By Scott Moritz

It was a tale of two techs Tuesday. Hewlett-Packard (HPQ) surprised Wall Street on Tuesday with a fourth-quarter earnings report that beat analysts’ profit and sales targets. HP shares soared nearly 14% in early trading.

Meanwhile, glass maker Corning (GLW) warned of a sales shortfall in the current quarter as demand for its flat-screen TV and computer panels drops faster than anticipated. Shares fell nearly 12%.

HP posted preliminary adjusted earnings of $1.03 a share, which compares with 84 cents in the year-ago quarter and beats analysts estimates by 3 cents. Sales for the quarter ended Oct. 31 were $33.6 billion, an 19% improvement from revenues of $28.3 billion in the same quarter last year. Analysts were looking for sales of $33 billion, according to Thomson First Call.

The recent acquisition of IT service shop EDS so far has helped HP dodge the full impact of the impending recession. “Our ability to execute in a challenging marketplace differentiates HP, enabling it to increase share, expand earnings and emerge from the current economic environment as a stronger force,” CEO Mark Hurd said in a statement.

Looking ahead, HP predicts pro forma profit of about 94 cents a share on sales of $32.25 billion in the first quarter ending in January. Analysts expected adjusted earnings of 93 cents a share on $33.7 billion in sales. HP says it will release its October quarter earnings Nov. 24.

Corning, however, continues to struggle with order cuts as flat-panels and big-screen TV inventories pile up. The company, the largest maker of liquid crystal display screens for televisions and computers, says fourth-quarter sales will fall below its guidance of $1.1 billion to $1.2 billion. It warned that profits will be at the low end or below its prior guidance of $0.20 to $0.28 a share. Corning did not offer revised financial targets.

By Scott Moritz

Qualcomm (QCOM) joined tech’s growing crowd of downward revisionists as the slumping global economy forced the company to slash its financial targets.

While the San Diego wireless chipmaker turned in a strong fiscal fourth quarter Thursday, Qualcomm like several tech giants – including Cisco (CSCO), Intel (INTC) and Apple (AAPL) – have lowered financial projections as business took a nose dive this fall.

Qualcomm posted adjusted earnings of $1.06 billion or 63 cents a share, a 17% increase over the 54 cent pro forma profit in the year ago period and 3 cents above analysts estimates, according to Thomson First Call.

Sales for the company’s fourth quarter ended in September were $3.3 billion, up $1 billion or 45 % over the same period a year ago. Analysts had anticipated revenue of $2.86 billion.

Similar to Cisco, which saw strong pre-October results yet dire post-October conditions, Qualcomm pulled down its forecast for the current quarter.

“As a result of the credit crisis and the economic uncertainty, our guidance reflects slower end-market device growth for 2009 than previously anticipated,” said CEO Paul Jacobs in a statement.

Looking ahead, Qualcomm cut its December quarter adjusted earnings forecast to a range around 48 cents or 8% below year-ago levels. Sales are now expected to drop 4% on a year-over-year basis to $2.4 billion roughly flat sequentially. Analysts had been looking for earnings of 61 cents on revenue of $2.9 billion.

Qualcomm shares dropped 3% in after-hours trading after closing at $33.05 Thursday.

Qualcomm, which makes components for cell phones and licenses wireless technology, says December-quarter chip shipments will drop to 62.5 million from the 79 million level a year ago. And the company predicts the average selling price for mobile phones will fall to $205 from $211 last year.

By Scott Moritz

Dell (DELL) is trying unpaid vacations (for starters). 

The No.2 PC maker, already grappling with a massive turnaround strategy, is taking a closer look at expenses and has informed employees of a company-wide cost cutting plan that includes voluntary five-day unpaid leaves for everyone.

According to an internal memo confirmed by a company representative, Dell has frozen its hiring and is considering a range of cost-reduction plans.

In addition to the unpaid furloughs, the company is offering buyouts and cutting some of its contract workers. Dell already completed a 10% staff reduction plan this year that was put in place in May.

Sales, particularly in the company’s PC business, started slumping in September, and Tuesday’s move shows they haven’t bounced back yet. Dell is scheduled to release its October earnings results November 20. Some observers are bracing for a shortfall warning before then, given the slumping demand and overall decline of the economy.

