August 29, 2003 3:41 PM PDT

Motorola to sell off its Symbian stake

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Motorola is planning to sell its 19 percent ownership stake in Symbian, the leading developer of operating systems for smart phones that use next-generation cellular networks.

The No. 2 global handset maker said Friday it is selling the stake to fellow Symbian investors Nokia and Psion, in a move that should give Motorola more freedom to work with developers of other operating systems. It will also give Java developers a choice of platforms when they write applications for features such as ring tones and advanced messaging, according to Motorola.

"We want to love all operating systems equally," said John Thode, general manager for Motorola's third-generation, or "3G," wireless networking products. The company did not develop any major products with Symbian during its five-year investment in the company, Thode said.

In February, Motorola announced its first Linux-powered handset, which uses Java technology. The Schaumburg, Ill.-based company said the Linux operating system would serve as a "key pillar of its handset software strategy."

Software products that are based on Linux code are rivals to Symbian in the market for smart-phone operating systems that use 3G networks. These networks provide wireless Internet access that is as fast as a dial-up connection. Microsoft is also a competitor with its Windows-based software, previously known as Smartphone but now being touted under the new Windows Mobile brand.

Earlier this month, Reuters reported that Motorola would launch a Microsoft phone by the end of the year.

"Over the last couple of quarters, we wanted to de-emphasize the focus on the OS and focus it on Java," Thode said. "We found Java is more important. It speaks to applications developers, and it speaks to consumers."

When Motorola's five-year, joint-investment agreement with Nokia and other Symbian investors expired Aug. 28, the company moved quickly to leave the group of handset makers that back the Britain-based developer. Psion on Friday announced that it would acquire some of Motorola's shares, raising its own investment stake to 31.1 percent from 25.3 percent. Nokia is expected to increase its stake to 32.2 percent from 19 percent.

Motorola's stake is valued at $90 million. Thode wasn't able to say how much the company had put into privately held Symbian but said he didn't believe it had lost money on the investment.

Last week, Symbian said shipments of smart phones loaded with its software rose tenfold during the first six months of this year, compared with the same period last year.

Motorola plans to continue licensing Symbian's operating system, Thode said, adding that no orders would be curtailed as a result of its relinquishment of its investor role. Earlier this week, in fact, Motorola announced that it's using the Symbian OS in its most advanced 3G handset yet.

"Being an investor does not give us as much influence as driving revenue to their business," Thode said.

 

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