Disruptions on all sides

18. Disruptions on all sides

One reason why Symbian struggled in the face of competition from new high-end smartphone platforms, like Apple’s iOS and Google’s Android, was that, for many years previous, we had our eye on a different kind of competition. We often stated that we saw as our primary competition, not the operating systems with publicly recognised names (such as Palm OS or Microsoft Windows CE), but operating systems that the major phone manufacturers were already using in-house. In search of large volume sales, we paid less attention to the high-value top-end of the market.

Symbian’s public stance regarding competing operating systems is well expressed in a Computer Business Review article from September 2005, which was prompted by news that Palm had decided to ship arch-rival Microsoft’s smartphone platform in their Treo handsets. Was this news – the selection of Microsoft rather than Symbian – a blow for Symbian? Our public stance gave no hint of discomfort. To quote from http://www.cbronline.com/news/symbian_looks_past_microsoft_to_mid_market

Symbian looks past Microsoft to mid-market

By CBR Staff Writer, 27 September 2005

When Microsoft Corp catapulted deeper into the smartphone OS market earlier this week, by replacing PalmSource OS in Palm Inc’s first 3G-enabled Treo, it did not crimp the game plan for market leader Symbian Ltd.

Symbian, which has its sights firmly set on the emerging mid-market, sees Microsoft’s move as a high-end play and quite distinct from its own strategy.

Microsoft is more of a distraction factor, David Wood, Symbian executive VP of research told ComputerWire yesterday. The big story for Symbian is not another high-end rival.

Instead, Symbian, whose OS is shipped in 54 smartphones by more than 200 carriers, is competing against incumbent OS in mid-market phones, Wood said. Sony Ericsson, for instance, uses the OSE operating system. And the Nokia series 30 and series 40 smartphones run on the proprietary Nokia OS (higher-end Nokia smartphones do run Symbian).

To displace incumbent mid-market operating systems, Symbian is working on a slew of upgrades to its latest version 9.1 OS with mid-market users in mind. By year’s end, Wood said, Symbian would release v9.2 to handset manufacturers…

Beyond that, the company will continue to upgrade its OS every four to six months, he said.

We are making a big, big effort to reach the mid-range, Wood said.

After all, the mid-market will emerge as the volume market as smartphones become more prevalent, Wood said. Currently, the broader smartphone market represents just 10% of the global mobile phone market, but is expected to reach 15%, or more than 130 million units shipped annually, by 2008, according to IDC estimates.

The volume market is important to Symbian because the company has a flat pricing strategy. It charges a $5 fee per phone unit, regardless of make or model.

Tweaks to its OS that will help it reach the mid-market include driving down the cost of smartphones, Wood said. For example, the company is working to improve the ease for OEMs to use one CPU in smartphone designs rather than two (most smartphones today require both a wireless signalling chip plus an application processor), Wood said.

Each update will provide more support for lower-cost phones, he said.

Symbian also will update the speed of the OS’s performance, which is an ongoing task as smartphone applications become increasingly complex. After all, the mid-market is less tolerant of an OS that does not have a zippy boot-up, as opposed to the prosumer market, he said…

Currently, Symbian outsells other high-end smartphone OS and has just a couple of toes in the mid-market, Wood said. (Symbian’s overall global market share is projected to reach as high as 80% in 2006). But Wood said that is mostly a function of the market’s relatively immaturity.

Wood said he hopes Microsoft’s increasing presence in smartphones will help accelerate the growth of the market. The bigger the overall market is, the larger the mid-market slice will be, he said.

Absent from this interview was any mention of Apple iOS or Google Android. After all, both these operating systems lay in the future at that point. What might more reasonably have been mentioned was the question of Linux-based smartphones, but at that time, Linux-based systems had achieved very little market traction.

Nevertheless, one particular Linux system was giving Symbian managers increasing cause for worry. This was the system used by Nokia inside their Nokia 770 “Internet Tablet” device. Announced at an industry event in New York on 25 May 2005, the operating system inside the device was given the name “Maemo”. The event chosen by Nokia for the launch was no accident – it was the LinuxWorld Summit, reflecting the fact that Maemo was based on Linux. Despite private assurances from Nokia that Maemo addressed a completely different device category from Symbian-powered smartphones, Symbian managers were far from being convinced.

Nokia looks at Linux

Symbian managers were aware of several strands of interest in Linux within Nokia. In parallel to their publicly announced usage of Linux in their Internet Tablet device, Nokia managers were apparently considering adopting the Linux kernel in their Series 40 phones – the phones commonly described as “feature phones”, which were one step down in functionality (and cost) from any “mid-range smartphone” supported by Series 60.

This awareness came as a by-product of an attempt to persuade Nokia Series 40 managers to consider a cut-down implementation of Symbian OS for their future roadmap. This happened at a specially convened meeting with Series 40 managers in Finland on 30 May 2005. Series 40 were represented by Tommi Uhari, Craig Livingstone, and Andy Turner. Symbian sent Charles Davies (CTO), Jorgen Behrens (VP Strategy), Jonathan Harris (Product Manager for Symbian kernel), and Andrew Thoelke (Chief Technical Architect). The Symbian team outlined a number of options, involving different amounts of Symbian OS, varying from “Tiny” (nanokernel only), “Small”, “Medium”, “Large”, and “Full”.

The Series 40 team listened carefully but then said “No”. However, they were careful to keep the door open for future discussions, and they helpfully shared some of their strategic thinking:

[ SNIP ]

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