Nearpoints

Craig Mathias

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Nokia Buys Symbian: Gunning for the iPhone and More

By Craig Mathias on Mon, 06/30/08 - 10:10am.

As I previously noted, the availability of a new, cheaper iPhone puts real cost pressure on the other handset manufacturers, and a ceiling on price. An iPhone 3G with 16 GB (and note that it's rare to find a smartphone with more that 64 MB today) is $300. So it stands to reason that demand for the iPhone 3G will be enormous, and that business and enterprise users (with many using the handset for double-duty business/personal use) will be a big part of the mix. At that price, the iPhone is indeed the smartphone for the rest of us.

Well, if $300 is in fact now the upper bound, it's clearly time to squeeze cost out of competitive products, or the game is in doubt. A recent example: RIM's stock got hammered last week when they missed their EPS target by a mere penny. While hardware remains the key element here, the OS/software platform is also a big factor in cost. Again, I expect LINUX (perhaps even in several flavors) to do just great here; it is, after all, free. RIM's BlackBerry is protected in the near term by aggressive introductions of new models (like the Bold) and a happy (despite the service outages) installed base. Apple has a cult following with many new converts all the time; the iPhone will thus continue its meteoric rise. So that leaves Symbian and Windows Mobile as the most vulnerable in the face of this onslaught. Note that I'm not saying that the iPhone will dominate the mobile platform space; indeed, I don't expect that it will. But the price/performance floor and cost ceiling that it defines kicks everyone else in the butt. Time to get busy.

Well, Symbian recently took steps to address this challenge, agreeing to be acquired by Nokia - who already owned 48% of the company, and who already heavily depends upon Symbian in its product line. Nokia will combine the Symbian OS with its S60 API and a few other elements contributed by others, and, no surprise here, turn it all over to a new Symbian Foundation with much if not all of it eventually going open source. In the interim, the code will be available royalty-free to those who pay US$1,500 to become members of the Foundation, a small price for an established mobile OS with a big installed base. All of this is, of course, a reaction to the iPhone and a preemptive strike against the LINUX brigade. And it could work - Symbian has a large following and a strong supporter in Nokia. Symbian could become to Nokia with the Mac OS is to the iPhone - a destination. But it will take an aggressive marketing program, along the lines of what Apple is extremely good at, to accomplish this. No slam dunk, then.

But as for Windows Mobile, if everyone else has the connectivity that used to be unique to this platform (for example, Exchange ActiveSync), then what functionality can be used to sell this product? I don't think there's much left here, although we shouldn't discount the market pull from true-blue Microsoft shops. Still, this OS will face the toughest road of all - high cost and little differentiation. But, then, Microsoft has IMHO taken its following for granted for far too long and will continue to face very heady competition on all fronts - open source, Google, and especially their own arrogance.

And there's a bigger question - is a mobile OS a journey or a destination? The purpose of an OS in any form, after all, is to make the fundamentally unreasonable world of hardware reasonable to programmers and end-users. Apart from the user interface, which really isn't part of the OS at all, does anyone apart from developers care what the underlying functionality is, and long as the usual (process management, file management, networking, graphics, etc.) are there? If that's the case, LINUX could eventually stomp everything - and everyone - else, including Apple, into the ground. But let's give Symbian the benefit of the doubt, at least for now. The game is, after all, just getting started.