Lining up for Linux mobile

News that phone giants will develop handsets using the Linux mobile open source solution as a standard has got rivals worried, particularly the Nokia-dominated Symbian platform

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By  Peter Branton Published  August 6, 2006

Introduction|~||~||~|As in the PC world, Linux is emerging in the mobile industry as the chief check on the power of the Microsoft platforms, but until now handset Linux has been fragmented and inadequate and the Nokia-dominated Symbian has been the most successful operating system for high-end phones. Nokia itself has been relying increasingly on technologies beyond Symbian to enhance its position in the smartphone sector and its broader strategy to take on Wintel (Windows and Intel) PCs in enterprise and multimedia markets. It is increasingly turning to Java, Linux and the open source process, but now it may have lost the momentum, temporarily at least, to its major rivals. Motorola, Samsung and the Japanese phone makers Panaso- nic and NEC have joined with the two cellular phone companies (cellcos) Vodafone and DoCoMo, that have been most aggressive about seizing the balance of power in handset design — a strategy that is the direct opposite of Nokia’s approach — and using their buying power to drive down costs and set open standards. The new group will seek further members and come up with reference platforms early next year, which could create a mass market for both complex and budget Linux phones, with massive economies of scale and reduced time to market, plus the benefits of contributions from the open source development community. This could reduce the appeal not only of Windows but Symbian, whose licensees have always chafed under the dominance of Nokia. So the big question will be whether Nokia itself will support the new would-be standard. It will probably have to, accepting that differentiation has moved upwards from the operating systems(OS), and that it must take its chance of forging a lead in a Linux world using its higher level technologies such as the increasingly open source Series 60 software environment. In recent months Nokia has increasingly used open source software to support its battle with Microsoft — which it aims to keep Windows off mobile devices and, as those devices start to usurp the position of the PC in business and leisure use, grab some of the market dominated by the software giant and the PC makers for itself. Now Nokia could find itself outsmarted on the open source front by a group of heavyweights that not only aim to fend off Microsoft, but also to weaken the power of Nokia itself in the mobile sector. Motorola and Samsung, the main challengers to the Finnish company in the handset market, are two of the big names in a new group aiming to establish an open Linux-based platform as a de facto standard for cell phones — and they are joined by two huge cellcos, Vodafone and NTT DoCoMo, both of which have been seeking to wrest the balance of power in handset evolution from the vendors, Nokia in particular. These four giants, along with NEC and Panasonic, plan to form an industry group by the end of the year and invite other vendors, operators and chipmakers to join. The aim is to develop standardised application programming interfaces and Linux-based architecture for mobile devices, as well as support for source code-based reference implementations and compliance tools. This environment would compete directly with Windows Mobile and Symbian — the OS platform dominated by Nokia — and could create, for the first time, a unified, well supported and functional mobile Linux, something that has largely eluded the industry so far, with each phone maker supporting a different variant of the OS and with only Palmsource seriously focused on addressing critical holes such as the lack of a usable browser. Motorola will contribute its Linux code to the effort, and all members will offer expertise in an effort to come up with a platform in 2007, along with the first supporting handsets. The platform will be licensed through the as yet unnamed foundation, although the licensing structure is apparently yet to be determined. The use of standards and open source technologies is logical for the mobile sector, which is moving away from its heritage of closed, incompatible platforms to a commoditised model more like that of the PC industry, on whose territory the handset makers plan to encroach rapidly. The use of standards will encourage wide-scale application development and reduce the cost of development of devices and new software functions, leaving the vendors to compete on the basis of higher level functionality and physical design, as well as elements such as battery life. All this will help support some key pressures on the operators — to reduce handset costs as margins shrink and to roll out new models and applications ever more frequently. DoCoMo has been particularly outspoken about the need to reduce costs and development times, investing in start-ups and forming ventures with phone makers that promise to support these goals. Its role in this new alliance is an extension of those efforts. DoCoMo and Vodafone have also been in the forefront of the bid by operators to take a greater role in defining how handsets are developed and to grab a share of the intellectual property cake. Two years ago they were instrumental in setting up the The Open Mobile Terminal Platform group, which aims to create common handset specifications and programming interfaces. The implication is that non-compliant devices will be excluded from the buying plans of the operators responsible for a massive proportion of phone purch- asing outside the Americas, and the Linux initiative continues in the same mode. For the vendors, Linux and open application program interfaces (APIs) are also appealing from the point of view of