Dell has been particularly vulnerable to the slowdown, having started its shift to a retail sales strategy and away from its famed buyer-direct, made-to-order manufacturing scheme. The company had boosted its staff levels for the transition.

In 2005, Dell had 72,000 employees, and by the end of 2006, the company had about 90,000 workers. Dell had 88,000 employees at the end of last year. “These were mostly white-collar workers brought in to build the business,” says Cowen analyst Lou Miscioscia. “Things have gotten a lot more challenging,” says Miscioscia, who doesn’t see the other PC makers like Hewlett-Packard (HPC) or IBM (IBM) having as bad a problem right now.

The big problem for Dell says UBS analyst Maynard UM, is that “they are unfortunately retooling during the backdrop of a weak end market. “

By Scott Moritz

Recessions are supposed to be boom times for yard sales and flea markets, so what’s eating eBay (EBAY), the world’s largest bargain bazaar?

Ebay shares hit a new five-year low Thursday as yet another analyst weighed in on the nagging deterioration of the auction giant’s business. Morgan Stanley analyst David Joseph downgraded eBay to neutral, pointing out that there are some troubling trends contributing to the company’s drooping e-commerce market share.

With fears that the credit crisis could throw the economy into a tailspin, Wall Street has been in a bit of a selling mood of late. When analysts point to signs of strain at eBay, investors don’t seem inclined to wait and see.

Foremost among eBay’s challenges, Joseph writes, is buyers’ shifting preference in favor of easy shopping, and away from the auction format. People like features like free delivery, shopping various selections within categories, and conveniences like one-click checkout. As the go-between agent in a transaction, eBay has limited control over these features.

As the analyst notes: Ebay is at a disadvantage in its “ability to compete in buyer experience.”

Given the changing tastes among shoppers, it’s not too surprising that eBay’s market share has dropped to 17% from 19% in the past two years. It’s also not shocking that Amazon’s slice of the business has grown to 5.3% from 3.7% in the same period, according to Morgan Stanley.

Other competitors have edged in as well. Local online swap shop specialist Craiglists has its fans. And while far from a runaway success, net giant Google’s (GOOG) Google Checkout purchasing system is an alternative to eBay’s PayPal service.

The weakening economy is having an impact on eBay also. Analysts point out that people are buying fewer items and at lower prices. So with less big ticket sales to add to the total tally, the overall average selling price is falling. And with the slowing sales volume in September, particularly in the U.S., eBay’s growth rate is “under pressure,” according to a Merrill Lynch report Tuesday.

To be sure, eBay has a solid position globally as the marketplace where sellers of cheap goods meet hunters of good bargains. And as a company, eBay is an upstanding financial citizen, with zero debt, $3.7 billion cash in hand, and a cash flow generation rate of $3 billion annually.

But as we saw this week with Monday’s 9% drop in the Nasdaq, even solid favorites in tech like Google, Apple (AAPL) and Research in Motion (RIMM) get trampled when people stampede for the exits.

Worries about eBay’s slowing growth and shifting consumer preferences certainly don’t encourage the highest bids in a market prone to panic.

By Scott Moritz

Solar tech stocks got a small jolt Wednesday after the U.S. Senate included an extension of renewable energy tax credits in its $700 billion financial bailout package.

A vote by the Senate on the financial rescue plan is expected Wednesday. If passed it will head to the House of Representatives, which could vote as early as Thursday. In a surprise move, the Senate version of the proposed package salvages key renewable energy subsidies left in limbo by the House last week.

“It was thought that this thing was likely dead until a new president was sworn in,” says Collins Stewart analyst Dan Ries, referring to the investment tax credit, or ITC.

Senate leaders included in the bailout bill extensions of the renewable energy investment and production tax credits that expire at the end of the year. “The legislation also includes alternative minimum tax relief and an increase of the FDIC insurance cap to $250,000; measures that will help the bill gain support with House members,” Ries wrote in a research note.

Solar stocks have had a particularly rocky week as uncertainty over whether the tax credits would be extended has left hanging billions of dollars in solar and wind projects in the pipeline.

“Today’s ITC development is certainly an unexpected positive catalyst, Barclays analyst Vishal Shah wrote Wednesday.

