Symbian, iPhone & the New Mobile Reality

Nokia, already a stakeholder in mobile OS maker Symbian, has announced that it will buy the remainder of the company and throw all the assets into a new platform called the Symbian Foundation, which will unite all the flavors of Symbian into a single, common software platform that will go open source in two years. Major mobile players such as Motorola, NTT DoCoMo, AT&T, LG Electronics, Samsung Electronics, STMicroelectronics, Texas Instruments and Vodafone have all signed on.

The story is not that this happened but why — and what it means for the mobile industry. You can read my analysis below the fold.

Symbian to me is like a football, constantly being kicked around and forever finding new goal posts.

Its genesis can be traced back to Psion, a company that made handheld computers long before they became fashionable. Now those machines are called converged mobile devices, a market the Symbian Foundation is going to target. Ironic…isn’t it?

What is being sold today as the Symbian Foundation is actually what Symbian used to be, a for-profit company that made an operating system used by a diverse group of handset makers. That was before Nokia and Sony Ericsson got their corporate knickers in a twist and decided that they wanted to build their own version of Symbian (S60, UIQ, etc.).

That divergence might have made sense when the mobile world was less complicated, divvied up amongst a handful of players that worked hand-in-glove with the carriers to make a ton of money. Today anyone can make mobile phones using off-the-shelf components, factories in Asia and instead focusing almost entirely on design, user experience and software.

Here is a quick rundown of the realities of today’s mobile business:

  1. Handset makers need to accelerate the release of their phones much faster than the current 12-to-18 month production cycles or run the risk of getting RAZR-d into oblivion, like Motorola.
  2. Phones are now a fashion business in that you’re only as good as your last model. Phone makers need to release new models as quickly (if not faster) as Parisian couture makers if they want to remain hot and gain sizable share of the handset market.
  3. They subsequently can’t afford to muck around with proprietary software platforms that can take months to be approved by the mobile carriers.
  4. Carriers want standardization because they want to deploy applications quickly, without having to test them on different handsets — a slow and laborious process.
  5. Users want high-end, smartphone-like features on low-end phones.

Mobile makers can easily adapt to — and thrive in — these new realities by taking a platform approach to their software stack. Over the past year or so we’ve seen the emergence of many platforms. Here is a list of some (not all) of the platforms vying for a dominant position, including my personal odds, based on talks with mobile industry insiders.

The PC industry went through a similar gut-wrenching change in which cheap components, the rise of OS platforms and extreme competition gutted certain players while others earned billions of dollars. The biggest prize went, unsurprisingly, to platform owner Microsoft — which didn’t merely sell an OS, but relentlessly wooed developers to write applications for its platform to make it more useful.

Guess who’s doing exactly that these days? Steve Jobs, of course. Last week, when comparing Samsung’s Instinct with Apple’s iPhone, BusinessWeek columnist Stephen H. Wildstorm summed up his drubbing of Instinct with what is the single most important truism of today’s mobile world: “Yes, good hardware design is critical. But in the end, it’s the software that really makes the difference.”

Indeed, the mobile industry’s old guard is experiencing the business equivalent of heartburn as players like Apple prove that software platforms, and the innovation they foster, are the only way to withstand the whiplash-inducing forces of commoditization.

Apple’s iPhone might be a pipsqueak in terms of market share, but it is an agent of change. It has taken the mobile business by the scruff of its neck, given it a thorough shake and in the process, rearranged its entire business structure. A few months ago, I spoke with senior officials at Symbian, who quite bravely argued that they weren’t worried about Apple or anybody else. They pointed to their big market share, thanks to Nokia’s success with its N-Series and E-Series phones. They talked about getting adoption for their platform in Japan.

But it was false bravado, for Apple, LiMo and Google are forcing them to change their game — not the other way around. Symbian’s even going open source in order to compete with mobile Linux. (Read OStatic’s take on Symbian Going Open Source.)

In this platform game, the winner is going to be the one that can attract the most developers. Symbian has a lot of developers but as the chart shows, those developers also have options. (As an aside, does anyone else think that Palm blew an opportunity to leverage their developer network and apps into a bigger position in the market?)

Looking for outside help is a good thing, but I’m not counting on the Symbian Foundation’s ability to achieve its lofty goals. In terms of market share, Symbian has long been propped up by Nokia. The problem is, Nokia is backing a confusing array of platforms, including Linux. Same goes for the foundation’s other members.

And that makes me wonder how long their loyalty to this platform is going to last. Will they change their commitments once they’re faced with the needs of their own, individual businesses? Will this be enough to get developers to commit to the platform? Those are just some of the many questions facing Nokia and Symbian — the answers to which are not what these guys want to hear.