Japan eased safety standards ahead of Boeing 787 rollout

Japan's government stepped in to give Boeing Co.'s now-grounded 787 Dreamliner and its made-in-Japan technology a boost in 2008 by easing safety regulations, fast-tracking the rollout of the groundbreaking jet for Japan's biggest airlines, according to records and participants in the process.

The concessions by an advisory panel to Japan's transport ministry reflected pressure from All Nippon Airways (ANA) and Japan Airlines (JAL) and a push to support Japanese firms that supply 35 percent of the 787 from the carbon-fiber in its wings to sophisticated electrical systems and batteries used to save fuel, people involved in the deliberations told Reuters.

"I believe the request for the changes came initially from the airlines. Ultimately, it was a discussion of measures to lower operating costs for the airlines," said Masatoshi Harigae, head of aviation at Japan's Aerospace Exploration Agency, one of the outside advisers who urged the eased regulatory standards.

There is no suggestion that easing regulatory standards contributed to the problems facing the Dreamliner, idled around the world after a string of malfunctions ranging from fuel leaks to battery meltdowns. There is also no evidence to suggest that continuing the mandate for more frequent manual inspections for new aircraft, including the Boeing 787, before 2008 would have helped catch signs of trouble earlier.

The looser regulations did not specifically address the risk of the Dreamliner's powerful batteries catching fire, the risk that safety investigators have zeroed in on in recent weeks.

But the steps taken by Japan's Civil Aviation Bureau in 2008 underscore how the deep commercial ties between Boeing and its Japanese suppliers and the backing of ANA and JAL helped build support for an easing of certification standards, based on a review of meeting records by the advisory panel released by the Ministry of Land, Infrastructure and Transport and comments from three of the seven experts who participated.

ANA and JAL declined to comment, deferring questions on regulatory standards to aviation officials and the ministry. Boeing in Tokyo said it couldn't immediately comment on the rule changes.

"We have not brought down our standards in comparison to other countries. This was a pragmatic revision," Tatsuyuki Shimazu, Chief Air Worthiness Engineer at the Civil Aviation Bureau, said.

ONGOING PROBE

Earlier this month, ANA was forced to make an emergency landing on a 787 domestic flight after a battery overheated and partially melted, triggering smoke alarms in the cockpit. The probe into that incident may take weeks or months as investigators still lack basic data to understand what went wrong, people involved have said.

In the meantime, the indefinite grounding of the Dreamliner has raised costs for both ANA and JAL and threatened to push back plans both carriers had for growth and new routes based on the new aircraft, analysts have said.

Boeing has yet to say whether it will compensate carriers for flight cancellations and higher operating costs. "We have been talking with our customers since (the 787 was grounded), but the details are confidential," said Rob Henderson, a Boeing spokesman in Tokyo.

After three meetings by a panel of industry and policy experts that concluded in March 2008, Japan's transport ministry said it would adopt 40 proposals to streamline regulations surrounding new aircraft. At the time, the ministry said the easier regulatory standards were designed in part to "quickly realize the benefits from the introduction of the 787."

ANA, the Dreamliner's biggest customer, and JAL committed to buy the first 787 in 2004, helping Boeing kick-start orders for the futuristic plane. Both subsequently increased their orders, with ANA planning to eventually fly 66 Dreamliners.

"At the time there was a lot of confidence in the aircraft. It was a discussion of measures to lower operating costs for the airlines," said Harigae.

Japan's government agencies often convene blue-ribbon panels of outside experts to review regulatory policy changes, as the transport ministry did for aircraft safety rules in 2007.

QUICKER TURNAROUNDS

Changes endorsed by the aviation group, including 40 revised safety guidelines, were presented as an effort to bring Japan into line with the framework of regulations in other markets, including the United States. At least five recommendations in the advisory report benefited the 787. Four mentioned support for the Dreamliner directly.

Three of the rule changes dealt with abbreviated testing and approval of pilots who had been cleared to fly the Boeing 777 and were preparing to switch to the 787. "It (787) is highly innovative and its safety is also advanced, but it's also very similar in design to the 777," said Kinya Fujiishi, an aviation journalist who sat on the panel. "This is why we thought it would be fine to revise the rule."

