Symbian released doubly disappointing sales figures yesterday. As well as a reduction in sales, the maker of the leading smartphone operating system also got paid less per phone in the last quarter resulting in a bigger loss.

This may not be a big issue in a market expected to grow significantly later this year, but analysts reckon it does show up a fundamental Symbian problem: its phones are simply too smart for their own good.

"In the mid-range mass-market, Symbian phones are becoming less competitive," said Dean Bubley of Disruptive Analysis. "The software's openness and complexity makes them expensive and time-consuming to develop, test and support, compared with more limited-but-simple closed feature phones."

Symbian phones are ideal for business applications, where software is downloaded and run on the phone for specific tasks. However, this part of the market is small compared to the mass market, where users simply want cameras and other easy features, and can’t see the point of downloading software.

"Handset manufacturers are ‘wringing the neck’ of comparatively low-end hardware, to add features like megapixel cameras and high-res screens onto non-smart phones,” said Bubley. By comparison, smartphones need separate applications processors, making it all more expensive and fiddly.

The result? Symbian sales fell from 2.76 million in the last quarter of 2003 to 2.4 million in the first of this year. Because handset sales are seasonal, this translates into a flat market share of 1.9 percent, but is disappointing in a market where handheld sales are soaring. The licence fee per phone also dropped, however, from £3.95 to £3.63.

That’s no big deal in a market which hasn’t really started yet. However, Symbian’s future is still undecided, with Nokia’s bid to buy a controlling share waiting on approval from the German trade regulator, the Bundeskartellamt. Even with that approval, Ericsson has promised to try and acquire enough shares to prevent Nokia getting a controlling interest in the smartphone operating system supplier.

Symbian’s problem overlaps with Nokia, whose poor performance on mid-range phones brought it disappointing results this quarter. "Panasonic's X700, which is not yet shipping, is the only [mid-range clamshell-format phone based on Symbian] launched outside Japan," said Bubley.

Symbian wants handset vendors (and not just Nokia) to launch more phones based on its OS, in the mid-range where it is not necessarily the first choice. It also wants more deals like the one where telco NTT DoCoMo mandated the platform for its next generation phones. And it wants vendors to pick up its version 8.0 software with its promise of cheaper, smaller phones.

Otherwise, "it may be that the 'smartness' of mass-market smartphones is going to be locked-down or submerged by operators' customised user interfaces," said Bubley. Instead of full-blown OSs like Symbian, phones may have a variety of 'thin' handset software platforms, he said.