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Staff members speak to trade visitors at the Nokia booth at the CommunicAsia expo in Singapore June 21, 2011.

Credit: Reuters/Tim Chong

HELSINKI (Reuters) - Apple and Samsung Electronics ended struggling Nokia's 15-year reign at the top of the smartphone sales rankings in the second quarter, researchers said on Friday.

Nokia has dominated the smartphone market ever since its 1996 launch of the Communicator model, but competition from its two nearest rivals and a slump in its own sales sent it straight from first to third place in the three months to June as growth in the sector starts to slow.

Apple sold a record 20.3 million iPhones in the quarter despite the fact that its iPhone 4 model is now more than a year old. Usually success of smartphone models does not last so long.

Apple unveiled its sales last week, but on Friday analysts also estimated Samsung sold 19 million smartphones in the quarter, well ahead of Nokia's 16.7 million as it was able to benefit from booming demand with smartphones using Google's Android software.

"Samsung's Galaxy portfolio has proven popular, especially the high-tier S2 Android model," said Neil Mawston, analyst at Strategy Analytics."

Strategy Analytics estimated smartphone market volume grew 76 percent from a year ago in the second quarter. ABI Research was somewhat more cautious estimating market grew 62 percent.

SLOWDOWN WORRIES

Growth on the overall cellphone market slowed too in the April-June period, as sales of basic phone models dropped for the first time in seven quarters due to consumers reining in spending, research firm IDC said on Friday.

IDC said strong smartphone demand boosted the market to still grow 11.3 percent from a year ago to 365.4 million phones, but this was a clear slowdown from the 16.8 percent growth seen in the previous quarter.

Strategy Analytics estimated the total market at 361 million cellphones in the quarter.

In a Reuters poll, 29 analysts' average forecast for the total market stood at 374 million phones.

IDC said sales of simpler so-called feature phones fell 4 percent from a year ago due to conservative spending and continued shift to smartphones, most visible in developed markets, such as the United States, Japan and Western Europe.

"The shrinking feature phone market is having the greatest impact on some of the world's largest suppliers of mobile phones," analyst Kevin Restivo said in a statement.

"Stalwarts such as Nokia are losing share in the feature phone category to low-cost suppliers such as Micromax, TCL-Alcatel and Huawei."

Struggling Nokia, still the world's largest phone maker by volume, saw its phone sales shrinking 20 percent from a year ago. This helped Samsung to close the gap to the Finnish firm in the overall cellphone market to the lowest level ever.

Some analysts already forecast for Samsung to become the world's largest cellphone vendor next year.

( Editing by Muralikumar Anantharaman and Andrew Callus)

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(AFP/File) - A man tries out a Nintendo 3DS in March 2011. Netflix on Thursday began letting subscribers in the United States and Canada stream movies and television shows to Nintendo 3DS videogame handsets.(AFP/File/Elodie Le Maou)

A worker is pictured behind a logo at the IBM stand on the CeBIT computer fair in Hanover February 26, 2011.

Credit: Reuters/Tobias Schwarz

BOSTON (Reuters) - IBM's signings of new business at its services division surged 16 percent in the second quarter, trouncing expectations and raising hopes that 2011 will be a good year for the technology sector.

Investors had feared that technology sales would slow in the second half, hurt by the economic uncertainty in Europe and Japan. But IBM offset sluggish business there with strong growth in developing markets from Brazil to China, and robust sales of a new line of mainframe computers.

Analysts said the results marked a strong start to the tech earnings season, with other bellwethers such as Apple Inc, Intel Corp and Microsoft Corp set to report quarterly results in coming days.

"As I look for the balance of the earnings reports this week, I think it's going to set a pretty good tone," said Keith Wirtz, chief investment officer for Fifth third Asset Management.

International Business Machines Corp shares climbed 2 percent to a record high on the news. The company also raised its full-year profit forecast after second-quarter results beat Wall Street estimates.

"Good service signings reflect that they are capturing their share of the solid IT spending that we're seeing in the market now," said Edward Jones analyst Josh Olson.

"IT spending and demand for software and services remains healthy despite all this economic turmoil, and businesses continue to invest in efficiency," he said. "We're seeing that in these results."