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Fire kills more than 200 in Brazil nightclub

PORTO ALEGRE, Brazil—

At least 200 people were killed in a nightclub fire in southern Brazil on Sunday after a band's pyrotechnics show set the building ablaze, and fleeing patrons were unable to find the emergency exits, local officials said.

Bodies were still being removed from the Kiss nightclub in the southern city of Santa Maria, Major Gerson da Rosa Ferreira, who was leading rescue efforts at the scene for the military police, told Reuters.

Local officials said 180 people were confirmed dead, and Ferreira said the death toll would rise above 200. He said the victims died of asphyxiation or from being trampled, and that there were possibly as many as 500 people inside the club when the fire broke out at about 2:30 a.m.

Television footage showed people sobbing outside the club, while shirtless firefighters used sledge hammers and axes to knock down an exterior wall to open up an exit.

"It was really fast. There was a lot of smoke, really dark smoke," survivor Aline Santos Silva, 29, told Globonews TV. "We were only able to get out quickly because we were in a VIP area close to the door."

President Dilma Rousseff cut short a visit to Chile and was returning to Brazil following the blaze, her spokesperson said.

Luiza Sousa, a civil police official in Santa Maria, told Reuters the blaze started when a member of the band or its production team ignited a flare, which then set fire to the ceiling. The fire spread "in seconds," Sousa said.

The disaster recalls other incidents including a 2003 fire at a nightclub in West Warwick, Rhode Island, that killed 100, and a Buenos Aires nightclub blaze in 2004 that killed nearly 200. In both incidents, a band or members of the audience ignited fires that set the establishment ablaze.

Brazil's safety standards and emergency response capabilities are under particular scrutiny as the country prepares to host the 2014 World Cup soccer tournament and the 2016 Summer Olympics.

Rio Grande do Sul state Health Secretary Ciro Simoni said emergency medical supplies from all over the state were being sent to the scene.

Santa Maria is some 186 miles west of the state capital of Porto Alegre. "A sad Sunday!" tweeted Rio Grande do Sul Governor Tarso Genro. He said "all possible measures" were being taken in response and that he was on his way to the scene.

(Additional reporting by Guillermo Parra-Bernal, Todd Benson and Brian Winter; Editing by Eric Beech)

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Japan to start 4K TV broadcast in July 2014: report

TOKYO (Reuters) - The Japanese government is set to launch the world's first 4K TV broadcast in July 2014, roughly two years ahead of schedule, to help stir demand for ultra high-definition televisions, the Asahi newspaper reported on Sunday without citing sources.

The service will begin from communications satellites, followed by satellite broadcasting and ground digital broadcasting, the report said.

The 4K TVs, which boast four times the resolution of current high-definition TVs, are now on sale by Japanese makers including Sony Corp , Panasonic and Sharp Corp . Other manufacturers include South Korea's LG Electronics .

Japan's Ministry of Internal Affairs and Communications had aimed to kick-start the 4K TV service in 2016. That has been brought forward to July 2014, when the final match of the 2014 football World Cup is set to take place in Brazil, the Asahi report said.

In Japan, the development of super high-definition 8K TVs is in progress, and the Ministry of Internal Affairs and Communications plans to launch the test 8K TV broadcast in 2016, two years ahead of schedule, it said.

(Reporting by Osamu Tsukimori; Editing by Paul Tait)

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Djokovic beats Murray for 3rd straight Aust. title

MELBOURNE, Australia (AP) — Novak Djokovic became the first man in the Open era to win three consecutive Australian titles when he beat Andy Murray 6-7 (2), 7-6 (3), 6-3, 6-2 in Sunday's final.

Little wonder he loves Rod Laver Arena.

"It's definitely my favorite Grand Slam," he said. "It's an incredible feeling winning this trophy once more. I love this court."

Djokovic has won four of his six major titles at Melbourne Park, where he is now unbeaten in 21 matches.

Nine other men had won back-to-back titles in Australia over 45 years, but none were able to claim three in a row.

Only two other men, American Jack Crawford (1931-33) and Australian Roy Emerson (1963-67), have won three or more consecutive Australian championships.

