Nokia’s CEO Olli-Pekka Kallasvuo leaves the stage after his speech during Capital Markets Day at Dipoli Conference Centre in Espoo in this December 2, 2009 file photo.

Credit: Reuters/Lehtikuva/ Pekka Sakki

HELSINKI (Reuters) - Nokia, the world’s biggest cellphone maker by volume, will introduce new smartphone models next week at its annual media and industry event, aiming to assure investors the company is on track to recovery.

Nokia, whose profits and share price have dived in the last few years, is now betting on the renewal of its line of smartphones, which could save the career of embattled CEO Olli-Pekka Kallasvuo.

The cellphone maker will unveil its new flagship model E7, which comes with a large touchscreen and full keyboard, at the show in London, two sources with direct knowledge of Nokia’s plans told Reuters.

Nokia will also introduce to the public its new N8 model, which is the first phone to use the new Symbian 3 software, along with other new smartphones, the sources said.

The N8 — unveiled in April and due to go on sale later this month — stands out among its rivals for its 12 megapixel camera but has a slower processor than Samsung’s top model Galaxy S and the latest iPhone.

"As the N8 starts shipping and other devices are unveiled, Nokia will be hoping that it can lay the foundation stones for its recovery given the onslaught of competitive products currently hitting the market," said Ben Wood, director of research at CCS Insight.

"It has made some big commitments on fixing Symbian and its first flagship product using the refreshed Symbian operating system. Failure is not an option," Wood said.

Nokia’s Symbian operating system has yet to attract a large number of software developers interested in creating compatible applications, a key selling point for high-end cellphones.

HAVE THEY FIXED IT?

Nokia controls 40 percent of the smartphone market with its Symbian software but has lost its leading position among the most expensive models to easier-to-use phones from Apple and Research in Motion.

Nokia’s failure to roll-out successful high-end cellphones, which have fatter margins, has hit the company’s profits and share price hard over the last few years. Its stock has dropped to roughly a third from mid-2007 when the iPhone went on sale.

Last year, Apple surpassed Nokia as the handset maker generating the largest total profit, despite selling only one iPhone for every 13 phones Nokia sells.

CEO Kallasvuo, whom industry sources say Nokia is looking to replace, has promised the usability of Nokia’s Symbian smartphones would not be an issue by the end of this year.

He will make the keynote speech at the London show on Sept 14 at 9 a.m. (4 a.m. EDT).

"Everyone will be very curious about the Symbian 3 user interface," said analyst Francisco Jeronimo from IDC.

"We will probably see good designs with a focus on touchscreen at very competitive prices, but the main question is: Have they finally fixed the user interface?"

(Reporting by Tarmo Virki; Editing by Karen Foster)

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Smartphones

A family walks past a display of a BlackBerry smart phone at a shopping mall in Dubai August 1, 2010.

Credit: Reuters/Mosab Omar

DUBAI (Reuters) - Concerns over Israeli access to BlackBerry data, and the use of the device by the United States to spy on the United Arab Emirates are behind the Gulf state’s moves to curb the smartphone, Dubai’s police chief said.

"The Unites States is the primary beneficiary of having no controls over the BlackBerry, as it has an interest to spy on the UAE," Dhahi Khalfan Tamim said in remarks carried by the website of the daily al-Khaleej on Friday.

"The West has accused us of curbing the liberties of BlackBerry users, while America, Israel, Britain and other countries are allowed access to all transferred data," Tamim added.

Tamim, who has been outspoken in blaming Israeli agents for the assassination of a top Palestinian militant at a Dubai hotel in January, did not say why Washington had an interest in spying on Western-allied UAE.

The UAE, where BlackBerry maker RIM has 500,000 users, has said it would suspend BlackBerry Messenger, email and Web browser services from October11 until the government could get access to encrypted messages.

Blackberry won a reprieve on a shutdown in India last month, after RIM agreed to give India access to secure BlackBerry data, according to an Indian government source.

BlackBerry’s Messenger application has spread rapidly in the Gulf where it is a popular business and social networking tool. But because the data is encrypted and sent to offshore servers, it cannot be tracked locally.

