Visa Inc. (V) unveiled plans to encourage U.S. retailers to shift to checkout systems that let consumers pay using their mobile phones, as the biggest payment network aims to jump ahead of rivals and curb credit-card fraud.

The company said it will let merchants that switch to credit-card readers supporting so-called EMV technology forego costly annual security certifications. Starting in 2015, it will also stop requiring banks to reimburse most merchants for some types of credit-card fraud, which can be prevented by using EMV systems, Visa said in a statement yesterday.

Visa wants to boost sales of new terminals and accelerate the move to transactions made via cell phones with near field communication chips, an emerging standard in mobile technology. When tapped on the new readers, enabled mobile phones can function like credit and debit cards. Research firm Crone Consulting LLC estimates that only about 200,000 of 6 million store terminals now accept such contactless payments. erminals now accept such contactless payments.

“It will speed up adoption of mobile payments by a year,” said Rick Oglesby, a senior analyst at Aite Group LLC in Mesa, Arizona. The total value of mobile payments for digital and physical goods, money transfers and near field communication transactions will reach $670 billion globally by 2015, up from $240 billion this year, according to U.K.-based consulting firm Juniper Research Ltd.

Visa’s security certification compliance costs businesses more than $2 billion a year, according to industry association Smart Card Alliance. The cost savings are an incentive for merchants to invest in point-of-sale upgrades, said Randy Vanderhoof, executive director of the group.
Support From Banks

Visa, based in San Francisco, also said it will require payment processors such as First Data Corp. to support EMV transactions by April 2013. Other credit-card networks are likely to offer similar inducements for merchants to switch to EMV terminals soon, Vanderhoof said.

“There’s been a stalemate between issuers and the merchants about EMV that’s finally going to be broken,” he said.

Banks support EMV’s adoption as a way to combat credit-card fraud, in which thieves copy magnetic-stripe cards. While EMV has taken off in Europe and Canada, U.S. merchants have resisted spending money to upgrade. Visa announced similar incentives for businesses abroad in February, but waited to offer them in the U.S. until implications of recent regulatory changes became clear, said Eduardo Perez, Visa’s head of global payment system risk.

“It’s going to provide a significant boost for merchants to adopt contactless terminals,” Perez said. McDonald’s Corp. (MCD) and Nordstrom Inc. (JWN) have endorsed Visa’s plans, the company said.
Competing Networks

Visa’s push to get merchants to adopt its system sooner may make it more difficult for a competing payment network to arise, said Richard Crone, who heads Crone Consulting.

Google Inc. (GOOG) and ISIS, a joint effort of AT&T Inc. (T), Verizon Wireless and T-Mobile USA, have built their own mobile-payment applications. While ISIS originally planned to introduce its own payment network to compete with systems such as Visa’s, ISIS later scrapped that plan and is now working with existing credit-card networks. Google is working on its mobile-payment service with MasterCard Inc.

“It locks in merchants to Visa’s applications and processing,” Crone said.

Facebook wants to hook into mobile phone users who don't necessarily have a profile set up on the dominant social network.

The company has launched a service in the US that's a separate app linking messages in Facebook with texts, chats and emails on a mobile phone.

In effect, the Web2.0 outfit has tapped into the SMS market by fanning out its existing messaging service to a mobile phone app that's available on Google's Android and Apple's iPhone, but, somewhat surprisingly, not on the Windows Phone.

Facebook, of course, has a much closer relationship with Microsoft than with Cupertino or Mountain View. But then Mark Zuckerberg's company is simply following the big money-making and data-raking players in the mobile market.

"You can use Messenger to reach all of your friends - whether they're on Facebook or in your phone contacts. All you have to do is type the person's name," noted Facebook in a blog post yesterday.In other words the app, which requires Facebook login credentials to work, can send phone messages to individuals who aren't signed up to the world's largest social network.

At the same time messages are synched across devices for existing Facebook users. The service can be used to communicate with groups, much like Blackberry's private BBM network. It also allows users to include location details and attach files like photos.