Born a week apart in May 1987 and friends since their junior playing days, Djokovic and Murray played like they knew each other's game very well in a rematch of last year's U.S. Open final. There were no service breaks until the eighth game of the third set, when Djokovic finally broke through and then held at love to lead by two sets to one.

Djokovic earned two more service breaks in the fourth set, including one to take a 4-1 lead when U.S. Open champion Murray double-faulted on break point.

"It's been an incredible match as we could have expected," Djokovic said. "When we play each other, it's always, we push each other to the limit and I think those two sets went over two hours, 15 minutes, physically I was just trying to hang in there. Play my game and focus on every point."

The 25-year-old Serb didn't rip his shirt off this time, as he did to celebrate his epic 5-hour, 53-minute win over Rafael Nadal in last year's final. He just did a little dance, looked up to the sky and then applauded the crowd after the 3-hour, 40-minute match.

Murray's win over Djokovic in the U.S. Open final last year ended a 76-year drought for British men at the majors, but he still is yet to make a breakthrough in Australia after losing a third final here in the last four years.

Djokovic's win went against the odds of recent finals at Melbourne Park. In four of the past five years, the player who won the second of the semifinals has finished on top in the championship match. But this year, Djokovic played his semifinal on Thursday — an easy 89-minute minute win over No. 4-seeded David Ferrer. Murray needed five energy sapping sets to beat 17-time major winner Roger Federer on Friday night.

"You don't wake up the next day and feel perfect, obviously," Murray said of the Federer match. "It's the longest match I played in six months probably. It obviously wasn't an issue today. I started the match well. I thought I moved pretty good throughout."

The win consolidated Djokovic's position as the No. 1-ranked player in the world, while Federer and Murray will be second and third when the ATP rankings are released Monday.

Their last two matches in Grand Slams — Murray's five-set win at last year's U.S. Open and Djokovic's victory here last year in five in the semifinals — had a total of 35 service breaks.

It was a vastly different, more tactical battle on Sunday, with the first two tight sets decided in tiebreakers.

"All our matches in last three years have been decided in a very few points, so it's really hard to say if I've done anything different," Djokovic said. "I tried to be more aggressive. So I went for my shots, especially in the third and fourth; came to the net quite often. I was quite successful in that percentage, so it worked well for me."

Murray, who called for a trainer to retape blisters on his right foot at the end of the second set, was visibly annoyed by noise from the crowd during his service games in the third set, stopping his service motion twice until the crowd quieted down. After dropping the third set, he complained about the noise to chair umpire John Blom.

"It's just a bit sore when you're running around," Murray said. "It's not like pulling a calf muscle or something. It just hurts when you run."

Djokovic came from 0-40 down in the second game of the second set to hold his serve, something he called "definitely one of the turning points."

"He missed an easy backhand and I think mentally I just relaxed after that," Djokovic said. "I just felt I'm starting to get into the rhythm that I wanted to. I was little more aggressive and started to dictate the play."

Although Djokovic went into the match with a 10-7 lead in head-to-heads, Murray had beaten Djokovic five out of eight times in tiebreakers, and that improved to six of nine after four unforced errors by Djokovic to end the first set.

Djokovic pegged back that edge in the second set, when Murray also didn't help his cause by double-faulting to give Djokovic a 3-2 lead, and the Serbian player didn't trail again in the tiebreaker.

On the double-fault, Murray had to stop as he was about to serve to pick up a feather that had fallen on the court.

"I could have served, it just caught my eye before I served ... I thought it was a good idea to move it," he said.

"Maybe it wasn't because I obviously double faulted. At this level it can come down to just a few points here or there. My probably biggest chance was at the beginning of the second set; (I) didn't quite get it. When Novak had his chance at the end of the third, he got his."

Djokovic will have little time to savor the win — he's playing Davis Cup for Serbia next weekend against Belgium.

"It's going to be a lot of fun ... to see how I can adjust to clay court in indoor conditions, playing away Davis Cup, which is always tricky," he said.

Andre Agassi was among those in the capacity crowd — the four-time Australian champion's first trip Down Under in nearly 10 years — and he later presented the trophy to Djokovic.

Victoria Azarenka, who won Saturday's women's singles final over Li Na, was also there with her boyfriend rapper Redfoo. Actor Kevin Spacey met in the dressing room with both players ahead of the match and later tweeted a photo of himself with them.

