June 25, 2008
Nokia in Deal to Make Mobile Software Free
By Kevin J. O'Brien
Nokia said Tuesday that it would make the software that runs its cellphones available to outside developers, as the company tries to head off competition from rival platforms and to stimulate the use of mobile music, video, e-mail and other services.Nokia, the world's largest maker of mobile phones, said it would spend euro 264 million, or $411 million, to buy the 52 percent it did not already own in Symbian, a London-based company whose software runs two-thirds of the world's smartphones and other advanced mobile devices, according to Canalys, a researcher in Reading, England.
The growing adoption of such phones, which include the Apple iPhone and devices from Nokia and other manufacturers, has greatly increased the use of high-speed wireless data networks. Symbian's software competes with offerings from Microsoft and Research in Motion, the company behind the BlackBerry. Google also plans to enter the fray with a system called Android, which can be used on a variety of phones.
Nokia said it planned to turn Symbian, founded in 1998, into a foundation that would make the software available royalty-free to the world's five largest phone makers - Nokia, Samsung, SonyEricsson, LG Electronics and Motorola. It would offer the software under the same terms, under a so-called open-source license, to the network operators AT&T Wireless, NTT Docomo of Japan and Vodafone of Britain.
"Our vision is to become the most widely used software platform on the planet," said Nigel Clifford, the Symbian chief executive. Nokia, based in Espoo, Finland, had 41 percent of the global mobile phone market at the end of March, according to Strategy Analytics, a research firm. In smartphone operating systems, Symbian had a 65 percent share at the end of 2007, compared with 12 percent for Microsoft Windows Mobile, 11 percent for Research in Motion, 7 percent for Apple and 5 percent for the Linux open-source system, according to Canalys.
Some operators have recently urged mobile manufacturers to reduce the number of software systems to accelerate mass-market adoption of new services. Smartphones accounted for 10 percent of global cellphone sales in 2007, according to Canalys, but are the fastest- growing segment in the industry. Their sales rose 72 percent in 2007 to 35.5 million units. Earlier this year, Arun Sarin, the outgoing chief executive of Vodafone, the world's largest mobile operator, called on phone makers to agree on two or three software platforms.
Nokia said it would buy the remaining stakes in Symbian from the other shareholders; Motorola, SonyEricsson and NTT Docomo.
Graham Titterington, an analyst at the research firm Ovum in London, said Nokia's strategy highlighted the significant role software is playing as cellphones rely more and more on sophisticated computing power and large memories.
He said the decision to use an open-source model mirrored efforts by other technology companies, like International Business Machines and Sun Microsystems, for the computer market.
"These companies didn't make less revenue from their products through open source," Titterington said. "They simply got the sales back in a different way, from maintenance and other service fees."
Olli-Pekka Kallasvuo, the Nokia chief executive, called the decision to consolidate and distribute the software a key step in smartphone development.
"Nokia is a strong supporter of open platforms and technologies as they give the freedom to build, maintain and evolve applications and services across device segments," Kallasvuo said.
The Finnish mobile phone maker is also facing an increasing number of competitors, particularly Microsoft, which is eager to extend its dominance of the market for software operating systems from desktop and laptop computers to mobile devices.
In the three years through June, the number of Windows Mobile users tripled to 35 million, said John Starkweather, Microsoft's director of global marketing for mobile software in Singapore. By the end of June, Microsoft said it expected to have sold 20 million copies of Windows Mobile over the last 12 months.
Originally published by The New York Times Media Group.
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