Funny how fortunes swing. Just a few weeks ago, BP was racing quickly to the bottom as Apple was contemplating world domination. This week, their fortunes have reversed -- if only a bit -- as Apple confronts antenna engineering problems and BP's shares are on the rebound on the promise of an oil cap and/or takeover.

Apple shares were down 3.73 (1.45%) to $249 and BP shares rose .84 (2.3%) to $37.02 in midday trading. Apple will be holding a press conference on Friday, as its antenna problems on the iPhone 4 appear to be expanding.

Read on, for the full news:

• An Apple engineer alerted CEO Steve Jobs to the presence of an antenna problem, reports Bloomberg.
• U.S. Sen. Schumer has written a letter to Steve Jobs about the iPhone 4 problems (AppleInsider). Dear Steve, my phone's not working. Can you fix it for a tax break?
• The antenna problems don't seem to be stopping Apple's rollout of new products -- an 11.6-inch MacBook and new iPod Touch are on the way (DigiTimes).
• Here's some fun: A writer says the Droid X self-destructs if you try to modify it (MobileCrunch).
• If the Droid X is a big success, Verizon may not need the iPhone, says the New York Times. Somehow we doubt that.
• The Pentagon is running out of funds (Reuters). Soon to be downgraded to a Triangle.
• Manufacturing data bad = stocks down (Bloomberg). One question I've always had: If the stock market is "forward looking" and "discounting," why can it react so violently to news?
• Billionaire Carlos Slim is digging for gold in Mexico (Bloomberg). Funny how even Billionaires want to find more money, isn't it? I mean, I'd hit the beach after the first $2B.
• BP says it's repaired the cap on the well and a test is proceeding (New York Times). We can only hope this doesn't end in another disappointment.
• I've seen lots of folks distributing the "Methane Bubble Doomsday" story on the social networks. Other journalists appear to be debunking it. Don't believe everything you read on the Internet, folks!
• Thierry Henry has retired from International football (WSJ). All washed up, at 32 years old, apparently. Hello MLS!
• I just don't know what to think of this headline. What do you think? Woman With World's Largest Breasts Fights For Life.
• 2.5 million muslims are threatening to quit Facebook (tnerd).

 

I have been digging into the excellent research put out by consultancy Chetan Sharma which digs deep into the telecom industry. Today I was shocked to read that more than 7 billion mobile apps downloads were made in 2009.

That is a shocking number. Now, some of this is misleading, I realize. I have several contacts in the mobile apps business which tell me that it is still hard to earn a living from mobile apps, unless you hit a real home-run and are in the top 5% of apps, it's hard to make money. The reason for this is that many apps are free, or very low cost, so if you include a revenue share from a partner such as Apple you really need to sell millions and millions of apps to make any money.

This is a big year for new Google products, as the company has introduced its own smartphone, the Nexus One, and is in the process of trying to buy AdMob, the mobile advertising player, pending Federal Trade Commission (FTC) review. I thought it would be a good idea to run through the Google earnings call from last week and see which key trends the company is focusing on. Here they are:

• Mobile advertising. Google sees huge growth in mobile advertising. This is why they would like to close the AdMob deal. On the earnings call, the company said that advertising customers are seeing increased mobile search & advertising activity and and that the company is focused on a "mobile first" strategy of adding mobile-friendly features. It was mum on what's going on with AdMob and the FTC other than saying they are "working with the FTC."
• Location: A main component of mobile is location. During the quarter Google launched Near Me Now which allows you to search via location to find services in the vicinity.
• Android & Chrome growth: Google is pushing hard with its new operating systems. The company said that Android is now powering 34 devices, up 70% quarter-over-quarter. 60,000 Android devices are sold and activated every day, according to Google. There are now 38,000 apps, up 70% quarter-over-quarter.
• Nexus One Profitable: The company stated on the conference call that Nexus One is now a profitable business.
• Traffic acquistion costs: On the negative side, Google's costs for traffic acquisition were up. One financial analyst noticed that it's interesting that Google is becoming more of a marketing company. Traffic acquisition costs were $1.7 billion or 26% of total advertising revenue. in fact, overall, Google's marketing spend overall increased nearly 50% year-over-year.
• Paid Click & Ad trends: Susan Wojcicki, VP of products, Google said: "We saw advertisers come back and start spending again driven by a lot of our largest advertisers really increasing their spend ..."
• Social Networking Competition: Perhaps the most interesting part of the conference call came when a financial analyst, Imran Khan of JP Morgan, asked about growth in social networks, including Facebook : "They are growing significantly faster as a [profit] source to a lot of your big customers like Ebay. How do you think Facebook and other social networking sites are a big long-term threat to Google’s business model?" Google's answer: "We don't comment on the issue of Facebook."

