The stated reason for the reductions: An effort to better align the company’s operations with its focused portfolio of future products. Seems Nokia (NOK), which typically spews out 50 or so new phones a year, many of them unremarkable, plans to concentrate on a smaller number of more “iconic” devices going forward.

In other words, Nokia is going to work a little harder to catch up with Apple (AAPL), which has really shown up the company these past few years. As Bengt Nordstrom, chief executive of telecom consultant Northstream, told Reuters earlier this year: “As much as iPhone and App Store is a success for Apple, it’s a humiliating defeat for the rest of the mobile industry. 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.”

“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.”

Consensus seems to be that the Droid is the device that will get Motorola back into the game. Indeed, Technology Business Research’s Ken Hyers says the Droid is likely a “serious challenger to the iPhone.”

Over at RBC Capital Markets, Mark Sue says good things as well. “The Droids are coming and Motorola will be an important part of Verizon’s push for smartphone differentiation,” he wrote in a note to clients Wednesday. “In addition to compelling products, Motorola seems to have gotten back into the good graces of the North American carrier federation, which should aggressively push the new devices.”

Of course, these endorsements don’t necessarily mean that Motorola is poised to return to its past glory. And they certainly don’t guarantee the Christmas turnaround the company is clearly hoping for. After all, the smart-phone market is far more competitive now than it was when Motorola last dominated it back in 2004.

Said Morningstar analyst Joseph Beaulieu: “[I’m not sure the Droid] will be good enough to cut through the noise that you’re getting from Apple iPhone, HTC’s Hero, Research In Motion’s BlackBerry and even Palm’s Pre and upcoming Pixi.”

“iDon’t have a real keyboard
iDon’t run simultaneous apps
iDon’t take night shots
iDon’t allow open development
iDon’t customize
iDon’t run widgets
iDon’t have interchangeable batteries
Everything iDon’t
DROID DOES”

Shown on Fox and CBS (CBS) during a pair of NFL football games Sunday afternoon, the ad clearly positions Droid as the mythical iPhone killer. And while that might seem foolhardy, perhaps even hubristic, those who’ve seen the Motorola (MOT)-designed device say it’s at the very least a worthy iPhone rival.

Says Boy Genius: “[This is] the Android device to beat, and easily the most impressive. From what we’ve been told, Google had a direct hand in the Motorola Droid. Something to the point of almost dictating every move Motorola made when designing and making the phone….the Droid, even in its non-final form, is the most impressive phone we’ve used since the iPhone. It’s positively amazing.”

A gushing endorsement of an unreleased device and as such, to be taken with a grain of salt. That said, it’s hard to believe Verizon (VZ) would go all out here without good reason. And make no mistake, the company is going all out, even to the point of licensing the “Droid” trademark from Lucasfilm.

This past weekend’s TV commercial and a Droid teaser site are clearly the beginning of a major marketing push intended to position Droid as the Apple (AAPL) iPhone’s better, or at least its equal. Little wonder then that Google (GOOG) CEO Eric Schmidt was so upbeat about Android’s future during the search engine company’s earnings call last week.

“Android adoption is literally about to explode,” Schmidt said. “You have all the necessary conditions, you have the vendors, you have the distribution and so forth. This is a very critical period with all of everything being delivered.”

PREVIOUSLY:

• Verizon to iPhone Users: “Want Five Times More 3G Coverage? There’s a Map for That.”
• Perhaps by “Devices Like the Pre,” Verizon CEO Meant the iPhone?
• Analyst: AT&T Screwed Without iPhone Exclusivity
• Q: Should Apple Bring the iPhone to Verizon? A: Yes.
• Apple, Verizon and the iPhone LiTE

Both debuted this morning, along with a Web-based storage and media-sharing service called My Phone. And while they’re certainly better than Microsoft’s offerings to date, the market seems unimpressed. Said Gartner (IT) analyst Carolina Milanesi: “There is nothing in this version that makes drastic changes that will get people to choose Windows who didn’t before.”

