Nokia Buys Symbian to Give it Away
By Jason Ankeny
The open source arena opened up wide last week when Nokia made the surprise announcement it will acquire the remaining shares of mobile software licensing company Symbian Limited and team with Sony Ericsson, Motorola and NTT DoCoMo to pool the Symbian OS, S60, UIQ and MOAP technologies to create a single open mobile software platform. The firms will also collaborate with other industry bigwigs to establish the Symbian Foundation, a non-profit initiative dedicated to accelerating the availability of new services and mobile experiences.
Nokia said it will contribute all of its shares in Symbian as well as the Symbian and S60 software to the foundation, with Sony Ericsson and Motorola agreeing to hand over UIQ technology and DoCoMo contributing its MOAP assets. Together, these components promise a unified platform with a common UI framework available to all foundation members under a royalty-free license, with the first devices based on the Symbian Foundation code expected to arrive in 2010.
As Nokia pointed out during its press conference, the Symbian move heralds the biggest-ever single release of proprietary code into the open-source wild. The obvious question is why Nokia would make such a bold decision, but while the announcement no doubt dropped a few jaws when it hit the newswires, the more you think about it the more sense it makes.
Despite its dominance in the international smartphone market, Nokia has never rested on its laurels, and with good reason: Consider how radically the mobile device business has changed in just the last 12 months. First there was Apple's iPhone, then there was Google's Android, and then Verizon Wireless announced its Open Device Initiative--and don't forget continued strong showings from the Windows Mobile and BlackBerry platforms.
Now Nokia controls an open platform that offers something Android can't: An operating system already ingratiated into the wireless ecosystem, free from Google's plans for mobile revenue domination. Giving Symbian away free could turn out to be the most profitable decision Nokia ever made. [FierceDeveloper]
Motorola Successfully Completes Acquisition of Soundbuzz
Motorola, Inc. a global leader in mobile entertainment, has successfully completed its acquisition of Soundbuzz Pte., Ltd., a leading pan-Asian music provider. Terms of the transaction were not disclosed.
Today’s milestone opens the door for Motorola to extend its successful Greater China music platform, MotoMusic, to India and Southeast Asia. In addition to a presence in 13 countries in the Asia-Pacific region, licenses with Sony BMG, EMI, Warner Music International, Universal Music Group, and over 45 independent record labels from around the world, the acquisition of Soundbuzz establishes MotoMusic as the leading music platform in the Asia-Pacific region.
“With the resources of Motorola, we are now able to immediately expand the digital music offerings available to our customers – and Motorola’s rapidly growing installed base of handsets throughout the region,” said Sudhanshu Sarronwala, CEO of Soundbuzz. “Clearly, this marks a major milestone, as it positions Soundbuzz and Motorola to better participate in the ongoing growth in Asia’s booming mobile music download market.”
“Music is the heart and soul of the mobile entertainment experience, and with Soundbuzz as a part of our family, Motorola has the biggest heart and the most soul in mobile music in Asia,” said Ian Chapman-Banks, Vice-President of Mobile Devices Marketing for Motorola Asia-Pacific.
“With a library of over 750,000 songs and half a million mobile music derivatives, Motorola now offers the people of the Asia-Pacific region an extensive music collection, all available for download either via the Internet or directly onto your mobile device,” Chapman-Banks noted.
Soundbuzz will maintain its Singapore headquarters along with other offices in Mumbai and Sydney, forming a core component of Motorola’s evolving mobile entertainment strategy in the Asia-Pacific region. [FierceWireless]
Nokia Acquire Trolltech: Will it Impact on the Handset Market
Nokia has announced plans to acquire Trolltech. Nokia has stated that the purpose of this acquisition is to accelerate its cross-platform software strategy for mobile devices and desktop applications, and to develop its Internet services business.
Looking beyond this initial statement, what is the real purpose of this acquisition for Nokia and its real impact on the handset marketplace?
