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.
Mobile phone maker Nokia announced Tuesday that it plans to acquire the 52 percent of mobile software specialist Symbian that it does not already own, in a cash deal valued at about 264 million euros, or $410 million.
Long a phone maker, Nokia has been dabbling in Web apps and services through its Ovi brand.
(Credit: Nokia)In addition, Nokia and a number of other electronics makers are forming the Symbian Foundation to drive the development of Web applications for use by consumers on cell phones. The foundation plans to provide a unified platform that has a common user interface framework and that will be available for all foundation members under a royalty-free license, Nokia said.
"Our vision is to become the most widely used software platform on the planet," Nigel Clifford, CEO of Symbian, said in a statement.
That ambition is a resounding shot across the bow of both Apple, which earlier this month unveiled its iPhone 2.0 ecosystem, and Google, which has been working on its own Android platform for mobile applications.
Nokia has already taken steps toward its own ecosystem of Web applications and services through efforts such as its Ovi brand for gaming, social networking, and mapping.
The other backers of the nonprofit Symbian Foundation are AT&T, LG Electronics, Motorola, NTT DoCoMo, Samsung Electronics, Sony Ericsson, STMicroelectronics, Texas Instruments, and Vodafone.
Nokia already owns 48 percent of Symbian, maker of a widely used operating system for mobile phones. It has now extended a cash offer for the Symbian shares not already in its hands at a price of $5.67 (3.647 euros) per share.
Most other stakeholders in Symbian--Ericsson, Sony Ericsson, Panasonic, and Siemens--have already accepted the offer, and Samsung Electronics is expected to accept it as well, Nokia said.
Yahoo announced deals on Tuesday to provide mobile phone ads through two Asian network operators, Idea Cellular in India and Maxis Communications in Malaysia.
In addition, Yahoo announced partnerships under which five new operators will make OneSearch, a service to provide search results on mobile phones, the default search option. Those partnerships are with Mahanagar Telephon Nigam in India, Hong Kong CSL, Smart Communications in the Philippines, Digital Mobile in the Philippines, and Vibo Telecom in Taiwan.
Yahoo also announced its Go 3.0 software for tapping into various online services such as news, photos, and finance, now works in more local languages in Asia.
Updated 12:34 p.m. PDT to correct the attribution of the cellular phone tracking story. The story that focused on the privacy issues was written by Seth Borenstein of the Associated Press.
Cell phone usage tracked in an undisclosed industrial nation revealed a majority of users tend to remain close to home for months at a time, according to a study conducted by Northeastern University and cited Wednesday in the journal Nature.
While the study of 100,000 cell phone users in a country outside the U.S. demonstrated that 75 percent remained within a 20-mile radius of their home over a six-month period, the study, nonetheless, raised privacy issues, according to an Associated Press report on CNN.com. The users didn't agree to participate in the study--such nonconsensual tracking would be illegal in the United States, according to a Federal Communications Commission source quoted in the AP story.
Albert-Lazio Barabasi, co-author of the study and director of Northeastern's Center for Complex Network Research, acknowledged he was concerned about the privacy issues when conducting the research, but that the phone numbers provided by the carrier were altered to conceal the users' identities. The report could not state the exact location of the users, but rather only the cell tower that was receiving and transmitting phone calls and text messages, according to the Associated Press story.
The Nature article noted that the research may aid urban planners in developing appropriate resources and could also inform epidemiologists on the potential path that viruses may take in a given population.
(Credit:
Apple)
Apple's iPhone is expected to cross the Canadian border later this year, the country's largest wireless provider said Tuesday.
Rogers Communications, which is also Canada's only GSM (Global System for Mobile Communications) provider, will serve as the region's iPhone carrier.
"We're thrilled to announce that we have a deal with Apple to bring the iPhone to Canada later this year. We can't tell you any more about it right now, but stay tuned," Chief executive Ted Rogers said in a statement.
The announcement comes 10 months after the Canadian company let it slip out of the bag that it would be the exclusive iPhone provider in Canada. Rogers Communications then had retract its press release, noting it had no definitive arrangement to carry the iPhone.
Motorola has reportedly reorganized its struggling mobile-phone business in anticipation of plans to spin it off into a separate publicly traded entity.
Rob Shaddock
(Credit: Motorola)Although Motorola, at press time, had not yet put out a statement on the changes, they appear aimed at developing products more quickly in response to consumer demands, according to reports by Chicago Tribune, The Wall Street Journal, and Reuters.
Motorola has reportedly combined two categories of phones, mid/high-tier feature phones and multimedia phones, into a single segment, according to the Tribune. And among a group of executives named, Rob Shaddock, a senior vice president of mobile devices, was named head of consumer products, according to the Journal and Reuters. The Journal added that John Cipolla was promoted to senior vice president for mid- to high-tier products; Steve Lalla will oversee teams focused on mass-market phones; and Todd DeYoung "was given responsibility for ensuring the company's cell phones match its overarching strategy and are being directed at the right market."
Motorola has seen its handset market share plummet, mostly due to a lack of compelling new products. In January, amid pressure from activist investor Carl Icahn, the company said it would consider separating its handset business from the rest of the company in an effort to increase shareholder value and revive the struggling business. Late last month it officially announced the plan and has since announced a round of layoffs.
Yahoo's still pushing hard on mobile technology, despite the potential distraction of a Microsoft takeover bid.
Yahoo this week led a $20 million investment in Vlingo, a speech-recognition technology company. The Sunnyvale, Calif.-based company also said that Vlingo will power the voice capabilities of the mobile oneSearch service, a search engine optimized for the phone.
