The Symbian operating system, championed by Nokia Corp. in its smart phones, currently has a majority of OS market share, a state of affairs likely to continue for the foreseeable future, according to projections from market research firm IDC.
This is likely despite the recent news surrounding Motorola Inc.’s new Linux OS alliance, which appears poised to counter Symbian’s market domination, and the growing success of Microsoft Corp.’s Windows Mobile OS in the enterprise and consumer spaces.
Though “the foreseeable future” is admittedly a potentially dubious term in the dynamic wireless industry, IDC analyst Dave Linsalata last week laid out his view of the current OS landscape and his firm’s rational for its end-of-decade projections for OS players’ market share.
The upshot? Symbian Ltd. today claims more than 60 percent of the mobile OS market, followed by Linux with 22 percent, Microsoft Windows Mobile with 6 percent, Palm OS with 4 percent and “other” (primarily Research In Motion Ltd.’s BlackBerry) with 8 percent.
Of course, the phrase “it’s all relative” applies here: According to market research firm Canalys, global smart-phone unit shipments for the first quarter of 2006 totaled about 16.7 million units, less than 10 percent of the more than 200 million units sold in the quarter. Retail costs hover in the $300 to $400 range, though the Moto Q smart phone has been priced disruptively at $200 by Verizon Wireless (with a two-year contract). Canalys forecasts that this segment will grow as 3G networks are built out and competition brings down the price of smart phones.
While Symbian is closely associated with Nokia, its majority shareholder and biggest champion, other handset vendors also employ it to a lesser extent, including Motorola, Samsung Electronics Co. Ltd., Sony Ericsson Mobile Communications L.P., Panasonic Mobile Communications Co. Ltd., BenQ-Siemens, Fujitsu and Sharp, among others. In fact, Symbian is owned by Nokia (48 percent), Ericsson (15.6 percent), Sony Ericsson (13 percent), Panasonic (10.5 percent), Siemens (8.4 percent) and Samsung (4.5 percent).
By 2010, according to IDC, Symbian probably will maintain or even grow its market share and Microsoft Windows Mobile may surpass Linux, due to Microsoft’s enterprise focus and a new emphasis on entertainment features for the consumer market. Linux itself-a wild card in Linsalata’s view-will continue to grow market share in Japan and Asia-Pacific markets, but its penetration of enterprise markets may be limited by a lack of recognizable brand and easily identified service support. Palm OS may lose market share. RIM’s BlackBerry has dominated in the North American smart-phone space and now is making strong in-roads in Europe and other international markets, giving it strength going forward.
Nokia’s smart phones take an understated approach to their Symbian-driven capabilities and that has driven adoption by consumers, particularly in Europe, Linsalata said. And that is likely to give Nokia and Symbian an edge going forward as smart phones push down into mass-market price tiers.
“Nokia focused on creating a user-friendly device in which the power of the OS was not immediately evident,” Linsalata said. “You might have to dig a little more than you would on a Windows Mobile device or a Palm OS device, where as soon as you turn it on, you have everything you need right in front of you.”
In other words, the “Start” menu on Windows and Palm-powered devices puts the user instantly into the mobile PC frame of mind. This has given Nokia an edge in getting smart phones adopted in the mass market, regardless of the relatively small niche now occupied by smart phones in the overall handset market, according to the analyst. Nokia’s emphasis on advanced operating systems, its push of Symbian into many of its product lines and its global distribution network has helped as well. The flip side has been slow acceptance of Nokia devices and Symbian by the enterprise market, though the vendor has focused of late on its enterprise service offerings and its E series of handsets for business users.
Symbian is making an effort to “modularize” its OS offering, so that handset vendors can pick and choose functions they wish to support. At the same time, operating systems are dropping in cost, raising the possibility that they someday will drive functions on mid-tier and entry-level phones.
Going forward, Japan’s NTT DoCoMo Inc. has placed some emphasis on Linux and Symbian as its preferred operating systems for its handset vendors’ 3G offerings, largely due to the common assertions of low cost and quicker time-to-market for both platforms. Given the relatively modest size of the smart-phone market, DoCoMo’s interest in Linux has rapidly given the OS market traction with NEC and Panasonic, moving the Linux OS from single to double-digit market share. (Not incidentally, DoCoMo-as well as Vodafone Group plc and Panasonic Mobile Communications-are members of Motorola’s new initiative to develop a common Linux platform for the industry.)
“We’re still talking a market that in 2005 was just over 56 million units,” Linsalata said. “So if you have vendors who ship a few million units each, that’ll sway the market significantly.”
According to Jerry Panagrossi, vice president of Symbian’s U.S. operations, four factors have driven uptake of his firm’s product: the merits of the technology, fair licensing practices, attention to the ecosystem (i.e., relations with chip vendors) and support for wireless standards.
Panagrossi said that his company doesn’t do market forecasts, but Symbian’s business model calls for increasing OS penetration of 3G handsets, and with network operators increasingly dependent on data revenues driven by 3G services and economies of scale, Symbian is poised to thrive even among ambitious rivals.
In a thinly disguised shot at competitors, Panagrossi pointed to Symbian’s $750 million investment in its technology and suggested that other operating systems such as Linux require sweat equity to reach the commercial robustness demanded by mobile handsets.
“You either pay a reasonable licensing cost or you do the labor,” he said.
