Nokia on Tuesday announced it plans to acquire all of Symbian, which develops an operating system for mobile phones. The Finnish phone giant currently owns about 48 per cent and will pay €264 million (US$410 million) for the rest.
It has received thumbs up from Sony Ericsson, Ericsson, Panasonic Mobile Communications and Siemens, which represents about 91 percent of the Symbian shares subject to the offer, according to a statement from Nokia.
Samsung Electronics, a partial stakeholder in Symbian, hasn't commented yet, but Nokia said it expects the company to agree to the sale.
The deal doesn't come as a surprise to Geoff Blaber, an analyst at CCS Insight.
"Nokia paid out more than $250 million in Symbian license fees last year, so it makes commercial sense to buy Symbian for about $410 million, rather than keep paying what is effectively a subsidy to the other shareholders," Blaber wrote in a company blog.
But that isn't the only explanation: Competition in the mobile phone market is intensifying.
"I think Nokia was more worried about the risk that Symbian's structure would erode its competitive position," said Blaber.
Symbian is being challenged by a number of new contenders, including the open-source operating system from the LiMo Foundation and Google's Android platform, which are challenging existing commercial models, according to Blaber.
Also announced on Tuesday was the formation of the Symbian Foundation, with members Nokia, Sony Ericsson, Motorola, NTT DoCoMo, AT&T, LG Electronics, Samsung Electronics, STMicroelectronics, Texas Instruments and Vodafone Group. All will get access to the Symbian operating system under a royalty-free license.
The deal will unite Symbian's OS, S60, UIQ and MOAP (which is the software platform for NTT DoCoMo's FOMA service) to create one open mobile software platform and a stronger competitor in the battle with other platforms.
To compete with Google and LiMo on an equal footing, the Symbian Foundation will make some parts of the operating system available as open-source code at launch. More code from the project will be made available over the next two years under the Eclipse Public License, according to a statement.
If Nokia's new approach works, it could greatly benefit the Symbian platform, Blaber said. With wider input from network operators and chip manufacturers as well as closer integration of the operating system and user interface, Symbian's operating system could become more stable and attractive to operators, developers and consumers, Blaber said.
Nokia expects the acquisition to be completed during the fourth quarter of 2008.