Another sad turn of events for Nokia (NOK), whose dominance of the smartphone market is being steadily eroded by competition from the likes of Apple (AAPL) and Research In Motion (RIMM). In its latest quarter, the company’s smartphone market share declined to 35 percent from 41 percent. This slide is likely to continue unless Nokia is able to inspire a major revival in its smartphone volumes with a worthy iPhone rival.

With sales of $10.1 billion last year, a third of its total, the home and networks business is among Motorola’s (MOT) largest and most profitable. It also makes Motorola one of the top three set-top box manufacturers in the industry. As such, the division will command a hefty price–roughly $4.5 billion, according to The Journal, which posits private equity firms and other communications gear makers as possible buyers.

No word yet on whether the possibility of selling home and networks emerged after Motorola was unable to spin off its mobile-phone business. The company for its part, insists that such a move is still in the cards.

“Separation into two independent, publicly traded companies (Mobile Devices and Broadband Mobility Solutions, which comprise Enterprise Mobility Solutions and Home and Networks Mobility Solutions) is the publicly stated long-term goal of Motorola,” the company said in a statement. “We remain committed to the separation goal and continue to believe that it is the right strategy to position Motorola for long-term success.”

This morning the Finnish mobile phone giant tapped Rick Simonson, currently its chief financial officer, as head of its handset division. And the company named Timo Ihamuotila, currently global head of sales, CFO.

While Simonson’s move from CFO to head of Nokia’s mobile phone business might seem a bit odd, analysts say it could be just what the company needs. “Simonson has been in the business for years,” Swedbank Securities analyst Jan Ihrfelt told Forbes. “He knows the company quite well, has the financial skills and the skills of a good communicator to make people in the company excited about new goals.”

And that’s clearly something Nokia (NOK) needs. For while the company is holding its ground in the broader mobile phone business, it’s losing it in smart phones, the fastest-growing segment of the market. As I noted yesterday, Nokia’s share of the smart-phone market slipped to 35 percent from 41 percent in its latest quarter, a grim reminder of just how poorly the company’s flagship smart phones are faring in their battle with iPhone maker Apple (AAPL) and BlackBerry manufacturer Research In Motion (RIMM).

Said Ihrfelt: “Nokia hasn’t been as quick as others in catching up with trends in the market and in bringing phones to consumers. One would expect a player the size of Nokia to have a product that competes with the iPhone, but that hasn’t been the case.”

Not yet, anyway. But that may soon change. A few weeks back, Nokia hired John Martin, former vice president of iPhone and Mac Internet Services at Apple to oversee development of new devices based on its Maemo platform.

But NEC, Hitachi and Casio are denying these reports anyway. Or rather, they’re denying that they’ve hammered out any sort of deal. “The media report out today is not something that the company has released,” NEC said in a statement. “It is also not true that we have made a decision regarding our cell phone operations.”

Yet.

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

“AT&T does not manage or approve applications for the App Store,” the company said in a statement. “We have received the letter and will, of course, respond to it.”

A flat denial, and one that would seem to throw Apple (AAPL) under the bus for denying iPhone owners access to Google Voice. Though just why Cupertino would take issue with an an iPhone application that offers free text messaging and allows users to make calls, routed via the Internet, for free in the United States and for a small fee internationally is unclear. After all, it’s not Apple’s domestic and international calling business the app is potentially encroaching on.

And AT&T (T) is being somewhat disingenuous here since it acknowledged this past May that it had SlingPlayer for iPhone black-holed from the App Store because of concerns over bandwidth.

So while AT&T may not directly “manage or approve applications,” the carrier is clearly capable of influencing management and approval of them.

Could it be that Apple is contractually bound to reject apps that might compete with AT&T’s service? An agreement like that would certainly make it easy for AT&T to adopt the hey-don’t-look-at-me stance it has taken with the FCC.

That said, it’s entirely possible that the Apple’s rejection of Google Voice apps had nothing to do with AT&T and everything to do with its increasingly complicated relationship with Google (GOOG).

