These are stories Report on Business is following Wednesday, Oct. 17, 2012.
Smartphone use surges
Sixteen years after the launch of the smartphone, the number of these gadgets in use now tops 1 billion, according to a new report today.
Unfortunately for some device makers – Research In Motion Ltd. is one, but it’s certainly not alone – the spark in the industry has been the iPhone over the last several years.
Yet fortunately, the new report from Strategy Analytics points out the huge growth potential, notably in emerging economies.
“The world’s first modern smartphone, the Nokia Communicator, was introduced in 1996,” said senior analyst Scott Bicheno.
“Nokia remained a dominant force in smartphones for over a decade until the arrival of Apple’s iconic iPhone in 2007,” he said.
“The iPhone revolutionized smartphone design and it catalyzed industry growth.”
Strategy Analytics put the number of smartphones in use around the world at 1.038 billion in the third quarter of the year, compared to an estimated 708 million a year earlier.
And that can only grow.
“We estimate one in seven of the world’s population owned a smartphone in the third quarter of 2012,” said Neil Mawston, the group’s executive director.
“Smartphone penetration is still relatively low. Most of the world does not yet own a smartphone and there remains huge scope for future growth, particularly in emerging markets such as China, India and Africa. The first billion smartphones in use worldwide took 16 years to reach, but we forecast the next billion to be achieved in less than three years, by 2015.”
Potash cuts outlook
Potash Corp. of Saskatchewan is cutting its profit outlook, largely because of delays in signing new deals with Chinese and Indian buyers.
The agricultural giant said today 2012 earnings per share will come in “below the low end” of its earlier projection of $2.80 (U.S.) to $3.20, The Globe and Mail’s Bertrand Marotte reports.
For the third quarter, earnings per share are now projected at the low end of its 70-cent to 90-cent forecast.
“The change primarily reflects lower than forecasted potash sales volumes due to delays in new contracts with buyers in China and India,” the company said.
Just yesterday, CIBC World Markets analyst Jacob Bout cut his price target on Potash shares to $46 from $54, also cutting his view of Agrium Inc. and The Mosaic Co., the other major producers.
His target on Agrium fell to $121 from $125, and on Mosaic to $64 from $72.
“The continued deterioration in potash demand has resulted in pricing pressure in key markets such as China and Brazil,” Mr. Bout said in his report on Potash Corp.
“With no stabilizer in sight, the threat of a potash ‘holiday’ in China and India has become the most likely scenario given current market conditions in these regions.”
Oil patch hops
Canada’s oil patch is hopping today with news of a few deals.
First, ExxonMobil Corp. has struck a $3-billion deal for Celtic Exploration Ltd., offering $24.50 a share and half a share in a new company to be created. That over all price includes debt.
Celtic’s main oil and gas business is in central Alberta, and it holds land in the Montney and Duvernay gas plays.
Separately today, Penn West Petroleum Ltd. Unveiled deals to sell $1.3-billion in non-core assets.
- Penn-West to sell $1.3-billion worth of non-core properties
- Exxon bids $3.1-billion to buy Canada's Celtic Exploration
U.S. housing starts surge
As JPMorgan Chase and Co.’s Jamie Dimon noted last week, the U.S. housing market appears to be turning the corner.
It just so happens that Canada’s residential real estate market is heading down at just about the same time.
The latest numbers released today show construction starts in the United States surging by 15 per cent in September, to an annual pace of 872,000. And that’s up from August. From a year ago, it’s up by almost 35 per cent.
Housing starts are now at their best showing in about four years.
Building permits also climbed, by almost 12 per cent.
"The rising optimism within the new build sector, as indicated by yesterday’s reported sixth consecutive monthly increase in homebuilders’ confidence to its highest level since 2006, as well as the elevated level of building permits suggest that the housing market should maintain this momentum over the coming months and we continue to expect overall housing market conditions to improve gradually over the forecast horizon," said economist David Onyett-Jeffries of Royal Bank of Canada.
Of course, in Canada, construction starts remain strong, but that’s not expected to last.
And the latest measure of the resale housing market showed sales down 15 per cent in September.
- U.S. housing starts surge to fastest pace since 2008
- Toronto condo resales falter as listings climb
- Canada's housing markets: Who's winning, who's losing
- Year-over-year home sales plunge 15.1 per cent in September
- Mike Moffatt's Economy Lab: Why Justin Trudeau runs the risk of policy by association
- Bank of America profit drops on settlement, charges
- PepsiCo's profit dips amid turnaround push
- Potash Corporation of Saskatchewan Inc$21.00-0.32(-1.50%)
- Agrium Inc$120.97-0.05(-0.04%)
- Mosaic Co$24.82-0.73(-2.86%)
- Penn West Petroleum Ltd$2.33-0.09(-3.72%)
- Exxon Mobil Corp$83.45-0.09(-0.11%)
- Apple Inc$112.71-1.91(-1.67%)
- Nokia Corp$5.66-0.08(-1.39%)
- Updated September 23 4:00 PM EDT. Delayed by at least 15 minutes.