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Jun 24, 2008

NEWS: Why Nokia's Buying Symbian: Apple, RIM, Google, Others

Ed: Response to Microsoft Mobile and Google Android. Not much impact on iPhone's cool appeal.

Nokia has a plan. Where is Motorola?

Why Nokia's Buying Symbian: Apple, RIM, Google, Others

nokia-n95.jpgWhy is Nokia (NOK) spending $410 million to buy the rest of Symbian, the smartphone operating system it co-owned with Sony Ericsson and others? Because its continued dominance of the smartphone market -- 60% of the install base, according to its press release -- is anything but guaranteed.

Buying Symbian won't help Nokia build sexier-looking, high-end gadgets. But in theory, Nokia's ownership will speed up Symbian's platform development and could allow Nokia -- its biggest customer -- to come out with more phones, faster.

That's important as new competitors enter the market with sexier, more exciting products, like Apple's (AAPL) iPhone, which is just opening up to outside developers. So far, Apple's success has mostly been in the U.S. But this year, it will start selling its iPhone in more than 70 countries, at alower, subsidized price.

Add new BlackBerry gadgets from Research In Motion (RIMM), Microsoft's (MSFT) continued success with Windows Mobile, and potentially exciting Linux-based platforms from Google (GOOG) and the LiMo foundation, and Nokia could have a lot to lose: Smartphones over $300 accounted for just 7% of the phones Nokia sold last year -- but they represented about 15-20% of its cellphone revenue and 20-25% of its gross profit, according to AmTech analyst Mark McKechnie.

One key move: Nokia will create a master platform by combining different flavors of Symbian's software, including Symbian OS and its S60 software, plus UIQ software from Sony Ericsson and Motorola (MOT), and MOAP from DoCoMo. This means that developers can write one app for all of them, instead of different editions for each -- a problem that frustrated coders.

Also important: Symbian will now be free, which gives carriers and device makers one more reason to choose it over Windows Mobile, Android, LiMo, or a different smartphone OS.

See Also:
Nokia Blindsided By iPhone, BlackBerry -- No 'Credible' Answer
Where Nokia Could Fail: Competing With Apple And RIM
Nokia Picks Up Social Networking Service Plazes

Nokia Acquires Symbian; Takes on Google's Android

Nokia isn't finished with its acquisition spree just yet. Tonight the Finnish company announced a plan to acquire the 52 per cent of Symbian it doesn't already own and make the platform open source. Nokia clearly aims to challenge Android, the open source mobile operating system of Google. Nokia CEO Olli-Pekka Kallasvuo says that it wants to create "the most attractive platform for mobile innovation and drive the development of new and compelling web-enabled applications".

The Symbian operating system currently powers Nokia's smartphones, as well as those of a large number of other hardware manufacturers.

All of the major stakeholders in Symbian, including Sony Ericsson, Panasonic, and Siemens, have accepted the offer, representing approximately 91% of the Symbian shares.  Nokia doesn't have a definitive answer form Samsung Electronics yet, but expects them to accept the offer as well.  

As Techcraver.com points out, part of this move might be an answer to the delays Google's Android operating system is currently experiencing. But at the same time, this could also be driven by Nokia wanting to have more control over both the hardware and software side of its business, similar to how Apple has created its own operating system for the iPhone.

Apple is said to be getting between $325 and $425 from AT&T for each iPhone 3G sold at the $199 to $299 subsidized price in the United States.

More impressive is that the estimates from Gartner and Piper Jaffray have the iPhone controlling 17 percent of the worldwide smartphone market by the end of 2009. In North America, they expect that number to be closer to 30 percent.

Find the full chart with the estimates below.

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