And, indeed, that appears to be the case. WinMo 6.5 is very clearly a stopgap on the path to 7.0, which is to be released next year. “Windows Mobile 6.5 isn’t just a letdown–it barely seems done,” Gizmodo’s John Herman complains, adding that its underpinnings reveal “an OS that hasn’t been fundamentally changed in years, and which bears a strong resemblance to Windows Mobile 6.1, and a startlingly not-weak resemblance to PocketPC.”

A startlingly not-weak resemblance to PocketPC. Not the comparison Microsoft (MSFT) was hoping for, I’m sure, especially given the OS’s decidedly flashier competition. But likely about all we could expect when even the company’s own executives are saying privately and publicly that they wish the OS was further along.

So 6.5 is really just a placeholder to keep Microsoft in the game–and just barely. As Windows Mobile Senior Product Manager Greg Sullivan told TechFlash, “It’s not the destination for us, by any stretch of the imagination, it’s a step along the way.”

“Throughout this report we have focused on the main ‘branded’ smartphones like iPhone, Android, Pre, BlackBerry, and Treo,” the market researcher explained. “And yet there are many more smartphones in use today, manufactured by the likes of LG, Samsung, Motorola, and Nokia, running either the Windows Mobile or Symbian operating system. What’s going on with these smartphones? For one thing, many users can’t identify their operating system. While Android users know they have a phone on the Android platform, most Windows Mobile or Symbian users have no idea what operating system is running their phone.”

That’s bad news for Microsoft (MSFT) and Nokia (NOK) because not only do these “other” smart phones tend to perform the most poorly in customer satisfaction, most of their owners would like to abandon them for Apple’s (AAPL) iPhone, Research in Motion’s (RIMM) BlackBerry or the Palm (PALM) Pre.

“The ‘generic’ smartphone is unloved, unappreciated, and unlikely to encourage any devotion among its users,” CFI concludes. “Its main role appears to be as a stepping stone to a ‘branded’ smartphone….Our data indicates there is little future for the ‘generic’ smartphone. Or, to be exact, the first generation of ‘generic’ smartphones. The iPhone has clearly raised the bar, but given the performance of the initial versions of the Pre and Android, the gap is narrowing. It’s clear from our data that the Android and Pre are worthy competitors to the iPhone, and more recent versions of the BlackBerry pose a bigger threat.”

PREVIOUSLY:

• Windows Mobile 6.5 “an Amazing Engineering Feat,” All Right…
• Perhaps if They Think of Their Win Mobile Devices as Broken iPhones…
• Ballmer on iPhone: Mr. Mojo Risin’

T-Mobile USA has priced the handset at $199 with a two-year contract, which seems a bit dear considering you can get a 16GB iPhone 3GS for the same price. Given $200 to spend and the choice between Motorola’s first-ever Android device and the first iteration of its Motoblur social networking service or Apple’s (AAPL) third-generation iPhone and second-generation mobile OS and App Store, what would you opt for?

How might your choice change if the Cliq were priced at $150?

[Image credit: LeakDroid]

“The commission has endorsed the local sale of the iPhone and the launch of its service within the limits of the law,” said Lee Tae-hee, a spokesman of the Korea Communications Commission. “If Apple includes location based-related details as a form of an agreement to its strategic partners such as KT, Apple’s iPhone can give location-related services here.”

Great news for Apple (AAPL). The South Korean market is a robust one, and analysts say that with the right carrier partner, Cupertino could be looking at sales over the first year ranging from 500,000 to two million. That said, they note that competing with the likes of Samsung and LG on their home turf won’t be easy. Between them, they control about 70 percent of the South Korean handset market.

“There seem to be a lot of people waiting for iPhones to go on sale here but it will not be easy for Apple to crack the Korean market as Samsung and LG already dominate the market with competitive phones,” said Jae Lee, analyst at Daiwa Securities in Seoul. “It will be difficult for Apple to steal market share significantly from the Korean makers in the short term but the iPhone could still be a threat to Samsung and LG in the long term.”

When the iPhone finally does arrive at market in South Korea, it will likely be with KT (formerly known as Korea Telecom) as a carrier partner. As Dan Butterfield over at iPhonAsia notes, KT CFO Yeon-hak Kim suggested as much this past summer. “Apple iPhone will be in our smartphone line-up,” he said in August. “iPhone will help to expand the smartphone market and will contribute to increasing the ARPU (average revenue per user).”

