13 July 2008

Weekend Reading
Analyze of Nokia's Move on Acquiring Symbian

CCID Consulting, China's leading research, consulting and IT outsourcing service provider, and the first Chinese consulting firm listed in Hong Kong, analyzes Nokia's move behind the Symbian acquisition.

On June 24, Nokia announces the acquisition of Symbian's part stocks, valuing at euro 264 million, which makes Nokia Symbian's exclusively-invested holding company.

The intention of Nokia's acquisition is obvious: improving Symbian's global influence so as to strengthen Nokia's leading position in smart phone field.

In 2007, global telecom industry and Internet service industry have undergone obvious changes, with convergence in communications and internet industries becoming increasingly significant. As Symbian's largest shareholder, Nokia faces its competitors such as traditional enterprises Microsoft and Palm in smart phone OS field and new forces such as Google and Apple in communications field.

How to exploit the advantages of Symbian camp, and make more and more terminal manufacturers use Symbian OS become the key to Nokia's success in the global smart phone market. At this content, the acquisition improves Nokia's layout in the smart phone OS field.

Firstly, Nokia's acquisition will inhibit traditional OS manufacturers' growth tendency such as Microsoft and Palm. In 2008Q1, only 21.25 million smart phones with Symbian OS were sold worldwide, but in 2007Q4, 220 million smart phones with Symbian OS were sold worldwide, which reviewed a significant downslide trend.

In order to turn this unfavorable situation, Nokia announces the acquisition of Symbian; meanwhile, Nokia cooperates with AT&T, LG Electronics, Motorola, NTT DOCOMO, Samsung, Sony Ericsson, TI and Vodafone to establish Symbian's foundation so as to drive development. This action will be helpful to Symbian's global popularization, and the participations of AT&T and TI are also helpful to Symbian's development in the highly potential Americanmarket.

Secondly, this acquisition will reply the challenge from Google and Apple. With the convergence tendency of telecom industry and Internet industry, IT giants such as Google and Apple has set foot in the communications field. Taking iPhone as an example, its exquisite industrial design and humanized operation interface has brought new philosophy to the smart phone field.

Facing new forces' impact, another strategy of Nokia's acquisition is the exemption of Symbian OS's patent royalty. Through this strategic implementation, Symbian will acquire support from third party software, which will become more important in the 3G era and widens the gap with Google and Apple.

In a word, because of acquiring Symbian and setting up Symbian foundation and exempting Symbian's user charge, Microsoft and Palm tolling OS faces unprecedented challenges. Because of these actions, Nokia strangles Google and Apple's potential growing space in communications field and Nokia's advantagein smart phone field will be more evident.