IBM said on Monday that signings rose to $14.3 billion during the second quarter, beating Wall Street projections and easing investor concerns after the closely watched number dropped in the first quarter.

Deutsche Bank said in a research note that analysts on average had expected signings of $12 billion to $13 billion.

Investors believe signings is a key indicator of future profits. But IBM says the focus should be more on total backlog of business, which grew by $15 billion during the quarter to $144 billion.

Some $8 billion of the $15 billion increase in backlog came from the developing economies that IBM defines as "growth markets."

WAITING OUT THE TURBULENCE?

Some investors had feared that corporations will keep a tight grip on 2011 technology budgets, waiting out the economic uncertainty in the United States and Europe.

But developing markets drove top line growth for IBM. On a constant-currency basis, revenue leaped 13 percent in growth markets -- which includes the BRIC countries of Brazil, Russia, India and China -- far outpacing the 3 percent sales growth chalked up in so-called major markets.

The growth in developing countries was led by sales to financial services firms and communications companies.

IBM reported second-quarter profit, excluding items, of $3.09 per share, beating the average Wall Street forecast of $3.03, according to Thomson Reuters I/B/E/S.

Revenue rose 12 percent from a year earlier to $26.67 billion, ahead of the average forecast of $25.35 billion.

Shares in the Armonk, New York, company rose to $178.90 in extended trade, beating the previous record high of $177.76 on July 6. They had fallen 26 cents to $175.28 in regular New York Stock Exchange trade on Monday.

Analysts said Wall Street had priced in strong growth expectations, limiting the stock's after-hours rally.

"Expectations are pretty high for this name right now. We've seen it do very well this year, up 20 percent or so to date," Olson said.

(Additional reporting by Alexei Oreskovic and Noel Randewich in San Francisco and Liana Baker in New York; Editing by Edwin Chan and Richard Chang)

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Netflix CEO Reed Hastings speaks during the unveiling of the iPhone 4 by Apple CEO Steve Jobs at the Apple Worldwide Developers Conference in San Francisco, California June 7, 2010.

Credit: Reuters/Robert Galbraith

LOS ANGELES (Reuters) - Netflix Inc hiked monthly prices for customers who use both its mail and online services, a move that could steer users toward its growing Internet streaming service.

The company said it was raising by 60 percent the monthly price of a plan that lets subscribers watch unlimited movies and video online and get DVDs by mail.

Customers in the United States who want both services will pay $7.99 per month to rent one DVD at a time plus $7.99 for unlimited streaming, or a total of $15.98 per month, the company said on Tuesday. The previous cost of this plan was $9.99 a month.

The changes take effect immediately for new subscribers, and in September for current customers.

Netflix, the top movie rental service with 23 million subscribers, recently has focused on its streaming service for televisions and mobile devices and downplayed its business of mailing DVDs in red envelopes.

The company faces growing costs for mail shipping and building its streaming library plus competition from online players such as Amazon.com Inc and Hulu.

The company separated the pricing for mail and streaming services "to better reflect the costs of each and to give our members a choice," Netflix Vice President of Marketing Jessie Becker wrote on a company blog post.

The company also said it saw continued demand for DVDs.

"Given the long life we think DVDs by mail will have, treating DVDs as a $2 add on to our unlimited streaming plan neither makes great financial sense nor satisfies people who just want DVDs," Becker wrote.

Merriman Capital analyst Eric Wold said he thought the company was aiming to "steer people away from DVDs" by raising the cost for the combined service.

The $6-per-month price hike could lead some customers to downsize to a streaming-only plan and perhaps visit a Coinstar Inc Redbox kiosk for an occasional DVD, said Wold, who has a "neutral" rating on Netflix shares.

Netflix said its $7.99 option for one DVD at a time was its lowest price ever for DVD-only service. The company also said it was creating a separate management team to focus solely on DVDs by mail.

Its Canadian service is streaming only, and the new Latin American service also will be streaming only.

Netflix shares gained 0.2 percent to close at $291.27 on Nasdaq.

(Reporting by Lisa Richwine. Editing by Robert MacMillan and Carol Bishopric)

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