If such a system comes to the UK, it's unclear whether the data, as is typical with SMS services, would pass through Facebook servers based in Blighty, thereby keeping the communications geographically land-locked.

Facebook has a tendency to farm out the data it gathers to the US, which could prove an issue for regulators in Europe when the Messenger app lands on this side of the pond in the not-too-distant future.

The Register asked Facebook to tell us its plans for how it will store such data when the app arrives in Europe, but a spokeswoman at the firm couldn't immediately provide us with an answer. We'll update the story if a full statement is forthcoming.

"When you're on the go, coordinating a bunch of people can be tricky, especially if plans change at the last minute. With Messenger, you can quickly start a group conversation and message everyone at once," noted Facebook yesterday.

"If you choose to add your location, the people you're messaging with can easily find each other on the map. You can also attach photos, so everyone else can see and comment on what you're looking at."

Given the recent headline-grabbing news about Blackberry's messenger service and its alleged role in the UK disorder, it's not unreasonable to wonder how Facebook's service will differ from, or indeed replicate, BBM's server behaviour. Blackberry's archives could potentially be scrutinised by police authorities to pinpoint troublemakers, for example.

Meanwhile, Facebook is not immune to skirmishes with data protection watchdogs in the EU. Just last week, Germany waded in against the firm's recent unannounced decision to switch its facial recognition technology on by default for its European userbase.

It's unclear whether Messenger will face similar criticism, but some might be unhappy with the app's ability to tap into private contacts stored on a mobile phone that have no accompanying profile set up on Facebook, especially if related data streams are shipped out to the US.

After outer space was proclaimed as hackers' newest target, thunderous applause followed at the opening of Chaos Communication Camp 2011 in Finowfurt, Germany. In the next ten years, hackers want to have their own communication satellites in orbit, reported Heise Online. Nick Farr (@hackersonaplane) of Hackers on a Plane said, "We can conquer the entire galaxy, if we stop for five minutes, to behave like idiots."

The plan to conquer space was followed by former WikiLeaks Daniel Domscheit-Berg announcing four days of public testing of Open.Leak.org. Domscheit-Berg told Forbes, "We need to be sure for the people who use such a system that it can't be compromised. Whistleblowers are the ones who take the risks. And they're the ones that get screwed if something goes wrong. So it's inherently important for us to make these people as comfortable as possible." The live testing will be here.

In case you didn't guess, this is no small hackers' shindig. Chaos Communication Camp is an international hackers' camp that takes place every four years. Among the attendees are EFF Senior Staff Technologist Seth Schoen and EFF co-founder John Gilmore. How creepy would it be if it were easy to snoop and intercept all those texts, emails and photos you send over your mobile phone? Do you think that's impossible, that the majority of the world's mobile Internet traffic is protected by encryption? Think again.

The greatly anticipated presentation by crypto specialist Karsten Nohl, chief scientist of Berlin-based Security Research Labs, will show how to crack the encryption that is meant to protect information sent over General Packet Radio Service (GPRS). Mobile phones that do not support 3G use GPRS and iPhones use GPRS when the connection reads "E" as opposed to "3G."

The New York Times reported that Nohl and a colleague, Luca Melette, intercepted and decrypted all wireless data traffic in a 3.1-mile radius by "using an inexpensive, modified, 7-year-old Motorola cellphone and several free software applications."

Golem.de added that Nohl modified the Motorola C-123 and enhanced it with the open-source software project Osmocom, then recorded and decrypted transmissions in the German mobile networks of T-Mobile, O2 Germany, Vodafone and E-Plus. Nohl called the level of encryption "weak" and he will demonstrate ways to decrypt GPRS traffic. While he does not intend to publish the encryption keys, Nohl will release software that he used for the attack. Almost all of the world's networks that use GPRS, do not bother to encrypt at all.

Nohl also told the NYT, "One reason operators keep giving me for switching off encryption is, operators want to be able to monitor traffic, to detect and suppress Skype, or to filter viruses, in a decentralized fashion. With encryption switched on, the operator cannot 'look into' the traffic anymore while in transit to the central GPRS system."

