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September 27, 2005

Symbian looks past Microsoft to mid-market

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.

By CBR Staff Writer

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 years’ end, Wood said Symbian would release v9.2 to handset manufacturers. (Of course, it will be several more months before these new features will be designed into new phones and reach market).

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 smarphone 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.

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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 signaling 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’ 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.

Also, Symbian is working to slim down the complexity of the operation of its OS, with easier-to-use menu structures, for example.

Because the smartphone industry is largely still emerging, particularly in North America, the mid-market is a moving target.

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 Woods 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.

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