Nokia grabs its future with Symbian buy

With the planned acquisition of mobile software maker Symbian, Nokia has decided to grab its future and run with it.

Nokia's decision to acquire the remaining stake in Symbian that it doesn't already own is designed to accelerate the mobile phone giant's product development--and serve as an open-source operating system platform to other handset makers, wireless carriers, software developers, and chipmakers, analysts say.

As a result, Nokia and other industry players hope to create a stronger defense against Apple's popular iPhone, Google's pending Android phone, and Microsoft's mobile operating system, analysts say.

"Nokia realized that under the current structure (where they owned only a minority stake), they could only hope Symbian would unlock their operating system and open it up to developers, handset makers, chipmakers, and carriers," said Jim Kelleher, an analyst with Argus Research.

Nokia and other electronics makers have formed the Symbian Foundation, a nonprofit that aims to create an ecosystem. The foundation is backed by carriers AT&T, Vodafone, and NTT DoCoMo and hardware competitors LG Electronics, Motorola, Samsung Electronics, and Sony Ericsson. Also joining the foundation are STMicroelectronics and Texas Instruments.

"By being a 100 percent owner, Nokia can push the Symbian Foundation initiative forward without the potential of dissenting stakeholders," said James Faucette, an analyst with Pacific Crest Securities. "Nokia wants to attract more development input from other sources and develop a reasonably good alternative to other operating systems that are being developed."

Of course, Nokia is also looking to bolster its own performance with the Symbian acquisition.

"Nokia is trying to accelerate its product development by acquiring Symbian and bringing development in-house," said Mark Sue, an analyst with RBC Capital Markets.

Nokia has seen its worldwide market share steadily erode over the recent quarters from roughly 50 percent of the handset market to around 45 percent, Sue noted.

Three to four years ago, Nokia faced a steep challenge as its competitors launched spiffy, colorful slider cell phones, Kelleher said. Nokia had no such offerings in the works.

"Nokia was guilty of having hardware with no slick, no color. It was just a lump...Nokia was caught short," Kelleher said. "But Nokia has since come back fast and fierce, with new changes to their phones."

He added that the cell phone maker has come to the realization it needs more than just hardware to keep customers interested and up-to-date.

This year, for example, Nokia launched such products as its Xpress Music Phones, the Nokia Tube, in response to Apple's iPhone, and its Prism clamshell phone with triangular buttons.

[disposableidentity]

When Steve Jobs launched the iPhone he said something like "we're 5 years ahead of the competition".

At the time I laughed and thought the iPhone was well conceived and well executed, but certainly not that far ahead.

Now I think he may have been right. Google is finding that developing a full mobile computing platform it harder than it looks. By the looks of their offering Microsoft already knows how hard it is. And now for Nokia (remember they are far and away that largest mobile phone company), the best they can do is turn their operating system over to the masses?

[East-Point]

Nokia camp, Google camp, Apple camp? Who will follow? Aren't we announcing we are more open? Maybe Apple will have to adjust its business model on iPhone soon because of coming competition.

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[disposableidentity]

East-Point, on the contrary! Apple will clean up with the rest of the market this fragmented. Aside from the iPhone (which has amazing developer tools and a built-in distribution model for Apps), Android is the platform developers want to use. But it's at least a year away, and looks like it will only be available on the 3rd & 4th largest US phone networks. Symbian phones have 60% of the world smartphone market now, but it's old and tired and hard to develop for. Opening it up will breath a little new life into it, forcing more phone manufacturers and developers to invest in it. Microsoft is still a player, but not a strong one in this space. And RIM continues to pump out well designed units based on a strong system. Look at how well Apple is doing against a monopoly in the PC market. Imagine how well Apple would do if the PC market wasn't dominated by one huge well-entrenched competitor.

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