As Daring Fireball’s John Gruber notes, “Google Voice is a mobile phone service provided by the maker of one of the biggest competitors to the iPhone OS. What if Google Voice were instead Microsoft Voice? And what if Windows Mobile were as modern and competitive as Android? Would you be as surprised then that Apple is discouraging iPhone owners from using the service?”

That’s the word from Nokia, which vehemently denied reports this morning that it is just months away from launching its first mobile phone based on Google’s mobile OS. “There is no truth to this story whatsoever,” the company said in a statement. “It is a well known fact that Symbian is our platform of choice for smartphones.”

Indeed. It was a just a little over a year ago that Nokia (NOK) invested some $410 million in the platform, establishing the Symbian Foundation and releasing the Symbian OS as a royalty-free open mobile platform. It seems unlikely that the company would jeopardize that effort by rolling out an Android touchscreen phone at its annual conference. Even more unlikely when you consider that Symbian is by far the world’s leading smartphone software platform. It might not have as much buzz as Google’s (GOOG) Android or Apple’s (AAPL) iPhone 3.0 or Palm’s (PALM) new webOS, but Symbian still claims 47 percent of the mobile OS market.

Interestingly, the move follows an investment by another high-profile licensee: Intel. The chipmaker last week increased its own stake in Imagination to 14 16 percent, causing some to speculate that Intel (INTC) was prepping a takeover bid for the company. After all, Intel uses PowerVR in its Atom platform, which is crucial to its success on the mobile phone market.

Could these dueling investments set the stage for a takeover battle for the company? It’s certainly possible, but Seymour Pierce analyst Ian Robertson says it’s unlikely.

“Apple and Intel are investors not buyers,” Robertson said in a research note. “We do not expect either Intel or Apple to go beyond 15-20 percent in the short to medium term and we would be very surprised indeed if they were to attempt to buy Imagination. We note that both Apple and Intel have the resources to swallow up the company without chewing. We remind investors that Intel has a long history of taking and holding significant stakes in companies that it has seen as important to its further success–notably Micron and RAMBUS where its investment was not necessarily a guarantee of success for these companies.”

On Thursday, Big Blue said it plans to invest $100 million over the next five years in mobile computing efforts, specifically emerging market mobility, mobile enterprise enablement and enterprise-to-end-user mobile experience. “Mobility and the associated analytics will change virtually every enterprise business process,” said Paul Bloom, chief technologist, IBM Telecom Research. “It will change the relationship between enterprises and their customers, their employees and their partners, enabling them to do business in more intelligent, efficient ways.”

A smart move for IBM, I think. With innovation in the mobile sector so focused on the everyday consumer, there’s certainly room for more corporate computing initiatives. And IBM (IBM) has the market heft and reputation to spur adoption there–particularly if it manages to develop some strong authentication and security measures.

Ironic, yeah?

It’s not certain why WSGR prepared the presentation, but the document obviously applies to the close ties between Apple (AAPL) and Google (GOOG) and, if nothing else, offers insight into the “interlocking directorates” provision of the Clayton Antitrust Act of 1914 and just why the FTC might be concerned that the companies may be in violation of antitrust law by sharing four board members and advisers between them: Google CEO Eric Schmidt, Genentech (DNA) CEO Art Levinson, Intuit (INTU) chairman Bill Campbell and former vice president Al Gore.

According to the WSGR presentation, the Clayton Act stipulates that a person cannot serve as director or officer of two or more competing companies when the two are engaged in U.S. or foreign competition; each has $25,319,000 in aggregate capital, surplus, and undivided profits; and at least one has two percent in overlapping sales (note: while that $25 million figure was correct at the time the deck was prepared, it has since risen to $26,161,000). Now, Apple and Google clearly both meet the “aggregate capital, surplus, and undivided profits” condition. They probably don’t meet the second, but it’s conceivable that they might in the future as Google’s Android platform rises to challenge Apple’s iPhone in the mobile phone software and services market.

And if and when they should? Well, that leads to what WSGR describes as “occasion of sin”– a theological term that refers to circumstances that by their very nature lead to sin.