Nokia's planned acquisition of Trolltech indicates that the company is getting serious about Linux, and signals more challenging times ahead for Symbian.
Currently, Nokia only offers Linux-based MIDs (mobile Internet devices) and even though it has not expressed any specific intentions so far, this acquisition is likely to lead to Nokia introducing other handsets based on Linux in the coming years. For Symbian, it will be a big setback and their market-share of the OS market will rapidly decline if Nokia starts offering Linux devices.
Motorola is a leading proponent of Linux and a Trolltech licensee, and one would have expected Motorola to be the most likely handset vendor to acquire Trolltech. However, Nokia claims that the acquisition is not all about introducing more Linux devices, and that it views Trolltech's Qtopia application platform as complimentary to Symbian.
Nokia believes that the acquisition will also allow it to enable a richer set of Internet services on handsets based on its S60 platform. Further, Nokia will be able to develop applications for multiple platforms from a single source code base, as well as bringing improvements in device UI and time-to-market.
The key question that this development raises, is how deeply the purchase of Trolltech will affect Symbian, and whether Symbian will become the Palm of the future. [ABI Research]
Additional Info:
Nokia announced it will make a public voluntary tender offer to acquire Norwegian open source software provider Trolltech for about $153 million. Trolltech software and application platforms are used in programs including Skype, Google Earth and Adobe Photoshop Elements.
"Common cross-platform layers on top of our software platforms attract innovation and enable Web 2.0 technologies in the mobile space," said Nokia's executive vice president of devices Kai Öistämö in a prepared statement.
"Trolltech's deep understanding of open source software and its strong technology assets will enable both Nokia and others to innovate on our device platforms while reducing time-to-market. This acquisition will also further increase the competitiveness of S60 and Series 40, added he." [FierceMobileContent]
Mobile Phone Market Shrugging Off Economic Downturn
World stock markets have recently taken a beating and the US domestic market teeters on the edge of recession but based on just-released mobile device shipment figures, it seems no one bothered to tell the mobile handset vendors, except for Motorola.“Many economic sectors are struggling and there are fears that the global market might mimic the downturn in the United States, but virtually all the mobile device vendors experienced very festive cheer in 4Q 2007,” said ABI Research vice president Jake Saunders, after assessing vendors’ latest results. “It looks like the quarter will clock out at our forecast of 342 million devices, which takes the yearly tally to 1.15 billion: a 15.8% increase on 2006.”
“Taking into account the growing sense of global economic uncertainty, ABI Research has reduced its 2008 handset market growth forecast from 13.5% to 12%,” added research director Stuart Carlaw.Motorola was the only vendor not to enjoy the fruits of 2007. By its own admission, Motorola’s market share shrank 38% year-on-year from 23.3% to 12.4%. Nokia, Sony Ericsson, Samsung and mostly likely LG (results to be released on January 25th) were net beneficiaries.
Motorola declares that its market share in 1Q 2007 looks set to decline further, but the company is fighting back. It has been beefing up its mobile device portfolio and some of its new handset models such as the ROKR E8 have received awards from key trade shows. It should also be acknowledged that Motorola did reduce its presence in a number of emerging ultra-low cost handset markets, while Nokia, Samsung, LG, and Chinese vendors such as ZTE and Huawei are pulling out the stops to address them.
ABI Research says North America (and to a lesser extent South America) is the chink in Nokia’s armor. Despite repeated declarations from senior management that Nokia will recover its position in the North American market, it has so far failed to do so. North American carriers require more customization, exclusive sales periods, and personalization to appeal to their customers. [ABI Research]
Motorola Acquires Music Service Provider Soundbuzz
Motorola announced a definitive agreement to acquire privately held pan-Asian music provider Soundbuzz Pte. Ltd., enabling the handset maker to expand its MOTOMUSIC service beyond China into the India, Southeast Asia, Australia and New Zealand markets.
With well over 90 percent of all digital music content in Asia sold via mobile channels, a level expected to remain in the coming years, Motorola's strength in music delivery will help its carrier customers access this growth opportunity. Financial terms of the deal, which expected to close in the first quarter, were not disclosed.
