Nokia-Symbian deal enables royalty-free open platform

Nokia has received irrevocable undertakings from Sony Ericsson Mobile Communications, Telefonaktiebolaget LM Ericsson (publ), Panasonic Mobile Communications and Siemens International Holding to accept the offer, representing approximately 91% of the Symbian shares subject to the offer. Nokia expects Samsung Electronics Co to accept the offer.

The acquisition is the prelude to the establishment of the Symbian Foundation by Nokia, together with AT&T, LG Electronics, Motorola, NTT DOCOMO, Samsung, Sony Ericsson, STMicroelectronics, Texas Instruments and Vodafone.

Nokia will contribute the Symbian and S60 software to the Foundation. Sony Ericsson and Motorola have announced their intention to contribute technology from UIQ, and DOCOMO has indicated its willingness to contribute its MOAP(S) assets.

From these contributions, the Foundation will provide a unified platform with common UI framework. A full platform will be available for all Foundation members under a royalty-free licence, from the Foundation's first day of operations.

Contributions from Foundation members through open collaboration will be integrated to further enhance the platform. The Foundation will make selected components available as open source at launch, and a complete mobile software offering is expected to be available in open source, released under Eclipse Public Licence (EPL) 1.0, within two years.

The Foundation's platform will build on the leading open mobile software platform, with more than 200 million phones, across 235 models, already shipped by multiple vendors and tens of thousands of third-party applications already available for Symbian OS-based devices.

Effectively, not only will Nokia pay €264 million to buy Symbian and then give away the operating system code for free, but it has convinced its competitors to contribute their technology as well – the motive being to stimulate innovation in the mobile Internet.

According to Canalys, mobile devices based on Symbian OS account for 60% of the converged mobile device segment. To date, more than 200 million Symbian OS based phones have been shipped, and more than four million developers are engaged in producing applications for Symbian devices.

ABI Research vice president Stuart Carlaw commented on the announcement, saying that there has been financial pressure on Nokia to move in this direction at some point. The sheer economics of the number of devices it ships with the OS versus the value it gets out of its historic shareholding clearly indicated that such a `rescue' was inevitable at some point.

"The real spice in this announcement is that Nokia is stating that it will offer the OS in a more 'open' way. Perhaps this is an admission that the pressure from the Linux industry is really forcing Nokia and Symbian to change their game," said Carlaw. "Questions remain as to whether the solution will be truly open and what the cost of a Symbian Foundation membership will be."

ABI Research director Kevin Burden added: "There are also questions on where the up and coming mobile Linux platforms would be today had Nokia taken care of this purchase several years ago. It's very possible that Nokia will eventually position the Symbian platform for mid-tier devices with another platform powering its high-end devices – a position that Sony Ericsson has already taken."

Nokia expects the acquisition to be completed during the fourth quarter of 2008 and is subject to regulatory approval and customary closing conditions.

The Foundation is expected to start operating during the first half of 2009, subject to the closing of Nokia's acquisition of Symbian.