing. During the first quarter, world-wide shipments fell 10.9 percent from the fourth quarter of 2008. That’s not nearly as bad as their 17 percent decline from the third quarter to fourth. So the good news here in that the bad news could have been worse. Says IDC: “The PC processor market is still in weak condition. While OEM demand picked up notably towards the end of the quarter and going into April, IDC is wary that the demand was due to OEMs replenishing their inventories rather than reflecting a return of solid end demand and return to market normalcy. IDC continues to expect modest sequential processor unit shipment decline in 2Q09.”

The ax is indeed swinging at Big Blue. Following reports that it is preparing to cut thousands of jobs in its global services unit, IBM (IBM) said Thursday it has begun notifying employees of what it likes to euphemistically refer to as “resource actions.”

“On March 26, we notified some employees to inform them that some jobs were being eliminated,” a spokesperson said in a statement. “IBM continuously evaluates its mix of skills and resources throughout the year, and makes changes as needed. Managing resources in this way keeps us competitive, while adapting to the evolving needs of our clients. We anticipate that some employees will find other positions within IBM, and we’re helping them in that effort. Those employees who leave IBM will receive separation benefits.”

According to Lee Conrad, spokesman for a union group called Alliance@IBM, “Employees are being notified this morning. We do know that 1,674 employees in the application Services unit will lose their jobs. This is one more in a series of IBM job cuts that have contributed to the downward slide of the IBM USA employee population. We see increases in the shifting of jobs offshore as US IBM employees are terminated.”

All told, some 5,000 staff are expected to be affected by the cuts, most in IBM’s Global Business Services division. An ironic twist of fate given IBM CEO Sam Palmisano’s January all-hands message to employees recognizing the division for its contributions to the company’s latest earnings report:

Under extremely challenging economic circumstances, we had a strong fourth quarter and a great 2008. I want to thank you for everything you have done to help achieve this impressive performance.

In the fourth quarter we had particularly strong contributions from our services and software businesses and from growth markets. Our two Global Services segments together delivered pre-tax profit growth of 32 percent and margin growth of 4 points on lower revenues compared to 2007. We signed 24 deals larger than $100 million–the highest we’ve seen in quite some time.

UPDATE: Some interesting comments popping up on the Alliance@IBM boards, among them this one, which offers another explanation for “resource actions” like today’s:

“This is not a story about another 5,000 layoffs in the sea of the millions already laid off. That’s exactly how IBM wants you to report it. In fact, the recession and other layoffs are great cover for IBM. The real story is this is not a typical recessionary layoff, pruning poor performers or re-balancing skills for client needs. This is a story about a deliberate and systematic business strategy to replace 15-20K American workers each year with lower-cost BRIC (Brazil, India, China) workers. So far this year, it is approaching 10K (5K in Jan; 5K today) with rumors of more to come in June and in the fall. This is not a story about moving unskilled work to another country. The layoffs have included highly-skilled and experienced professionals–scientists with PhDs, MBAs, seasoned software developers, marketing experts, consultants, project managers and manufacturing workers. This is a story about throwing near-retirement workers into the layoff pool–and using some of the savings (not sent overseas) to hire lower cost & unsuspecting new college grads.”

PREVIOUSLY:

• IBM: The “I” Stands for “India”
• Will This New “Long-Term View” Approach Also Include Layoffs?
• IBM: Maybe No One Will Notice Our 2,800 Layoffs…

The technology industry was supposed to cut 180,000 jobs in 2008; instead, it cut 186,955 jobs –up 74.2 percent from the 107,295 job cuts recorded in 2007. That’s the dismal word from recruitment outfit Challenger, Gray & Christmas, which helpfully notes that this is the largest industry workforce reduction since 2003, when tech suffered 228,325 layoffs.

Still a chance to break that record, though. Said Challenger, “Cuts could reach even higher in 2009, as there is no evidence yet that the economy has hit the bottom of this downward portion of the cycle. We almost certainly will not see a repeat of the 2008 first quarter, in which tech cuts totaled just 17,345.”

Sacked.

A quick scan of the carnage.

• 8,000 whacked at Sprint (S)
• 6,000 let go at Royal Philips (PHG)
• 1,100 sacked at AMD (AMD)
• 4,000 adjusting to new economic realities at Motorola (MOT)
• 3,000 laid off at Seagate (STX)
• And a few hundred at Oracle (ORCL), as well
• 1,900 declared redundant at Dell (DELL)
• 5,000 losing their jobs at Microsoft (MSFT)
• 1,000 managers and 5,000 contractors pink-slipped at Alcatel-Lucent (ALU)
• 1,500 gone at Yahoo (YHOO)
• 12,000 released into the wild at AT&T (T)
• 600 cut loose at Adobe (ADBE)
• 6,000 aligned with the global economic climate at Sun (JAVA)
• And at Nortel (NT) 1,300 positions cut on top of the 1,200 previously announced

Grim isn’t it? Sad thing is, this is just a simple snapshot of what’s been happening in tech. According to the Department of Labor, employers in the states shed 524,000 workers in December, 2.6 million in all of 2008. That makes the last year the worst for layoffs since 1945, when 2.75 million jobs were lost. And that’s frightening, because according to some experts, we’ll get no respite in 2009. “We are very early in the cycle,” Peter Morici, a professor at the Robert H. Smith School of Business at the University of Maryland told BusinessWeek, adding that we’ve so far only seen a sliver of the job losses to come. “We are going to see the fury of the Old Testament for what we have done to the economy.”