According to MIT's Technology Review, it costs 10 euros (about $14) for the radio equipment that Nohl and Melette designed to attack GPRS. Nohl said companies that ignore the risks "will be negligent." He hopes this applies pressure to improve security and require "better authentication among devices and base stations communicating over GPRS." He suggested "mobile applications take steps now to use encryption such as SSL, which already protects much of the sensitive information sent over the Internet."

Nohl has spent the last two years researching and releasing tools which should twist carriers' arms to upgrade the security in their networks. In 2009, he worked with others to release a 2-terabyte GSM rainbow table to "inform about the fact that GSM calls are already being intercepted and decrypted using commercial tools." Then Nohl and Chris Padget spent $1,500 on hardware and cracked the code that was supposedly meant to prevent such snooping of radio signals as they hopped between mobile phones and base stations. The researchers said, "Cloning, spoofing, man-in-the-middle, decrypting, sniffing, crashing, DoS'ing, or just plain having fun. If you can work a BitTorrent client and a standard GNU build process then you can do it all, too. Prepare to change the way you look at your cell phone, forever."

Then in 2010, Nohl "bundled many of the various tools he helped develop into a comprehensive piece of software that gave amateurs the means to carry out many of the attacks," reported The Register. "That same year, other cryptographers cracked the encryption scheme protecting 3G phone calls before the so-called Kasumi cipher had even gone into commercial use."

Before you next send that naughty photo, text or IM, consider the possibility that the GPRS encryption protecting your "sensitive" mobile device data can be cracked for cheap . . . and the German researchers behind it are showing other hackers how to snoop and create chaos too.

The EVO 3D is a successor of the largely popular and perhaps the first 4G smartphone to be launched in the U.S., the EVO 4G. This is the latest release from the Google, HTC collaboration following the EVO 4G and the Nexus One, and offers first ever glasses free 3D technology. On the HTC Evo 3D, you cannot only view 3D content, but you can also create your own 3D photos and videos.

Hardware

The EVO 3D has many style elements merged into it and primarily takes inspiration from its parent, EVO 4G and the Incredible 2. However the subtle 2D to 3D mode switch and the missing silver gating from the earpiece help identify this phone from its predecessors. The gHD screen is almost 4.3 inches in size and is protected by a sheet of Gorilla glass to protect the capacitive touchscreen underneath.

The materials used in exude a build quality that most of the phones in this price bracket usually boast about.Performance

The gHD display is probably the best in the market probably only rivaled by the Motorola Droid or even the Super AMOLED Plus screen of the Samsung phones, giving the HTC Evo 3D the ideal platform for watching movies, videos, playing games, and surfing the Web.

The battery life on the device is not one of its best features lasting a little under 15 hours after a reasonable number of phone calls, a little web browsing and a few 3D photographs. The battery drains by almost 60% for about 80 photos and a few videos shot in 3D. The 3D camera is therefore especially taxing on the device.

Multimedia

A major chunk of the back of the phone is occupied by the dual LED flash and the twin cameras both boasting 5 megapixel autofocus lenses. These lenses separated by around 3.25 cm enable the user to capture stereoscopic content which can be viewed glass free which is probably the first time it is available on a commercial mobile device.

You can also choose to take the images in conventional 2D format at full resolution of 2560 x 1920 pixels which is a little more than the resolution in 3D which captures at a wide screen format of 1920×1080 pixels from each of the two cameras on the HTC Evo 3D.

Video capture is smooth at 720p and 30fps and is encoded into the standard H264 format. Audio capture is in stereo both in the 3D and 2D modes. In 3D mode however the video is recorded by the two cameras and merged into one at 1280×720 in a method similar to anamorphic technique. The video shooting also comes with the autofocus and the touch to focus options for further clarity.

Being one of the first 3D phones to be commercially available on the market, this phone has a lot of promise. The display of the phone and the processing capabilities of the phone are a few other selling points of this phone.

* By: Maria Tomasch

As more consumers use their smartphones for banking and shopping, threats to your phone become more prevalent.

