Handset makers are reeling from the blow of economic slowdown. Both Nokia and Sony report losses  during the first quarter but remain optimistic that the worst will soon be over.

The world’s largest cell phone maker, Nokia, reports a 90 percent drop in profits for the first quarter, while Sony Ericsson says it lost $387 in revenues from January to March this year.

“As expected, the first quarter of this year has been extremely challenging for Sony Ericsson due to continued weak global demand. We are aligning our business to the new market reality with the aim of bringing the company back to profitability as quickly as possible.” says Sony Ericsson Dick Komiyama.

Industry watchers have warned cell phone manufacturers of a decline in the mobile market for 2009 as users were unlikely to upgrade their existing handsets during the down economy.

Cell phone companies report about $161 million in profits for the first quarter, down from last year’s $1.6 billion for the same period.

Nokia sold 93.2 million mobile phones during the first quarter, a 19 percent year-over-year decline.
Sony is even faring worse than Nokia. The company will soon resort to retrenchment to save about $522 million in costs.

Sony has posted a 35 percent decline in cell phones shipped for the first quarter compared to the same period last year. Only 14.5 million handsets were shipped from January to March this year.

Unlike Nokia, Samsung and Motorola which offer entry-level handsets that are a big hit in Asia, Sony Ericsson mainly relies on sales of its high-end phones.

Sony foresees that the mobile market will shrink by 10 percent this year, a prediction that was also echoed by other mobile makers.

Despite the current bleak picture, both Nokia and Sony, however, say market stability is in the horizon.

“The market is no longer falling in an uncontrolled manner. I am encouraged by the sign of stabilization seen at the end of the first quarter,” Nokia CEO Olli-Pekka Kallasvuo told Information Week.

Nokia, however, remains the underdog in the smartphone market as Apple’s iPhone, RIMM’s Blackberry, and HTC smartphones continue to hold users spellbound.

Hopefully, the second quarter will see Nokia gaining ground in the smartphone race with its N97 expected to be a major hit globally. Already, the entry-level 5800 XpressMusic smartphone scored 2.6 million units in sales in the first quarter.

Nokia controls 37 percent of the overall mobile market pie, but it still needs to make significant penetration into the U.S. market which is largely dominated by local carriers.

Nokia, however, is set to be a key player in the U.S. mobile landscape by making more CDMA phones. Its E71 smartphone is now being marketed by telecommunications giant AT&T.

Nokia’s revenues are also expected to get a boost with the launch of its over-the-air application store, Ovi. It will be a find, buy, download, and install apps platform for Series 40 and Series 60 users, utilizing social networking and location-based information.

Like Nokia, Sonny is also gearing up to get a fair share of the smartphone market with the upcoming launch of its multiple mobile movie and music services as well as the Idou smartphone.

Former US vice president and Nobel Peace Prize laureate Al Gore lauded the initiatives of the wireless industry to help reduce the adverse effects of global warming, but said the industry still needs to strengthen initiatives and pursue higher goals for the environment than just mere profits.

The environmental activist was the final keynote speaker during the annual CTIA Wireless held last week.  According to the CTIA website, the four-day event gathered some 34,000 key players of the wireless industry from 169 countries to launch and explore innovations in the field.

Gore said much of the future will depend on how the environmental problems are dealt with at present. As the world grapples with the seemingly insurmountable issue of global warming, Gore said the wireless technology will play a major role in solving the problem.

“Wireless is going to be one of the key tools we use to solve the climate crisis,” said Gore. “The wireless communications industry is at the heart of the transition we need to make.”

Gore said to address the climate problem, it is important for individuals to have ready access to useful information “so that they don’t have to go to centralized locations and go through a lot of rigmarole… when they can get (information) even as they’re mobile and going about their daily lives.”

Gore recognized the initiatives of the wireless industry to promote the environmental thrust in terms of advocacy and education campaigns. Today, many companies have become environmentally conscious, getting rid of carbon emissions and trimming down wastes. We now have phones made from recycled materials, like Samsung’s Blue Earth and Motorola’s Renew. Samsung’s Blue Earth has add-in solar cells in the gadget, Nokia reclaims old phone parts, while LG Electronics puts up sun-powered phone charging outlets.

