Global Insight Perspective | |
Significance | Nokia launches the Symbian Foundation—after buying out Symbian co-owners—in a move which creates an open-source software platform with a readily available ecosystem. |
Implications | By creating an open-source software platform, Nokia has taken the fight to Google and will leverage its existing clout in the market to isolate Google. |
Outlook | Given the combination of delays, uncertainties about evolutionary path, and Nokia's latest initiative, Global Insight believes Google's game plan is fatally derailed and will struggle to gain traction in the market. |
A battle is brewing in the mobile-software market as Nokia positions itself to challenge Google's Android open-source credentials. Nokia announced today that it is buying out other shareholders in handset software firm, Symbian, in a move which will enable the Finnish company to assimilate Symbian into its own strategy. Nokia said it will pay 264 million euro (US$410.7 million) for the 52% stake in Symbian which it does not already own, and has already reached an agreement with co-owners Sony Ericsson, Ericsson, Panasonic, and Siemens (Nokia said it expects Samsung to sell its 9% stake in Symbian soon). However, the bigger news is in what Nokia now wants to do with Symbian.
In a statement today, Nokia said it is creating a not-for-profit Symbian Foundation to provide royalty-free open platform for mobile handsets and accelerate innovation inmobile software. The Foundation will be open to all organizations and has already drafted in: fellow handset-makers Sony Ericsson, Motorola, LG, and Samsung; mobile operators AT&T and Vodafone; and chip producers ST Microelectronics and Texas Instruments. The foundation will unite the Symbian operating system with three user interfaces—Nokia's S60, Motorola/Sony Ericsson's UIQ, and NTT DoCoMo's MOAP—to create one open mobile-software platform. Nokia said the foundation will provide a unified platform with a common user interface framework, and will be available for all foundation members under a royalty-free license from the foundation's start date in 2009.
Outlook and Implications
- The Battle Begins: The creation of the Symbian Foundation represents the latest posturing in the mobile software market. Symbian has a strong grip on the market, accounting for about 60% of the converged mobile-device market and about 7% of all mobile handsets. However, other players have been ramping up their determination to compete in the market. Microsoft's Windows Mobile, the second-most-common platform, has received significant boosts from Microsoft's deep pockets and the acquisition of other smaller companies such as Danger. Apple has also waded in, with its unique software pack for the iPhone, although the single device strategy is hardly a threat to Symbian which has shipped in more than 235 different handset models. However, the biggest threat to Symbian, and even Windows Mobile, is in the "Google phenomenon"—Google's decision in late 2007 to launch its Android software platform and create the Open Handset Alliance (OHA). Android has been creating waves in the market as an "Open Source" software platform; and when allied to Google, harbors the potential to radically alter the industry. The LiMo Foundation has also sought to create an alternative to Google Android using an open source Linus platform. Intriguingly, less than a year since Vodafone's outgoing chief executive, Arun Sarin warned the industry to streamline the number of mobile handset operating systems so as to encourage mobile-software development, industry giants are squaring up for what is essentially a battle for hearts and minds (see United States: 15 May 2008:Verizon Joins LiMo Foundation and World: 6 November 2007: Google Unveils "Software-Based" Mobile Phone Strategy).
- Nokia's Game Plan: For Nokia, the battle is a fight for survival. For a company which has consistently reinvented itself from a paper manufacturer to a mobile-phone giant, mobile software is at the centre of its latest strategic push to redefine itself. Nokia's chief executive, Olli-Pekka Kallasvuo has been clear about this since taking over in 2006 and sees the establishment of the foundation as one of the biggest contributions to an open community ever made. "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 and offer by far the largest ecosystem, enabling rapid innovation," he said. "Today's announcement is a major milestone in our devices software strategy." However, what is more crucial in this case is that Nokia is taking the fight to Google on its own terms. Google prides itself on open-source credentials and is eager to build up a coalition of industry players to push through with its agenda (which is to cultivate a viable platform for mobile advertising). However, Nokia has nipped that in the bud. With Android suffering from serious delays and growing uncertainties of how it will evolve, Nokia is offering the Symbian Foundation, with a tried and tested software platform, an open-source agenda, and most importantly, a readily available ecosystem. By tying up the top five mobile handset markets, key chipmakers, and the likes of AT&T and Vodafone, Nokia wants to starve Android—and similar initiatives—of influential industry players, leaving them to toy around with smaller players with lesser chance of changing the status quo in the market (see Germany: 23 June 2008: Nokia Acquires Social Networking Site "Plazes"and World: 12 June 2008: Nokia Launches Mobile Advertising Alliance).