In the earlier mixed doubles final Sunday, wild-card entrants Jarmila Gajdosova and Matthew Ebden of Australia beat the Czech pair of Lucie Hradecka and Frantisek Cermak 6-3, 7-5.

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CDC: Flu seems to level off except in the West

New government figures show that flu cases seem to be leveling off nationwide. Flu activity is declining in most regions although still rising in the West.

The Centers for Disease Control and Prevention says hospitalizations and deaths spiked again last week, especially among the elderly. The CDC says quick treatment with antiviral medicines is important, in particular for the very young or old. The season's first flu case resistant to treatment with Tamiflu was reported Friday.

Eight more children have died from the flu, bringing this season's total pediatric deaths to 37. About 100 children die in an average flu season.

There is still vaccine available although it may be hard to find. The CDC has a website that can help.

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CDC: http://www.cdc.gov/flu/

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'Argo' wins Producers Guild Awards

LOS ANGELES (AP) — "Argo" continues to shake up the Oscar race by taking the top honor at the Producers Guild Awards on Saturday.

Ben Affleck, coming off winning Golden Globe Awards for best motion picture drama and director for the real-life drama, received the award handed out at the Beverly Hilton Hotel.

"I'd be remiss if I didn't mention that I'm still working as an actor," he said in his acceptance speech.

Affleck also stars in "Argo" as the CIA operative who orchestrated a daring rescue of six American embassy employees during the 1979 Iranian hostage crisis. George Clooney and Grant Heslov share the producer award with Affleck as "Argo" beat out the Civil War saga "Lincoln," which has a leading 12 Academy Awards nominations.

Other nominees in the PGA movie category were "Les Miserables," ''Zero Dark Thirty," ''Beasts of the Southern Wild," ''Django Unchained," ''Life of Pi," ''Moonrise Kingdom," ''Silver Linings Playbook," and Skyfall."

Along with honors from other Hollywood professional groups such as actors, directors and writers guilds, the producer prizes have become part of the preseason sorting out contenders for Academy Awards.

The big winner often goes on to claim the best-picture honor at the Oscars on Feb. 24.

Disney's "Wreck-It Ralph" won the guild's animation category, beating "Brave," ''Frankenweenie," ''ParaNorman" and "Rise of the Guardians."

"Searching for Sugar Man" took the documentary prize, beating "A People Uncounted," ''The Gatekeepers," ''The Island President," and "The Other Dream Team."

Showtime's "Homeland" won the producer's award for television drama series, which beat out "Breaking Bad," ''Downton Abbey," ''Game of Thrones," and "Mad Men."

The ABC sitcom "Modern Family" took the prize for best comedy series for the third straight year, beating "30 Rock," ''The Big Bang Theory," ''Curb Your Enthusiasm," and "Louie."

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Pitching Chicago to China

World Business Chicago Vice Chairman Michael Sacks and former Commerce Secretary William Daley leave Sunday on a six-day business mission to China, Sacks' first official foreign trip as a top adviser to Mayor Rahm Emanuel.

Sacks said that he and Daley will pay their own way to China while World Business Chicago, a nonprofit that acts as the city's economic development agency, will cover the travel costs for two staff members, including one from the mayor's office.

Sacks and Daley will visit Hong Kong and Beijing before joining up with Choose Chicago CEO Don Welsh and the Chicago Symphony Orchestra in Shanghai.

There, they'll take in a CSO concert and co-host a reception for about 75 people, including tour operators, and China-based alumni of Northwestern University's Kellogg School of Management and the University of Chicago's Booth School of Business.

Sacks said he asked for Daley's help in selling Chicago to foreign officials, specifically the Chinese, after the former chief of staff to President Barack Obama returned home from Washington last year. Sacks said that was months before Daley said he was considering a run for governor in 2014.

"His gravitas, his stature as former commerce secretary and former chief of staff have made the quality of this trip better than anything I could have done myself," Sacks said. "I would not have been able to secure these meetings without him."

Daley and Sacks are expected to meet with 30-plus corporate executives, including the CEO of Hong Kong-based airline Cathay Pacific and billionaire Chinese entrepreneur Lu Guanqiu, whose son-in-law, Pin Ni, runs Elgin-based auto parts maker Wanxiang America Corp.; six Chinese officials, including the acting mayor of Beijing and China's commerce minister, Chen Deming; and U.S. Ambassador to China Gary Locke.

