IDG News Service —
Nokia on Tuesday announced it plans to acquire all of Symbian, which develops an operating system for mobile phones. The Finnish phone giant currently owns about 48 percent and will pay ¬264 million (US$410 million) for the rest.
It has received thumbs up from Sony Ericsson (ERIC), Ericsson, Panasonic Mobile Communications and Siemens, which represents about 91 percent of the Symbian shares subject to the offer, according to a statement from Nokia.
Samsung Electronics, a partial stakeholder in Symbian, hasn't commented yet, but Nokia said it expects the company to agree to the sale.
The deal doesn't come as a surprise to Geoff Blaber, an analyst at CCS Insight.
"Nokia paid out more than $250 million in Symbian license fees last year, so it makes commercial sense to buy Symbian for about $410 million, rather than keep paying what is effectively a subsidy to the other shareholders," Blaber wrote in a company blog.
But that isn't the only explanation: Competition in the mobile phone market is intensifying.
"I think Nokia was more worried about the risk that Symbian's structure would erode its competitive position," said Blaber.
Symbian is being challenged by a number of new contenders, including the open-source operating system from the LiMo Foundation and Google's (GOOG) Android platform, which are challenging existing commercial models, according to Blaber.
Also announced on Tuesday was the formation of the Symbian Foundation, which will come into being during the first half of next year with members including Nokia, Sony Ericsson, Motorola (MOT), NTT DoCoMo, AT&T, LG Electronics, Samsung Electronics, STMicroelectronics (STM), Texas Instruments (TXN) and Vodafone Group (VOD). All will get access to the Symbian operating system under a royalty-free license.
The deal will unite Symbian's OS and S60, UIQ (which is run as a separate company, but owned by Sony Ericsson and Motorola) and MOAP, the software platform for NTT DoCoMo's FOMA service, to create one open mobile software platform and a stronger competitor in the battle with other platforms.
To compete with Google and LiMo on an equal footing, Symbian will also become an open-source based platform. The Symbian Foundation will make some parts of the operating system available as open-source code at launch. More code from the project will be made available over the next two years under the Eclipse Public License, according to a statement.
Nokia buying Symbian was the fastest way to get all this going, and it also gains its competent staff, according to Nokia's Kai Öistämö, senior vice president of devices.