The Senate bill extends for three years the production tax credit crucial to the wind industry as well as grants an eight-year extension of the 30% investment tax credit for solar projects.

Solar wafer maker LDK Solar (LDK) rose 10% in midday trading Wednesday but is still down 36% in the past month. Similarly, solar cell manufacturer, JA Solar (JASO) was up 11% but still 34% down in the past 30 days. Silicon Valley solar module make SunPower (SPWRA) was up nearly 9% Wednesday.

While far from a done deal, Collins Stewart’s Ries is optimistic that the credit crisis has lawmakers in a conciliatory mood. “House and Senate have bounced different versions of solar bills back and forth over the past two weeks,” he says. “Given the urgency of the bailout plan, we believe there will be pressure to keep changes to this large package of legislation to a minimum.”

“There’s a ray of hope,” Ries added. “I’d give it a better than 50% chance of passing.”

By Scott Moritz

Three of tech investors’ favorite horses - Google (GOOG), Research in Motion (RIMM) and Apple (AAPL) - which led the stampede out of the Nasdaq Monday, came rushing back a bit Tuesday.

Panic sellers who sent the Nasdaq down 9%, its steepest one-day drop since the Internet bubble burst in 2000, were replaced by bargain hunters Tuesday. In mid-day trading Google shares were up 8% and RIM’s stock bounced 10%. Apple was up 5%, while the Nasdaq as a whole rose 3%.

Apple was one of the biggest losers Monday, falling18% after two analysts downgraded the stock on fears that Mac sales were going the way of the rest of the PC market. FORTUNE’s Philip Elmer-Dewitt, however, pointed out that some of the gloomy predictions were based on a survey of business IT buyers, not quite Apple’s core market.

Other analysts came to Apple’s defense Tuesday. Goldman Sachs’ David Bailey reiterated his buy rating  saying the stock was oversold.

“We think yesterday’s 18% decline more than captures the concerns over Mac growth in a weakening spending environment, making Apple shares attractive at current levels,” Bailey wrote.

Monday’s broad selloff, and in particular the Nasdaq’s plunge, kicked into high gear after lawmakers failed to pass a Wall Street bailout bill. Amid fears that the current credit crunch could push the economy into a deep recession, not even the tech sector’s lack of debt and strong cash position were enough to keep panicky investors from bailing.

Tuesday’s rebound offered some solace, but as Monday’s collapse showed, tech is along for Wall Street’s ride, like it or not.

By Scott Moritz

Apple (AAPL) got hit with a pair of downgrades Monday as analysts see a weaker consumer taking a big bite out of the computer-maker’s growth rate.

RBC and Morgan Stanley analysts slapped Apple with neutral ratings, down from buy, on concerns that the slumping economy will put a chill on sales of Mac notebooks and desktop computers.

Citing a IQ/Changewave survey, RBC noted that 40% of consumers questioned said they “plan on spending less on electronics in the next 90 days,” RBC analyst Mike Abramsky wrote in the note. This is the weakest outlook ever measured in these surveys, Abramsky wrote.

Apple shares fell 16% in morning trading Monday in the wake of the reports, as investors get a sobering view of how popular consumer devices can lose momentum in a faltering economy.

The growing credit crisis has helped deflate consumer confidence and force delays in purchases of items like new computers and flat-screen TVs. The problem for Apple, writes Kathryn Huberty in a downgrade of Apple to neutral Monday, is that not only is PC sales growth slowing but the one area shrinking less is the under-$1,000 price range where Apple is absent.

Add the slowdown in PC sales to the higher costs of iPhone production, and Huberty says there will be a dramatic drop in Apple’s profit growth. Huberty cut her Apple earnings growth projection for the year to 6%, well below the 9% analysts’ consensus average.

Apple is not recession proof, RBC’s Abramsky writes.

Not surprisingly, investors have taken flight from stocks in some of the stronger players as the market jitters spread across nearly all sectors. Apple shares are down 35% and smartphone rival Research in Motion (RIMM) is down 47% in the past month.

RIM’s disappointing outlook Thursday confirmed that the once hot smartphone segment is cooling just as the larger mobile phone market grinds into slow gear, not just in the U.S., but globally as Nokia (NOK) recently pointed out.