Welcome to Tuesday's news brew, where we wrap up the world's business news. It's a busy day, from Baklava Bailouts to Twitter Tweets. The markets are selling off, from stocks to commodities, though the general stock market selloff is quite subdued. Let's start with Twitter, which we covered in an earlier post, but has plenty of opinions around the horn:

• Want to catch up on the latest Twitter "monetization" announcement? Start by reading Jeremiah Owyang's excellent analysis (Web Strategy).
• Twitter has launched Ads -- where better to read about that then Ad Age?
• John Battelle has some thoughts (Searchblog). They're not fully formed though -- he says they are "developing."
• Twitter to roll out advertising (WSJ).
• Mary Meeker is bullish. On Mobile. Big surprise there, eh?
• An Android "iPad killer" is on the way. Will that boost Adobe?
• Greece is trying to lay off the Baklava Bailout by selling more debt (Bloomberg). Isn't funny how the answer to bad debt is always more debt?
• Citigroup took at $15B loss on "liquidity puts," according to Congressional testimony. Sounds like they should have been called "lack of liquidity puts."
• The U.S. trade gap widened more than expected (BusinessWeek).
• Chinese growth may accelerate (BusinessWeek). That's right. They can grow even faster.
• Oil sells off as supplies balloon (Reuters)
• Here's a cool map of U.S. trade sanctions around the globe (VisualEconomics.com)

Yesterday, Palm (PALM) shares traded up on lots of option-buying activity and chatter that it could be acquired. Today, the shares are backing off. Financial reporters, traders, and stock-message board hounds are scrambling around to find the "Palm acquisition story," but what if there is no story? I cannot see Palm being sold except in a fire sale. Think about it, if you are trying the sell something, the ideal condition is to sell it when it's hot, the market is moving forward, and everybody wants a piece of you. Think of selling the nicest house on the street during the real estate bull market in 2006. Easy sale, right? Multiple bidders. But what about selling a sub-par property in a down market? Selling Palm now is akin to selling a fixer-upper in a real estate glut. Palm OS is losing market share. It's got huge competitors -- RIM, Apple, Microsoft, and now the Google Android devices. Barron's reports today that Barclays Capital is throwing cold water on the Palm acquisition story, and this doesn't surprise me. It sites Lenovo, the Chinese PC manufacturer, as one of the potential suitors, according to the "rumors." Meanwhile, Palm CEO Jon Rubinstein is quoted in Fortune as saying the company "has great assets," which to me is a euphemism for "we're trying to sell." Rubinstein even admits to blowing it. Here's the problem I have with that scenario, as well as any other Palm acquisition scenario. If you are a manufacturer looking for a smartphone platform, including the OS, why would you look at Palm? Take a look at what HTC did with Google Android -- they snapped in an open OS, built a phone, and started selling it. If you are going to start a smartphone manufacturing operation right now, the OS is not the problem. There are plenty to choose from.  Why pay a premium to buy an OS when you can snap in something open that is gaining momentum, such as Android, rather than with Palm's OS. We detail the dynamics of the new smartphone OS market in our new report, the "Android Ecosystem," which is on sale now.

