Nokia to buy rest of Symbian, give away its software

Nokia is buying the consortium that makes the software for its phones and making it available for free to other manufacturers, in hopes of blunting the influence of competing software providers.

Nokia (NOK)said Tuesday that it is offering to buy the 52% of Britain's Symbian that it doesn't already own for about $410 million. Symbian's software is the most widely used on high-end phones.

Nokia will then establish a foundation with handset makers Sony Ericsson and Motorola and Japanese carrier NTT DoCoMo to make the software available royalty-free. They will combine their three versions of the Symbian software for advanced, data-enabled phones into one open platform.

AT&T, LG Electronics, Samsung Electronics, STMicroelectronics, Texas Instruments and Vodafone Group, will also join the foundation, Nokia said.

Nokia said that all previous owners of Symbian, except Samsung, have committed themselves to accept the offer and that it expects Samsung to join them shortly.

While more than 90% of PCs run Windows, the market for cell-phone software is much more fragmented, with a dozen competing platforms. That means software developers have a much harder time creating applications, and it raises costs for handset manufacturers and carriers that have to deal with many different systems.

In the race to set create a dominant standard for phones, the price of the software has become one differentiator. Symbian and Microsoft have been charging royalties for their software, but a leading challenger, the LiMo Foundation, will make software available for free. Google plans to give away its handset software, Android.

The foundation model addresses another concern from carriers and handset manufacturers, which don't want a single company to control the software like Microsoft does on desktops.
In giving away the software, Nokia is counting on the benefits of increased adoption to offset its upfront costs. Technology companies often donate the fruits of their research to non-profit organizations with this in mind. Last year, Nokia gave away a low-power wireless technology called Wibree to the Bluetooth consortium.

Redeye analyst Greger Johansson in Stockholm, Sweden, said Nokia's move will make Symbian a tougher competitor to the other operating systems, considering that Symbian already has 60% of the smart-phone market. Symbian software has yet to become popular in the U.S., where the smart-phone market has been dominated by Research in Motion, Palm, and manufacturers using Windows Mobile. Apple, with its iPhone, is an up-and-comer.

Nokia said it expects the acquisition to be completed during the fourth quarter of 2008 and is subject to regulatory approval.