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Is Nokia Souring on Symbian?
By Christopher Saunders | July 17, 2009
Mobile phone giant Nokia is dumping its Symbian professional services unit, selling the group to Accenture in a move that raises questions about the mobile operating system's future.
The sale, for an undisclosed amount, will see Nokia (NYSE: NOK) part ways with a group that focuses on software development for handset manufacturers -- rivals for Nokia's core business. It also serves chip manufacturers and mobile carriers.
Nokia said about 165 employees will join Accenture (NYSE: ACN) as a result of the transaction, which is slated to conclude in third quarter, subject to customary closing conditions.
The move further clouds Nokia's relationship with Symbian, the mobile operating system in which it had been a partner for years and on which it has been banking heavily as a foil to upcoming rivals.
It also comes less than a day after Nokia cut its profitability and market share forecasts as competitors like Apple make greater inroads into the business.
Last year, the company bought out its partners in Symbian and announced plans to open source the software -- a tactic designed to woo new developers to the platform and encourage its spread. The move made sense considering the threat Nokia faced from vendors like Apple (NASDAQ: AAPL), whose iPhone continues to gain traction among app developers, and from rivals like Google, which is pushing its own open source OS, Android.
But for some observers, it's now unclear how dedicated Nokia remains to Symbian. While Nokia continues to rely heavily on Symbian for its mobile devices, that situation may not be true for much longer, industry analyst Jack Gold said in a research note.
"Nokia keeps distancing itself from Symbian, divesting of nearly anything that is directly related," he said. "This reinforces our earlier position that Symbian is no longer strategic to Nokia's success."
Gold said that he believes Nokia won't drop Symbian as its chief OS in the near term.
"But having some distance between Nokia and Symbian allows Nokia to look at alternatives, especially Linux-based solutions for higher-end smartphones," he added.
Nokia's been signaling a willingness to look beyond Symbian with an increased interest in Linux of late. Nokia and Intel stuck an alliance last month that could see the handset maker adopting an Intel-backed Linux OS on its upcoming devices.
Nokia said at the time that it had committed to working with Intel (NASDAQ: INTC) on Moblin, a mobile OS designed for the small screens used by smartphones and mobile Internet devices (MIDs). The software is specially designed for Intel's low-power Atom processors, which Nokia plans to use in smartphones and MIDs. Intel recently released a beta of version 2.0 of the operating system.
Intel and Nokia also agreed to collaborate on Maemo, a Linux-based OS created by Nokia and used in its N810 Internet Tablet.
"I'd expect Nokia to offer other OS-based phones within the year, beyond the Linux tablets they have now," Gold said. "As they move further into the MID space, these will also be Linux ... devices, some of them powered by Intel Atom chips that do not currently support Symbian anyway."
"In fact, I expect Nokia to offer high end feature phones in the next 1-2 years that run Atom chips, once the next generation of Atom chips makes it to the lower power level needed for a phone," he added. "These will not be Symbian OS-powered devices."
Gold also said that the deal with Accenture indicates that Nokia is changing its plan from trying to attract developers to its operating system, instead preferring to hop on board with other popular alternatives.
"Nokia's [developer] ecosystem ... has not garnered as much support as they would like," he said. "Moreover, as Symbian has a minimal footprint in North America and many developing nations, support for other OSes is crucial if Nokia is to compete at the high end of the phone and smartphone segment where the majority of profits are to be found."
Nokia spokespeople did not return requests for comment by press time.
Symbian Horizon
The sale of Nokia's Symbian Professional Services group also comes on the heels of renewed efforts by the Symbian Foundation -- the Nokia-backed body responsible for the OS's development -- to further encourage application developers to adopt its platform.
The foundation yesterday unveiled Symbian Horizon, a publishing platform that developers can use to distribute their applications to carriers' and handset makers' mobile app stores, including Nokia's Ovi store, AT&T and Samsung.
The group said it had already signed a number of companies to use Horizon to distribute their apps, including Dynatech, The Guardian, MobileIron, National Public Radio (NPR), Skout, Ustream and Wine.com.
The service is expected to become publicly available in October.