That is according to the Mobile Threat Report released Wednesday by mobile security company, Lookout.

In January, there were 80 Android apps infected with malicious software, according to their data. By June, there were more than 400. The report claimed as many as 1 million Android owners were affected.

The Wall Street Journal’s Smart Money gives a list of problems the group warns about. Some are problems that commonly threaten your home computer like malware, spyware and privacy threats.

Check out some of the top threats:

Phishing scams: These are attacks designed to trick you into providing log-in information or other personal information. Attackers send links in emails and text messages that redirect users to web pages designed to mimic legitimate businesses, often banks. Avoid clicking on links in emails, and look for telltale signs like misspellings.

Drive-by downloads: Downloads that begin automatically when a user visits a web page. You’re usually lured there by spam or advertising, so be careful where you click.

Wi-Fi sniffing: Attackers intercept data from apps and web pages that is sent unencrypted. Be cautious about what you do on your phone, and check that apps or sites for mobile banking are both encrypted and secure.

Check out all 10 threats to your cell phone’s security at Smart Money.

(Credit: T-Mobile)

In preparation for honoring its commitments to make Microsoft's Windows Phone 7 operating system Nokia's primary OS going forward, the Finnish cell phone maker will stop selling Symbian smartphones and feature phones in the U.S. and Canada, according to All Things D.

In addition, Nokia will apparently wave goodbye to its traditional model of selling many of its higher-end phones unlocked, says All Things D's Ina Fried, and will work more closely with wireless carriers to price and distribute Nokia's Windows Phones. This is a wise move that will give Nokia its best chance for competing against other Windows Phone vendors, and subsidized Android phones as well.

Related stories
• Imagining a Nokia Windows Phone
• Report: Nokia N9 not coming to the U.S.
• Nokia circles back to Symbian with its 500 smartphone

"When we launch Windows Phones we will essentially be out of the Symbian business, the S40 business, etc.," Nokia's U.S. President, Chris Weber, told Fried in a story published today.

Interestingly, Nokia's plans for the U.S. contradicts Nokia CEO Stephen Elop's promise in May that Nokia would stick by Symbian until 2016.

"We're in a period where the investment in Symbian absolutely continues," Elop had said.

Even if Elop's pledge was only meant to apply to existing Symbian users in specific global markets, like China, it isn't surprising to see Nokia gather forces in the U.S., the home of Nokia's adoptive Windows Phone OS, and Canada, the stomping grounds of Nokia's Elop.

Nokia still faces steep hurdles in forging tighter bonds with carriers, relationships that are crucial to getting its new, untested phones into carriers' lineups at competitive rates. Making matters trickier yet will be convincing carriers of Windows Phone itself, which is still a newbie smartphone platform and has struggled with sales.

Adding a third layer of complexity is Nokia's best bet for exposure, T-Mobile. Although T-Mobile currently carries the Nokia Astound, there's no guarantee that a fruitful relationship will survive a successful T-Mobile merger with AT&T.

With its work cut out for it, it's none too early for Nokia to refocus its North American presence in preparation for launching Windows Phones. For their sake, we hope it's not too late to push off Nokia's new ventures in this pocket of the world.

The mobile phone market is deluged with data. Four times a year there is a spike in market share estimates just after quarterly financial results are released, while the time in between is filled with analyst forecasts and surveys from market research firms trying to get to the bottom of changing market trends.July has been a particularly big month, with a number of studies, surveys and predictions. Individually they're of varying interest and credibility, but there is some value for app developers in pulling the data together and poring over the likely implications. So that's what we've done.

Global mobile shipments

IDC's estimates for global shipments of mobile phones is a good place to start. The company says that 365.4m units were shipped in the second quarter of 2011, a figure that includes feature phones and smartphones. That's up 11.3% year-on-year from the 328.4m phones that IDC thinks shipped in Q2 2010, although below the 13.3% growth that the analyst had expected.

IDC says that sales of feature phones actually fell 4% year-on-year in the latest quarter: the first time it has done so since the third quarter of 2009. The overall growth is thus being driven by surging sales of smartphones.