Singapore-based Soundbuzz's end-to-end, multi-region music delivery platform enables sales and distribution of digital content via over-the-air and broadband connections, complete with subscriber management and content management tools as well as payment, client software and media delivery technologies.
Soundbuzz content partners include Sony BMG, EMI, Warner Music International and Universal Music Group alongside more than 45 independent record labels in Asia, the U.S. and Europe. Soundbuzz also boasts operator deals with Hutchison 3, Motorola, Airtel, SingTel, Optus Zoo, Telstra/BigPond Music, Microsoft (Windows Media Player 10), Creative Technology and Sony BMG.
"We are very pleased to announce this transaction with Soundbuzz. It will provide Motorola with one of the most extensive music libraries in the Asia Pacific region, advance our music and video offerings in Australia and South East Asia, and build on the success of our MOTOMUSIC Services in China," said Bill Werner, senior vice president, future solutions and technology for mobile devices. "We are delighted to welcome Soundbuzz's strong management whose extensive region specific experience in the music and video industries will enhance the strength of our mobile device teams."
"Motorola's dedication to enhancing the digital music experience in Asia complements our own objectives and makes it the ideal partner," said Sudhanshu Sarronwala, CEO of Soundbuzz. "This combination will help us extend our platform and create exciting growth opportunities for Soundbuzz's employees and our partner music labels. Further, our customers will benefit from the technological advancements that we expect to deliver as part of a global leader in mobile communications."
Motorola intends to maintain Soundbuzz's Singapore headquarters, which will be an integral component of Motorola's digital music development strategy in Asia. [FierceMobileContent/PRNewswire]
Forecast: Mobile Phones to Dominate GPS Market
Mobile phone-based navigation is poised to dominate the GPS market, according to a new study issued by analysis firm Telematics Research Group. TRG reports that while portable navigation device makers like Garmin and TomTom remain worldwide market leaders, selling 30 million dedicated PNDs in 2007, handset makers like Nokia, Motorola, LG and Samsung are quickly gaining ground, moving about 20 million navigation-enabled phones last year.
TRG forecasts that annual navigation-enabled phone sales will outstrip dedicated PND (personal navigation devices) sales sometime in the next year, with the combined market reaching sales in excess of 220 million units by the end of 2012 and passing the 500 million-unit threshold by the end of 2015.
"Dedicated PNDs are mobile devices optimized for navigation while mobile phones with navigation are optimized for communications, which gives them an advantage in the emerging new world order for navigation," said TRG principal analyst Dr. Egil Juliussen in a prepared statement.
“In the years to come navigation-enabled mobile phones will be used for auto navigation, pedestrian navigation and many other types of location-based services,” says Juliussen. “This opens up a new world of services and capabilities.”
The pieces are in place and the players are making their moves. Recent acquisitions by TomTom and Nokia point the way toward the coming battle for the GPS consumer. Required for success in the GPS market of the future will be connectivity, inexpensive maps and rich point-of-interest content – addresses alone will not be enough.
Garmin and TomTom are adding connectivity to their devices. Mobile phone makers are adding maps. “A large volume market for inexpensive, dedicated navigation devices will live on past 2008,” Juliussen says, but survival for TomTom and Garmin may mean finding a way to compete for smartphone users.
“Dedicated PNDs are mobile devices optimized for navigation while mobile phones with navigation are optimized for communications, which gives them an advantage in the emerging new world order for navigation,” Juliussen concludes. [FierceMobileContent]
How Far Will Nokia's Transformation Go?
The shifting focus on software rather than pure hardware is a big step for the wireless industry. But according to iSuppli analyst Tina Teng, the move is nothing new for Nokia.
“Nokia’s been doing this for a long time, and this is just the next step in moving beyond the devices themselves,” says Teng, who adds that the company’s music service in particular could be a game changer and a threat to carrier-operated stores, much like Apple’s iTunes. “Just look at what Apple did with their Wi-Fi enabled iPhones - you don’t have to go through the cellular networks to download music anymore.”