That has raised fears in security-conscious Gulf states, especially in the UAE and Saudi Arabia, that a lack of access could fetter their ability to ferret out potential spies, assassins or Islamic militants, analysts say.

(Reporting by Firouz Sedarat; editing by Ralph Boulton)

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Google co-founder Sergey Brin participates in a panel discussion in Mountain View, California February 9, 2010.

Credit: Reuters/Robert Galbraith

SAN FRANCISCO (Reuters) - Google Inc said on Friday it was the target of an investigation by the Texas Attorney General’s office into the fairness of its search engine rankings.

The world No. 1 search engine company said the probe is the first by a U.S. legal authority into the fairness of its rankings, which can make or break commercial websites.

Google faces a similar probe by the European Commission, prompted by complaints from some small websites that felt they were unfairly hurt by low Google search rankings.

Texas Attorney General Greg Abbott has asked for information about complaints from a number of companies, Google said on its website. Google specifically mentioned websites operated by Foundem, TradeComet and myTriggers as challenging its results, saying they competed with the search giant.

A spokeswoman for the Texas Attorney General confirmed the probe, but would give no further details. Google said it looks forward to answering questions from the Texas attorney general.

"We recognize that as Google grows, we’re going to face more questions about how our business works," Deputy General Counsel Don Harrison said in a blog post. Harrison was not available for further comment.

In its statement on Friday, Google pointed out that two of the companies are represented by attorneys who also work for Microsoft Corp, which has publicly encouraged companies to challenge Google’s business practices. Microsoft did not immediately respond to a request for comment.

TradeComet CEO Dan Savage said in an email that Google is trying to "distract from its own antitrust problems by pointing to others and their lawyers."

A myTriggers spokesperson added that its concern "is just the harm to myTriggers done by Google’s anti-competitive conduct and bullying tactics."

Foundem did not respond to a request for comment.

PRIVACY SUIT SETTLED

Separately, Google has settled a federal lawsuit accusing it of privacy violations in connection with its Buzz social networking service, according to a court document filed on Friday.

To settle the lawsuit brought by a Gmail user, Google will set aside $8.5 million for attorneys fees and donations to organizations focused on Internet privacy, according to the court filing.

In addition, "the settlement requires that Google undertake wider public education about the privacy aspects of Buzz," the filing said.

Launched in February, Buzz initially used an individual’s email contacts from Google Gmail to build a social network of contacts that the rest of the world could see, which led to privacy concerns. Google then changed the settings so that contacts were kept private by default.

The settlement filing comes as Google also said it would simplify and update its privacy policies, according to Associate General Counsel Mike Yang on the company’s website (here).

The case is: In Re Google Buzz User Privacy Litigation, 10-cv-00672, U.S. District Court, Northern District of California, San Francisco.

(Reporting by Dan Levine; Editing by Matthew Lewis, Leslie Gevirtz and Richard Chang)

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LOS ANGELES (Reuters) - Shares in Netflix Inc neared their all-time high on Thursday, after Apple Inc said that the company’s streaming video service would be added to a new version of Apple TV.

The tie-in with Apple TV, a smaller, cheaper version of Apple’s earlier web-to-TV product, could cement Netflix’s dominance in the online movie rental business.

Netflix’s 15 million subscribers already stream many movies online over dozens of devices, including Web-connected televisions and Blu-ray players, as well as game consoles.

Piper Jaffray analyst Michael Olson estimates that Apple will sell 1.5 million units of Apple TV in 2011, on top of the 65 million or so Netflix-enabled devices already in consumers’ hands.

"By far, they are the leading streaming company so everybody’s gunning for them," said Edward Woo, an analyst with Wedbush Securities. "Everyone sees what Netflix has with their subscription model, and it’s only a matter of time until everyone starts to copy them."

Netflix shares rose 3 percent to $137.93 on Nasdaq on Thursday, near its all-time high of $140.90 hit last month.

AMAZON CHALLENGE

Amazon.com Inc also offers streaming of movies and TV shows over a number of devices, but the online retailer has been slow to create its streaming business.

Amazon has 118 million customers that it could use to build its streaming business, Barclays Capital analyst Douglas Anmuth said in a research note, but Netflix has an advantage with its core business of mailing out DVDs.

