Is Nokia Actually Going To Take Over Symbian?

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Symbian Limited, the company that controls the Symbian operating system used on so many smart phones, is a partnership between several companies. Each owns a certain number of shares and, at this point anyway, none has a controlling interest.

One of the chief topics of conversation at last week’s 3GSM World Congress was the fact that Nokia has agreed to buy Psion’s shares of the Symbian partnership. If this deal goes through, Nokia will own about 63 percent of the partnership, giving it virtual control of the Symbian OS.

David Nagel, CEO of PalmSource, made it clear that he would be happy for this to happen. In his keynote address at his company’s developer conference a few weeks ago, he said that PalmSource would have a much easier time convincing the other members of Symbian to start using the Palm OS in their smart phones, rather than continue to use an operating system controlled by their chief rival, Nokia. I heard several people at the conference say “Are they going to change the name to the Nokia OS?”

And I’m sure Microsoft feels the same way about it. Ericsson’s CEO was even asked during his keynote address last week if Nokia taking control of Symbian would cause his company to go to Microsoft. He denied it, but if Ericsson and the others decide to bail out of Symbian, Microsoft is definitely a top contender.

Is It Going To Happen?

However, there are some questions about whether this deal is going to go through. Reuters has reported that the other members of Symbian are going to try and prevent Nokia from getting a majority stake.

For example, Sony Ericsson has said it would like to buy some of Psion’s shares. If enough of the other partners are willing to do so, they could prevent Nokia from owning more than 50 percent of the company. Nokia CEO Jorma Ollila said his company is open to the idea.

In addition, Mr. Ollila insists that even if Nokia does end up owning a majority of Symbian, it won’t use this to take control of the operating system. “Openness obviously will be underlined by everything Symbian does, whatever the shareholding base,” he said at last week’s conference.

Would Symbian Be Better Off?

The Symbian OS isn’t like Microsoft’s operating system for smart phones or the Palm OS. Two handsets that both run the Symbian OS can have radically different user interfaces and can’t necessarily run the same applications.

Last fall, a Gartner vice president used his keynote at his company’s symposium to criticize Symbian for its lack of standardization and predict that this will eventually allow Microsoft to control the smart phone market.

Nokia’s Ollila has said that his company and the other Symbian partners are working hard on standardization, but it can be very difficult and time consuming to get six companies to agree.

Another thing Mr. Ollila said at the 3GSM World Congress was that “Symbian needs two years or so more investment to really make the platform solid for the future.” With Microsoft and PalmSource coming on strong, I’m not sure it has that long. If Nokia has the final say, it could potentially speed this process up tremendously.

On the other hand, Palm Inc. tried for years to be both the top seller of Palm OS handhelds and one that licensed the operating system to other companies. It eventually spun the licensing business off as a separate company because it was too difficult to convince the other licensees that Palm wasn’t being given preferential treatment. Nokia would almost inevitably also have to fend off such accusations, no matter how unbiased it tried to be.

Why Does this Matter?

I know a lot of Brighthand readers are only interested in handhelds and pay little attention to smart phones. It’s important to keep in mind that these two categories are starting to merge together.

Take a look at the just-announced Motorola MPx Pocket PC or the Symbian-powered Nokia 9500 Communicator. It’s very difficult to classify whether these are handhelds or smart phones.

If the Symbian partners get their acts together, there could be a wireless handheld in your future that runs the Symbian OS.

Of course, this is far from certain. It is frequently pointed out that a large majority of the smart phones sold in the world run the Symbian OS. However, this number is somewhat deceptive. A large number of these, perhaps even a majority, are being used as simple “dumb” phones. Jeff Hawkins, palmOne’s chief technology officer, pointed out recently that of the first million handsets sold with GPRS, only 18,000 people activated the data service. Without it, what was technically a smart phone was, in effect, a dumb phone.

So the market is still wide open. Symbian may have the lead now, but Microsoft is coming on strong with the smart phone version of Windows Mobile, and palmOne’s Treo 600 is proving to be very popular. Only time will tell how this competition will turn out.

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