KT officials are telling the Korea Times that they’re looking at a November launch date. “KT has been in talks with Apple to introduce iPhones,” said a KT official. “Sometime in November, the latest iPhone model dubbed as ‘iPhone 3GS’ and its previous model will be commercialized. KT and Apple will decide on the coverage of location-based services.”

Clearly, there’s quite a bit of enthusiasm around the device and its Motoblur feature, which connects a variety of social networking services to the phone’s core functions.

Said Mark Sue, an analyst at RBC Capital: “Our initial take is favorable, and it seems that Motorola is carving out a niche in the crowded smartphone market by focusing on socially minded demographics as opposed to enterprise users or pro-sumers. We think it’s a step in the right direction.”

C.L. King analyst Lawrence Harris was similarly impressed. “Our initial impression of the CLIQ is that it is not an iPhone killer, but that it will be a contender,” he said in a research note issued today. “…Initial reviews suggest that the CLIQ’s build quality is excellent with a solid keyboard, two important selling points.”

And Tavis McCourt at Morgan Keegan said the CLIQ is a credible device–assuming Motorola (MOT) can sell enough of them. “MOTOBLUR clearly differentiates a Motorola Android-based smartphone from others on the market and provides Motorola a fighting chance at successfully turning around Mobile Devices with Android-based devices,” he noted today.

“The CLIQ appears to be a solid touch screen smartphone,” McCourt added, “but we will defer from offering a more confident opinion until we get a chance to test one and note that we expect the upcoming Motorola Android-based device for Verizon Wireless may be somewhat more impressive. We believe Motorola ultimately needs to sell about 2 million smartphones/quarter in order to become sustainably profitable in its Mobile Devices business.”

McCourt’s conclusion: “Given Motorola’s global distribution, this does not require a ‘home run’ product, but only a series of ‘solid’ products. The CLIQ appears to be a good first step in this turnaround.”

Why? Well, the CLIQ, or DEXT as it will be confusingly branded in the U.K., incorporates Motorola’s new “MotoBlur” service, which essentially corrals Facebook, MySpace, Twitter, Picasa, GMail and MS Exchange activity into a single feed and presents them on your phone.

In form, the CLIQ is a sideways slider. Like the Palm (PALM) Pre, the device boasts a full touchscreen and QWERTY keyboard. It’s got a 320 x 480-pixel, 3.1-inch HVGA screen and a five-megapixel camera. The CLIQ is video-capable (play, stream and capture) and supports the broad spectrum of media formats. It runs Android 1.5 (Cupcake), and Motorola (MOT) claims a battery life of six hours.

Jha says the phone is not intended to be a single iconic device–like, say, Apple’s (AAPL) iPhone. Rather, it is the first of a broad line of handsets, all running Android and Motoblur, that will be targeted at different customer segments around the world.

A wise strategy in the current market? Who knows? But at least it’s a step in the right direction. Motorola clearly needs to do something to right itself after the past few disastrous years. Hard to believe the company controlled 16.1 percent of the global handset market just two years ago. It’s market share today? A modest 6.5 percent. The CLIQ will be sold through T-Mobile in the United States.

The device’s spec sheet below; click to enlarge.

Sprint effectively lowered the price of the Palm Pre today to $99 for new customers only, offering a $100 service credit to those who port their numbers over from another carrier. To be eligible for the promotion, first noted by Pali Research, customers must purchase the Pre along with a two-year service agreement and abandon their current carriers. Agree to that and Sprint will apply a $100 credit to your monthly bill over a three-month period.

The offer, which begins today and runs through Oct. 10 (or Oct. 31, depending on which page of Sprint’s site you’re looking at), should goose sales, if only a bit–assuming Sprint (S) advertises the Palm (PALM) Pre offering.

“We believe sales of the Pre have been fairly stable over the past month but a price cut to $99 should stimulate sales into the end of Q3, as it would for any popular phone,” Pali Research analyst Walter Piecyk told Digital Daily. “Operators have been getting more aggressive on phone subsidies in Q3, which is likely a reflection of the maturity of the wireless industry in the United States, which is at 90 percent penetration.” (Click on image below to enlarge.)