Not Lady Gaga, just Gaga. Admob is out with its latest metrics report and it says that smartphone traffic is growing like mad, on pace to nearly triple in a year. Below is Admob's chart showing how smartphones are taking off. Also, Android continues to grow fast, according to AdMob (although Admob's OS data will soon become suspect as it's in the process of being acquired by Google). And Symbian OS share continues to collapse, as its traffic share fell from 43% to 18%. Below is a chart of the OS share according to Admob's measure of apps traffic. Samsung leads the feature phone category, followed by Nokia and SonyEricsson

LAS VEGAS -- All of the exciting new devices and discussion about high-bandwidth 4G (Fourth Generation) data services (up to 100Mbps) here at CTIA have the comm equipment guys salivating: It's likely to mean a boom in new business for building backhaul networks, the plumbing that carriers need to haul all of the data to and from the mobile towers. There are deals to be had, as Alcatel-Lucent announced a new deal with Verizon for backhaul networks paving the way for 4G. In addition, equipment vendors were announcing new gear that can accommodate service providers that need to overhaul their networks for mobile upgrades. For example, Huntsville, Alabama-based Adtran yesterday announced a flexible new Ethernet mobile backhaul product, the NetVanta(R) 8044M,  that can easily swap between copper and fiber.

LAS VEGAS -- Given that the rest of the Western world is wallowing in a lingering recession/depression, it's nice to hunker down in Vegas at the CTIA where it's sunny, people are still smiling, and the mobile world looks like it's going strong. I would describe the news flow as light, but there is plenty of excitement in the halls and aisles of the trade-show floor where serious innovation and is happening around the growth concept known as the mobile consumer: New location-based mobile apps, 4G, mobile commerce, unified communications, and even such staid telecom technologies such as fiber and mobile backhaul are all being lifted by the increasing mobile data traffic.  People will chuck their cars and forfeit their homes before they'll part with their smartphones, apparently. Well, if you don't have a home, you may as well have a device so that you can still network and send Twitter messages.

Trying to track the news on Android sales can be challenging. A recent spate of reports on disappointing Nexus One sales (Google's Android phone) had some folks scratching their heads. But this morning, Barron's reports that BroadpointAmTech sees Android sales climbing. BroadpointAmTech analyst Mark McKechnie lifted his 2010 forecast on Motorola's Android phones from 1.7M to 1.9M. But McKechnie noted that this is still a problem for vendors of older phones, such as Motorola, because sales of Motorola's older, "legacy" phones are declining faster than Android phones are ramping. Just a few days ago, mobile analytics company Flurry said that Google's Nexus One phone  sold only 135,000 units in the first 74 days, compared with Motorola Droid's 1.05 million and Apple iPhone 3GS' 1 million units. That was deemed disappointing by many Android-watchers. Randy Giusto, an independent analyst who is also a contributing analyst to the Rayno Report, says its too early to make big judgments about the success of Android or the Nexus One. "Goldman Sachs went crazy and said they would do 3M units, so that got everybody's expectations a little high," says Giusto. "[It's an experiment to push the envelope, the question is whether other phone suppliers will adopt Android, which would be great." However bullish Goldman Sachs was in the beginning, they've backtracked now. The firm recently slashed the sales forecast to 1M.

It's pretty clear that the Apple and Google fistfight is coming. This should be fun to watch -- kind of like watching two preppy investment bankers go at each other in the corporate parking lot. A little background: I think the defining moment came last summer when Google CEO Eric Schmidt resigned from Apple's board. Today, developer Tim Bray showed us why Google is gearing up for a fight with Apple with Android, and why it could be worthy.Both Google and Apple are headed for a collision course because they both want a large piece of mobile apps and mobile services. I've been doing some research, and Android is real, and it's coming soon (we'll have a comprehensive report next week!). Here are my top ten reasons why I look forward to this: 10) Fawning press reports on the iPhone and Google get boring. 9) It would be interesting to watch the iPad fail, just to mix things up for a change. Eight) Google has a point: Apple's system is far too closed. 7) Apple has a point: They make better user interfaces than anyone. Period. 6) It would make the world seem less obvious. 5) Googlers need to prove they can do something other than Adwords. 4) It doesn't involve Redmond. 3) Maybe there's a chance we get to see Eric Schmidt go Steve Ballmer on us? 2) We'll get cheaper phones. 1) It's the battle of the arrogant preppies! Somebody will lose!