Speaking of Apple - the extension to software and services also means that Nokia’s circle of competitors is also growing. Once restricted to traditional phonemakers like Motorola and Samsung, the company could soon find itself neck-and-neck with cellular operators who would rather sell their own branded services, Internet-centric companies like Google and Yahoo and mobile newcomers like, you guessed it, Apple.
But as the company continues its metamorphosis from manufacturer to service provider, it threatens to irreparably damage its relationships with network operators. Realistically speaking, how much further can Nokia go?
Already Orange UK griped in a leaked memo that the combination of the Nokia Music Store link and Orange's own branded music service on the same handset could confuse its subscribers, prompting a threatened boycott of Nokia's new N81 device. Don't expect rival operators to keep their mouths shut much longer. /FD
Mobile phone sales up 40% in China
According to the deputy chief of China Mobile Communications Association, sales of mobile phones in the country increased by 40 percent year-over-year to 120 million units in 2006. Xie Linzhen predicts the figure will continue to rise to a staggering 150 million units shipped in 2007.
China produced 450 million mobile phones last year, and exported nearly 350 million of them. Nokia and Motorola control the majority of the market, according to the Chinese government, but local manufacturers contributed about 50 million units last year.
Xie added global mobile phone sales climbed 25 percent last year with total shipments reaching one billion units. Worldwide sales are expected to grow 20 percent this year, said Xie.
He said the rapid increase in mobile phone sales was a result of a booming world economy which is allowing people to upgrade to a newer mobile phone more often. Last year the number of mobile users in China reached 461 million, up 68 million from 2005.
Read more
Related stories: Most Chinese mobile users sure to buy 3G handsets
Motorola, Texas Instruments to develop 3G-WiMAX handsets
Texas Instruments and Motorola will jointly develop 3G and WiMAX handsets, using TI silicon. The new low-cost multimedia mobile devices will likely ship in 2008. TI will develop a chipset to Motorola specifications, which will include TI solutions. TI will also make the chip in its own fabrication plants and is providing a similar customized solution for Motorola's 3G chips.
Telephony Magazine notes that although Motorola did not designate TI as the exclusive provider of the WiMAX chipset, its decision does raise questions about how much larger a part in the WiMAX ecosystem Intel is playing in Sprint's planned Mobile WiMAX network. Sprint named Intel as one of its partners in the nation-wide WiMAX network it is building. Other partners include Samsung, which is developing its own WiMAX silicon, and Nokia. Nokia has not yet revealed its silicon supplier, but the company has had a long relationship with TI.
Sprint Nextel said it would spend $3 billion to build an entire Web-based phone network in the U.S. dedicated to Mobile WiMAX.
Source: FierceWiFi. For more on the Motorola-TI deal, see this Motorola press release
Motorola: Bigger marketshare, lower profits
Sometimes more is less: Motorola managed to grab 4.3 percent more in handset marketshare during its fourth quarter, but suffered a 48 percent drop in net income as a result. The slimming margins on the budget-priced cell phones for emerging markets created the financial downturn, which the company warned The Street about two weeks ago.
While sales increased 17 percent year-over-year to $11.8 billion, original expectations called for a sales estimate between $11.8 billion and $12.1 billion. To offset the loss, Motorola will cut 3,500 jobs, bringing in an expected savings of $400 million over two years.
The company's quarterly results are seemingly in stark contrast to those SonyEricsson announced earlier in the week. While SonyEricsson only increased its marketshare from 8 percent to 9 percent, it still managed to increase net income threefold from the fat margins of its music phones. Motorola may be more focused on gobbling marketshare and seeding emerging markets with cheaper, albeit less profitable phones: A mile wide, but puddle-deep. So, which is a better focus: Marketshare or Margins?
Source: FierceWireless. For more on Motorola's fourth quarter read this press release
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