Sacks' role with World Business Chicago is a volunteer position. His day job is CEO of Grosvenor Capital Management. The investment firm is known as a hedge fund of funds because its primary business is to invest in multiple hedge funds on behalf of large investors, such as pension funds, corporations and sovereign wealth funds.

Sacks frequently travels abroad for his work, often adding city-related sales pitches to his itineraries. This, however, is his first foreign trip focused on his work at World Business Chicago.

Spertus changes name

The Spertus Institute this week will tweak its name — and with it, its identity — as part of an ongoing effort to recover from an unfortunately timed decision to open a new building on the eve of the financial crisis.

The institute, which has been a pillar of Jewish culture in Chicago since 1924, will now be called the Spertus Institute for Jewish Learning and Leadership. The institute also announced that its programming for children and families will be cut for the foreseeable future in favor of new academic offerings for people working at nonprofits.

"During the past 31/2 years, we eliminated a $3.8 million operating deficit, largely by dramatically reducing our programmatic footprint," said Hal Lewis, the institute's president, who took over in July 2009. "So I didn't have the money to go and get branding assistance. But I was convinced we had a branding challenge — because when I first became president I spent a good solid four months on a listening tour, in which people told me, 'Oh, yeah, I know something about Spertus,' but there was uncertainty about the work we did."

A grant from the Harvey L. Miller Foundation paid for most of the rebranding effort, which an outside consulting firm led.

"I should say I'm generally skeptical of consultants," Lewis said. "But they taught me something elegantly simple: Spend more time talking about the why and less time on the how. We know the enormous array of programs we offer ... but we never said why that's important. ... (The answer is) we believe that a learning Jewish community is a vibrant Jewish community. It is the historic experience of the Jewish people that learning doesn't stop at adolescence."

The institute has about 400 students in degree and certificate programs, from a one-day certificate in grant writing to a doctorate in Jewish studies, which can take up to 10 years to complete. The institute also offers public lectures on politics, arts and culture as well as museum-style exhibits.

Spertus plans to offer new leadership concentrations within its master's degree programs aimed at youth workers, camp counselors and early childhood teachers. It also plans to create programs in social entrepreneurship and lay-leader training. Lewis said also he may eliminate one of Spertus' existing education degrees, but these changes are not final and will not be announced until the spring.

"We were never best at early childhood education," Lewis said. "The synagogues are far better at that ... So this is not a retreat from one of our historic strong suits."

The seeds of the long-running overhaul of Spertus can be traced to the November 2007 opening of its building, an iconic glass sculpture at 610 S. Michigan Ave.

Lewis said so many assumptions about the building failed to materialize, such as revenue from room rentals. Nonprofits also heavily cut professional development funds during the recession, which, in turn, lowered enrollment because students were no longer able to get help paying for their master's degrees.

However, rentals and other economic indicators are beginning to reverse. The falling stock market hurt Spertus' program endowment, slicing it to about $6 million, and its building endowment to about $12 million. Those funds are now at about $7 million and about $17 million, respectively, Lewis said.

Steven Nasatir, president of the Jewish United Fund/Jewish Federation of Metropolitan Chicago, said his organization is assisting Spertus with fundraising. He said without the branding and other program changes Lewis is making, Spertus would be "treading water."

"The name change is a manifestation of resetting goals and is a positive thing," he said. "People have to better understand what you're attempting to do."

Melissa Harris can be reached at mmharris@tribune.com or 312-222-4582.

Twitter @chiconfidential

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3 dead, 2 wounded in pair of early morning shootings

After a few quiet nights, gun violence returned to Chicago's cold streets early Saturday morning with three people killed by gunshots and one person left with tears, blood-stained clothing and a friend's body.

Laverne Smith stood crying at one end of a vacant lot in the Lawndale neighborhood on the West Side early this morning while her friend, close like a brother, lay covered by a white sheet behind a maroon van at the other end.

Ronnie Chambers, 33, no address available, had been in the driver's seat of the van, which had just arrived in the 1100 block of South Mozart Street when one person, probably two, opened fire, police said. Chambers, identified by family members at the scene and later by police, died at the scene, in Smith's arms.

