Symbian deal a catalyst for smartphone competition

We're about to see what full-blown competition for the future of the computing industry looks like when multiple players get a shot to make an impact.

The next great operating systems wars are about to be fought, as traditional computing companies collide with teams representing the mobile phone industry. Nokia's decision Tuesday to unify, then open-source, the Symbian operating system for smartphones clarifies how today's most-widely used handset operating system will evolve to match the open-source initiatives headed by Google and the LiMo Foundation and competition from companies like Microsoft, Research in Motion, and Apple.

Forget RIM and Apple for a moment, since those companies are taking a different tack than the rest of the industry by building the entire widget themselves: both hardware and software. The Symbian Foundation's goal is by 2010 to develop a royalty-free open-source operating system based on Symbian's existing software that phone makers will license to use on their phones.

Unless RIM and Apple change their strategy to start licensing their operating systems, Nokia and Symbian will be competing for the affections of phone makers and carriers with Microsoft's Windows Mobile, Google's Android, and Linux-based mobile operating systems from the likes of the LiMo Foundation and others.

"(Symbian) is transitioning from a profit making licensor of the leading mobile device operating system, to an open source provider of a mobile OS that anyone can use on a royalty free basis," wrote Jack Gold, principal analyst at J.Gold Associates in a research note distributed Tuesday. "This is a direct challenge to Google's Android initiative, although somewhat belated."

The opportunity is clear: the smartphone market is growing by leaps and bounds as people start to realize what is possible with an Internet connection and a powerful operating system in the palm of their hand. But despite the fact that Symbian's operating system is used by 60 percent of the world's smartphones--most of which were sold by Nokia--upstarts like Apple and Google have pushed the established smartphone industry to evolve their software with the times.

As Om Malik puts it, and as I've written before, phone makers can't get by on flashy hardware anymore. "Indeed, the mobile industry's old guard is experiencing the business equivalent of heartburn as players like Apple prove that software platforms, and the innovation they foster, are the only way to withstand the whiplash-inducing forces of commoditization," Malik wrote Tuesday.

Prior to Tuesday's announcement, Nokia owned 47.9 percent of Symbian. That close relationship with Nokia--the world's largest handset vendor--ensured its software would appear on a large number of devices sold throughout the world. But application development for Symbian phones was somewhat confusing in that there were several different user interfaces in use, depending on the phone vendor. Nokia's phones used the S60 interface. Motorola's Symbian-based phones used the UIQ interface. Symbian phones that ran on NTT DoCoMo's network used the MOAP interface.

The Symbian Foundation will unify those user interfaces, which will likely make application development easier and more consistent across a wide range of phones. This is exactly what Google wants to do with Android: unify the mobile Linux community behind a consistent interface that's compatible across a wide variety of phones and available under an open-source license.

Nokia, Symbian, and their main partners--Sony-Ericsson, Motorola, and DoCoMo--have all agreed to contribute their user-interface technology under the open-source Eclipse license to any company that wishes to join the Symbian Foundation. Those components will start to become available in 2009, when the Symbian Foundation is formally established, and will be available as open-source projects up until the point when the first formal Symbian Foundation operating system is released in the first half of 2010, the companies said Tuesday.

The Symbian Foundation will also match Android and the LiMo Foundation in a key way: the operating system and its components will be available to phone makers royalty-free. One of the main attractions of mobile Linux was the low cost of getting a mobile Linux operating system up and running, as opposed to paying Symbian or Microsoft royalties or licensing fees for the software. This could cause major problems for Microsoft, who is expected to continue its pay-for-play mobile operating system business, Gold wrote in his report.

Scott Rockfeld, group product manager for mobile communications at Microsoft, said that putting together a modern mobile phone represents a significant investment of time and money even if you choose a royalty-free path, and that Windows Mobile demonstrates enough value in getting that system up and running quickly that certain phone makers will continue to pay for it.

Gold wasn't so sure. "It may be difficult for Microsoft to continue to justify its relatively high license fees for an OS that competes with a fully featured one that is offered for free. While I do not expect Windows Mobile to simply fade away, I do expect that ultimately Microsoft will have to be more competitive (i.e., free or close to free) if it wants to remain a major factor in the wider mobile device platform marketplace. It will have to make its revenues on applications and services instead," he wrote.

It's not immediately clear how the Symbian Foundation will affect the LiMo Foundation, which actually has phones out in the market using a Linux-based operating system developed by a consortium of industry players. Morgan Gillis, executive director of the LiMo Foundation, called Nokia's move a "strong endorsement of the philosophical underpinnings" of the LiMo Foundation, although the LiMo Foundation focuses more on the plumbing of the operating system rather than the user interface.

But is LiMo now caught between two giants, Nokia and Google? Motorola and DoCoMo were founding members of the LiMo Foundation, but have chosen to hedge their bets by participating in both the Symbian Foundation and the Open Handset Alliance.

Gillis recognizes that by the time the Symbian Foundation releases an operating system in 2010, some of today's current players may have fallen by the wayside. "The question is really what is the right number of platforms from the industry. Major players say there has to be rationalizations down to some number, but the right number is not bigger than four. ...It's much more efficient to have a small number," he said.

Right now, with Symbian, Microsoft, LiMo, Android, Apple, RIM, Palm, and other Linux consortia all fighting for a place at the table, somebody's going to have to lose. Malik thinks that LiMo, Symbian, and Apple have the best chance of "winning big," with Android and Microsoft fighting for that remaining spot at the table.

The next two years will be fascinating ones for the smartphone industry as processing power increases, software grows more sophisticated, and wireless networks become faster and more prevalent. This evolution of computing will not follow the PC industry's lead and coalesce around a dominant player anytime soon, and there's no better spur for innovation than competition.

The evolution of the mobile operating system is being defined by traditional players like Microsoft and Apple, the younger establishment represented by RIM, Nokia/Symbian, and the Linux consortia, and the 800-pound gorilla of the 21st century: Google. They are raising the bar with features and design while attempting to make sure developers have a chance to participate, and the results of this competition should delight the smartphone buyers of the next decade.