To use the voice-search service, which will be available immediately, people must first download the Vlingo client. (It currently works only on select BlackBerries, but Yahoo said it will be available soon on other mobile phones.) With the application, users can voice queries, such as "What is the best place to play craps in Las Vegas?" into the phone, and they will receive a set a search results on their mobile phone browser.
The two-year-old Vlingo, based in Cambridge, Mass., raised the $20 million in a second round of financing, which also included the company's previous backers, Charles River Ventures and Sigma Partners.
Updated 7:35 AM PDT. News.com's Richard Defendorf contributed to this story.
Under pressure from investors, Motorola has decided to split into two publicly traded companies, one handling handsets and accessories and the other taking on wireless broadband networks and enterprise-level communications services.
"Our decision to separate our Mobile Devices and Broadband & Mobility Solutions businesses follows a review process undertaken by our management team and Board of Directors, together with independent advisers," CEO Greg Brown said in a release. "Creating two industry-leading companies will provide improved flexibility, more tailored capital structures, and increased management focus--as well as more targeted investment opportunities for our shareholders."
The Mobile Devices business will handle the designs, manufacturing, and sales of mobile handsets and accessories, and will license a portfolio of intellectual property. The Broadband & Mobility Solutions business will handle voice and data communication solutions and wireless broadband networks for enterprises and governments. It will also handle IP video, cellular, and high-speed broadband network infrastructure, and cable set-top receivers.
Brown said a search for a chief executive for Mobile Devices is under way.
Although the Mobile Devices division generated sales in 2007 virtually equal to those of the company's other two divisions, it also lost $1.2 billion while the other divisions earned $1.9 billion. And Motorola lost its standing as the world's No. 2 handset supplier to Samsung Electronics.
Investor Carl Icahn has been pressuring the company to separate out its mobile phone business, and has been engaged in a protracted legal struggle with the company regarding its future.
Icahn announced earlier this week that he had declined an offer of two seats on Motorola's board and was suing the company to obtain documents related to its mobile devices business and use of corporate aircraft by senior managers, board members, and their families. Aiming for four seats on the Motorola board, Icahn said the documents would help him, and other shareholders, determine what Motorola's board should have done to help the company right its struggling handset business.
It's not yet clear what revisions to his strategy Icahn might make now that Motorola has agreed to the split he requested. His intention to seat four allies on the board, according to a story published Wednesday by the Financial Times, was unofficially approved by the board's current lineup in all cases except one: Keith Meister, chief executive of Icahn Enterprises, who, the board claims, is "unqualified."
Icahn's other nominees to the Motorola board are former Viacom chief Frank Biondi, securities-firm founder William Hambrecht, and MIT engineering professor Lionel Kimerling.
One consequence of the separation: the newly separated unit may now find it easier to partner with another mobile-devices company to help it regain market share and operate more efficiently.
"I suspect it's a prelude for a joint venture for the mobile devices business," Avian Securities analyst Tero Kuittinen told Reuters.
"It might be easier to negotiate with a standalone unit. It's positive news because it shows the company is moving toward a serious restructuring," said Kuittinen, who sees Chinese and Japanese companies as the top candidates for a venture.
For an out-there 2009-2010 chip, Intel's Moorestown seems to get mentioned a lot by executives. If you consider, however, that this silicon may represent Intel's single biggest push into the "very large" mobile phone market, then all that jawboning is understandable.
At recent Intel conferences, CEO Paul Otellini and other high-ranking executives have dropped the Moorestown name frequently. Why? First, it will be Intel's showcase system-on-a-chip, combining the CPU, graphics, and memory controller on a single die, which, in turn, will be combined with other silicon. Second, it will probably serve as the main launching pad for Intel into the mobile phone market. The "first entry into phone form factors," as Intel has stated. What the chipmaker calls "MID phones" or Mobile Internet Device phones (see graphic below). Third, it could be a major market for Intel's upcoming solid state drives (SSDs).
Moorestown platform
(Credit: Intel)MID phones will have other goodies too. Like high-speed WiMax broadband wireless (if, indeed, a widespread infrastructure is in place by then). With Moorestown, Intel is also targeting 10 times lower power consumption (at idle) than the 2008 "Menlow" Mobile Internet Device design. Which, theoretically, means much better battery life.
Moorestown targets "very large" phone market
(Credit: Intel Corp.)The flip side to all of this is that Intel is currently not a player in mobile phone processors. And its largest competitor, AMD, is ahead here. AMD's Imageon line of chips--inherited from ATI--are currently used in over 50 mobile phones and devices from companies like Motorola, LG, Panasonic, and Samsung. And AMD offers graphics technology to Freescale Semiconductor, Qualcomm, and STMicroelectronics, among others.
Last month, AMD disclosed the Imageon A250 applications processor for video recording/playback and photo imaging, among other applications. The chipmaker also revealed the Imageon D160 mobile TV solution. AMD also offers Z460 3D graphics that tap into the same patented AMD Unified Shader Architecture that provides a graphics platform for the Microsoft Xbox 360 video game system.
Though they initially seemed cool to the idea, telecom gear makers in Asia are indeed interested in discussing a partnership with Motorola's handset division, according to a Mergermarket.com report cited Wednesday by Reuters.
The Motorola handset unit's steady loss of market share has generated plenty of anxiety among shareholders and plenty of fallout, including intervention by activist investor Carl Icahn; the resignation of CEO Ed Zander and phone division chief Stu Reed; and on-again/off-again declarations that Motorola is considering a spin-off of its handset business. The new report by Mergermarket.com, a mergers-and-acquisitions specialist owned by the Financial Times Group, cites a banker among its sources and describes the interested parties as "leading Asian telecommunications equipment and device makers."
The Reuters article goes on to point out that an executive with China-based phone maker ZTE told the news service at the GSMA Mobile World Congress in February that his company was "keeping in touch with Motorola on a wider cooperation."