Smith wore a pink blood-stained shirt under a pink jacket, white pants dotted with drops of blood, and pink sandals. She paced the crime scene, at the north end of Mozart Drive where it ends at Fillmore Street, letting out occasional screams and leaning on her friend for support.

"I held him, they had to pry me from him," she said, crying. "He was breathing, gasping."

At least one other man, 21, was inside the van when the shooting started, police said. He had jumped from the front passenger seat to the back, quick thinking that police said probably saved his life. He was wounded in the thigh and taken to Mount Sinai Hospital. Police did not say how many people were inside the van. They also did not say exactly how many shooters there were, but did say seven shots were fired.

The shooting happened across the street from Safer Foundation North Lawndale, an Illinois Department of Corrections transitional facility for adults with criminal records, and half a block west of a fire station.

Family and friends, none of whom wanted to give their names, circled the north end of the scene, marked by yellow tape hung around trees, light poles and cop cars.

A young man at the scene who refused to give his name but said he saw the shooting called the gun used a "big boy."

"Look at that (bullet) hole," the young man said, motioning to the passenger side door on the van. "That's a full nickel."

An east-facing car sat abandoned in the T intersection formed by Mozart and Fillmore. Police weren't sure whether the people who abandoned the car were involved in the shooting or freaked out and fled the scene. Police found casings from two weapons – one a rifle – whose bullets had entered the van from both sides.

"He was gangsta with his (expletive)," the man said of the individual or individuals who did the shooting. "He knew what he was doing."

Despite his apparent proximity to the attack, he explained to a detective that he could not help police do their jobs. He later complained to a supervisor about their response time – he said 27 minutes but police said 3. Police said that they received one 911 call about shots being fired in the area.

A 16-year-old boy who said he was with the victims when the shooting happened wandered around the lot, looking toward the ground most of the time. He looked emotionally spent after being held by police for a short time at the scene.

"I just want to go home," he said, though he had no ride home. "It just happened so fast. I'm tired of explaining myself."

In the other fatal overnight shooting, three men were shot about 4 a.m. outside of a diner at the corner of Wallace Street and Pershing Road in the Bridgeport neighborhood on the South Side, police said. Two men died at the scene. 

More details to come.

pnickeas@tribune.com

Twitter: @PeterNickeas

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Samsung puts lid on capex for the first time since financial crisis

SEOUL (Reuters) - Samsung Electronics Co turned cautious on spending for the first time since the global financial crisis, keeping its annual investment plan unchanged at 2012 levels, as demand for computer chips wanes and the smartphone market slows.

Samsung, one of the industry's most aggressive spenders, has ramped up capital expenditure every year since 2004 except 2009 to meet soaring demand for its array of consumer electronics and mobile devices. It sold a record 700,000 smartphones a day in the last quarter.

But with the personal computer market shrinking for the first time in 11 years, the global smartphone market growing more slowly, and Apple Inc moving to buy fewer of Samsung's microprocessors used in the iPhone and iPad, the South Korean IT giant is now forced to keep a lid on spending.

"Overall its earnings momentum remains intact, and smartphone shipments will continue to grow even in the traditionally weak first quarter, as Samsung's got a broader product line-up and Apple appears to be struggling in pushing iPhone volumes aggressively," said Lee Se-chul, a Seoul-based analyst at Meritz Securities.

Samsung, which reported a record quarterly and annual profit on Friday, said it would keep 2013 capital expenditure unchanged from 2012.

"The key word for us in investment in 2013 is flexibility. We'll decide as the market demand dictates," Robert Yi, head of Samsung's investor relations, told analysts.

Data from the company shows Samsung started to slow down planned investment in the last quarter.

Samsung said it spent 4.4 trillion won in October-December, pushing its 2012 investment to a record 23 trillion won ($21.5 billion). But the company said in October that it was on course to spend 25 trillion won in 2012.

Analysts had expected a 4-20 percent cut in Samsung's 2013 capital spending.

By contrast, Taiwanese rival TSMC is planning to raise its capital expenditure to $9 billion this year, aimed in part at winning Apple orders away from Samsung.

