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.
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.