Telecommunication companies have also started to reduce power usage in their operations, which reduces carbon footprint. There are those that have built cell sites powered by alternative sources of energy such as wind, geothermal, biodiesel, and solar to get rid of environmentally ravaging batteries and diesels.

Gore said the most important contribution that the wireless industry will make in the anti-global warming bandwagon is to create linkages among green technologies, initiatives, and industries worldwide.

In the field of telemedicine, Gore said patients don’t have to travel long distances to meet doctors as sharing of valuable information can now be done wirelessly without producing tons of paper records.

Eventually, there will be no need for massive centralized power plants as new electric grids fed by renewable energy from alternative sources will be established in localities. The wireless technology will be the key element to connect and manage these grids.

Gore said the wireless industry is “one of the great success stories in the American economy” and that progress in this field will continue to revolutionize the communication processes.

One of the most eye-popping products rolled out during the recent CTIA is Samsung’s first WiMax-enabled Mobile Internet Device (MID) called Mondi.  The pocket-size device runs the Opera 9.5 Web browser and has a 4.3-inch touch screen.

Executives were thrilled by the much-awaited RIM’s Blackberry App Store, which makes it easier for Blackberry users to customize their phones by directly downloading third-party application from an online catalog.

U.S. Senators Olympia J. Snowe (R-Maine) and Bill Nelson (D-FL) have joined forces to solve the worsening problem of wireless spam. The two have introduced a bill to solve the growing number of unsolicited text messages which have caused headaches to millions of cell phone users.

Dubbed the m-SPAM Act, the legislation improves existing anti-spam laws and boosts the powers granted to the Federal Communications Commission and Federal Trade Commission to crack down on unwanted SMS.

Most importantly, the legislation gives consumers protection by making it such a no-no to send commercial text messages to wireless numbers listed on the Do-Not-Call registry.

“Mobile spam invades both a consumer’s cell phone and monthly bill,” Snowe said in a statement. “There is also increasing concern that mobile spam will become more than just an annoyance–the viruses and malicious spyware that are often attached to traditional spam will most likely be more prevalent on wireless devices through m-spam. This significant and looming threat must be addressed in order to protect consumers and vital wireless services.”

Based on the data gathered by Ferris Research, an all-time high of 1.1 billion spam text messages were received by consumers in 2007. The CTIA data, however, said this figure is still a much conservative estimate and that in fact, 28.8 billion unwanted text messages—dubbed in 2000 as “spasms”—were reported within the month of June 2007 alone.

The m-SPAM Act is a welcome development considering that in the 2003 CAN-SPAM Act, the rules enforced by FCC only banned the sending of email spam to cell phones. It turned out that  wireless spam is equally headache-inducing for users as it has been used for phishing attacks wherein unscrupulous individuals try to trick wireless users into disclosing personal information over the phone.

Aside from such dangers, another reason why mobile spam is especially irritating to users is because it clutters their inbox and they have to shoulder the per text message cost, which is sometimes at 20 cents.

“Spam e-mail is bad enough,” said Nelson. “Now, we are seeing a proliferation of unwanted text messages – and consumers are getting stuck paying.”

According to Secure Computing Magazine Australia, mobile hackers are taking advantage of inadequate mobile spam and fraud protection offered by mobile networks.

Messaging security vendor Cloudmark claimed that advancements in mobile technology such as the introduction of unlimited messaging plans, as well as the increase in open networks and mobile applications have made wireless spamming an attractive and lucrative option for spammers.

It has been found out that one of the biggest triggers of mobile spam is via number harvesting by websites offering free ringtone downloads. Users are made to provide their phone numbers before they can download the ringtone. The numbers gathered are used to send mass advertising messages to users. Once the spam starts pouring in, users are usually left with no other option but to change their cell phone numbers.

Another anti-spam strategy, albeit a very extreme and unpopular one among SMS buffs, is the option offered by phone providers to completely disable text messaging functions on a user’s account.  So far, this option has been useful only to individuals who have had no need for the SMS function.