IDC describes this as a "transition point", and is backed up by US market research firm Nielsen, which claims that in its home market, more smartphones were sold between March and May 2011 than feature phones. However, the transition point is not just happening in big Western markets: IDC notes strong sales of low-cost Android smartphones in Latin America, and also in south east Asia.

The company's tale of the top five mobile phone vendors shows Nokia still in first place, having shipped 88.5m units, but with its market share having fallen from 33.8% in Q2 2010 to 24.2% in Q2 2011. That raises the spectre of second-placed Samsung (70.2m units / 19.2% market share) overtaking it in the near future.

Smartphone shipments

That's for all phones, but many app developers are focusing purely on smartphones. There is no shortage of estimates for that sector of the market in the second quarter of this year, and some hard data too.

Starting with the latter, Apple sold 20.4m iPhones in Q2, overhauling Nokia, which sold 16.7m "smart devices" – the term it uses for smartphones. HTC has just announced that it sold 12.1m smartphones in Q2, while other companies revealing their smartphone figures include LG (5.4m), Sony Ericsson (5.3m), Motorola (4.1m).

Samsung and Research In Motion are a bit more awkward. In the former case, it's because Samsung declined to give exact figures for its smartphone sales in Q2, citing competitive fears. In RIM's case, the difficulty is that its financial year doesn't follow the calendar year, so in its fiscal quarter ending on 28 May, it shipped 13.2m BlackBerry smartphones. Analyst ABI Research has provided predictions for both, pegging Samsung's Q2 smartphone shipments at around 19m, and sticking with RIM's figure of 13.2m.

Divvying smartphone shipments up by manufacturer is one thing, but what app developers are more interested in is the operating system split. ABI Research thinks Android took a 46.4% share of smartphone shipments in Q2 with 47m units, ahead of iOS (20.4m), Symbian (16.7m) and BlackBerry (13.2m).

Source: ABI Research

Smartphone penetration

The data above applies to new shipments of smartphones, but there are other companies looking into how many devices each OS has out in the wild. Nielsen has just published a handy chart tracking OS share among smartphone owners with a contract in the US, for example.

It puts Android's share at 39%, followed by iOS (28%), BlackBerry (20%) and then Windows Mobile and Windows Phone combined with 9%. Android and Windows Phone penetration is also broken down by manufacturer, which is useful.

Source: Nielsen

comScore caused controversy in July 2011 with its own estimates for smartphone OS penetration in the UK, which suggested iOS has a 27.1% market share, followed by Android (26.7%) and Symbian (22.5%), with BlackBerry some way behind.

Research In Motion complained publicly about these stats, however, saying that while comScore estimates it has 3.6m BlackBerry users in the UK, the actual figure is just under 7m.

Source: comScore

Smartphone and apps predictions

What about the future, then? Or at least the near future. Analyst firm Gartner has made its predictions for sales of smartphones to end users – note, this is different from shipments, since it covers phones actually being bought by people, as opposed to being stocked by retailers.

It sees Android taking a firm grip of the market this year running right through to 2015, when Gartner thinks Google will be powering just under half (48.8%) of all smartphones sold. The company thinks 467.7m smartphones will be sold in 2011, rising to 1.1bn by 2015.

But the key point is that it thinks this will continue to be a four-horse (at least) market, with Windows Phone (19.5% in 2015), iOS (17.2%) and BlackBerry (11.1%) all having healthy sales bases for the next four years. Yes, it's easy to scoff at any company making bold predictions for the next four years of a market that's changed hugely in the last four years – Apple's iPhone is four years old after all.

The obvious follow-on from these predictions are estimates for how app developers will benefit. Canalys has some forecasts on this front, claiming that direct revenues from sales of apps, in-app purchases and app subscriptions will top $7.3bn (£4.4bn) in 2011, rising to $36.7bn (£22.3bn) by 2015. These estimates do not include advertising revenues.

