Nokia buys control of Symbian
HELSINKI, Finland (Reuters) -- Top mobile phone maker Nokia moved to take control of the world's leading cell phone software group, Symbian, on Monday, drawing a line in the sand between the Finnish firm and rival Microsoft.
Nokia said it would buy around one-third in Symbian from Psion, with the British software firm to get an estimated £135.7 million ($252.6 million) in a deal that values all of Symbian at £436.2 million.
The purchase pushes Nokia's stake to some 63 percent in the venture, which is expected to be loss-making for the foreseeable future. The deal is expected to close in the coming months.
For handset makers, in an industry which expects to sell over 550 million phones in 2004, the move narrows their choice of major software suppliers for new generation phones to two -- Nokia and Microsoft.
Leading handset makers Samsung Electronics from South Korea and Germany's Siemens as well as other handset makers are Symbian shareholders, and the deal will force them to buy the software from a firm controlled by an rival.
"The other investors in Symbian will now have to decide if they want to be part of Nokia or Microsoft. They're caught between a rock and a hard place,'' said John Strand, a mobile telecommunications consultant in Copenhagen.
Lines drawn
The ownership change is the second in five months at Symbian after Motorola, the world's second-largest handset maker pulled out, although it said it still planned to make phones based on Symbian software.
Symbian is the clear leader in making operating software for advanced mobile "smart phones'' that run personal computer-style functions such as calendars, contact lists, games and electronic mail on top of voice calls and other traditional features.
Smart phones are a fast-growing segment within the mobile phone sector, which research group IDC said amounted to close to 10 million units in 2003. Most of those phones were powered by Symbian. The segment is forecast to rise to over 125 million in 2007, according to investment bank Merrill Lynch.
Investment bank Merrill Lynch estimates Symbian's share of the smart phone market at around 80 percent but says this will drop to 40 percent over time as Microsoft and smaller players -- Palm and Research in Motion, both of which are strongest in North America, and companies using Linux software -- grab share.
Microsoft has so far been unable to repeat its success in the PC industry and lost early skirmishes in the battle for handset software, with the software giant's first steps marked by technical glitches and partnerships gone sour.
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