Nokia Throws Open Mobile Software

Buying Symbian and making its mobile operating-system software open source should keep the likes of Apple and Microsoft on their toes

by Jennifer L. Schenker

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Few companies have the heft to take on Apple (AAPL), Google (GOOG), and Microsoft (MSFT)—much less all three at the same time. But Nokia (NOK), the world's largest handset maker, made it clear on June 24 that it does not intend to cede its ground in mobile-phone software to gate-crashing U.S. tech giants.

The Finnish company announced a plan to buy the 52.1% of shares it doesn't already own in London-based Symbian, the leading maker of operating system software for advanced mobile phones. In an industry-shifting move, Nokia will merge the company with parts of its own organization and then create an open-source foundation that will give away the resulting software for free to other handset makers.

Until now, Symbian has been owned by a consortium of rivals including Nokia, Sony Ericsson, Panasonic (MC), Siemens (SI), and Samsung. The company was set up a decade ago to develop an independent software platform for smartphones. And indeed, Symbian software is now used in more than half of all such devices, relegating rivals such as Microsoft's pint-size Windows Mobile to a thin slice of the market.

But in the past year, the complexion of the industry has shifted as a new crop of rivals, most using open-source Linux software, have barged in. Nokia and the newcomers are now locked in a high-stakes battle whose outcome could shape the future of mobile communication—and by extension, of the Internet, as a growing number of consumers around the world access the Web from handheld devices (BusinessWeek.com, 2/12/08).

The new Symbian Foundation will be steered by a board of 10 members: five from phone manufacturers Nokia, LG Electronics, Motorola (MOT), Samsung, and Sony Ericsson, and five from network operators and chipmakers AT&T (T), NTT DoCoMo (DCM), Vodafone (VOD), STMicroelectronics (STM), and Texas Instruments (TXN). The goal? "To be the most widely used platform in the world," said Nigel Clifford, Symbian's chief executive, during a London press conference on June 24.

Moving into Mass Market

But there's more to it than that. In an era of emerging wireless applications, a platform is merely the jumping-off point. The real focus in the industry is shifting from what's inside the phone to the snazzy online stuff a handset can access over the air—from mobile music and photo sharing to GPS and location-based services. That's why Nokia is racing to deliver all manner of such offerings through a combination of in-house development and aggressive acquisitions. On June 23, for instance, it bought Berlin-based Plazes, which offers mobile social networking.

Before Nokia can convert millions of customers to wireless Web services, though, it has to give many more phones the capability found in its high-end N-Series models or the trendsetting Apple iPhone.