“We’ve learned and struggled for a few years here figuring out how to make a decent phone. PC guys are not going to just figure this out. They’re not going to just walk in.”

Palm CEO Ed Colligan, December 2006

“Five hundred dollars? Fully subsidized? With a plan? I said that’s the most expensive phone in the world and it doesn’t appeal to business customers because it doesn’t have a keyboard, which makes it not a very good e-mail machine.”

– Microsoft CEO Steve Ballmer, January 2007

At 37.9 percent, Nokia’s share of the global handset market is the largest in the industry. Odd then to learn that it is not the most profitable. And odder still to learn that that honor belongs to Apple, which has been in the handset market for just two years.

According to Strategy Analytics, Apple’s third-quarter iPhone operating profit was $1.6 billion, while Nokia’s was $1.1 billion. Driving Apple’s profits: Strong sales, high wholesale prices and tight cost controls.

“We have identified at least 4 key factors underlying Apple’s success,” Strategy Analytics analyst Alexander Spektor explains. “First, Apple created a simple sub-brand–the iPhone–which was memorable and easy to remember. Second, the firm developed an attractive family of models with standout usability that enabled Apple to charge way-above-average prices to operators and consumers. Third, Apple distributed and co-marketed its handsets through top-tier carriers in numerous high-value countries. And fourth, the vendor has kept a solid grip on production costs by working with Foxconn, the world’s largest contract handset manufacturer.”

Quite an achievement for Apple (AAPL) and a major humiliation for Nokia (NOK), which has seen its dominance eroded by the likes of Apple and Research in Motion (RIMM), and not just in North America, but in Europe. Indeed, in its latest quarter Nokia’s smart-phone market share dropped by six points.

As Strategy Analytics analyst Neil Mawston noted at the time, “[Nokia has] no iPhone killer to drive a major revival in its smartphone volumes. [It] is still struggling in the U.S. smartphone market, and with competition intensifying in China as well, Nokia’s battles can only get tougher in 2010.”

Analysts had expected AMD to lose 42 cents a share on revenue of $1.26 billion, according to a consensus survey by Thomson Reuters. Instead, the company lost 18 cents a share on revenue of $1.4 billion, which was down from $1.8 billion for the same quarter last year.

Not the sort of blow-out quarter we saw from Intel (INTC) earlier this week, but encouraging news nonetheless. Certainly, AMD’s leadership believes the company is poised for a turnaround. During a conference call to discuss AMD’s (AMD) third-quarter results, CEO Dirk Meyer offered an upbeat outlook for the remainder of 2009 despite the current loss.

“Third quarter consumer PC demand continued to improve from prior periods, with particular strength in notebooks and in China and continued recovery in Europe and in North America,” Meyer said. “And it appears the commercial IT markets are positioned to improve next year….Going forward, we believe we are well positioned to succeed.”

Looks like Yahoo has found its new CFO. This afternoon, the company said that Tim Morse will take charge of its finances. Morse, who has served as chief financial officer for chip maker Altera (ALTR) since 2007 and spent 15 years at GE (GE) before that, will start work on June 17 and assume CFO responsibilities on July 1.

Welcome news, since Yahoo has been looking to fill the position since Blake Jorgensen said he would step down from the Silicon Valley-based company last February.

What did it take to bring Morse to Yahoo? According to an SEC filing, a $500,000 signing bonus, a base salary of $500,000, an option to purchase 400,000 shares of Yahoo stock, and 150,000 shares of restricted stock.

The appointment of Morse is yet another for Yahoo CEO Carol Bartz, who has tended to pick her top execs from a more business-focused sector than one focused on the consumer Internet, which is Yahoo’s arena.

Here is the official press release:

Morse Appointed Chief Financial Officer of Yahoo!

SUNNYVALE, Calif.–(Business Wire) Yahoo! Inc. (Nasdaq:YHOO) announced today that the Board of Directors has appointed Tim Morse as chief financial officer. Reporting directly to Carol Bartz, the chief executive officer of Yahoo!, Morse will be responsible for the company’s finance, investor relations, and mergers and acquisitions groups. He will commence employment on June 17, 2009 and will assume the responsibilities of CFO on July 1, 2009.

“Tim has a proven ability to translate strategy into structure, process, and execution, and I am delighted that he will be joining my leadership team to help drive Yahoo!’s growth,” said Bartz. “With his passion for operational finance, global experience, and expertise simplifying complex organizations and managing growth, Tim is a natural fit for Yahoo!.”

Morse has financial experience in both large and small organizations, managing in complex, fast-paced environments and establishing scalable, cost-effective processes and controls. Prior to joining Yahoo!, he was the CFO of Altera Corporation, a semiconductor company specializing in programmable logic devices for communications, industrial, and consumer applications. Morse previously served as the CFO and general manager of business development for General Electric Plastics. A 15 year veteran of GE, he also held a variety of positions at GE Plastics, GE Appliances and GE Capital in North America, Europe and Asia.