UPDATE: Here’s the official explanation from Sprint, which seems to have resolved its internal confusion over the offer’s expiration date.

“Starting today, customers can get a $100 service credit when they move their number from another wireless carrier to a Palm Pre from Sprint and activate a new line of service with a two-year agreement. The $100 service credit will be applied to the customer’s Sprint bill within three invoices. This offer is available in to consumers and individual-liable business customers in all channels except WalMart. The offer expires Oct. 10, 2009.”

UPDATE: Sprint has cancelled the offer. You’ll find further details, here.

The week that took us from August to September was one for the books over at BoomTown, especially if you’re 12.

Kara spent Monday morning at Activision Blizzard (ATVI), where they are pushing forward with the entire Guitar Hero line, even as the game industry faces a nearly 50 percent decline in U.S. sales this year. Kara got to play hero to several of the forthcoming releases, including previewing the much anticipated DJ Hero console.

The youth movement continued with the fancy bar graph from Forrester Research’s annual “State of Consumers and Technology,” which drove home an important fact of life for media outlets. All the money being spent on new media expansion is a fight for the young; older consumers are sticking to more reliable fare.

BoomTown wasn’t just about the kids though, as 23andMe co-founder Linda Avey announced her exit from the gene-juicing business to focus on a foundation related to Alzheimer’s research. Avey co-founded 23andMe with Anne Wojcicki in 2006 with early money from Genentech (DNA), Google (GOOG) and New Enterprise Associates, as well as Wojcicki’s husband, Google co-founder Sergey Brin.

While BoomTown was keepin’ it real with the kids, Digital Daily was abuzz with a spate of iPhone news. John started Monday off on the topic of the Sept. 9 iPod event with confirmation that music, indeed, will be center stage. In the Apple world, that means iPods and iTunes, though Beatles fans are keeping their fingers crossed.

Readers got a compare-and-contrast of Apple’s (AAPL) foreign and domestic policy when John covered a potential two-carrier system in China and the long-awaited stateside activation of MMS features in the iPhone OS3. Meaning that while China may get the iPhone carrier flexibility so far absent in the U.S. market, American consumers are just about to get a new feature that’s been standard on every smartphone for a year or more.

MediaMemo covered a fluid week in the world of media giants and Top Chefs. Disney (DIS) went off to the mines and instead of seven dwarfs, found Marvel and the rights to its 5,000-character portfolio. Disney CEO Bob Iger didn’t think $4 billion was too much to pay to bring Iron Man and friends to the happiest media empire on earth and is sure the company will benefit from such “rich intellectual property.”

If the Disney vault got 5,000 new friends this week, eBay said goodbye to one long-time partner. Peter reported that the long, difficult breakup between eBay and Skype was finalized when eBay sold a 65 percent stake in the VOIP juggernaut to the internationally mixed bag of Silver Lake, Index ventures, Andreessen Horowitz and a Canadian pension fund.

Peter rounded out the week of motion with lots of changes in Google’s ranks. The search giant shuffled the chairs with David Fischer moving out of the self-serve ad business with no sign yet of a replacement. Google China saw the big chair turn upside-down when Kai-Fu Lee announced that he’d leave the company this month to begin his own venture. Lee will be replaced by the tag team of Boon-Lock Yeo and John Liu, who will oversee engineering and business, respectively.

Not all Google’s shifts were outbound though. “Charlie’s Café” at the main campus got its Top Chef back after Preeti Mistry failed to make the cut on the Las Vegas iteration of the popular TV show. Regular fans of the show weren’t surprised by her dismissal, but at least Google can put one in the plus column this week.

Over at The Mossberg Solution, Katie took aim at a possible answer to a question plaguing all image-conscious technophiles: Yea or nay to the omnipresent Bluetooth earpiece. Plantronics (PLT) and Aliph, maker of the Jawbone, both say yea and are upping the ante on the recently reviled symbol of cellphone userdom. Katie reviewed the fashion-forward Discovery 975 and Jawbone Prime, each designed to separate its users from $130. In exchange, they’ll get redesigned outsides and some new features that might even put one back in Brad Pitt’s ear.