In other words, inevitable sin. And competition between the two companies is no absolution, either. As the presentation explains, there is “no safe harbor for de minimus competition.” Given the obvious overlaps between Google and Apple–between both products and directors–the two companies would seem to be heading for some sort of confrontation with the FTC. Especially if, as sources say, Google CEO Eric Schmidt has no intention of resigning from Apple’s board–even in the face of increasing government scrutiny of the company.

UPDATE: WSGR tells me the document was prepared for an internal training session. It had no explanation for why the firm published it on the Web.

UPDATE: As Danny Sullivan notes in the comments, Google has removed the cached version of the document — rather expeditiously. However, there’s still a cached version available over at Microsoft.

Clayton Act Section 8 Interlocking Directorates – Free Legal Forms

In 2007, Google (GOOG) applied for its own mark on Android, the name for its open-source mobile phone operating system, and was rejected on the grounds that it was too similar to Specht’s. Google went ahead and debuted the OS with the Android name anyway, and now Specht is suing the company. In a complaint filed in a Chicago federal court, Specht claims that Google’s use of the term will deceive and confuse customers. He asks the court to bar Google from using the name and demands $2 million in damages for its misstep. Google, says Specht, “stole first and asked questions later.”

Google, for its part, disagrees. The company clearly views the suit as opportunistic and says it has no intention of paying that $2 million penalty. It says the trademark, Android Data, hasn’t been used in at least three years and that Android Data Corporation has been dissolved. It argues there can be no confusion between the two names. “We believe the claims are without merit and we plan on defending them vigorously,” a spokesperson said. “We have no interest in settling this case.”

“That the worldwide mobile phone market started off 2009 with a year-over-year decline highlights just how much the economic recession has affected all industries, including the wireless market,” Ramon Llamas, IDC senior research analyst, said in a statement. “The market continues to adapt to the new economic reality with both vendors and retailers exercising caution to remain profitable. In some cases, this has meant holding less inventory, or even reducing headcount. Fortunately, new features and demand for phones will help the market resist the financial pressure. We expect to see further year-over-year declines worldwide, even as some regions show signs of improvement.”

Nokia, the world’s largest maker of mobile phones, will soon be just a tad smaller. This morning the company said it will sack a further 450 employees in its mobile services business, a division charged with developing and delivering the Ovi-branded Internet services tied to Nokia devices. Seems the still souring economy has undermined Nokia’s (NOK) ambitions in that area, and Apple’s (AAPL) success with the iPhone App Store has inspired it to look to third-party developers to bring new applications to its devices. Said Niklas Savander, Nokia’s executive vice president of services, “The planned changes are aimed at improving and simplifying the user experience of Nokia services, increasing opportunities for third party developers and other partners to create compelling services, and accelerating the development of a common platform for Nokia’s different service offerings.”

In other words, the planned changes are aimed at catching up with Apple. “As much as iPhone and App Store is a success for Apple, it’s a humiliating defeat for the rest of the mobile industry,” Bengt Nordstrom, chief executive of telecom consultant Northstream, told Reuters. “Twenty years of efforts from operators and vendors to create mobile applications that customers like is overtaken in a heartbeat by someone that never done it before.”

Overall, Nokia’s announcement is good news for mobile app developers, bad news for the ones handling them internally at Nokia. It’s not as if we didn’t see this coming, though. The econalypse has been having deleterious effects on Nokia. In January, the company warned that world-wide sales in ’09 are likely to fall 10 percent year-to-year. As CEO Olli-Pekka Kallasvuo put it at the time, “the macro environment is challenging and, we believe, will remain so in 2009.”

“If you’re selling something or running a campaign–if you want to do that in the traditional world, then you would set up an 800 number, for example,” Stefan Oberg, the head of Skype’s business division, told ZDnet. “But 800 numbers are local to a country. So if you’re an international business, you have to set up 800 numbers in many countries. Now a company can have a button on their webpage or refer to Skype in an ad, and it’s like a virtual, global 800 number.”

As I said, a compelling proposition. But will enough companies take Skype up on it to really cause a significant increase in revenue? Particularly in a market as competitive as business communications? A market in which traditional phone companies are already peddling their own VOIP offerings?