Integrated circuit and systems software solution provider Qualcomm Inc.'s (QCOM) shares, first discussed here on January 28, 2011, at a price of $53.74, have pulled back about 10% to $54 in early 2011, but just view the retreat as a chance to scoop up shares, if you missed the January entry price.

And the reason is obvious enough: Qualcomm has the right products at the right time. The smartphone segment, aided by the 3G internet, is on fire, which has resulted in record model station modem (msm) chipset shipments.

Google's (GOOG) mobile operating system, Android, is an example of how acquisitions have made a big difference. This technology came from a deal struck in 2005. Then, after lots of internal development, Google launched Android in 2007. Since then, the growth has been sizzling.

In fact, according to the most recent report from comScore, Android's market share hit 31.2%. Yes, it is now the number one mobile operating system.

Safeway (SWY) overall option implied volatility of 28 is near its 26-week average of 29, according to Track Data, suggesting nondirectional movement into its March 9 analyst meeting.

Nokia (NOK) volatility is near ten-month lows. Nokia April and July put option implied volatility is at 38, below its 26-week average of 44, according to Track Data, suggesting decreasing price movement.

Options Update is by Stock Specialist Paul Foster of theflyonthewall.com.

Analyst Upgrades

• Molycorp (MCP) to overweight from neutral at JPMorgan.
• Humana (HUM), HealthSpring (HS) and UnitedHealth (UNH) to buy from neutral at UBS.
• Williams Cos. (WMB) to conviction buy from neutral and UBS (UBS) to buy from neutral at Goldman.
• China Kanghui (KH) to overweight from neutral at Piper Jaffray.
• Arthur J. Gallagher (AJG) to buy from hold at Citigroup.
• Armstrong World (AWI) to buy from hold at BB&T.
• Time Warner (TWX) to buy from hold at Benchmark Co.
• Calpine (CPN) to overweight from equal weight at Barclays.
• 3M Company (MMM) to neutral from underperform and Kirby (KEX) to buy from underperform at BofA/Merrill.

Microsoft (MSFT) and Nokia (NOK) recently announced a strategic partnership in which Nokia will adopt Windows Phone 7 as the main operating system for its smart phones. Microsoft competes with other tech bellwethers like Google (GOOG), Research In Motion (RIMM) and Apple (AAPL) that make smart phones and tablets, as well as the corresponding operating systems for mobile phones and tablet devices.

We believe the Nokia deal presents upside for Microsoft, as it provides an opportunity to gain share in both the smart phone operating system market and the search advertising market by leveraging Nokia's large global presence.

Lately, Research In Motion (RIMM) has been ramping up its dealmaking. Some of the recent transactions include QNX, Dash Navigation and Torch Mobile.

Tthe latest deal came this week: RIM agreed to buy Gist (the price tag was not disclosed). The company develops a service that prioritizes incoming messages. It even provides the user with helpful research information on contacts, such as from social networks and blogs. The app is currently for Apple's (AAPL) iPhone and Google's (GOOG) Android devices.

So, I'm sitting here in front of my screen, watching the market action. Kind of a boring day, at least for my portfolio. In particular, one of my holdings, Microsoft (MSFT), is acting in a very boring manner. I was hoping to see some interest on the part of Wall Street in that name today following the stock's recent weakness, but alas, there is none to be had. At the time of this writing, shares are down fractionally to $27.15.

Investors have been digesting the news concerning the deal between the maker of Windows and Nokia (NOK). The plan is to generate some competition in the smartphone business. Success with this initiative would be nice for shareholders of both companies.

Analyst Upgrades

• Abercrombie & Fitch (ANF) to outperform from market perform at Wells Fargo.
• Trinity Industries (TRN) to buy from hold at BB&T.
• Cameron (CAM) to outperform from sector perform at RBC Capital.
• Expedia (EXPE) to positive from neutral at Susquehanna.
• Micron (MU) to buy from hold at Lazard Capital.

This is probably one of the most interesting stories of the Internet revolution. Microsoft (MSFT) jumped out the starting gate with its Windows operating system and took the world by storm. Then for some unknown reason, Microsoft missed the entire search engine revolution and Google (GOOG) raced to first place. Now Microsoft has again missed the next leg -- the iPhone and iPad revolution, and Apple (AAPL) holds first place in this segment.

Nokia (NOK) was a pioneer in the smartphone revolution, but with Apple's drive to the top, Nokia lost its momentum. Once Nokia had 50% of the handset market. Now that share has fallen to just 29%. It's hard to believe but Microsoft has only 2% of the global phone software market.

First we had the iPhone revolution. Now, The Financial Times reports that Apple (AAPL) is planning to expand the iPhone to handle mobile commerce, giving the company access to the multibillion-dollar transaction industry.

You are probably wondering what and how this will be done. The iPhone 5, due out this year, likely will incorporate technology called Near Field Communication (NFC). NFC incorporates financial account information and ties the data to specific devices.

Analyst Calls

• Medtronic (MDT) to buy from neutral and 1-800-Flowers.com (FLWS) to neutral from sell at Goldman.
• CarMax (KMX) to outperform from perform at Oppenheimer.
• Points International (PTSEF) to buy from neutral at Merriman.
• Nokia (NOK) to market perform from underperform at Morgan Keegan.
• Amdocs (DOX) to overweight from equal weight at Barclays.
• Western Alliance (WAL) to outperform from sector perform at RBC Capital.
• Carbo Ceramics (CRR) to outperform from market perform at BMO Capital.
• Rackspace (RAX) to buy from hold at Benchmark Co.
• Brinker (EAT) to equal weight from underweight at Morgan Stanley.

It's become all-too-common for Nokia (NOK). That is, another quarter with a drop in earnings. As for Q4, there was a 21% reduction. As for its global market share, it fell by 2% to 32%. So far in today's trading, the stock is off 2.52% to $10.46.

True, Nokia cranks out lots of cash. In the quarter, earnings still amounted to $1 billion. Sales were up 6%.