By Scott Moritz

NEW YORK – A brief hands-on experience with the Google (GOOG) G1 phone gives the impression that after a slew of touchscreen duds from other telcos, Apple’s (AAPL) iPhone finally has a worthy rival.

The highly-anticipated HTC phone for T-Mobile (DT) was unveiled in New York Tuesday, and kiosks with technical experts were set up so media people could run the first Android-powered phone through some tricks. T-Mobile will start selling the phone Oct. 22 for $179 with a two-year contract.

The G1 has a large touchscreen, nearly the same size as the iPhone. But unlike the iPhone, there is a physical keyboard under the slide-open screen. People familiar with the iPhone will find the G1 a little lighter and thicker. The G1, for you ultra-thin fans, is about 3/4 of an inch thick, downright portly compared to the svelte half-inch iPhone.

Navigating the screen is fairly easy and there are several ways to move around. The touchscreen has a swipe capability that allows you to flick up and down or side to side. There is also a small trackball-type button at the bottom of the phone for scrolling.

The 3G network coverage at the show – only 16 cities currently have T-Mobile’s 3G networks – was fast. Google’s homepage loaded in five seconds and Google search results also popped up in five seconds. Sites like CNNMoney and Fortune took about 17 seconds to load. That is a fairly standard 3G speed.

Calls worked, and the sound was clear, for those considering the device as a phone primarily.

It is clear, however, that with Google’s support, Android and HTC have made a solid Internet device that combines web access with technology like GPS and software like Google Maps. Applications like Compass Mode, as Fortune’s Philip Elmer-Dewitt explains, gives you a 360-degree street view, a trick that has been limited to PCs until now.

The phone has so-called push e-mail through its Gmail service. As Fortune reported Monday, T-Mobile was considering a low-tier price plan that would give G1 users free e-mail without a data plan. T-Mobile technology chief Cole Brodman says the company looked at a few different pricing plans, but decided that the e-mail only data plan “doesn’t do the device justice.”

The G1 will have two monthly price options, $25 for data plan limited to 400 text messages or $35 for unlimited data. That’s compares with AT&T’s $30 and $45 data plans for the iPhone.

HTC’s touchscreen has some familiar features, like a shifting orientation if the user tips the phone on its side. It also has a zoom-in function that is done with plus and minus buttons on the screen rather than the two finger pinch or separate approach on the iPhone.

The G1 allows dragging and dropping of pictures and text, a feature the iPhone still lacks. The music player was easy to use and there is a direct link to Amazon’s music store.

Overall, and first impressions being what they are,  the G1 stands well above disappointing touchscreens like Verizon’s (VZ) LG Voyager or Sprint’s (S) Samsung Instinct. And until Research in Motion (RIMM) delivers its touchscreen Storm BlackBerry, T-Mobile’s G1 is the toughest competition yet to the iconic iPhone.

By Scott Moritz

Android lands at T-Mobile Tuesday, and as part of the effort to deliver the Google phone to the mobile market, T-Mobile is considering including free e-mail access.

The new Android-powered phone will have Google’s (GOOG) Gmail service built in, and T-Mobile executives are considering offering access to Gmail free, without the need for a data plan, says one person close to the discussions.

The HTC-manufactured T-Mobile phone will be the first of the hotly-anticipated Android-operated handsets, and one of several new challengers to Apple’s (AAPL) iPhone. The Android project was created by Google to cultivate an open application platform to operate next-generation mobile phones.  T-Mobile  – a unit of Deutshe Telekom (DT) - is expected to unveil the phone during a press conference at 10:30 ET Tuesday, and offer it for sale later this fall.

Analysts see the Google phone as the beginning of an important lead in mobile Internet advertising through ads appearing on Android powered phones. Sandeep Aggarwal, an analyst with Collins Stewart, estimates that the phone will generate $5 billion in incremental revenue for Google by 2011.

Should T-Mobile decide to offer free Gmail access, it would be seen as a big counter move to Research in Motion’s (RIMM) BlackBerry e-mail service, which costs $15 a month extra. And if telcos embrace Google’s ad-supported free e-mail, it could help drive Google’s ultimate aim to spread its successful desktop advertising business to mobile phones.

The move to provide free Gmail has risks, however.