Shares in Samsung fell 2.1 percent as of 0250 GMT, lagging a 1.1 percent decline in the wider market.

RECORD EARNINGS

Samsung had poured money into factories to boost production of chips and panels used in Apple products and its Galaxy range devices, pushing its operating profit to 8.84 trillion won in the last quarter. The 89 percent increase from a year earlier was in line with its earlier estimate.

Profit at its mobile devices division, which makes phones, tablets and cameras, more than doubled to 5.44 trillion won in the quarter from a year earlier, lifted by a broader offering of smartphones - from the very cheap to the very expensive.

The division accounted for 62 percent of Samsung's overall fourth-quarter profit, up from 55 percent a year earlier.

Samsung is also seeing strong sales of its Note phablet, which analysts expect to help Samsung get through any seasonal weakness better than rivals.

Samsung, which doesn't provide a breakdown of smartphone sales, is estimated to have sold around 63 million smartphones in the last quarter, including 15 million Galaxy S IIIs and 7 million Note IIs.

The company also said 2012 operating profit rose 86 percent to an all-time high of 29 trillion won.

SAMSUNG VS APPLE

Samsung sold 213 million smartphones last year and enlarged its share of the global market to 30.4 percent from around 20 percent in 2011, a report by market research firm Strategy Analytics showed on Friday. The sharp increase reflects Samsung's aggressive marketing of its wide product range.

Apple's share of the market rose slightly to 19.4 percent from 19.0 percent in 2011, according to the report.

Globally, sales of smartphones surged 42.7 percent last year to 700 million, Strategy Analytics said.

Samsung said on Friday it expects the global smartphone segment to shrink in January-March from the seasonally strong fourth quarter, and that growth of the overall handset market will slow to the mid single-digits this year.

The forecast is in line with industry estimates, with signs of a slowdown having already emerged.

Apple shipped 47.8 million iPhones in the three months ended December, a record that nonetheless disappointed many analysts accustomed to years of outperformance. The Cupertino, California-based company also missed Wall Street's revenue forecast for a third straight quarter as iPhone sales lagged expectations.

Apple shares have dropped by more than a third since mid-September as investors fret that its days of hyper growth are over and its devices are no longer as 'must-have' as they were.

By contrast, shares in Samsung have risen 12 percent in the same period as the company once seen as quick to copy the ideas of others now sets the pace in innovation.

At the world's biggest electronics show in Las Vegas this month, Samsung unveiled a prototype phone with a flexible display that can be folded almost like paper, and a microchip with eight processing cores, creating a buzz that these may be used in the next Galaxy range.

"It's very probable to us that the Exynos 5 Octa (processor) will find its way into the Galaxy S4," UBS analyst Nicolas Gaudois wrote in a recent note.

"It also looked as if the curved display is close enough to finished product. We came away even more convinced that displays will provide significant differentiation to Samsung devices, and application processors will materially grow over time," Gaudois said. ($1 = 1066.2000 Korean won)

(This story corrects 19th paragraph to show Apple's 2012 smartphone market share rose slightly according to Strategy Analytics.)

(Reporting by Miyoung Kim; Editing by Ryan Woo)

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Azarenka wins back-to-back Australian titles

MELBOURNE, Australia (AP) — Victoria Azarenka won her second consecutive Australian Open title, beating Li Na 4-6, 6-4, 6-3 in a final that included a break for fireworks, two medical timeouts and a nasty fall to the court by Li.

The Chinese star first tumbled to the court after twisting her left ankle in the fifth game of the second set and had it taped.

On the first point after a 10-minute pause in the third set while fireworks boomed overhead from nearby Australia Day celebrations, Li fell over again and slammed the back of her head on the court. The 2011 French Open champion was treated and had another timeout before being allowed to resume the match.

Azarenka, who broke down in tears and sobbed into her towel when the match ended, won five of the next six games to claim her second major title and retain the No. 1 ranking.

"Unfortunately, you have to go through some rough patches to achieve great things. That's what makes it so special for me," she said. "I went through that, and I'm still able to kiss that beautiful trophy."

Serena Williams, who lost in the quarterfinals, will become the new No. 2 in the rankings.

