Nokia pulls a Google

If Nokia has its way, Linux won’t be the only mobile software associated with the term “open.”

In a bizarre maneuver, Nokia is buying up the remaining shares of Symbian—a company it has long controlled with a near-majority stake—but once it gains control, it isn’t planning to monopolize the world’s dominant mobile OS. Instead it’s turning Symbian and its S60 user interface and middleware over to a non-profit foundation, which will license it royalty-free to competing handset makers.

The Symbian Foundation will become the repository of all Symbian code and guide the future development of the operating system, just as the Open Handset Alliance will guide the future development of the Linux-based OS Android, originally contributed by Google. Along with Nokia’s contribution of the Symbian and S60 intellectual property, Motorola and Sony Ericsson will kick in the Symbian-based user interface UIQ, and NTT DoCoMo will toss in its own middleware, MOAP. AT&T, LG Electronics, Samsung, STMicroelectronics, Texas Instruments and Vodafone are also coming along for the ride, and any developer willing to shell out a $1500 annual fee can join the foundation and contribute their own code. But application development and licensing of the Symbian OS and various UIs will be gratis once the foundation gets off the ground in 2009.

According to Nokia, its motivation is market economics: The more the OS proliferates, the more phones Nokia can sell and the more applications and services Nokia can distribute. The fact that the Symbian OS is already the leading mobile operating system with over 200 million units ships gives the foundation a good baseline to build off of—one that Android doesn’t have. “We’re leveraging strong assets that already exist,” said Mary McDowell, Nokia executive vice president and chief development officer. “This sets us apart from other platforms in the market.”

Nokia is also in the tough position of trying to convince other handset makers to adopt an operating system it had financial control over while it developed competing solutions on the same platform. By maintaining a separate user interface from its competitors (S60), Nokia was fragmenting the market, not unifying it. And as it evolves into a services company, Nokia has found itself developing innovative applications like Nokia Maps solely for its own variety of Symbian smartphones rather than the whole market. J. Gold Associates principal analyst Jack Gold said it just wasn’t worth it for Nokia to own the enabling technology anymore.

“Nokia has decided that its future is not in maintaining a unique device OS/platform but in services and offerings that set it apart in the marketplace,” Gold said in a research note. “The effort to maintain S60 long term was not worth the investment.”

Forming an umbrella foundation to manage the distribution and evolution of a mobile operating system is certainly nothing new. In addition to Google taking the lead on Android, the LiMo Foundation is launching its own Linux-based OS and has gained the support of Verizon Wireless. In fact, the open-licensing pressure from the Linux wing of mobile might have been a big factor in Nokia’s bold move, said Stuart Carlaw, ABI Research vice president.