Nokia to buy remainder of Symbian for $410 million
Nokia presents a new model N96 on show at the Mobile World Congress in Barcelona on February 12, 2008. Photo: JOSEP LAGO/AFP/Getty Images
Nokia Oyj, the world's biggest maker of mobile phones, offered to buy the 52 percent of Symbian Ltd. it doesn't own for about 264 million euros ($410 million) to create royalty-free operating systems for handsets.
Nokia will pay 3.647 euros a share for closely held Symbian, the Espoo, Finland-based company said today in a statement. It currently holds a 47.9 percent stake. Nokia will contribute Symbian's S60 operating system to a foundation for open-source software for mobile phones, together with technology from Sony Ericsson Mobile Communications, Motorola Inc. and NTT DoCoMo Inc.
Symbian's free software will compete with Microsoft Corp., Research In Motion Ltd., Google Inc. and Apple Inc. in operating systems for handheld computers and smartphones, which allow users to access the Internet, check e-mail, play music and send video. Google said yesterday it's on schedule to deliver the first handsets that run its Android operating system to customers by the second half of this year.
''This is strategically a very smart move, '' said Matthias Maus, an analyst at BHF-Bank AG in Frankfurt, in an interview with Bloomberg Television. ''They also have Google in mind.''
Symbian, based in London, is the world's biggest maker of operating systems for advanced mobile phones, with a 60 percent market share in the first quarter, Nokia said, citing data from research firm Canalys.
''Through this acquisition and the establishment of the Symbian Foundation, it will undisputedly be the most attractive platform for mobile innovation,'' Nokia Chief Executive Officer Olli-Pekka Kallasvuo said in the statement.
Sony Ericsson, Motorola
Sony Ericsson and Motorola will give access to their UIQ software platform to the foundation, while NTT Docomo will add its Mobile Oriented Application Platform, or MOAP, which is the software used for the company's third-generation wireless service. AT&T Inc., LG Electronics Co., Samsung Electronics Co., STMicroelectronics, Texas Instruments Inc. and Vodafone Group Plc will also take part in the foundation. It will supply the user interface free of royalties for all members.
''This looks like the same type of open-source initiative as the Google one,'' said Mikko Ervasti, an analyst at Evli Bank in Helsinki, which has an ``accumulate'' rating on Nokia. ''They are now developing Symbian, which has been seen as a bit old- fashioned technology. This is positive for Nokia that it has found these partners.''
Stakeholders
Ericsson AB holds a 15.6 percent stake in Symbian; Sony Ericsson, the mobile-phone venture of Ericsson and Sony Corp., holds 13.1 percent; Matsushita Electric Industrial Co.'s Panasonic has 10.5 percent; Siemens AG owns 8.4 percent and Samsung has 4.5 percent. Nokia said 91 percent of shareholders agreed to sell their shares.
The purchase, which is anticipated to close in the fourth quarter, will be dilutive to Nokia's earnings in 2009, breakeven in 2010 and accretive from 2011 onwards, Nokia said, as it will save in royalty payments.
The foundation is scheduled to start operations in the first half of next year and is subject to Nokia completing the Symbian buy.
Symbian's shipment growth slowed to 17 percent in the first quarter from 53 percent in the fourth quarter. In April, Nokia said the total market for smartphones in the first quarter rose 42 percent to 33.3 million units, while the company's market share fell to 44 percent from 50 percent in that segment. (Bloomberg)
- Juho Erkheikki