Strategy Analytics thinks that by the end of 2012, paid downloads will reach nearly $2bn every quarter, with Android Market overtaking Apple's App Store for the volume of downloads (but not the revenues) by the end of that year too.

Meanwhile, IDC has its own research into apps, albeit with figures for the number of downloads rather than revenues. It thinks that mobile app downloads will rise from 10.7bn in 2010 to 182.7bn in 2015, with social and location features contributing to a shift away from paid download revenues towards in-app purchases and advertising.

Tablet sales / predictions

The last area experiencing some frenetic number-crunching in July was the tablet market, both in terms of what's selling now, and what will be selling in the rest of 2011 and beyond.

Strategy Analytics recently published its estimates for Q2 2011, claiming that Apple's iPad took a 61% share of tablet shipments with 9.3m units, with Android nabbing a 30.1% share with 4.6m. The company thinks 0.7m Windows-powered tablets edged RIM's BlackBerry PlayBook (0.5m) into fourth place in the tablet OS market.

Separately, investment bank UBS predicts that iPad will take a 63% share of the tablet market for 2011 as a whole with 37.9m units, although it divides the market by manufacturer rather than operating system. That sees Samsung in second place with 5m sales, followed by Asus (2.2m), RIM (1.9m) and Motorola (1.8m).

Informa Telecoms & Media also has its crystal ball working overtime on tablets, suggesting that iPad currently has 75% of the market, but that this will fall to 39% in 2015, just ahead of Android's 38% – Informa thinks 90m iPads and 87m Android tablets will be sold that year, with Android finally overtaking iOS in 2016.

Lies, damned lies and statistics? Quite possibly: this can only be a snapshot of what people think is happening in the market. Expect many of these predictions to be revised during the second half of 2011, as the smartphone and tablet markets continue their dizzying evolution.

Researchers from the University of Maryland School of Medicine have found that a mobile phone app can help patients manage their Type 2 diabetes. Their study, which is one of the first to look at mobile health technology, involved software that provides real-time feedback on blood sugar levels – if levels are too high or too low, patients are prompted to take the necessary steps to correct it. The 163 patients who participated in the interactive program over a 12-month period were able to lower their hemoglobin A1 (a key measure of blood sugar control) by an average of 1.9 percent.

Charlene C. Quinn, PhD, RN, led the study and explains in a release why the results are encouraging:

The 1.9 percent decrease in A1c that we saw in this research is significant. Previous randomized clinical trials have suggested that just a 1 percent decrease in A1c will prevent complications of diabetes, including heart disease, stroke, blindness and kidney failure.

Quinn says the study also shows the potential of mobile phone software to help patients manage other chronic diseases: “We tell patients that they can meet these goals if they eat a healthy diet, exercise daily and take their medication as directed, but we don’t really give them the tools to do that.” Her paper will appear in the September issue of Diabetes Care.

Previously: Turning to an app to help your health and Health-care consumer apps: helping or hurting?
Photo by lululemon

The worldwide mobile phone market grew 11.3% year over year in the second quarter of 2011, despite a weaker feature phone market, which declined for the first time since Q3 2009. Nokia Corp. remained the top maker of mobile phone despite of major losses of the market of smartphones.

According to the International Data Corp. (IDC), vendors shipped 365.4 million units in Q2 2011 compared to 328.4 million units in the second quarter of 2010. The 11.3% growth was lower than IDC's forecast of 13.3% for the quarter and was also below the 16.8% growth in Q1 2011.

The feature phone market shrank 4% in Q2 2011 when compared to Q2 2010. The decline in shipments was most prominent in economically mature regions, such as the United States, Japan, and Western Europe, as users rapidly transition to smartphones. This was the first decline since Q3 2009 and reflected a combination of conservative spending and continued shift to smartphones. The feature phone forecast isn’t expected to be any rosier in the quarters and years to come. Shipment growth of the device type won’t exceed 1.1% in any year forecasted by IDC.

