Nokia ups ante with Symbian takeover

Nokia is cranking up the pressure on both Microsoft and Google's mobile ambitions with its €264m (£209m) takeover of the Symbian mobile phone operating system group.

Once it gets the go-ahead from Europe's competition regulator, the Finnish handset maker will buy out Symbian's five other owners and turn it into a not-for-profit foundation that any company can join. Symbian comes in three different varieties. Nokia's plan is to standardise the technology and then make the code "open source" so that Foundation members can use it to develop new hardware or software free of charge. Olli-Pekka Kallasvuo, the chief executive of Nokia, said: "This will drive the development of new and compelling web-enabled applications."

Symbian is already the market-leading mobile operating system. It runs on some 60 per cent of smart phones, compared with Microsoft on just 15 per cent. But Symbian's dominance is also threatened by the development of Google's Android open source platform, expected later this year. The Symbian Foundation plan takes on the Android model and upsets the economics of Microsoft. "The open source approach is directly focusing on Android and offering operators an alternative," Carolina Milanesi, a research director at Gartner, said. "It also puts a lot more pressure on Microsoft because its $8-$12 licence fee will be a competitive disadvantage."

For Nokia it is also a sensible strategic move, because it will mean more handsets that are equipped to run Ovi, its mobile services platform. But the Symbian deal is not expected to get regulatory clearance until the end of the year, and not expected to produce actual results until 2010. "If nothing happens for two years, Microsoft will have plenty of time to work out a response and Android will have time to seed the market," Ms Milanesi said.