The global smartphone leader said yesterday it planned to spend $410 million to buy all of Symbian -- in which it already owns a large stake -- to create a new, royalty-free mobile software platform.
At the same time, it pledged to release Symbian's mobile OS to the open source community through a new organization it created called the Symbian Foundation. (The foundation will also release Nokia's (NYSE: NOK) S60, a five-year-old Symbian-based platform designed for its higher-end handsets.)
News of the open sourcing of the world's leading mobile platform sent shockwaves through the fiercely competitive mobile services space, where carriers and handset manufacturers are increasingly looking to software features to set them apart from the competition.
This month alone saw the arrival of the next generation of Apple's popular iPhone, while the market is also bracing for further upheaval: Internet heavyweight Google (NASDAQ: GOOG) is widely expected to release its open source mobile OS, Android, during the second half of the year, while efforts to promote mobile Linux by the LiMo Foundation continue to gain traction.
"It's no longer about making devices sleek but making them sing and dance," Carmi Levy, senior vice president for strategic consulting at AR Communications, told InternetNews.com.
It's all about the software
As a result, industry observers see Nokia's gambit as an effort to shore up its software -- it relies principally on Symbian-based OSes like S60 -- against handset rivals using Microsoft software, while insulating itself from new, and potentially fast-moving competitors like Google.
This move from Nokia makes enormous sense both from an offensive and defensive position, telecom analyst Jeff Kagan told InternetNews.com. They want to lead, but they also don't want to follow."
Nokia for some time has been signaling its interest in using open source to add new features to the software on its handsets. In January, the company spent $150 million to snap up open source software vendor Trolltech, giving it control of the firm's Qtopia mobile application development framework. The technology had earlier found success in products from Nokia rivals including Motorola (NYSE: MOT).
Nokia has also looked into ways to bridge the divide between its S60 Symbian variant and Linux.
For Nokia, taking the lead on a major open source effort also represents an opportunity for deeper U.S. market penetration. While it dominates in Europe -- thanks to its handsets' support for GSM, the primary European network system -- it has thus far failed to gain similar levels of traction in the U.S., where the rival CDMA system reigns.
That may change as a new generation of high-speed, data- and application-friendly mobile networks arrive on the scene. With Long-Term Evolution and WiMAX laying the groundwork for richer application experiences, Nokia is positioning itself to take advantage of the trend by making it easier for developers to build on its platforms.
"This gives up a real opportunity to use Symbian to provide a richer product ecosystem," Lee Williams, senior vice president for S60 software at Nokia, told InternetNews.com.