What’s Important in the Financial World (2/13/2012)

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Mobile Phone Sales

The growth of mobile phone sales, so hot for so long, has cooled. Research firm Gartner reports that sales of these devices fell 1.7% to 1.75 billion in 2012. Maybe the problem is that anyone who can own a handset already does. The smartphone end of the industry continues to do better. Smartphone sales were 207.7 million in the fourth quarter of last year, or up 38.3%. No company has been able to approach Samsung and Apple (NASDAQ: AAPL) in terms of global smartphone market share. That situation did not improve for their competitors at the end of 2012. According to Gartner:

In the fourth quarter of 2012, Apple and Samsung together raised their worldwide smartphone market share to 52 percent from 46.4 percent in the third quarter of 2012. Samsung ended the year in the No. 1 position, in both worldwide smartphone sales and overall mobile phone sales.

“There is no manufacturer that can firmly lay claim to the No. 3 spot in global smartphone sales,” said Mr. Gupta. “The success of Apple and Samsung is based on the strength of their brands as much as their actual products. Their direct competitors, including those with comparable products, struggle to achieve the same brand appreciation among consumers, who, in a tough economic environment, go for cheaper products over brand.”

Global Oil Demand

In its February Oil Market Report, the International Energy Agency (IEA) burst the bubble created by the idea that a better economy will raise oil prices. The economy is not that much better, the agency expects. From the report:

Crude oil futures breached nine-month highs in early February, propelled by stronger economic signals from China and the United States, robust financial market activity and cold weather in the Northern Hemisphere, the IEA said in its February Oil Market Report, released on Tuesday, 13 February.

The report slightly lowered its estimate of global oil demand, to 90.7 million barrels a day (mb/d) in 2013, following downward revisions to the International Monetary Fund’s forecast of economic activity, while the global demand estimate for the final quarter of 2012 was trimmed by 210 kb/d to 91.0 mb/d on weaker data for Saudi Arabia and the hurricane-hit United States.

Bumpy Airline Merger

Federal approval of the potential merger between U.S. Airways Group Inc. (NYSE: LCC) and bankrupt AMR likely will hinge on what the carriers are willing to give up. Antitrust experts believe that the new company will have to abandon some routes where the marriage would make the new airline completely dominant. According to Reuters:

To preserve competition, antitrust experts say, the Justice Department is likely to ask for divestitures in US Airways’ hub at Washington’s Reagan National and Charlotte, N.C., and AMR’s hub in Dallas. Outside these areas, the carriers fly different routes for the most part.

“Overlapping routes are bad, and connecting routes are good,” said Herbert Hovenkamp, who teaches antitrust at the University of Iowa College of Law.

“If you put these two airlines on a map you’re going to see a lot of complementary routes but you’re not going to see very many where the two of them fly on the same route,” he added.

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