Symbian's Autonomy Assured as Owners Split Psion Stake.
Symbian Ltd is likely to avoid being seen as a Nokia shop after three of the company's other shareholders chose to take up their rights to buy a share of Psion Plc's stake.
In a further display of solidarity, the mobile operating system developer announced the raising of 50m pound ($92.7m) in a rights issue. The money will be used to develop the OS for the mid-market, to strengthen its position with enterprise software vendors, and to prevent fragmentation among its user-interface variants.
The deal pins Nokia's stake in Symbian at 47.9%, up from 32.2%. The figure falls way below the 70% the Finnish handset giant would have needed to take control of Symbian. But crucially it is also below the 50% mark at which is would have been perceived by the masses to have been the dominant partner. Nokia paid 93.4m pounds ($173.2m) for its portion of Psion's shares.
"This is a very good day for Symbian," CEO David Levin told a news conference in London yesterday. "Our goal was to preserve wide-ranging, multi-shareholder company [ownership] and I believe we've achieved that. It shows a very rich and deep sweep of support [for Symbian's strategy]."
Levin poured hot water on speculation that a satisfactory outcome to the conundrum, widely considered as key to the further development of the smart phone market, was ever in doubt. "[It] doesn't come as a surprise to me but it's a good outcome," he said.
His contention was supported by Matti Alahuhta, executive VP and chief strategy officer with Nokia. "About six months ago we started this process. All the time we encouraged other licensees to take up their pre-emption rights." Senior executives from Panasonic, Siemens and Sony Ericsson were on hand to pledge their own support.
Suggestions of unease among other Symbian shareholders have been rife since Psion, the UK-based industrial handheld manufacturer and originator of the Symbian platform, opted to sell up in mid-February.
Sony Ericsson, which had been the most vocal critic of Psion's decision to sell its 31.1% of Symbian to Nokia, was the biggest winner in the share sale. The company boosted its own 1.5% stake to 13.1%, after adding Ericsson's pre-emption rights to its own, for 57.3m pounds ($106.3m).
Siemens and Panasonic also took the opportunity to expand their ownership of Symbian. The German industrial giant's stake has risen from 4.8% to 8.4% at a cost of 20.1m pounds ($37.3m) while Panasonic spent 16.9m pounds ($31.3m) to grow its own share from 7.9% to 10.5%. The total value of the share sale topped 187.7m pounds ($348.1m).
Symbian's newest shareholder, Samsung, chose not to exercise its pre-emption rights although it was fully involved in the discussions. Levin said legal red tape relating to Korean companies buying stakes in overseas ventures had contributed to Samsung's decision. The company remains loyal to Symbian, however, and reiterated plans to extend its range of Symbian phones into the 3G arena.
With the uncertainty over Symbian's ownership now seemingly settled the 50m pounds ($92.7m) in cash raised though Symbian's latest rights issue will be put to use in strengthening the OS's market position in the face of the looming presence of Microsoft.
Top of Levin's agenda is the recruitment of another 300 engineers over the next 18 months, to add to Symbian's existing staff of 900. The expansion is expected to add about 30m pounds to Symbian's current cost base of around 70m pounds.
The fresh blood will be tasked with preparing the OS for a move into the handset mass market, an area already targeted by Nokia with its Series 60 variant of Symbian and by PalmSource with the Garnet version of Palm OS.
Broader support for enterprise applications is also targeted in an effort to increase the appeal of Symbian-based devices to corporate customers. Symbian developers will be heartened by an increased commitment to narrowing the programming gap between the three Symbian UI camps, Nokia (Series 60, 80, 90), its own UIQ and the FOMA interface used by Fujitsu for its NTT DoCoMo handsets.
"What we've done over time is to look at the total handset market of 500 million and the addressable market that could carry Symbian OS. The purpose is to make it easier, cheaper and faster to build better, more capable phones," said Levin. Symbian has set this addressable market at about 280 million units annually by 2008, not far short of half of the total market by this time.
Developments to Symbian OS for the mass market will not compromise the capabilities of the system. "We're not believers in a Symbian Lite," added Levin. Instead, a future version of Symbian OS seems likely to offer optional modules for different handset scenarios.
Symbian will also re-emphasize its independence with the appointment, for the first time, of a non-executive chairman from outside the Symbian family. Levin said the company is actively seeking an appropriate individual but added that there is nothing to announce as yet.
Nokia will have two directors on Symbian's supervisory board, with one each from Ericsson, Sony Ericsson, Siemens, Samsung and Panasonic. Levin and Symbian CFO Thomas Chambers will hot foot between Symbian's supervisory board and its operational board, which takes responsibility for day-to-day decisions. Levin described the re-jig as "an important change in governance."
Symbian also provided a strategic update. Some 23 handsets based on Symbian OS are currently shipping around the world from six manufacturers. Some 34 devices are known to be in development from 10 manufacturers. Some 12.4 million Symbian phones had shipped by the end of the first quarter 2004, 2.4 million in that period alone.
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|Date:||Jul 8, 2004|
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