"The shrinking feature phone market is having the greatest impact on some of the world’s largest suppliers of mobile phones. Stalwarts such as Nokia are losing share in the feature phone category to low-cost suppliers such as Micromax, TCL-Alcatel, and Huawei," said Kevin Restivo, senior research analyst with IDC's worldwide mobile phone tracker.

"For the overall market to grow by double digits year over year, despite the decline in feature phones, is testament to the strength of the global smartphone market. While this is not a new trend – smartphones have been the primary engine of growth for the last several quarters – it does mark something of a transition point, as demonstrated by the growing number and variety of smartphones featured in the vendors' portfolios," said Ramon Llamas, senior research analyst with IDC's mobile phone technology and trends team.

Nokia’s hold on the top global mobile phone spot weakened last quarter as inventory buildups in traditional strongholds, namely China and Europe, led to sharp year-over-year shipment declines. Nokia’s global feature phone and smartphone businesses suffered a similar fate. One positive sign for Nokia last quarter were dual-SIM devices; the company shipped over 2.6 million of these in the second quarter. Over the long term, Nokia’s smartphone fortunes will be dictated by its ability to sell Windows Phone 7 smartphone devices, which are expected to hit the market this year. It is Nokia’s primary smartphone platform of the future. In the meantime, Nokia is trying to sustain shipment volume with low-cost mobile phones and devices powered by the aging Symbian smartphone platform.

Samsung posted double-digit growth from the same quarter a year ago, and just slightly slower growth than the overall pace of the market. Like other vendors it realized a decrease in demand for its feature phones, but made up the difference with continued success for its Android-based Galaxy smartphones. The difference between Samsung and market leader Nokia continued to shrink, with less than 20 million units separating the two vendors, mostly resulting from Nokia's struggles in the market. Still, Samsung expects continued growth into the second half, which could put it in closer contention with Nokia.

LG Electronics held on to its number three position during the quarter, thanks in part to its Optimus smartphone sales worldwide. However, a combination of factors – including soft demand for its feature phones, slow pace of smartphone releases, and competitive pressures, led the company to downgrade its outlook for the year by 24%. Originally, LG had anticipated flat growth in 2011 from 2010 levels, even as it expected the overall market to increase by 8%. Should LG's volumes decrease as much as it anticipates, other vendors may jockey for position ahead of LG.

Apple maintained its number four position overall but closed the gap on Top 5 competitors thanks to another record unit shipment quarter. The company easily posted the highest growth rate of the worldwide leaders despite the fact that its flagship iPhone 4 is now more than a year old. The triple-digit shipment volume growth allowed Apple to more than double its share when compared to the same quarter last year. Apple’s ability to bring its smartphone momentum to developing economies, where it’s less successful, will help dictate the company’s smartphone fortunes in future.

ZTE likewise improved volumes and picked up market share during the quarter, enough to maintain the number five position. Long known as a purveyor of simple, voice-centric mobile phones, ZTE has stepped up its smartphone game with the continued success of its Android-powered Blade and Racer smartphones while announcing Libra, Skate, and Amigo smartphones for release in the second half of this year. Feature phones continued to be popular for ZTE, with the release of its 547i, a social networking-centric device in Europe.

The E-Commerce company Alibaba Group has introduced its own mobile operating system for mobile phones and tablets in China. The aim of company is to promote its online products in its home country as both Android and Apple’s iOS devices are increasingly popular in China.

Alibaba subsidiary Alibaba Cloud Computing launched the Aliyun operating system. A Chinese handset manufacturer, Beijing Tianyu Communications Equipment will launch the first smartphone running on Aliyun operating system by the end of July. Aliyun OS based tablet will also be unveiled in China later this year.

The President of Alibaba Cloud Computing, Wang Jian said, “The business model on the web is already established, if you can bring the web on to the phone, you can basically bring that business model on to the phone. ”

The Aliyun operating system can run Android apps and it can also run web-based apps built with JavaScript or HTML 5. The new mobile operating system has 20 “Cloud apps”, including Internet search and a barcode scanner to search products online that access Alibaba company services over the Internet.

The Aliyun OS also offers 100 GB of virtual data storage to each user over the Internet.