Americans Mike and Bob Bryan won their record 13th Grand Slam doubles title, defeating the Dutch team of Robin Haase and Igor Sijsling 6-3, 6-4. They had been tied with the Australian greats John Newcombe and Tony Roche with 12 major titles.

The women's 2-hour, 40-minute match featured 16 service breaks, with Li losing her service nine times.

On a crisp Saturday night, Azarenka won the coin toss and elected to receive, a ploy that seemed to work when a nervous Li was broken to start the match. After a double fault on the first point, Li's forehand long gave Azarenka the early lead.

When she first injured her ankle, Li was trailing 3-1 in the second set. When she came back, she won three of the next four games to tie it 4-4, but Azarenka broke back and then held her serve.

Azarenka broke in the opening game of the final set, just two games before the match was suspended for the fireworks, a planned stoppage of play that both players were notified about before the match.

While Azarenka jogged around and practiced her serving motion during the 10-minute fireworks break, Li sat on her courtside chair for most of the stoppage.

It was on the first point that she again fell to the court.

Li said she went "totally black" for two seconds after her head hit the court, and when a medical official asked her to follow her finger, "I started laughing, thinking 'This is a tennis court, not like a hospital.'"

Li said the tournament doctor saw her after the match and checked out her head and neck.

"I should be OK,' Li said.

From the outset, the capacity crowd at Rod Laver Arena was firmly behind Li, cheering loudly when she was introduced. Meanwhile, Azarenka's errors were applauded, and one spectator even mocked the loud hooting sound she makes when she hits a shot.

The chill from the crowd was a remnant of Azarenka's semifinal win over American teenager Sloane Stephens, when Azarenka was criticized for taking a questionable 10-minute medical timeout near the end of the match. She was accused of taking the time out to compose herself after she'd wasted five match points while serving for the match against Stephens. Azarenka said she needed the time out because a rib injury was making it difficult for her to breathe and she had a knee injury.

In the second set Saturday, a few fans heckled Azarenka. One man yelled, "Take a deep breath, Vicky."

By the end of the match, she appeared to have won some of the fans back. Azarenka's friend, rapper Redfoo, yelled down to her from the player box "You deserve it," and she later blew kisses to the crowd. Someone else in the crowd shouted "Victoria, we love you."

Azarekna appeared to quickly forgive the crowd, saying during the trophy presentations that she wanted to thank the fans for their support.

"I will always keep very special memories of this court and it will be in my heart forever," she said, pausing several times to find the right words. "Of course, I (almost) forgot to say congratulations to Li Na, she's had a terrific start to the year ... hope to see you in many, many more finals."

Later, Azarenka said she expected a "way worse" reception from the crowd.

"You just have to go out there and try to play tennis in the end of the day," she said. "The things what happened in the past, I did the best thing I could to explain, to do everything I could, and it was left behind me already."

Azarenka and Li had met twice before in Grand Slam tournaments, with Li winning both times — in the fourth round of the 2011 Australian Open and quarterfinals at the French Open. Li lost the 2011 Australian Open final to Kim Clijsters but won her first Grand Slam title at Roland Garros a few months later, beating Francesca Schiavone.

But after failing to advance past the fourth round at any major in 2012, Li hired Carlos Rodriguez, Justine Henin's former coach. The hard training he's put her through in the past four months appears to be paying dividends.

Li won a WTA tournament in China before travelling to Australia, where she advanced to the semifinals at the Sydney International.

In the men's final on Sunday, Novak Djokovic will attempt to win his third consecutive Australian Open against U.S. Open champion Andy Murray. Djokovic has had the benefit of an extra day off after an easy three-set win over David Ferrer on Thursday night, while Murray needed a tough five-setter to defeat Roger Federer.

Murray has predicted a tough match with long rallies against Djokovic, the player he beat in the final at Flushing Meadows in September.

"I'm ready for the pain," he said. "I hope it's a painful match, that will mean it will be a good one."

The Bryan brothers have six Australian Open doubles titles to go along with four at the U.S. Open, two at Wimbledon and one at the French Open.

In the other final Sunday to end the year's first Grand Slam, the unseeded pairs of Jarmila Gajdosova and Matthew Ebden of Australia and the Czech Republic's Lucie Hradecka and Frantisek Cermak play for the mixed doubles championship.

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