T-Mobile could undercut its own data revenue stream from BlackBerry subscribers if users trade in their Curves and Pearls for the Android phone. But T-Mobile, the No.4 wireless shop, needs an attention-getting strategy like free e-mail to help set itself apart from bigger players like AT&T (T), Verizon (VZ) and Sprint (S).  

Google referred calls for comment to T-Mobile and a T-Mobile representative could not provide an immediate comment.

As for the HTC Android phone itself, one user who got an early trial described the slide out keyboard as a little awkward for some typing tasks. The browsing quality however was “better than BlackBerry and close to the iPhone.”

By Yi-Wyn Yen

There’s a ton of videos to watch on the Web. YouTube uploads 13 hours of video each minute. But finding what to watch isn’t easy.

Video search is one of the biggest challenges on the Internet today. A number of online video companies are trying to figure out how to find and discover content for viewers, but a debate rages on the best method to deliver results.

VideoSurf is the latest startup that claims it has solved the video search problem. Major video search players like Blinkx, Truveo, and Everyzing rely on tagging video clips with descriptions and analyzing the audio portion of clips to make videos searchable through text. Google (GOOG) and Microsoft’s Live Search (MSFT) are also making headway with speech-to-text technology to index videos. VideoSurf cofounder Lior Delgo, a former Yahoo search executive, says his company has made a video search breakthrough by scanning and analyzing the images within videos as a way to organize the content.

Analyzing a video is an incredibly complex problem. VideoSurf does the heavy lifting for web viewers with algorithms that identify people and backgrounds in videos and then converts them into thumbnail frames that summarize sections of the video.

Visual computer scanning means search results will be more relevant, says Delgo. “Before this, there was no way to navigate videos visually. You had to rely on tagging content surrounding the video. But video is not text,” he says. “If you can visually see what a video is about, you can make better decisions about whether you want to watch it or not.”

For example, say you want to watch clips that feature Republican vice president nominee Sarah Palin on The Daily Show. VideoSurf will pull up video results and display frames in which Palin is shown. Viewers can then click on the frames and jump to a particular scene on the video. VideoSurf indexes video content from a number of top news and entertainment sites, including Comedy Central (VIA), Hulu, YouTube, and CNN (owned by Fortune’s parent company, Time Warner.) VideoSurf launched its new product last week and currently requires viewers to sign up to use the service.

VideoSurf is not the only company that uses visual scanning technology to index videos. Digitalsmiths has been cataloging digital videos for movie and TV studios for the past three years and is now providing its technology for web-based videos.

Last month Warner Bros. (which also is by Time Warner) launched TheWB.com and runs Digitalsmiths’s search technology so that viewers can find every scene, say,  where Joey Tribbiani says “How you doin?” on Friends. TMZ.com (another Time Warner property), a popular celebrity blog, also powers Digitalsmiths to archive its videos.

The top search engines are pushing for more videos to be included in text-based searches. For example, when a search for Jamaican Olympic gold medalist Usain Bolt is entered, at least one video pops up in the first 10 results for Google, Yahoo (YHOO) and Microsoft’s Live Search.

Search engines have the computing power to process the massive amounts of video data, but don’t have the technology, which is why Gartner digital media analyst Allen Weiner predicts VideoSurf and Digitalsmiths will be acquired soon by the one of the major engines. “The search engines have been waiting for the next generation of technology to come alone. You can only do so much by metadata and tags. This is going fuel a lot of interest in acquisitions,” Weiner says.

Both VideoSurf and Digitalsmiths provide similar technology for video search, but their business approach is different. Digitalsmiths partners with media publishers to allow them to customize its video search products. VideoSurf, like YouTube, is essentially a destination site for consumers.  Digitalsmiths CEO Ben Weinberger says, “Nobody should think they’re so powerful that you’ll be the place that everyone wants to come watch videos.”

Online video analysts say both VideoSurf and Digitalsmiths are making video search better, but there’s still a long way to go. “The reality is, when you compare performing a typical [text-based] web search on Google to searching for videos on any of the engines, it’s nowhere near as good,” says Will Richmond, a broadband video analyst for VideoNuze. “You’ve got speech-to-text, facial scanning, and tagging. There’s a real art to figure out which of these will yield the best result. At the end of the day, you can really only measure the approach by the quality of the results.”