Nokia Plans Mobile Software Surge With Open-Source Symbian

The cell phone maker is buying the remaining shares of Symbian for $410 million and plans to open source the mobile operating system.

Paul McDougall, Editor At Large, InformationWeek

June 24, 2008

4 Min Read

Much of the cell phone industry, led by Nokia, sought to wrest control of its destiny from commercial software makers Tuesday with the announcement that it would convert its own Symbian operating system into a free, open source OS backed by a coalition of some of the world's biggest handset makers and mobile chip producers.

Nokia, already a 48% stakeholder in Symbian Ltd., said it would buy out the company's remaining shares from its telecom partners for $410 million and place the Symbian OS -- the world's most widely used mobile operating system -- into the hands of the open source movement under the royalty-free Eclipse Public License.

To steward the project, Nokia will partner with rival manufacturers Sony Ericsson, Motorola, and LG Electronics under the banner of a newly formed group called the Symbian Foundation. The group also includes AT&T, NTT DoCoMo, Texas Instruments, Vodafone, Samsung, and ST Microelectronics.

Foundation representatives said in a statement that the group plans to add the Nokia S60, DoCoMo MOAP, and UIQ mobile environments to Symbian to create "one open mobile software platform" that will be available over the next two years.

"We want to make this the most widely used software platform on the planet," said John Forsyth, Symbian's VP for strategy, in an interview. Symbian is used in about 66% of all smartphones and 6% of basic cell phones.

Forsyth pledged that, under open source governance, Symbian would continue its twice-yearly product release cycles. "We've got to keep that heartbeat going," he said.

In banding together, European and Asian handset makers are making it clear that they are not prepared to follow the PC industry in handing over their destiny to American software makers like Microsoft and Google.

PC makers have long been vexed by the fact that the most valuable piece of real estate on their systems -- the user interface -- is for the most part controlled by Microsoft, a situation that Redmond has leveraged to create numerous revenue-generating products and partnerships while dictating key standards and collecting license fees.

Microsoft has been looking to replicate that scenario in the cell phone market through its Windows Mobile OS. Google, meanwhile, recently entered the fray with its Android Alliance, an open source platform that could help the company extend its dominance of search advertising into the mobile market.

But a growing number of handset makers want the freedom to create their own user experience -- and milk the associated revenue opportunities themselves. "The question which every [equipment maker] has been asking itself is, 'How do I change the ratio between what I spend on commodity engineering and differentiation?' " said Forsyth. With Microsoft and Google looming, not to mention Apple with its iPhone and RIM's BlackBerry, industry watchers believe Nokia's move comes at a time when handset makers need to defend their turf more than ever.

"The creation of the Symbian Foundation reflects the fact that Symbian’s competitive landscape has started to change rapidly over the past year with new entrants and old competitors increasing their influence," said Adam Leach, principal analyst at research firm Ovum.

In addition to limiting rivals' presence in the handset market, Nokia's plan could help increase Symbian's footprint in both mature and emerging markets worldwide. The big reason: Without license fees, Symbian-based phones should cost less than competitors. Microsoft, for instance, charges hardware makers about $14 for each phone shipped with Windows Mobile aboard.

Symbian had been charging handset makers about $4 per phone to carry its OS.

Microsoft may have to rethink its business model. Forsyth said Symbian's new royalty-free offerings will save handset makers "a few dollars" per unit, "which is an enormous amount of money if you're in that business."

"Symbian will match Android on zero-dollar pricing, and this diminishes one of its major competitive advantages," said Bonny Joy of Strategy Analytics. "For Microsoft, the pressure will surely mount to cut the price of its license fees to handset vendors."

For users, the Symbian Foundation could deliver benefits beyond cheaper phones. Given its broad membership -- the group encompasses chipmakers as well as handset producers -- the alliance could solve thorny standards issues that often result in incompatibilities between networks and devices.

Forsyth adds that the Symbian Foundation will look to make Nokia's S60Webkit the default base for mobile Web browsers. "Having a common use browser platform across most of the world's handset manufacturers will be a great thing," he said.

Some industry watchers say the move will congeal the fragmented cell phone market into several distinct camps, a fact that should also help promote standards. "Fragmentation within the software platform market is the biggest single barrier to mobile data services and revenues," said Ovum's Leach.

It's not all clear sailing for the Symbian Foundation and its members, however. Both Microsoft and Google are multibillion-dollar companies that won't back down from the mobile market without a fight.

And news of the foundation's launch may already be sparking unintended consequences. With its software being subsumed by the Symbian Foundation, UIQ Technologies -- a joint venture held by Sony Ericsson and Motorola -- said Tuesday that it might lay off more than half of its 375 employees, according to Dow Jones.

About the Author(s)

Paul McDougall

Editor At Large, InformationWeek

Paul McDougall is a former editor for InformationWeek.

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