Symbian ended nine months of uncertainty today, with the announcement of a round of shareholder investment that leaves it free from control by its biggest shareholder, Nokia.

Whatever Nokia's real motives, the last nine months have seen Symbian's image transformed. Last year, it was still seen as closely linked to the somewhat unworldly Psion, which set the ball rolling when it founded Psion six years ago. Now it has cut those apron strings and become an independent entity, owned and steered by its customers, the handset makers.

Nokia has 47 percent of the company, and gets two seats on the board compared with one each for Panasonic, Siemens Samsung, Ericsson and Sony Ericsson, but the company is determinedly independent and the board will be led by a, to-be-announced, independent chairman.

Nokia's welcome for the announcement sounded genuine enough. Its bid for control precipitated a round of support from the other handset manufacturers which leaves Symbian far better off than it was before Psion sold its shares last year. The company now has £50 million cash to consolidate its lead in smartphones and pursue its efforts to get Symbian into the mid-range and enterprise markets.

Full steam ahead, no IPO
The announcement should put a temporary stop, at least, to speculation on a Symbian IPO, said CEO David Levin: "The reasons you have IPOs are if you have shareholders who want to sell, or you want to raise capital. We have shareholders who want to buy," he said. "We don't have a queue of people looking for the exit and we don't have a shortage of money."

It is not a stopgap either, he said: "This money is what we require to win," he said. "It is not a first installment."

The plan: ship cheaper phones
The main thing Symbian plans to do is to take its phones down to the mid-tier of the phone market, where price is a crucial issue. To do this Symbian will drop the price to handset makers, allowing the basic bill of materials cost of a Symbian phone to fall from $132 in 2003 to around $78 in 2008, said Levin.

"Symbian smartphones need about $10 software and integration," says Dean Bubley of Disruptive Analysis. "At the bottom end of the market the software costs less than $1. There's a yawning gulf in the middle ground, for phones with $5 or $6 of software."

Stressing that Symbian's prices are consistent, and based on a published rate card (in a veiled dig at Microsoft) Levin said that currently it charges handset makers $7.25 for each of their first two million phones, and $5 per phone thereafter, for the basic software. Use of one of the high level platforms, such as UIQ, FOMA or Nokia Series 60 and integration, add to the software cost.

Given those figures, Symbian will break even when it ships 30 million phones per year. With 2.4 million shipped in the first quarter of 2004, and a rapid expansion in the market, it could be on target for that soon. According to a graph Levin presented, the falling price will give Symbian an addressable market of more than 100 million next year, which, with its 60 percent market share should take it comfortably past breakeven.

Asked if he had a projected date for breakeven, Levin was cagey: "Yes," he said, and did not elaborate.

Three goals
Symbian now has three goals, according to Levin. Firstly, to get into that broader market; secondly to deliver into the enterprise; and thirdly, to make closer relationships with its platform-making partners, who create a high-level interface for faster product development. Nokia has three such partners: its UIQ subsidiary, Nokia's System 60, and Fujitsu/DoCoMo's FOMA.

These partners "make it easier, faster and cheaper to deliver a more capable phone for the consumer," said Levin.

All the handset partners at the press conference spoke in support of these goals. "An open platform requires a multi-company, broad ownership structure," said Matti Alahuhta, VP and chief strategist at Nokia, while Tomozo Hiroki, board member of Panasonic, described the transactions as "an overwhelming vote of confidence in Symbian by key members of the mobile phone industry." John Peter Leesi, chief financial officer of Sony Ericsson said simply: "We believe in an independent Symbian," and Jens-Thomas Pietralla chief marketing officer of Siemens Mobile, praised Symbian's openness as the "key to driving the market forward".

Of the big investors, only Samsung was missing and only Samsung failed to increase its holding. According to Levin this was most likely because it was the most recent investor: "It is complex for a Korean company to make an investment abroad and Symbian is Samsung's only minority holding abroad," he said. "The practicalities of the investment are complex for the scale." Despite its absence on the day, Samsung has endorsed and signed the new shareholders' agreement, he said.

All of the handset vendors sang the praises of smartphones, and particular their penetration of the consumer market. "The smartphone market is heading for accelerated growth," said Alahuhta, while Pietralla said the smartphone is "the fastest growing segment of the phone market with 80 percent annual growth".

Consumers or enterprise
Enterprise IT managers may feel some dismay at the emphasis on consumer phones to bring the price down and volumes up. "In the end it is consumers who will be paying the bill," said Pietralla. "Enriching their lives will be the proof of the pudding."

Set against that, Levin placed enterprise penetration high on his goals, and roundly denied any suggestion that Symbian might spin off some kind of "Symbian Lite" for cheap phones.

"We're not believers in a Symbian lite," said Levin. "There is one common Symbian OS." He suggested that handset makers might get choices, as devices become more segment specific, but said: "We have no intention to split the OS and have a cut down version. We will deliver our code in terms of one evolving main line."

The big picture
The announcement makes most sense when seen in the context of efforts by the operators to get more uniformity in phone platforms, to make it simpler to create services.

While Symbian, and the three Symbian platform makers are coming from the manufacturers' side to make uniform interfaces for application developers, the operators are also moving to define the platforms they want to build their services on.

The OMTP group, led by DoCoMo and including most of its major competitors, intends to define operators' common requirements for phones.

OMTP and the new-look Symbian could be a sign that the phone market round the world is growing to look like that in Japan, where DoCoMo - with hardware manufacturers - has actually defined device architectures (the Symbian-based FOMA specification built with Fujitsu for instance).

On the world stage, however, such efforts require greater consensus, says Dean Bubley of Disruptive Analysis. "It could be getting a bit expensive to control these specifications," he said. "In OMTP, DoCoMo is collaborating with its direct competitors."

Handset manufacturers want freedom from having to make devices that comply with huge lists of requirements from every single carrier, says Bubley.

With the new-look Symbian and other moves from the operators, the phone market could become a lot simpler and more uniform.

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