Forecast that a market is going to grow by a third, investors start to salivate. Tell them it is smartphones and mouths go dry. There was a time when owning Samsung or Apple and shorting BlackBerry or HTC was an easy trade. But things got harder a year or two ago; competition appears to be eroding high-end handset profits.

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As Apple founder Steve Jobs was noisily pitching the company’s soon-to-be-launched iAds advertising network last week, Apple was quietly making sure it could block Google and Microsoft from delivering commercials to iPhone and iPad owners.

Google complained that the rule change would be bad for app developers and consumers, while federal antitrust regulators are examining the switch to see if it runs afoul of the law. But experts said Apple is most likely within its rights, however much competitors and developers fret, and the FT’s Lex column agreesRead more

The FT’s Lex column writes that while Hewlett Packard’s acquisition of Palm may make a degree of financial sense for both companies, the challenge will be to meaningfully integrate Palm without alienating existing partners.

HP is a long-term partner of Microsoft, and is soon to release the first real competitor to the iPad: a touchscreen slate running Windows 7. In promoting Palm, the two companies will have conflicting priorities for the development and marketing of some new products, while playing nice on the full scale PC side.

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With talk swirling that floundering handset maker Palm is looking for a buyer, the FT’s Lex column assesses the likelihood of a deal:

As for the price-tag, Palm’s enterprise value is about $950m but if Palm’s biggest investor Elevation insists on breaking even, Barclays Capital reckons a bidder would have to offer between $1.2bn and $1.5bn. That is in reach of Chinese computer-maker Lenovo, one of the rumoured interested parties. For Nokia, also an oft-mooted acquirer, it would represent about a quarter of its annual spending on research and development.

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The iPad arrives tomorrow, and the FT’s Lex column thinks that early adopters might be on to something:

Pity the junior tech analysts sent to count queuers at Apple’s iPad launch on Saturday. Wall Street clearly has its finger in the wind: forecasts for first year sales range from 1m to 10m units. That the launch has been both so keenly awaited and so hard to predict says a lot about the device itself: no-one quite knows what it’s for. The tablet could be a “game-changer”; it could be a flop.

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The FT’s Lex column says that it was high time Lenovo’s optimistic investors were brought back to earth, and that fixing the PC company’s struggling international operations will not be easy:

Founder Liu Chuanzhi, who returned as chairman in February, started by axing 2,500 overseas jobs in a bid to shave about 15 per cent from annual operating costs. But that’s the easy bit.