Carolina Milanesi

AT&T is poised to launch a new Motorola handset later this month that is expressly designed to deliver mobile socializing capabilities. Called the Karma, the 3G handset with QWERTY keyboard -- which will retail for $79.99 after the mail-in rebate -- combines text messaging and instant messaging with one-click Facebook and MySpace icons on the device's home screen.

The bad news for the mobile-device industry is that its sales in the first quarter were horrible. The good news is that smartphone sales are showing strength.

Those are some of the takeaways from a report by industry researcher Gartner released Wednesday. The report indicated that worldwide mobile-phone sales in the first quarter of this year were down 8.6 percent to 269.1 million units compared to the same quarter last year. But smartphone sales, which were 13.5 percent of all mobile-device sales, were up 12.7 percent.

Global mobile handset sales fell 9.4 percent year on year to 269.1 million units in the first quarter, even as smartphone sales rose 12.7 percent to 36.4 million units, according to Gartner.

Overall, the mobile-device market recorded its biggest quarter-to-quarter contraction since the research firm began monitoring the market on a quarterly basis in 2001, said Gartner Research Director Carolina Milanesi. "This was also the first time the market contracted year over year during the first quarter, a period traditionally helped by strong seasonality in the Asia/Pacific market," she said.

Nokia is attempting to make a splash this summer with a new phone and a new app store to go with it. Executives from the Finnish phone maker have been teasing about an application store dubbed Ovi for some time, but this week Niklas Savander, Nokia's executive vice president of services, told Forbes it will launch as the largest app store to date, boasting 20,000 apps.

Mobile-phone giant Nokia plans to slash 700 more jobs worldwide in the next few months amid weakening demand for its products. The announcement Monday by Espoo, Finland-based Nokia comes just two months after the company first said it would shrink its handset unit and cut 1,000 jobs.

Last month, Nokia continued cost-cutting measures by starting its global Voluntary Resignation Package, which offered the first 1,000 employees who volunteered to leave severance packages. The company also encouraged employees to take holidays as time off instead of taking cash compensation.

Analysts say the economic downturn is having a negative impact on the global mobile-device market, an industry that was once thought to be relatively immune.

According to Gartner, all five of the world's top handset vendors were affected during the fourth quarter, when global handset sales fell 4.6 percent year over year to 314.7 million units. The firm said the decline is significant because it occurred in a quarter when holiday sales typically drive handset growth.

Positioning device maker Garmin has dropped plans to enter the cell phone market on its own and instead teamed up with Taiwan's low-cost PC maker Asustek, the companies said on Wednesday.

The move to jointly offer navigation phones -- often called GPS phones, because they can determine a person's exact location -- builds on an existing manufacturing deal between the companies, and comes as the phones continue to gain in popularity among handset users.

The App Store has become a place of innovation for developers who want to showcase their work while making money, a place to find amusing apps -- and a place that just might make your life easier.

Apple is featuring its most recent convenience applications in two new advertisements on its Web site called Fix and Check.

The Cupertino, Calif.-based company spotlights three applications designed to make your life run more smoothly in its Fix advertisement, and three more convenience apps in its Check ad.

Nokia told investors that its sales declined 19 percent year-over-year to 12.7 billion euros (US$16.5 billion) in the fourth quarter. The company also said it now expects the mobile-device industry's sales this year will fall about 10 percent from 2008 levels.

Nokia's mobile-device shipments in the fourth quarter slid 15 percent year-over-year to 113.1 million. And for the entire industry, the Finnish handset maker estimates mobile-device shipments fell nine percent year-over-year to 305 million in the quarter.

Nokia on Thursday reported a 69 percent drop in profit for the fourth quarter and said it will cut 1,000 jobs. The Helsinki, Finland-based mobile-phone maker blamed the plummeting profit on a lack of demand for its mobile handsets.