For years, the Linux operating system has been relegated to computing's back room -- the world of servers. Then last September, Motorola (MOT) released a cell phone based on Linux, and the mobile world has never looked back.
Rather than be held prisoner to any company's proprietary software, cellular service providers (which distribute most phones) are beginning to ask specifically for Linux-based handsets, says Michael Sudol, general manager of the group at Motorola PCS that's focused on Linux. So in January, Motorola released its second Linux-based phone for Asia. And later this year, its Linux-based smartphones -- essentially a cross between a phone and a personal digital assistant -- will become available worldwide. The market for smartphones should grow from 3.5 million units, or 1% of the total cell-phone market, in 2002, to 45 million units, or 7% of the market, by 2007, according to tech consultancy ARC Group.
As smartphones grow more popular, Linux will become a threat to more established mobile operating systems: Microsoft's (MSFT) Windows Mobile OS and Symbian, developed by an alliance of companies led by No. 1 cell-phone maker Nokia (NOK). Motorola has already narrowed its bets on which operating system will win: It created a stir last August by selling its 19% stake in Symbian and deciding to go with Windows Mobile and Linux.
Why should this decision pay off? Sudol talked to BusinessWeek Online reporter Olga Kharif about this and other issues on Mar. 25. Here are edited excerpts of their conversation:
Q: What are the benefits of using Linux?
A: With Linux, we aren't limited to a major operating system release [from another company] to determine when we launch our products. That lets us time our product introductions to better meet the needs of both our phone-company customers and consumers. For instance, in Western markets, we can launch phones around holidays like Christmas, when sales are strongest. In China, we can launch them around the Chinese New Year.
Q: Some wireless service providers, like NTT DoCoMo (DCM) in Japan, are rallying around Linux. Why?
A: They like a greater feeling of control. They worry that [otherwise] their time to market will conflict with the operating system company's own agenda.
Q: So far, you have come out with two Linux-based phones for the Asian market. Are you planning to roll out such products in the U.S. anytime soon?
A: One of our challenges has been to globalize the platform -- and that's starting. We'll ramp up our Linux strategy globally toward the end of this year.
Q: Can Linux help you regain the No. 2 position in handsets that you held for a long time but recently lost to Samsung?
A: In the long run, it will be one of the things that set us apart in helping us tailor our products to the needs of phone companies. This will be one of the building blocks that could move us into a strong No. 2 position very quickly.
Q: Linux is obviously a differentiator for Motorola now. Are you worried that this differentiation will be erased if other handset makers jump on the Linux bandwagon?
A: Our competitive advantage is formed by more than just an operating system. We're trying to compete in a Symbian world -- against a company [Nokia] that has control over Symbian. We think that our solution is better.
Linux is an open environment, and competitors can come in. But I'd rather have a playing field that has everyone starting from the same base and then leveraging their own competencies, such as relationships with customers. So, we know there'll be more competition. DoCoMo, for example, won't just go to one vendor for Linux-based phones. But with the early investments we've made around Linux, we can sell something to operators that our competition can't right now.
Q: Motorola is one of few companies that has tried every one of the three major operating systems on the market. You've worked with Symbian. Now you work with Microsoft and Linux. What do Microsoft's OS and Linux offer that Symbian, which you decided to leave, doesn't?
A: The rationale behind our operating system selection is more than trying to find what's the best OS, however you define that. The reasons for our selection have to do with our customers and what they're asking for.
We've moved away from Symbian for strategic reasons. And when we made that decision, we didn't find any of our major operators pushing back. If they had, we'd have gone down a different path.
Q: You've said that you don't want to be dependent on one company's operating system. Why then work with Microsoft?
A: Microsoft has a great reputation and brand awareness, and those factors can be leveraged beyond the desktop. It has been beneficial for us and for Microsoft to bring together a solution for phone companies that were interested in leveraging Microsoft's brand name -- and Motorola's brand.
Q: Could Linux or some other OS dominate the mobile space?
A: In all likelihood, there will be multiple operating systems in the mobile environment for some years to come. We'll see Symbian-based devices, Microsoft OS-based devices, and there's a lot of momentum now around Linux. It's in the best interests of consumers and operators to have competition, so no one entity can control the OS and the industry.
Q: What benefits do you hope to see from tapping into the Linux development community?
A: The Linux development community is very large -- and it could support our future work. That will become more and more important in the future, when visions of the connected home, the connected auto, the connected office, in which all devices communicate to one another wirelessly, become reality.
Q: Why is Linux better for the connected office?
A: The reason Linux has gained so much credibility in the corporate environment is its flexibility. It's already used in many companies' PCs and servers. With mobile, we'll have this underlying, consistent layer, which will work the same on all devices.
Q: How can Linux change the way the mobile market functions today in terms of the number of players involved?
A: Linux is just a platform. Success in the market will depend on how effectively people implement solutions that leverage that operating system. The consumer market can only tolerate only so many different options.
The really interesting unknown here is whether having the Linux ecosystem can provide more compelling solutions. We don't know the answer to this question -- we're just starting to find out.