reducing time to market and preserving margins. In a world where much of the growth is in high-volume low- margin markets such as emerging economies, there is no longer the luxury of maintaining highly individual platforms with no economies of scale. Nokia, with its huge market share advantage, has a far stronger buffer against margin erosion than any of its competitors because of its volumes and the economies and purchasing power those bring. So in joining forces, other handset makers are not just seeking to control the development agenda and to prevent Nokia using its might to set de facto standards, but they are also looking for more pragmatic gains in terms of the economies of a common platform, and the savings from tapping into the open source process. ||**||Nokia’s dilemma|~||~||~|Nokia now faces the dilemma of whether to join the new group or seek to outdo it by setting standards of its own, based on its recent efforts to put its key software architectures, such as the Series 60 browser, into open source. This relates to the dilemma Nokia already faces, ever since it introduced Linux into its own thinking with products like the popular internet tablet. Does it retain its commitment to Symbian or throw in its lot with Linux, and which will be more effective in fending off Microsoft and bolstering its own position in its key target growth markets - mobile enterprise and digital multimedia? If Nokia increases its support for Linux, it may as well join the new group, to ensure it gets its share of access to the open source contributions, and because it can still use higher level products such as Series 60 for differentiation and as the basis of a push into licensing and would-be standards. This will indicate that the battle is now being fought above the operating system — in the user interface, browser, and development environment and so on —and that the role of Symbian is largely redundant. Symbian was conceived to take on the mantle that Linux could now adopt — a collective effort by the major handset makers to create economies of scale, neutralise Microsoft and pool resources in creating a platform for the emerging smartphone sector. But its power to achieve these goals was weakened significantly when its supporters and co-owners started to lose faith, and as Nokia became more dominant, further alienating the other Symbian participants. In 2003 Motorola sold its stake and put Symbian handset developments on the back burner; in 2004 founder Psion sold most of its own stake to Nokia, giving the Finnish company almost half of the shares and putting the other stakeholders — Sony Ericsson, Ericsson, Samsung, Siemens and Panasonic — in the shade. Also, Symbian saw Linux starting to become credible as a mobile OS, and the issue of the OS itself becoming less critical as competitive edge shifted upwards to Java and platforms such as Series 60. Adoption of the new Linux platform will be a setback for Nokia’s dreams of controlling the next generation standards via Symbian, but while it gives the other handset makers a more level playing field with the giant, there is no reason why Nokia should not retain its dominance, by porting Series 60 and other key technologies to the new platform. After all, the Finnish company has so far been the most astute of the cell phone majors in using the open source process to further its aims. We believe the days when a ‘Nokia against the world’ situation might have developed are gone, and the giant will do better to work within the open system and try to dominate it, while ensuring it can compete for its share of business from the supporting operators. This will be especially important to its troubled relationship with major customer Vodafone, which has been trying to lessen its dependence on Nokia, which has traditionally been resistant to operator attempts to play a greater role in defining and specifying handset designs. DoCoMo is also a major buyer of cell phones of course and the strength of Japanese representation in the initial line-up of the new body will remind Nokia of the uphill struggle that may await it in bolstering its market share in key Asian territories. The Japanese handset makers, which are heavily influenced by DoCoMo in design terms, are relatively small on a global basis but have commanding share at home, and, with 3G, they are spreading their wings into the west, as Vodafone’s support for Sharp has illustrated. While Panasonic is only ranked the number ten handset vendor worldwide, in Japan it is second behind Sharp, and followed in third place by NEC. Panasonic and NEC are also behind only Nokia in smartphone shipments; largely due to heavy buying by DoCoMo for its FOMA services (DoCoMo claims it has no plans to drop its non-Linux smart phones, including Symbian models, however.) With China looking to Japan and Korea for technology leadership in 3G and beyond, these companies will stand a good chance of eroding the early market share built up in that huge market by Nokia and Motorola. And one of the key reasons for mobile industry interest in Linux is the support of China for the operating system. Nokia, then, cannot afford to miss out on the potential opportunities the new group will present — nor can the group afford to exclude the Finnish company, without whose endorsement no mobile system could claim to be a real standard. The balance of power has shifted against the market leader, but not fatally so, and it has a real chance to drive the mobile open source agenda — even if this means sacrificing some of the technologies over which it has more direct control. And a show of unity with its rivals, however superficial, can only harm Microsoft’s play for mobile domination by extending the Linux-Windows divide into the mobile arena. The author is Caroline Gabriel, Experture Expercycle Analyst, Experton Group ||**||

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