"We don’t believe any competitor at this point would ‘go backwards’ and build out a DVD-by-mail business, even though it has been a significant factor in subsidizing and enabling Netflix’s shift to streaming," Anmuth said.

Netflix subscribers pay a minimum of $8.99 a month, and 61 percent of them are streaming content online, the company said.

"Ultimately (the business) will be only streaming, but that is several years away, and we’ll still be delivering DVDs for 15 or 20 more years," Netflix spokesman Steve Swasey said.

Critics once knocked Netflix’s streaming service for lacking popular movies, but the company said a deal reached last month with the Epix pay TV channel would bolster its content.

The five-year Epix deal, worth almost $1 billion, makes Netflix the exclusive Web-only distributor of films from Viacom Inc’s Paramount Pictures, Metro-Goldwyn-Mayer Studios and Lions Gate Entertainment Corp, including new releases 90 days after their premium pay TV and on-demand debuts.

Analysts say the cost of acquiring content could cut into Netflix’s margins and those of other companies that try to expand into streaming. Meanwhile, Netflix will continue to grow, they said.

"Netflix has a very solid early position," said Marianne Wolk, senior analyst with Susquehanna Financial Group. "Their service is compelling. The advantage is that they have an excellent recommendation engine, and it’s one of the best user interfaces for finding films that you like."

(Additional reporting by Jennifer Saba, Editing by Ilaina Jonas)

People compare the performance of Apple’s iPad (L) and Samsung’s Galaxy Tab tablet devices at the Internationale Funkausstellung (IFA) consumer electronics fair at "Messe Berlin" exhibition centre in Berlin, September 2, 2010.

Credit: Reuters/Thomas Peter

BERLIN (Reuters) - Samsung Electronics’ first tablet computer, the Galaxy Tab, will go on sale in two weeks, it said on Thursday, turning up the heat on Apple Inc’s iPad.

Global handset vendors and PC makers including Nokia, LG Electronics and Hewlett-Packard Co are moving into the new category of devices, between traditional PCs and smartphones, taking a cue from Apple.

Dell Inc said last month it was launching its new tablet device, the Dell Streak, to U.S. customers.

"We see huge potential for this kind of product," YH Lee, head of marketing at Samsung Mobile, told Reuters in an interview on the sidelines of the IFA consumer electronics fair. The Galaxy Tab, with a 7-inch screen, will go on sale in European markets in mid-September. The device, which uses Google’s Android software, offers access to books, films and music.

"Samsung is betting big on the tablet category with this device," said Ben Wood, research director at CCS Insight, adding the success of Galaxy Tab, which is clearly smaller than iPad, which has a 9.7-inch screen, will depend on pricing.

Samsung’s portfolio management director Thomas Richter said prices would depend on operator packages in different countries, but the device would cost more than high-end smartphones.

In Finland the suggested retail price for Galaxy Tab, without subsidies, would be 949 euros ($1,214), well above the iPad’s price.

Apple’s 32 GB iPad sells for 864 euros on average in Finland.

Samsung said all key European operators selling Samsung phones were set to also offer the Tab to their clients, and several major carriers would sell it in the United States.

Last week research firm iSuppli forecast the iPad would account for nearly three-quarters of worldwide tablet shipments this year, and hold at least 70 percent of the market in 2011 and 62 percent by 2012.

Samsung said the market was far from fixed yet.

"The market opportunity is wide open," said YH Lee.

MANY MORE ANDROID TABLETS

To seize the opportunity, Toshiba unveiled its Folio 100 tablet, with 10 inch screen, and said it would be available during the fourth quarter in Europe, Middle East and Africa.

Toshiba’s tablet will use an Nvidia processor and Google’s Android.

Huawei said its first tablet, a 7-inch screen running Google’s Android software, would reach consumers in Europe in time for the holiday sales season.

"The device would cost 300 euros, or less," Huawei Devices marketing chief Victor Xu told Reuters in an interview.

Xu said the company’s next tablet would have a 10-inch screen and reach consumers next year.

Xu said the company has decided to focus on using Android software.

"Key for Huawei is that it’s an open standard and not controlled by some dinosaurs," Xu said.

(Additional reporting by Nicola Leske; Editing by Michael Shields and Will Waterman)