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Nokia sets sight on Symbian

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CIOL Bureau
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HELSINKI, FINLAND: Nokia Corp is buying out other shareholders of handset software firm Symbian Ltd and will make the software royalty-free to respond to new rivals such as Google.

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Symbian's software is used in two-thirds of smartphones -- handsets with computer-like capabilities -- and 6 per cent of all cell phones, but new platforms such as Google's Android and Apple's iPhone could challenge its dominance.

"The move's a shrewd response to growing threats from other providers of mobile phone software," said Geoff Blaber of UK-based research firm CCS Insight, citing the open-source LiMo Foundation as well as Google and Apple.

Currently, Symbian's closest rival is Microsoft's Windows Mobile operating system.

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"This puts a lot of pressure on Microsoft right at a time when they are trying to really push into the consumer space," said Gartner analyst Carolina Milanesi.

"Lower price points are what operators and the market need to push smartphone adoption and dropping royalty is going to help that. For operators this offers a good alternative to Android," she said.

Nokia, which makes 40 per cent of all phones sold globally, will pay €264 million ($410 million) for the 52 per cent of British-based Symbian it does not already own, it said on Tuesday.

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Foundation

The Finnish company also said it and other top cell phone makers along with operators AT&T, NTT DoCoMo, Vodafone and chip makers Texas Instruments and STMicroelectronics had formed the Symbian Foundation to develop the software further.

Nokia will contribute Symbian and its S60 software assets to the foundation, while other members will put in their UIQ and MOAP software to create a new joint Symbian platform in 2009.

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"It offers us an opportunity to innovate faster on a bigger, united, more widely accepted platform," said Kai Oistamo, head of Nokia's devices business. "It also enables us to deliver new products, we believe, faster to the market."

Nokia said Sony Ericsson, Ericsson, Panasonic and Siemens had accepted the offer for their Symbian stakes, and it also expected Samsung Electronics to accept.

"The biggest surprise is that Nokia gets full ownership all at once, and at a good price," said Karri Rinta, analyst at Handelsbanken.

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"This was a logical move. There was pressure for Nokia to increase its holding, especially since there were owners such as Panasonic and Siemens who were there for historic reasons."

Nokia said it expects the deal to be completed by the end of this year, and to weigh on earnings in 2009.

On reported basis, Nokia expects the acquisition to reach break even in 2010, and boost earnings in 2011. On a cash basis, it expects the earnings boost from 2010.

Shares in Nokia were up 0.1 per cent at €15.70 at 0848 GMT, broadly in line with the DJ Stoxx European technology shares index.

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