“Yahoo! is an amazing brand with a unique combination of assets, and I am extremely excited to be joining a finance team with a deep commitment to financial excellence and fiscal discipline,” said Morse. “I look forward to working with the entire leadership team to continue to focus on driving results and creating value for our shareholders.”

Morse holds a bachelor’s degree in finance and operations and strategic management from the Boston College Carroll School of Management.

Global mobile handset sales fell at a record pace in the first quarter of 2009. And they’re likely to do so once again in the second. That’s the grim news today from Gartner, which reports that first-quarter sales of handsets fell to 269 million units, down 14.5 percent from the fourth quarter of 2008 and 9.4 percent from a year earlier.

“There were some signs of a recovery in markets such as North America and China, but overall sales in the first quarter of 2009 registered the biggest quarter-on-quarter contraction since Gartner began monitoring the market on a quarterly basis in 2001,” said Gartner research director Carolina Milanesi. “We really don’t see demand stabilizing before the second half of 2010.”

Demand for low-end mobile phones, that is. Smart phones are doing just fine. Their sales rose 12.7 percent to 36 million units. That’s 13.5 percent of all mobile devices sold in the first quarter, up from 11 percent a year earlier. The chief beneficiaries of this trend: Apple (AAPL) and Research in Motion (RIMM).

Apple doubled its share of the smart phone market in the first quarter of 2009, nabbing 10.8 percent of worldwide sales, up from 5.3 percent in the first quarter of 2008. The company sold 3.9 million iPhones during Q1 2009, more than double the 1.7 million it sold in the first quarter of 2008. Meanwhile, RIM’s share of the smart phone market reached 19.9 percent in the first quarter, up from 13.3 per cent a year earlier. It sold 7.2 million BlackBerry devices to end users, up from 4.3 million in the same period a year earlier.

Incidentally, Nokia (NOK) remains the market leader in smart phones and handsets overall, though its share in both is declining. The company claimed 36.2 percent of the handset market in the first quarter of 2009, down from 39.1 percent in the first quarter of 2008. Its share of the smart phone market dropped to 41.2 percent from 45.1 percent during the same period.

How is it that smart phone makers like Apple and RIM are defying a downturn that’s playing havoc with their dumbphone-manufacturing colleagues? Touchscreens and app stores.

Said Gartner analyst Roberta Cozza: “Much of the smartphone growth during the first quarter of 2009 was driven by touchscreen products, both in midtier and high-end devices. ‘Touch for the sake of touch’ was enough of a driver in the midtier space, but tighter integration with applications and services around music, mobile email, and Internet browsing made the difference at the high end of the market.”

Good news for Palm (PALM), which is bringing a device that fits that bill to market on June 6.

While confirming that these “resource actions” are indeed taking place, IBM (IBM) refused to discuss details. Instead, it offered up the standard staff reduction obfuscations as comment. “We are not going to discuss specific numbers or locations,” spokesperson Doug Shelton told The Poughkeepsie Journal. What I can tell you is that managing resources and skills is an ongoing component of our business model. IBM continuously evaluates its mix of skills and resources, and makes changes as needed. The nature of our business is that we must constantly assess employee skills and resources and at any given time, give IBM the flexibility to match the current and future needs of our clients (skills that the client needs). Managing talent in this way promotes the continued competitiveness of our operations and matches our skills and capabilities with the evolving needs of our clients.”

So much for IBM’s lifetime employment concept.

[Image credit: Someecards]

Still, the PC industry is feeling the effect of the economic meltdown. “The U.S. home market saw definite softness,” said Gartner analyst Mika Kitagawa. “The global PC market finally felt the impact from global economic downturn.”

The fastest growing computer segment in the quarter: mini-notebooks. “The mini-notebook segment experienced strong growth in the global PC, led by robust growth in the Europe, Middle East and Africa (EMEA) region,” said Kitagawa. “In the North America market, the economic crunch created more interest in the sub-$500 segment. Because the mini-notebook is still a new segment, it is too early to determine if the emerging segment created new market opportunities or if it cannibalized lower priced systems.”

Seems the volatility in the world’s economy hasn’t undermined interest in new PCs so much as refocused it on a new category.

One last point worth noting here, in light of Tuesday MacBook event. Apple (AAPL) continues to exceed industry growth in laptop sales. As Apple COO Tim Cook noted yesterday, “Several quarters in a row, we’ve been growing two to three times the market growth.”

This rising social-networking tide overseas is, of course, lifting all boats, but none higher than Facebook. With 132 million unique visitors in June–up 153 percent from the same month a year earlier–Facebook is now the largest social network in the world. Its biggest rival, MySpace, had 117 million users in June, a 3 percent increase over last year. Why the gross disparity? Thanks to its new Translations application, Facebook now dominates several markets where it was once relatively unused. In fact, nearly 63 percent of Facebook’s users are outside North America. That’s the sort of thing that happens when you manage to translate your site into 89 languages.